Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS Financial Statements of THE SOUTH INDIA PAPER MILLS LIMITED (âthe Companyâ) which comprises of the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act. 2013 (âthe Actâ) with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act., read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and 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 adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Standalone Ind AS Financial Statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.We conducted our audit of the Standalone Ind AS Financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Ind AS Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matters
The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 01, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the accounting principles generally accepted in India, including the Companies (Accounting Standards) Rules, 2006 (as amended) specified under Section 133 of the Act, read with the Companies (Accounts) Rules, 2014 audited by the predecessor auditor whose report for the year ended March 31, 2017 and March 31, 2016 dated May 25 th, 2017 and May 26th, 2016 respectively expressed an unmodified opinion on those financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), as amended, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. 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 and belief were necessary for the purpose 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 appears from our examination of those books;
c. the Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account; Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. in our opinion, the aforesaid Stand alone Ind AS Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
e. On the basis of written representations received from the Directors as on March 31,2018 taken on record by the Board of Directors, none of the Directors is disqualified as on March 31,2018 from being appointed as a Director in terms of Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure 2â.
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 35 to the Standalone Ind AS Financial Statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
âANNEXURE 1â TO THE INDEPENDENT AUDITORSâ REPORT
Annexure 1 referred to in clause 1 of paragraph on the âReport on Other Legal & Regulatory Requirementâ of our report of even date to the Standalone Ind AS Financial Statements of the Company for the year ended March 31, 2018:
On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) According to the practice of the Company, fixed assets are physically verified by the management at reasonable intervals which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Management has confirmed that no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable and the discrepancies noticed were not material.
(iii) The Company has not granted any loans, secured or unsecured to Companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act.
(iv) According to the information and explanations given to us, the Company has not granted any loans, investments or provided guarantees and security for which the provisions of Section 185 and 186 of the Act are applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits for which the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder are applicable.
(vi) We have broadly reviewed the cost accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate.
(vii) According to the records of the Company:
(a) the Company is generally regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities
(b) On the basis of our examination of the documents and records, disputed statutory dues to the extent which have not been deposited with the appropriate authorities are as under:
Statute |
Nature of the Dues |
Amount in dispute not acknowdeged |
Period to which the amount relates |
Forum where the dispute is pending |
Central Excise Act, 1 944 / CENVAT Credit Rules, 2004 |
Excise Duty |
8,15,339 |
2008-09 |
CESTAT, Bangalore |
Penalty |
50,000 |
Except dues stated in the above para, there are no other dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute.
(viii) According to the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to the bank as at Balance Sheet date.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. The term loans raised during the year have been applied for the purpose for which they were obtained.
(x) According to the information and explanations given to us by the management, we report that no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration pending approval of shareholders in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with Directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under Section 45-1A of the Reserve Bank of India Act 1934.
âANNEXURE 2â TO THE INDEPENDENT AUDITORSâ REPORT
Annexure 2 referred to in âclause f of paragraph 2â on the âReport on Other Legal & Regulatory Requirementâ of our report of even date to the Standalone Ind AS Financial Statements of the Company for the year ended March 31, 2018:
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âtheActâ)
We have audited the internal financial controls over financial reporting of THE SOUTH INDIA PAPER MILLSLIMITED (âthe Companyâ) as of March 31,2018 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the âGuidance Noteâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribedunder Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial control over financial reporting includes those policies and procedures that:
i. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
ii. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and Directors of the Company; and
iii. provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
for Murthy Swamy & Associates LLP
Chartered Accountants
Firmâs Regn. No.: S200065
M D Venkatesha Murthy
Partner
Membership No.: 209189
Place : Bengaluru
Date : 24th May, 2018
Mar 31, 2016
To the Members of
THE SOUTH INDIA PAPER MILLS LIMITED NANJANGUD
Report on the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of THE SOUTH INDIA PAPER MILLS LIMITED(âthe Companyâ) which comprises of the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and 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 adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its Profit and its Cash Flow for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), as amended, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure Iâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. 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 and belief were necessary for the purpose 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 appears from our examination of those books;
c. the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d. in our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e. On the basis of written representations received from the Directors as on March 31, 2016 taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2016 from being appointed as a Director in terms of Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure IIâ.
