We have audited the accompanying Standalone Financial Statements of BANCO PRODUCTS (INDIA) LIMITED(hereinafter referred to as "the Company"), which comprise the Balance Sheet as at March 31, 2025, the Statement ofProfit and Loss (including other comprehensive income), Cash Flow Statement and Statement of Changes in Equity for theyear then ended and notes to the Standalone Financial Statements including a summary of material accounting policiesand other explanatory information (hereinafter referred to as "the Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid StandaloneFinancial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act readwith the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principlesgenerally accepted in India, of the state of affairs of the Company as at March 31,2025, and its profit, other comprehensiveincome, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of theCompanies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities forthe Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the Standalone Financial Statements under the provisions of the Companies Act, 2013 and theRules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion on the Standalone Financial Statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of theStandalone Financial Statements of the current period. These matters were addressed in the context of our audit of theStandalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinionon these matters. We have determined the matters described below to be the key audit matters to be communicated inour report.
Auditor's Response
1
Revenue Recognition
The Company recognizes revenues when controlof the goods is transferred to the customer at anamount that reflects the consideration to whichthe Company expects to be entitled in exchangefor those goods. In determining the sales price,the Company considers the effects of rebates anddiscounts (variable consideration). The terms of ar¬rangements in case of domestic and exports sales,including the timing of transfer of control, the natureof discount and rebates arrangements, deliveryspecifications including incoterms, create complex¬ity and judgment in determining sales revenues.
Audit procedures included the following:
• Considered the adequacy of the Company’s revenuerecognition policy and its compliance in terms of Ind AS115 'Revenue from contracts with customer's.
• Assessed the design and tested the operatingeffectiveness of internal controls related to revenuerecognition.
• Performed sample tests of individual sales transaction andtraced to sales invoices and other related documents. Inrespect of the samples selected, tested that the revenuehas been recognized as per the incoterms in accordancewith Ind AS 115.
• Selected sample of sales transactions made pre andpost- year end, agreed the period of revenue recognitionto underlying supporting documents.
The risk is, therefore, that revenue is not recognizedin the correct period in accordance with terms of IndAS 115 'Revenue from contracts with customer's,and accordingly, it was determined to be a keyaudit matter in our audit of the Standalone Ind ASStandalone Financial Statements.
• Assessed the relevant disclosures made in theStandalone Ind AS Standalone Financial Statements.
2
Valuation of Inventory
As disclosed in Note 9 [Inventories] to the Stand¬alone Financial Statements, the Company holdsInventories of ' 27,725.69 lakhs which represent25.73% of total assets of the Company as at theBalance sheet date. Considering the number of lo¬cations and the level of inventory held across itsfactories, as well as the physical verification of in¬ventory at these locations on different dates, thepotential risk of existence of such inventory and theidentification of non-moving, obsolete / damagedinventory is a significant area of audit importance.Inventories are valued at the lower of cost and netrealizable value. The inventory valuation also re¬quires management estimates towards write-downof inventory items to its net realizable value (wher¬ever applicable) and allowance for slow moving ornon-moving inventory.
Our audit procedures to verify the existence of inventoriesconsisted of testing the relevant internal controls, includingin specific the testing of the inventory physical verificationprocess that are performed by the management at variouspoint in time at their factories.
As required under SA 501 "Audit Evidence - AdditionalConsiderations for Specific Items”, we have observed thephysical verification of Inventory, conducted by management,in certain factories selected by us based on our professionaljudgment. Our procedures in this regard included:
• observing compliance of stock count instructions bymanagement personnel; observing steps taken bymanagement to ascertain the existence of inventory onthe date of the count (including identification of non¬moving, obsolete / damaged inventory),
• performing independent inventory counts on samplebasis and reconciling the same to the managementcounts and reviewing the reconciliation of the differencesin inventory quantity between the physical count and thebooks of accounts, and
We tested sample of inventory purchases throughout the auditperiod with purchase invoice and other supporting documentsto ensure if the inventory is valued as per the Company'saccounting policy.
We performed cut off testing for purchase and salestransactions made near the reporting date to assess whethertransactions are recorded in the correct period by testingshipping records, sales / purchase invoices, etc., for sampletransactions.
3
Investment in Subsidiaries
As disclosed in Note 4 [Non-Current Investments]to the Standalone financial statements, theCompany's equity investments in subsidiaries,amounted to ' 18,694.54 lakhs as at March 31,2025. Such investments are carried at cost as perInd AS 27 - Separate Financial Statements.
The carrying value of investments in subsidiarieswas considered to be a key audit matter as theseare material and significant to the net worth ofthe Company and is dependent on the futureperformance of the subsidiaries.
