We have audited the accompanying Standalone Financial Statements of MMP INDUSTRIES LIMITED (the “Company”),which comprises the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including the Other ComprehensiveIncome / (Losses), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date andnotes to the Standalone Financial Statements, including a summary of material accounting policies and other explanatoryinformation, (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, as amended, (“the Act”) in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended (“Ind AS”), and other accountingprinciples generally accepted in India, of the state of affairs of the Company as at March 31, 2025, and its standalone profitincluding total comprehensive income / (losses), its standalone cash flows and the standalone changes in equity for the yearended on that date.
Basis of Opinion
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs)specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the “Auditor’sResponsibilities for the Audit of the Standalone Financial Statements” section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“the ICAI”)together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisionsof the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion 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 the StandaloneFinancial Statements of the current period. These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Foreach matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters and to be communicated in our report. We havefulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the Standalone Financial Statementssection of our report, including in relation to these matters. Accordingly, our audit included the performance of proceduresdesigned to respond to our assessment of the risk of material misstatement of the Standalone Financial Statements. The resultsof our audit procedures, including the procedures performed to address the matter below, provide the basis for our auditopinion on the accompanying Standalone Financial Statements.
The Key Audit Matters
How was the matter addressed in our Audit
Revenue Recognition (Refer Note No. 1.4.(d) and 29 of the Standalone Financial Statements)
Revenue is one of the key profit drivers and is thereforesusceptible to misstatements. Revenue is measured in net ofany discounts and rebates. Revenue from sale of products isconsidered as key audit matter as there is a risk of accuracyof recognition and measurement of sales in the StandaloneFinancial Statements considering the following aspects:
* Determination of performance obligation for recognitionof revenue.
* Estimation of variable consideration in pricing.
* Cut-off is the key assertion in so far as revenue recognitionis concerned, since an inappropriate cut-off can result inmaterial misstatement of results for the periods.
Our audit procedures with regards to revenue recognition is acombination of internal controls and substantive procedureswhich included the following:
* Evaluated the design of internal control.
* For evaluation of operating effectiveness of internalcontrols, tested revenue by verifying, on sample basis,agreements executed with the customers, relevantdocumentary evidence of satisfaction of performanceobligation for timing of recognition of revenue, accuracyof revenue recognition including variable considerationincluded pricing, cut off transactions at the year end andtax amount of the invoices.
* Performed substantive testing by verifying the salesinvoice and other relevant documentary evidence onsample basis.
* Obtain the balance confirmation from selected samplesand verified the reconciliation, if any, for the confirmationreceived.
* Evaluated the appropriateness of accounting policies,related disclosures made and overall presentation in theStandalone Financial Statements.
Capital Work-in-Progress / Property, Plants and Equipment
The Company had embarked on a project on enhancementof Property, Plants and Equipment in “UMRED” and“BHANDARA” location. The Value of such Property, Plantand Equipment capitalized during the reporting period is' 2,478.43 Lakhs and ' 1,609.39 Lakhs respectively. Theproject needs to be capitalized and depreciated once the assetsare ready to use as intended by the Company’s management.Inappropriate timing of capitalization of the project and / orinappropriate classification of categories of item of Property,Plant and Equipment could results in material misstatementof Capital Work-in-Progress / Property, Plant and Equipmentwith a consequent impact on charge of depreciation andresults for the period.
Our audit procedures included testing the design,implementations and operating effectiveness of controls inrespect of review of capital work-in-progress, particularlyin respect of timing of the capitalization and recording ofadditions to items of various categories of Property, Plant andEquipment with source documentation, substantive testingof appropriateness of the cut-off date considered for projectcapitalization.
We tested the source documentation to determine whether theexpenditure is of capital nature and has been appropriatelyapproved and segregated into appropriate categories. Wereviewed operating expenses to determine the appropriatenessof accounting. Further, through sites visit, we physicallyverified the existence of capital work-in-progress / Property,Plant and Equipment.
Existence and Valuation of Inventories
The Company’s inventories as at the end of the reportingperiod are ' 13,472.16 Lakhs representing 26.65% ofthe Company’s total assets. (Refer “Note No. 10” of theStandalone Financial Statements)
The existence of inventories is a key audit matters due toinvolvement of high risk, basis the nature and size of theproducts where in value per unit is relatively insignificantbut high volumes are involved which are distributed acrossdifferent plants of the Company.
In response to these key matters, our audit included, among
others, the following principal audit procedures:
* Understood the management’s control over physicalinventory counts and their valuation.