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 34A to the Standalone Financial Statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure I referred to in clause 1 of paragraph on the âReport on Other Legal & Regulatory Requirementâ of our report of even date to the Standalone Financial Statements of the Company for the year ended March 31, 2016:
On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) According to the practice of the Company, fixed assets are physically verified by the management at reasonable intervals which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Management has confirmed that no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable and the discrepancies noticed were not material.
(iii) The Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act.
(iv) According to the information and explanations given to us, the Company has not granted any loans, investments or provided guarantees and security for which the provisions of section 185 and 186 of the Actare applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits for which the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under are applicable.
(vi) We have broadly reviewed the cost accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148(1)of the Companies Act, and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate.
(vii) (a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities.
(b) On the basis of our examination of the documents and records, disputed statutory dues to the extent which have not been deposited with the appropriate authorities are as under:
Statute |
Nature of the Dues |
Amount in |
Period to which the amount relates (FY) |
Forum where the dispute is pending |
Central Excise Act, 1944 / CENVAT |
Excise Duty |
8,15,339 |
2008-09 |
CESTAT, Bangalore |
Credit Rules, 2004 |
Penalty |
50,000 |
2008-09 |
Except dues stated in the above para, there are no other dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute.
(viii) According to the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to the bank as at Balance Sheet date.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. The term loans raised during the year have been applied for the purpose for which they were obtained.
(x) According to the information and explanations given to us by the management, we report that no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with Directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of THE SOUTH INDIA PAPER MILLS LIMITED (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the âGuidance Noteâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We have conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
for B S Ravikumar& Associates
Chartered Accountants
Firmâs registration number: 006101S
B.S.Ravikumar
Partner
Membership number: 010218
Place : Bengaluru
Date : 26th May, 2016
Mar 31, 2015
We have audited the accompanying standalone financial statements of The
South India Paper Mills Limited ("the Company"), which comprise of
Balance Sheet as at 31st March, 2015, Statement of Profit and Loss,
Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management's Responsibility 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 the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and 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 adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We have conducted our audit in accordance with the Standards on
Auditing specified under Section 143(10) of the Act. Those Standards
require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its profits and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015
("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
statement on the matters specified in paragraphs 3 and 4 of the Order
to the extent applicable.
2. 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 and belief 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 it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 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 31st March, 2015 taken on record by the Board of
Directors, none of the directors are disqualified as on 31st March,
2015 from being appointed as a director in terms of Section 164 (2) of
the Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 34 A to the
financial statements;
ii. the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. there has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Referred to in paragraph 1 under "Report on Other Legal and
Regulatory Requirements" section of our Independent Auditors'
Report of even date.
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we state that:
(i) (a) the company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) According to the practice of the Company, fixed assets are
physically verified by the management at reasonable intervals which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Management has confirmed that no material
discrepancies were noticed on such verification.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of the
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
(iii) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal controls.
Further on the basis of examination of the books and records of the
Company, and according to the information and explanations given to us,
we have neither come across nor have been informed of any continuing
failure to correct major weaknesses in the aforesaid internal control
procedures.
(v) According to the information and explanations given to us, the
Company has not accepted any deposits for which the provisions of
Sections 73 to 76 or any other relevant provisions of the Act and the
rules framed thereunder are applicable.
(vi) We have broadly reviewed the cost accounts and records maintained
by the Company pursuant to the Rules made by the Central Government for
the maintenance of cost records under section 148(1)of the Companies
Act, and we are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have, however
not made a detailed examination of the records with a view to determine
whether they are accurate.
