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International Paper APPM Ltd.

BSE: 502330 Sector: Industrials
NSE: IPAPPM ISIN Code: INE435A01028
BSE 00:00 | 25 May 327.95 -6.10
(-1.83%)
OPEN

337.50

HIGH

337.50

LOW

327.50

NSE 00:00 | 25 May 329.05 -3.95
(-1.19%)
OPEN

333.25

HIGH

338.15

LOW

327.05

OPEN 337.50
PREVIOUS CLOSE 334.05
VOLUME 2856
52-Week high 418.00
52-Week low 272.00
P/E 14.73
Mkt Cap.(Rs cr) 1,304
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 337.50
CLOSE 334.05
VOLUME 2856
52-Week high 418.00
52-Week low 272.00
P/E 14.73
Mkt Cap.(Rs cr) 1,304
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

International Paper APPM Ltd. (IPAPPM) - Auditors Report

Company auditors report

TO THE MEMBERS OF

INTERNATIONAL PAPER APPM LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of International Paper APPMLimited ('the Company') which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ('the Act') with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards prescribed under Section133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

Attention is invited to Note 42 (a) of the financial statements regarding the ongoinglitigation with respect to the levy of electricity duty by the State Government onconsumption of electricity by captive generating units and the interim orders of theHon'ble Supreme Court of India on hearing the Special Leave Petition filed by the Companyin respect of which the Company has on grounds of prudence and abundant caution made aprovision amounting to `2357.43 lakhs during the year in view of the inherentuncertainty in predicting the final outcome of the above litigation. Additionally anamount of `1571.62 lakhs has been disclosed as contingent liability. Based on the legaladvice obtained in the opinion of the Management no further provision would be requiredin relation to this disputed matter.

Our opinion is not modified in respect of this matter

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report that:

a. We have sought and obtained all the information and explanations which to the bestof 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 theCompany 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 Statementdealt with by this Report are in agreement with the books of account.

d. In our opinion the aforesaid financial statements comply with the AccountingStandards prescribed under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on March31 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 from being appointed as a director in terms of Section164(2) of the Act.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in 'Annexure A'. Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors)

Rules 2014 as amended in our opinion and to the best of our information andaccording to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the financial statements asregards to its holding and dealings in Specified Bank Notes as defined in the NotificationS.O. 3407(E) dated the November 8 2016 of the Ministry of Finance during the period fromNovember 8 2016 to December 30 2016.

Based on audit procedures performed and the representations provided to us by themanagement we report that the disclosures are in accordance with the books of accountmaintained by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government in terms of Section 143(11) of the Act we give in 'Annexure B' astatement on the matters specified in paragraphs 3 and 4 of the Order.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm Registration No. 008072S)
Sumit Trivedi
Partner
(Membership No. 209354)
Hyderabad
April 25 2017

ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 ('the Act')

We have audited the internal financial controls over financial reporting ofInternational Paper APPM Limited ('the Company') as of March 31 2017 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the 'Guidance Note') issued by the Institute of Chartered Accountants of India and theStandards on Auditing prescribed under Section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Deloitte Haskins & Sells

Chartered Accountants (Firm Registration No. 008072S)

Sumit Trivedi

Partner (Membership No. 209354)

Hyderabad April 25 2017

ANNEXURE 'B' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

(i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.

b. The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

c. According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed/transfer deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate.

(ii) As explained to us the inventories were physically verified during the year bythe management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.

(iv) The Company has not granted any loans made investments or provided guarantees andhence reporting under clause (iv) of the Order is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year. In respect of unclaimed deposits the Company hascomplied with the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act 2013.