* Evaluation of design and testing of the operatingeffectiveness of internal controls relating to physicalinventory counts at the plants. In testing these controls,we observed the inventory cycle count process on asample basis, inspected the results of the inventory cyclecount and confirmed that the variances were approvedand appropriately accounted for.
* Evaluation of design and testing of the operatingeffectiveness of internal controls relating to purchases,sales and inventories including the automated controls.
* We have performed the physical verification ofinventories on a sample basis for establishing theexistence of inventory as at the end of the reportingperiod.
* For a representative sample, verification that the finishedgoods inventories were correctly measured, using arecalculation of the measurement of those inventoriesbased on the cost of acquiring them from suppliers andconsidering the costs of directly attributable to suchgoods.
* Assessed the key estimates used by the Company’smanagement to determine the net realizable value andthe consistency thereof with the Company’s policy onprovision for non-moving inventory and performed asensitivity analysis on the estimated selling price andcompared with the cost per item.
Carrying Value of Trade Receivables
As at March 31, 2025, trade receivables constituteapproximately 17.71% of total assets of the Company (Refer“Note No. 11” of the Standalone Financial Statements). TheCompany is required to regularly assess the recoverability ofits trade receivables.
The Company applied, expected credit loss (ECL) modelfor measurement and recognition of impairment loss ontrade receivables. The Company uses a provision matrix todetermine impairment loss allowances. The provision matrixis based on its historically observed default rates over theexpected life of trade receivables and is adjusted for forward¬looking estimates.
This is a key audit matters as significant judgment is involvedto establish the provision matrix.
Our audit procedures included, among other the followings:
* Evaluated the Company’s accounting policies pertaining to
impairment of financial assets and assessed compliancewith those policies in term of Ind AS - 109, “FinancialInstruments”.
* Assessed and tested the design and operating effectiveness
of the Company’s internal financial controls overprovision for expected credit loss (ECL).
* Evaluated the management’s assumption and judgment
relating to various parameters which included thehistorical default rates and business environment inwhich the entity operates for estimating the amount ofsuch provision.
* Evaluated the management’s assessment of recoverability
of the outstanding receivables and recoverability of theoverdue / aged receivables through inquiry with themanagement, and analysis of the collection trends inrespect of receivables.
* Assessed and read the disclosures made by the Company in
the Standalone Financial Statements.
Emphasis on Matters
We draw attention to the “Note No. 52” of the Standalone Financial Statements, which describes events subsequent to theyear end, the effects of a fire in the Company’s production facilities. Since, this is the non-adjusting subsequent event, noadjustment has been made in the Standalone Financial Statements for the period ended March 31, 2025. Our opinion is notmodified in respect of these matters.
Information Other than the Financial Statements and Auditor’s Report thereon
The Company’s Management and the Board of Directors are responsible for the other information. The other informationcomprises the information included in the Management’s Discussion and Analysis, Board’s Report including Annexure tothe Board’s Report, Report on Corporate Governance, Business Responsibility and Sustainability Report and Shareholder’sinformation, but does not include the consolidated financial statements, standalone financial statements and our auditor’sreport thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form ofassurance 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; we arerequired to report that fact. We have nothing to report in this regard.
Management’s Responsibility for the Standalone Financial Statements
The Company’s Management and the Board of Directors are responsible for the matters stated in Section 134(5) of the Actwith respect to the preparation of these Standalone Financial Statements that give a true and fair view of the standalonefinancial position, the standalone financial performance including the other comprehensive income / (losses), standalone cashflows and standalone changes in equity of the Company in accordance with the accounting principle generally accepted inIndia, including the Indian Accounting Standards (Ind AS) as specified under Section 133 of the Act, read with the Companies(Indian Accounting Standards) Rules, 2015, as amended, time to time. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequateinternal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accountingrecords, relevant to the preparation and presentations of the Standalone Financial Statements that give a true and fair view andare free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the Company’s Management and the Board of Directors are responsible forassessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless the Company’s management and Board of Directors either intends toliquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Company’s Board of Directors are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detecta material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individuallyor in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of theseStandalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughoutthe audit. We also:
• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error,design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriateto provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher thanfor one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal controls.
• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that areappropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinionon whether the Company has adequate internal financial controls with reference to Standalone Financial Statements inplace and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures made by the Company’s Management and Board of Directors.