(vii) (a) According to the records of the Company, the Company is
regular in depositing undisputed statutory dues including provident
fund, employees' state insurance, income-tax, sales-tax, wealth tax,
service tax, duty of customs, duty of excise, value added tax, cess and
any other statutory dues with the appropriate authorities.
(b) On the basis of our examination of the documents and records,
disputed statutory dues to the extent which have not been deposited
with the appropriate authorities are as under:
Statute Nature of the Amount in Period to which
Dues Rs. the amount
relates (FY)
Central Excise Act, Excise Duty 3,54,725/- 2008-09
1944 Penalty 3,54,725/- 2009-10
Central Excise Act, Excise Duty 8,15,339/- 2008-09
1944 / CENVAT Penalty 50,000/- 2008-09
Credit Rules, 2004
Service Tax under Penalty 2,63,068/- 2007-08
Finance Act, 1994 on late payment To
of Service Tax 2010-11
Statute Forum where the dispute
is pending
Central Excise Act, 1944 CESTAT, Bangalore
Central Excise Act, CESTAT, Bangalore
1944 / CENVAT Credit Rules, 2004
Service Tax under Finance Act, 1994 CESTAT, Bangalore
Except dues stated in the above para, there are no other dues of income
tax or sales tax or wealth tax or service tax or duty of customs or
duty of excise or value added tax or cess which have not been deposited
on account of any dispute.
(c) the amount required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made thereunder has been
transferred to such fund within time..
(viii) The company has no accumulated losses as at 31st March 2015. The
company has not incurred cash losses during the year and in the
immediately preceding financial year.
(ix) In our opinion and according to the information and explanation
given to us by the management, the company has not defaulted in payment
of principal and interest to financial institutions or Banks as at the
Balance Sheet date.
(x) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions, as at 31st March 2015.
(xi) In our opinion and according to the information and explanations
given to us, term loans have been applied for the purpose for which
they were obtained.
(xii) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
for B S RAVIKUMAR & ASSOCIATES
Chartered Accountants
Firm's Registration No.006101S
B S RAVIKUMAR
Place : Bengaluru Partner
Date : 28th May, 2015 Membership No.010218
Mar 31, 2014
We have audited the accompanying financial statements of The South
India Paper Mills Limited, Chikkayanachatra, Nanjangud ("the
Company"), which comprise the Balance Sheet as at March 31, 2014, the
Statement of Profit and Loss and Cash Flow Statement for the year then
ended, and a summary of significant accounting policies and other
explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 ("the Act"). This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit, evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment
of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness
of the entity''s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003
("the Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of Section 211 of the Act;
e. on the basis of written representations received from the Directors
as on March 31 2014 and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
Referred to in paragraph iunder "Report on Other Legal and Regulatory
Requirements" section of our Independent Auditors'' Report of even
date.
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we state that:
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) According to the practice of the Company, fixed assets are
physically verified by the management at reasonable intervals which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Management has confirmed that no material
discrepancies were noticed on such verification.
(c) The Company has not disposed off any substantial part of its fixed
assets during the year so as to affect its going concern status.
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of the
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3. (a) According to the information and explanations given to us, the
Company has not granted any loan, secured or unsecured, to Companies,
firms and other parties listed in the Register maintained under Section
301 of the Companies Act, 1956.
(b) the Company has not borrowed any loan, secured or unsecured from
companies, firms and other parties listed in the Register maintained
under section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, no major
weakness has been noticed in the internal controls. Further on the
basis of examination of the books and records of the Company, and
according to the information and explanations given to us, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in the aforesaid internal control procedures.
5. (a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the transactions that need to be entered into the register
in pursuance of Section 301 of the Companies Act, 1956 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, having regard to the fact that the items purchased/sold,
services rendered/received are of a special nature and suitable
alternate sources do not exist for obtaining comparable quotations, the
transactions made in pursuance of contracts or arrangements entered in
the registers maintained under Section 301 of the Companies Act, 1956
and exceeding the value of five lakh rupees in respect of any such
party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time or
the prices at which the transactions for similar goods have been made
with other parties.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits for which the
provisions of Sections 58A and 58AA of the Companies Act, 1956 are
applicable.