(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended and prescribed by the Central Government under sub-section (1) of the Section148 of the Companies Act 2013 and are of the opinion that prima facie the prescribedcost records have been made and maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

a. The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax cess and other material statutory duesapplicable to it with the appropriate authorities.

b. There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Sales Tax Service Tax Customs Duty Excise Duty ValueAdded Tax cess and other material statutory dues in arrears as at March 31 2017 for aperiod of more than six months from the date they became payable.

c. Details of dues of Income Tax Sales Tax Service Tax Custom Duty Excise Duty andValue Added Tax which have not been deposited as on March 31 2017 on account of disputesare given below:

Name of statute Nature of dues Forum where dispute is pending Period to which the amount relates Amount involved (` Lakhs) Amount unpaid (` Lakhs)
Income Tax Act1961 Tax Commissioner of Income Tax 2010-11 and 524.87 524.87
(Appeals) Visakhapatnam 2011-12
Deputy Commissioner of 2009-10 19.96 19.96
Income Tax (TDS) Hyderabad
High Court of Andhra Pradesh 2001-02 to 12.64 12.64
2003-04
Income Tax Appellate Tribunal 2001-02 14.26 14.26
Hyderabad 2008-09 40.08 40.08
Income Tax Office TDS 2008-09 2.12 2.12
Rajahmundry 2010-11 1.78 1.78
Interest High Court of Andhra Pradesh 1979-80 24.96 24.96
Central Sales Tax Appellate Deputy 2008-09 21.54 21.54
Tax Act 1956 Commissioner Visakhapatnam
Sales Tax Appellate Tribunal Visakhapatnam 2005-06 33.82 16.91
Andhra Pradesh Tax Sales Tax Appellate Tribunal Visakhapatnam 1995-96 to 1999-2000 27.41 27.41
General Sales
Tax Act 1957 &
Central Sales
Tax Act 1956
Andhra Pradesh General Sales Tax High Court of Andhra Pradesh 1990-99 2000-01 to 2004-05 126.78 126.78
Tax Act 1957 Sales Tax Appellate Tribunal 1996-97 10.82 6.57
Visakhapatnam
AP Value Added Tax Act 2005 Penalty Assistant Commissioner LTU Kakinada 2009-12 1.81 1.77
Tax Sales Tax Appellate Tribunal Visakhapatnam 2009-12 23.66 23.66
Appellate Deputy Commissioner Visakhapatnam 2009-10 and 2014-15 214.44 108.56
Madhya Pradesh Tax High Court Madhya Pradesh 1997-98 15.00 15.00
Value Added Tax Act 2002
West Bengal Value Tax Additional Commissioner of 2009-10 1.78 1.78
Added Tax 2005 Commercial Taxes
Orissa Entry Tax Deputy Commissioner of 2006-07 to 4.24 3.38
Tax Act 1999 Commercial Taxes 2009-10
Central Excise Duty Customs Excise & Service 2004-05 to 624.21 624.21
Act 1944 Tax Appellate Tribunal 2010-11
Bangalore
Commissioner of Central 2008-09 and 1.86 1.86
Excise (Appeals) 2009-10
Visakhapatnam
High Court of Andhra Pradesh 1996-97 and 1997-98 97.40 97.40
February1994 0.36 0.36
2004-05 0.10 0.10
Duty & Customs Excise & Service 2001 to 2012 2709.09 2666.08
Penalty Tax Appellate Tribunal
Bangalore
Commissioner of Central 2000-01 to 542.61 258.66
Excise (Appeals) 2003-04
Visakhapatnam 1994 - 1995 186.37 86.56
2001 - 2002
2015 32.99 32.99
2006-07 to 6.78 6.78
2008-09
2010-11 to 16.09 16.09
2015-16
High Court of Andhra Pradesh 2004-05 to 386.66 386.66
2007-08
Penalty Customs Excise & Service 2003-04 to 531.22 531.22
Tax Appellate Tribunal 2010-11
Bangalore
Finance Act 1994 Service High Court of Andhra Pradesh 2004-05 and 126.50 126.50
Tax 2005-06
Service Commissioner of Central 2004-05 to 355.34 355.34
Tax & Excise (Appeals) 2012-13
Penalty Visakhapatnam
Customs Excise & Service 2004-05 to 202.81 202.81
Tax Appellate Tribunal 2008-09
Bangalore March 2012 105.11 105.11

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks andgovernment. The Company has not issued any debentures and does not have any borrowingsfrom the financial institutions.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe Order is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Sections 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the

Company has not entered into any non-cash transactions with its directors or directorsof its holding or subsidiary company or persons connected with him and hence provisions ofSection 192 of the Companies Act 2013 are not applicable. The Company does not have anassociate company.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm Registration No. 008072S)
Sumit Trivedi
Partner
(Membership No. 209354)
Hyderabad
April 25 2017