• Conclude on the appropriateness of the 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, we arerequired to draw attention in our auditor’s report to the related disclosures in the Standalone Financial Statements or, ifsuch disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up tothe date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as agoing concern.
• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures,and whether the Standalone Financial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makesit probable that the economic decisions of a reasonably knowledgeable users of the Standalone Financial Statements maybe influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and inevaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone FinancialStatements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of theaudit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 thought tobear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significancein the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describethese matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremelyrare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of such communication.
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order") issued by the Central Government of India
in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure “A”, a statement on the matters specified
in paragraph 3 and paragraph 4 of the said Order.
2. As required by Section 143(3) of the Act, based on our audit, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and beliefwere 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 it appearsfrom our examination of those books.
c. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including the Other ComprehensiveIncome / (Losses), the Standalone Statement of Cash Flows and the Standalone Statement of Changes in Equitydealt with this Reports are in agreement with the relevant books of account.
d. In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards asspecified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, asamended, time to time.
e. On the basis of the written representation received from the directors as on March 31, 2025, taken on the record bythe Board of Directors, none of directors is disqualified as on March 31, 2025, from being appointed as a directorin term of Section 164(2) of the Act.
f. With respect to adequacy of the internal financial controls with reference to these Standalone Financial Statementsof the Company and the operating effectiveness of such control, refer to our separate report in Annexure “B” Ourreport expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internalfinancial controls with reference to Standalone Financial Statements.
g. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirementsof Section 197(16) of the Act, as amended, time to time, in our opinion and to the best of our information andexplanations given to us, the remuneration paid / provided by the Company to its directors during the reportingperiod is in accordance with the provision of section 197 of the Act.
h. With respect to the other matters to be included in the Independent Auditor’s Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014, as amended, time to time, in our opinion and to the best of ourinformation and according to the explanations given to us;
(i) The Company has disclosed the impact of pending litigations on its standalone financial position in itsStandalone Financial Statements - Refer “Note No. 47” of the Standalone Financial Statements.
(ii) The Company has made the necessary provisions, as required under the applicable law or the IndianAccounting Standards, for material foreseeable losses, if any, on long-term contracts including derivativecontracts.
(iii) There has been no delay in transferring the amounts required to be transferred to the Investor Education andProtection Fund by the Company.
iv) a) The Management has represented that, to the best of its knowledge and belief, no funds (which arematerial either individually or in the aggregate) have been advanced or loaned or invested (eitherfrom borrowed fund or share premium or any other sources or kind of funds) by the Company to or inany other person or entities, including the foreign entities (“Intermediaries"), with the understanding,whether recorded in writing or otherwise, that the Intermediaries shall, whether, directly or indirectlylend or invest in other persons or entities identified in any manner whatsoever by or on behalf of theCompany (“Ultimate Beneficiaries") or provide any guarantee, security or the like to or on behalf ofthe Ultimate Beneficiaries;
b) The Management has represented, that, to the best of its knowledge and belief, no funds (which arematerial either individually or in the aggregate) have been received by the Company from any personor entities, including foreign entities (“Funding Parties"), with the understanding, whether recordedin writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in otherpersons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“UltimateBeneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
c) Based on such audit procedures that have been considered reasonable and appropriate in thecircumstances, nothing has come to our notice that has caused us to believe that the representations
under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any materialmisstatement.
(v) As stated in “Note No. 50” to the Standalone Financial Statements:
a) The final dividend proposed in the previous year, declared and paid by the Company during thereporting period is in accordance with section 123 of the Act, as applicable.
b) During the reporting period and until the date of this report, the Company has not declared or paid anyinterim dividend in accordance with section 123 of the Act, as applicable.
c) The Board of Directors of the Company has proposed the final dividend for the period, which is subjectto the approval of the shareholders at their ensuing Annual General Meeting (AGM). The amount ofdividend proposed is in accordance with section 123 of the Act, as applicable.
(vi) Based on our examination, which included test check, the Company has used accounting software formaintaining its books of accounts for the financial period ended March 31, 2025, which has a feature ofrecording audit trail (edit log) facilities and the same has operated throughout the period for all the relevanttransactions recorded in the software systems. Further, during the course of our audit, we did not come acrossany instance of the audit trail feature being tampered with and the audit trails have been preserved by theCompany as per the statutory requirements for the record retention.
Place: Nagpur For MANISH N JAIN & CO.
Dated: May 23, 2025 Chartered Accountants
UDIN No.: 25175398BMIEIS2622 FRN No. 0138430W
Partner
Membership No. 175398