7. On the basis of internal audit reports broadly reviewed by us, we
are of the opinion that, the coverage of internal audit functions
carried out by a firm of Chartered Accountants appointed by the
management is commensurate with the size of the Company and nature of
its business.
8. We have broadly reviewed the cost accounts and records maintained by
the Company pursuant to the Rules made by the Central Government for
the maintenance of cost records u/s. 209(1)(d) of the Companies Act,
1956 and we are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have, however
not made a detailed examination of the records with a view to determine
whether they are accurate.
9. (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues including provident fund,
investor education protection fund, employees state insurance, income-
tax, sales-tax, wealth-tax, service tax, custom duty, excise-duty, cess
and other statutory dues applicable to it with the appropriate
authorities and there were no undisputed amounts payable which were in
arrears as at 31st March 2014 for a period of more than six months from
the date they became payable.
(b) On the basis of our examination of the documents and records,
disputed statutory dues to the extent which have not been deposited
with the appropriate authorities are as under:
Statute Nature of the Amount in
Dues Rs.
Central Excise
Act, 1944 Excise Duty 3,54,725/-
Penalty 3,54,725/-
Central Excise Excise Duty 8,15,339/-
Act, 1944 /
CENVAT Penalty 50,000/-
Credit Rules,
2004
Service Tax
under Penalty 2,63,068/-
Finance Act,
1994 on late payment
of Service Tax
Statue Period to which Forum where the
the amount dispute is pending
relates (FY)
Central Excise Act, 1944 2008- 09 CESTAT, Bangalore
2009- 10
Central Excise
Act, 1944 / CENVAT
Credit Rules, 2004 2008-09 CESTAT, Bangalore
2008-09
Service Tax under
Finance Act, 1994 2007-08 CESTAT, Bangalore
To
2010- 11
10. The Company has no accumulated losses as at 31st March 2014 and has
not incurred any cash losses in the financial year ended on that date
or in the immediately preceding financial year.
11. According to the information and explanations given to us and as
per the records of the Company examined by us, during the year the
Company has not defaulted in repayment of dues to the financial
institutions and banks.
12. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund / nidhi / mutual benefit fund /
society. Accordingly, the provisions of the clause 4 (xiii) of the
Companies (Auditors Report) Order 2003 are not applicable to the
Company.
14. The Company is not dealing in or trading in shares, securities,
debentures or other investments. Accordingly, the provisions of the
clause 4 (xiv) of the Companies (Auditors Report) Order 2003 are not
applicable to the Company.
15. According to the information and explanations provided to us, and
as per the records of the Company examined by us, the Company has not
given any guarantees for loans taken by others from banks or financial
institutions.
16. In our opinion, and according to information and explanations given
to us, on an overall basis, the term loans have been applied for the
purposes for which they were obtained.
17. On the basis of an overall examination of the balance sheet of the
Company and information furnished by the management, in our opinion and
according to the information and explanation given to us, funds raised
on short-term basis have not been used for long-term investments.
18. The Company has not made any preferential allotment of shares to
parties and Companies covered in the register maintained under Section
301 of the Companies Act, 1956 during the year.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the
year.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
for B S RAVIKUMAR AND ASSOCIATES
Chartered Accountants
Firm''s Registration Number 006101S
B S RAVIKUMAR
Place : Mysore Partner
Date : 22nd May 2014 M. No.10218
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of The South
India Paper Mills Limited, Chikkayanachatra, Post Nanjangud ("the
Company"), which comprise the Balance Sheet as at March 31, 2013,
the Statement of Profit and Loss and Cash Flow Statement for the
year then ended, and a summary of significant accounting policies
and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit, evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of Section 211 of the Act;
e. on the basis of written representations received from the directors
as on March 31, 2013 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
Referred to in paragraph 1under "Report on Other Legal and Regulatory
Requirements" section of our Independent Auditors'' Report of even date.