Our procedures included, but were not limited to, the following:
• We obtained the audited financial statements of thesubsidiaries, and evaluated the assessment carriedout by the Company with regard to net worth of thoserespective subsidiaries with the carrying value of theinvestments made in those entities.
• We also obtained the Management’s documentation andtested its assessment on whether there were indicatorsfor impairment if any, of the aforesaid investments, asrequired by Ind AS 36, Impairment of Assets.
Based on above procedures performed, we found themanagement's assessment of carrying value of investmentsin subsidiaries, to be reasonable.
The Company's management and Board of Directors are responsible for the preparation of the other information. The otherinformation comprises the information included in the Management Discussion and Analysis, Board's. Report including
Annexure to Board's Report, Business Responsibility and Sustainability Report, Report on Corporate Governance andShareholder’s Information, but does not include the consolidated financial statements, standalone financial statements andour auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any formof assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, indoing so, consider whether the other information is materially inconsistent with the standalone financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, weare required to report that fact. We have nothing to report in this regard.
Management's and Board of Director's Responsibilities for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013("the Act") with respect to the preparation of these Standalone Financial Statements that give a true and fair view of thefinancial position, financial performance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 ofthe Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financialcontrols, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant tothe preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is responsible for assessing the Company's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realisticalternative but to do so.
The Board of Directors is responsible for overseeing the Company’s financial reporting process.
Auditor's Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of users taken on the basis of these Standalone FinancialStatements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticismthroughout the audit. We also,
• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraudor error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures thatare appropriate in the circumstances, under section 143(3)(i) of the act, we are also responsible for expressingour opinion on whether the company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, weare required to draw attention in our auditor's report to the related disclosures in the Standalone Financial Statementsor, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However, future events or conditions may cause the Company tocease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including thedisclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in amanner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate,makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statementsmay be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit workand in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the StandaloneFinancial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing ofthe audit and significant audit findings, including any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirementsregarding independence, and to communicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of mostsignificance in the audit of the Standalone Financial Statements of the current period and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about thematter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits ofsuch communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government of Indiain terms of Section 143(11) of the Act, we give in the Annexure, a statement on the matters specified in paragraphs3 and 4 of the Order to the extent applicable.
2. (A) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as itappears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statementof Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with therelevant books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified underSection 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the directors as on March 31, 2025 taken onrecord by the Board of Directors, none of the directors is disqualified as on March 31, 2025 from beingappointed as a director in terms of Section 164 (2) of the Act.
f) With respect to adequacy of the internal financial controls over financial reporting and the operatingeffectiveness of such controls, refer to our separate report in "Annexure- B" attached herewith. Our reportexpresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internalfinancial controls with reference to Standalone Financial Statements.
(B) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information andaccording to the explanations given to us:
a) The Company has disclosed the impact of pending litigation on its financial position in its financial statement.Refer Note 33 of the Standalone Financial Statements;
b) The Company did not have any long-term contracts including derivative contracts; for which there wereany material foreseeable losses; and
c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education andProtection Fund by the Company.
d) (i) The management has represented that, to the best of its knowledge and belief, no funds have
been advanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other persons or entities, including foreignentities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that theIntermediary shall:
• directly or indirectly lend or invest in other persons or entities identified in any mannerwhatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company or
• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The management has represented, that, to the best of its knowledge and belief, no funds have beenreceived by the Company from any persons or entities, including foreign entities ("Funding Parties"),with the understanding, whether recorded in writing or otherwise, that the Company shall:
• directly or indirectly, lend or invest in other persons or entities identified in any mannerwhatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Party or
• provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries; and
(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances,nothing has come to our notice that has caused us to believe that the representations under subclause(d) (i) and (d) (ii) contain any material mis-statement.
e) As per Standalone Financial Statements:
a. The interim dividend declared and paid by the Company during the year and until the date of thisreport is in compliance with Section 123 of the Act.
f) Based on our examination, which included test checks, the Company has used accounting software systemsfor maintaining its books of account for the financial year ended March 31,2025 which have the featureof recording audit trail (edit log) facility and the same has operated throughout the year for all relevanttransactions recorded in the software systems. Further, during the course of our audit we did not comeacross any instance of the audit trail feature being tampered with and the audit trail has been preservedby the Company as per the statutory requirements for record retention.
(C) With respect to the matter to be included in the Auditor's Report under Section197(16) of the Act, as amended:
In our opinion and according to the information and explanations given to us, the remuneration paid by theCompany to its directors during the current year is in accordance with the provisions of Section 197 of the Act.The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are requiredto be commented upon by us.