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we state that:
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and
situation of fixed assets.
(b) According to the practice of the Company, fixed assets are
physically verified by the management at reasonable intervals which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Management has confirmed that no material
discrepancies were noticed on such verification.
(c) The Company has not disposed off any substantial part of its fixed
assets during the year so as to affect its going concern status.
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of the
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3. (a) According to the information and explanations given to us, the
Company has not granted any loan,
secured or unsecured, to companies, firms and other parties listed in
the Register maintained under Section 301 of the Companies Act, 1956.
(b) the Company has not borrowed any loan, secured or unsecured from
companies, firms and other parties listed in the Register maintained
under Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, no major
weakness has been noticed in the internal controls. Further on the
basis of examination of the books and records of the Company, and
according to the information and explanations given to us, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in the aforesaid internal control procedures.
5. (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions that need to be entered into the
register in pursuance of Section 301 of the Companies Act, 1956 have
been so entered. (b) In our opinion and according to the information
and explanations given to us, having regard to the fact that the items
purchased/sold, services rendered/received are of a special nature and
suitable alternate sources do not exist for obtaining comparable
quotations, the transactions made in pursuance of contracts or
arrangements entered in the registers maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of five lakh rupees in
respect of any such party during the year have been made at prices
which are reasonable having regard to the prevailing market prices at
the relevant time or the prices at which the transactions for similar
goods have been made with other parties.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits for which the
provisions of Sections 58A and 58AA of the Companies Act, 1956 are
applicable.
7. On the basis of internal audit reports broadly reviewed by us, we
are of the opinion that, the coverage of internal audit functions
carried out by a firm of Chartered Accountants appointed by the
management is commensurate with the size of the Company and nature of
its business.
8. We have broadly reviewed the cost accounts and records maintained
by the Company pursuant to the Rules made by the Central Government for
the maintenance of cost records u/s. 209(1)(d) of the Companies Act,
1956 and we are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have, however
not made a detailed examination of the records with a view to determine
whether they are accurate.
9. (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues including provident fund,
investor education protection fund, employees state insurance, income-
tax, sales-tax, wealth-tax, service tax, custom duty, excise-duty, cess
and other statutory dues applicable to it with the appropriate
authorities and there were no undisputed amounts payable which were in
arrears as at 31st March 2013 for a period of more than six months from
the date they became payable. (b) On the basis of our examination of
the documents and records, disputed statutory dues to the extent which
have not been deposited with the appropriate authorities are as under:
Statute Nature of the Amount in
Dues Rs.
Central Excise Act, 1944 Excise Duty 3,54,725/-
Penalty 3,54,725/-
Central Excise Excise Duty 8,15,339/-
Act, 1944 / CENVAT Penalty 50,000/-
Credit Rules, 2004
Service Tax under Penalty 2,63,068
Finance Act, 1994 on late payment
of Service Tax
Period to which Forum where the
the amount dispute is pending
relates (FY)
2008-09 CESTAT, Bangalore
2009-10
2008-09 CESTAT, Bangalore
2008-09
2007-08 CESTAT, Bangalore
To 2010-11
10. The Company has no accumulated losses as at 31st March, 2013 and
it has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. According to the information and explanations given to us and as
per the records of the Company examined by us, during the year the
Company has not defaulted in repayment of dues to the financial
institutions and banks.
12. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund / nidhi / mutual benefit fund /
society. Accordingly, the provisions of clause 4 (xiii) of the
Companies (Auditors Report) Order 2003 are not applicable to the
Company.
14. The Company is not dealing in or trading in shares, securities,
debentures or other investments. Accordingly, the provisions of clause
4 (xiv) of the Companies (Auditors Report) Order 2003 are not
applicable to the Company.
15. According to the information and explanations provided to us, and
as per the records of the Company examined by us, the Company has not
given any guarantees for loans taken by others from banks or financial
institutions.
16. In our opinion, and according to information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
17. On the basis of an overall examination of the balance sheet of the
Company and information furnished by the management, in our opinion and
according to the information and explanation given to us, funds raised
on short-term basis have not been used for long-term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956 during the year.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the
year.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
for B S RAVIKUMAR & ASSOCIATES
Chartered Accountants
Firm Registration Number 006101S
B.S. RAVIKUMAR
Place : Mysore Partner
Date : 30th May, 2013 M No. 10218
Mar 31, 2011
1. We have audited the attached Balance Sheet of The South India Paper
Mills Limited, Chikkayana Chatra, Post Nanjangud as at 31st March,
2011, Profit and Loss Account and the Cash Flow Statement for the year
ended on that date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as
amended by companies (Auditors Report), (Amendment), Order 2004,
(together the ÃOrder') issued by the Central Government of India in
terms of sub- section (4A) of section 227 of the Companies Act, 1956,
we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books and proper returns adequate for the purposes of our audit
have been received from the branches not visited by us;
(iii) The Balance Sheet, Profit and Loss account and Cash Flow
Statement dealt with by the report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
(v)On the basis of written representations received from the directors,
as on 31st March, 2011 and taken on record by the Board of directors,
we report that none of the directors are disqualified as on 31st March,
2011 from being appointed as director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act 1956.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March, 2011,
(b) In the case of the Profit and Loss Account, of the Profit for the
year ended on that date; and,
(c) In the case of the Cash Flow statement, of the Cash Flows for the
year ended on that date.
ANNEXURE TO AUDITORS' REPORT
Referred to in paragraph 3 of the Auditors' Report of even date to the
members of The South India Paper Mills Limited for the year ended 31st
March, 2011
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we state that:
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) According to the practice of the Company, fixed assets are
physically verified by the management at reasonable intervals which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Management has confirmed that no material
discrepancies were noticed on such verification.
(c) The Company has not disposed off any substantial part of its fixed
assets during the year so as to affect its going concern status.
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of the
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3. (a)According to the information and explanations given to us, the
Company has not granted any loan, secured or unsecured, to companies,
firms and other parties listed in the Register maintained under section
301 of the Companies Act, 1956.
(b)the Company has not borrowed any loan, secured or unsecured, from
companies, firms and other parties listed in the Register maintained
under section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, no major
weakness has been noticed in the internal controls. Further on the
basis of examination of the books and records of the Company, and
according to the information and explanations given to us, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in the aforesaid internal control procedures.
5. (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions that need to be entered into the
register in pursuance of section 301 of the Companies Act, 1956 have
been so entered.
(b)In our opinion and according to the information and explanations
given to us, having regard to the fact that the items purchased/sold
services rendered/received are of a special nature and suitable
alternate sources do not exist for obtaining comparable quotations, the
transactions made in pursuance of contracts or arrangements entered in
the registers maintained under section 301 of the Companies Act, 1956
and exceeding the value of five lakh rupees in respect of any such
party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time or
the prices at which the transactions for similar goods have been made
with other parties.
6. During the year, the Company has not accepted any deposits from the
public covered u/s 58A of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules 1975. As there are no outstanding
deposits, compliance of Section 58AA or obtaining an order from
National Company Law Tribunal does not arise.
7. On the basis of internal audit reports broadly reviewed by us, we
are of the opinion that, the coverage of internal audit functions
carried out by a firm of Chartered Accountants appointed by the
management is commensurate with the size of the Company and nature of
its business.
8. We have broadly reviewed the cost accounts and records maintained
by the Company pursuant to the Rules made by the Central Government for
the maintenance of cost records u/s. 209(1)(d) of the Companies Act,
1956 and we are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We are not
required to and accordingly, have not made a detailed examination of
the records.
9. (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues including provident fund,
investor education protection fund, employees state insurance,
income-tax, sales-tax, wealth-tax, Service Tax, custom duty,
excise-duty, cess and other statutory dues applicable to it with the
appropriate authorities.
(b) On the basis of our examination of the documents and records,
disputed statutory dues to the extent which have not been deposited
with the appropriate authorities are as under:
Statute Nature of Amount Period to Forum where
the Dues in (Rs.) which the the dispute
amount is pending
relates
(FY)
Karnataka Electricity 33,01,232/- 2003-04 Karnataka
Electricity Tax (on 2004-05 High Court
(Taxation captive
on consum consumption)
ption) and interest
Act, 1959
Central Duty on Sale 3,54,725/- 2008-09 Commissioner
Excise Act, Sludge 2009-10 of Central
1944 Excise
(Appeals),
M'lore
Penalty 3,54,725/-
Central Cenvat credit 8,15,339/- 2008-09 Additional
Excise Act, ON removal of Commissioner
1944/CENVAT capital of Central
Credit goods Excise
Rules, 2004 (Appeals),
Mysore
Penalty 1,00,000/-
10. The Company has no accumulated losses as at 31st March 2011 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. According to the information and explanation given to us and the
records of the company examined by us, during the year the company has
not defaulted in repayment of dues to the financial institutions and
banks.
12. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund / nidhi / mutual benefit fund /
society. Accordingly, the provisions of the clause 4 (xiii) of the
Companies (Auditors Report) Order 2003 are not applicable to the
Company.
14. The Company is not dealing in or trading in shares, securities,
debentures or other investments. Accordingly, the provisions of the
clause 4 (xiv) of the Companies (Auditors Report) Order 2003 are not
applicable to the Company.
15. According to information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks or
financial institutions.
16. In our opinion, and according to information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
17. On the basis of an overall examination of the balance sheet of the
Company and information furnished by the management, in our opinion and
according to the information and explanation given to us, funds raised
on short-term basis have not been used for long-term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956 during the year.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the
year.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
for B.S.RAVIKUMAR & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Registration No. 006101S
B S RAVI KUMAR
Partner M. No. 10218
Place : Mysore
Date : 26th May 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of The South India Paper
Mills Limited, Chikkayana Chatra, Post Nanjangud as at 31st March,
2010, Profit and Loss Account and the Cash Flow Statement for the year
ended on that date annexed thereto. These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 as
amended by Companies (Auditors Report), (Amendment), Order 2004,
(together the Order) issued by the Central Government of India in
terms of sub- section (4A) of section 227 of the Companies Act, 1956,
we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books and proper returns adequate for the purposes of our audit
have been received from the branches not visited by us;
(iii) The Balance Sheet, Profit and Loss account and Cash Flow
Statement dealt with by the report are in agreement with the books
of account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the Companies
Act, 1956;
(v)On the basis of written representations received from the directors,
as on 31st March, 2010 and taken on record by the Board of directors, we
report that none of the directors are disqualified as on 31st March, 2010
from being appointed as director in terms of clause (g) of sub-section
(1) of section 274 of the Companies Act 1956.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March, 2010,
(b) In the case of the Profit and Loss Account, of the Profit for the
year ended on that date; and,
(c) In the case of the Cash Flow statement, of the Cash Flows for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT
Referred to in paragraph 3 of the Auditors Report of even date to the
members of The South India Paper Mills Limited for the year ended 31st
March, 2010
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we state that:
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) According to the practice of the Company, fixed assets are
physically verified by the management at reasonable intervals which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Management has confirmed that no material
discrepancies were noticed on such verification.
(c) The Company has not disposed off any substantial part of its fixed
assets during the year so as to affect its going concern status.
2. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of the
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3. (a) According to the information and explanations given to us, the
Company has not granted any loan, secured or unsecured, to companies,
firms and other parties listed in the Register maintained under section
301 of the Companies Act, 1956.
(b)the Company has not borrowed any loan, secured or unsecured, other
than deposits covered under section 58A, from companies, firms and
other parties listed in the Register maintained under section 301 of
the Companies Act, 1956. Maximum amount outstanding during the year is
Rs 31.93 lakhs (No. of parties 15) and the balance as at 31.3.2010 is
NIL. Repayment of principal and interest is regular.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, no major
weakness has been noticed in the internal controls. Further on the
basis of examination of the books and records of the Company, and
according to the information and explanations given to us, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in the aforesaid internal control procedures.
5. (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions that need to be entered into the
register in pursuance of section 301 of the Companies Act, 1956 have
been so entered.
(b)In our opinion and according to the information and explanations
given to us, having regard to the fact that the items purchased/sold
services rendered/received are of a special nature and suitable
alternate sources do not
exist for obtaining comparable quotations, the transactions made in
pursuance of contracts or arrangements i entered in the registers
maintained under section 301 of the Companies Act, 1956 and exceeding
the value of | five lakh rupees in respect of any such party during the
year have been made at prices which are reasonable ç having regard to
the prevailing market prices at the relevant time or the prices at
which the transactions for I similar goods have been made with other
parties.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of Sections 58A and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. Since the Company has not defaulted
in repayment of deposits, compliance of Section 58AA or obtaining an
order from National Company Law Tribunal does not arise.
7. On the basis of internal audit reports broadly reviewed by us, we
are of the opinion that, the coverage of internal audit functions
carried out by a firm of Chartered Accountants appointed by the
management is commensurate with the size of the Company and nature of
its business.
8. We have broadly reviewed the cost accounts and records maintained
by the Company pursuant to the Rules made by the Central Government for
the maintenance of cost records u/s. 209( 1 )(d) of the Companies Act,
1956 and we are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have, however
not made a detailed examination of the records with a view to determine
whether they are accurate.
9. (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues including provident fund,
investor education protection fund, employees state insurance,
income-tax, sales-tax, wealth-tax, Service Tax, custom duty,
excise-duty, cess and other statutory dues applicable to it with the
appropriate authorities.
(b) On the basis of our examination of the documents and records,
disputed statutory dues to the extent which have not been deposited
with the appropriate authorities are as under:
Statute Nature of the Amount in Period to
which Forum where the
Dues Rs. the amount dispute is
pending
relates(FY)
Karnataka
Electri
city Electricity Tax 30,93,523/- 2003-04 Karnataka
High Court
(Taxation
on consum
ption) (on captive 2004-05
Act, 1959 consumption)
Central
Excise Act, Penalty on 3,59,506/- 2004-05 Commissioner
of
1944/CENVAT Service Tax 2005-06 Central Excise
Credit
Rules, 2004 Credit availed (Appeals),
Mlore
on Exempt
Goods
10. The Company has no accumulated losses as at 31st March 2010 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. According to the information and explanation given to us and the
records of the company examined by us, during the year the company has
not defaulted in repayment of dues to the financial institutions and
banks.
12. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund / nidhi / mutual benefit fund /
society. Accordingly, the provisions of the clause 4 (xiii) of the
Companies (Auditors Report) Order 2003 are not applicable to the
Company.
14. The Company is not dealing in or trading in shares, securities,
debentures or other investments. Accordingly, the provisions of the
clause 4 (xiv) of the Companies (Auditors Report) Order 2003 are not
applicable to the Company.
15. According to information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks or
financial institutions.
16. In our opinion, and according to information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
17. On the basis of an overall examination of the balance sheet of the
Company and information furnished by the management, in our opinion and
according to the information and explanation given to us, funds raised
on short-term basis have not been used for long-term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956 during the year.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the
year.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
for B S Ravikumar & Associates
Chartered Accountants
Firm Registration No. 00610IS
Place : Mysore (B S Ravikumar)
Date : 27th May 2010 Partner
M. No. 010218