the Members of
AGIO PAPER & INDUSTRIES LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Agio Paper & IndustriesLimited ("the Company") which comprise the Balance Sheet as at March 31 2021the Statement of Profit & Loss (including the Statement of Other ComprehensiveIncome) the Statement of Cash Flow and the Statement of Changes in Equity for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the financial statements").
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 theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS ") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and loss (including othercomprehensive income) its cash flows and changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the 'Auditor's Responsibilities for the Audit of the Financial Statements'section of our report. We are independent of the Company in accordance with the 'Code ofEthics' issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the financial statements.
Emphasis of Matters
Attention is drawn to the note no. 34 of the financial statement regarding suspensionof the operation at the factory due to reasons mentioned in the note and disposal ofsubstantial portion of the plant & machinery and capital work in progress. Theseconditions indicate material uncertainty that may cast significant doubt about theCompany's ability to continue as a going concern. However the statement has been preparedon a going concern basis for the reasons stated in the above mentioned note. Theappropriateness of the said basis is inter alia dependent on the Company's ability toinfuse requisite funds for meeting its obligations and resuming operations. Our opinionis not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the financial year ended March31 2021. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined that there are no key audit mattersto be communicated in our report.
Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the AnnualReport but does not include financial statements and our auditors' report thereon. Ouropinion on the financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those charged with governance are also responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
a. Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
b. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
c. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
d. Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
e. Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements for thefinancial year ended March 31 2021 and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
2) As required by section 143(3) of the Act we report that:
i. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief are necessary for the purpose of our audit.
ii. 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.
iii. The Balance Sheet Statement of Profit & Loss (including other comprehensiveincome) Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
iv. In our opinion the aforesaid financial statements comply with the accountingstandards specified under section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended from time to time.
v. On the basis of written representations received from the Directors as on March 312021 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2021 from being appointed as a director in terms of section 164(2) of theAct.
vi. With respect to the adequacy of the internal financial controls with reference tothe financial statement of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
vii. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
viii. 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) inour opinion and to the best of our information and according to the explanations given tous:
i) The Company has disclosed the impact of pending litigation as on March 31 2021 onits financial position in its financial statement - refer note no. 32
ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
There were no amounts which were required to be transferred to the Investor Educationand Protection Fund by the Company during the year.
ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report to the Members of Agio Paper & Industries Limited of even date)
i. In respect of the Company's fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant & equipments.
b) According to the explanation provided to us by the management due to non-operationof factory during the whole year physical verification of the property plant andequipments could not be carried out.
c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company as at the balance sheet date.
ii. According to the information and explanation given to us the company has eitherdisposed off or written off the entire inventory and accordingly paragraph 3(ii) of theOrder is not applicable to the Company.
iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liability partnershipsor parties covered in the register maintained under section 189 of the Act. Accordinglyparagraph 3(iii) of the Order is not applicable to the Company.
iv. In our opinion and according to the information and explanation provided to us theCompany has not made any loans or investments during the year. The Company has neitherissued any guarantee nor has provided any security on behalf of any party.
v. The Company has not accepted deposits from public within the meaning of section 73to 76 of the Act and the Rules framed there under to the extent notified.
vi. According to the information and explanations given to us the maintenance of costrecords under section 148(1) of the Act has not been prescribed and as such paragraph3(vi) of the Order is not applicable to the Company.
vii. According to the information and explanations given to us and on the basis of ourexamination of the books of account:
a) The Company has generally been regular in depositing to the appropriate authoritiesundisputed statutory dues including provident fund employee's state insurance incometax duty of customs goods & service tax cess and other statutory dues. Noundisputed statutory dues as above were outstanding as at March 31 2021 for a period ofmore than six months from the date they became payable.
b) According to the information and explanation given to us the details of disputeddues of income tax sales tax service tax duty of customs duty of excise& valueadded tax which have not been deposited and the forum where the dispute is pending as onMarch 31 2021 are as under:-
|Name of the Statute ||Nature of the Dues ||Amount in Rs. ||Period to which the amount relates ||Forum where dispute is pending |
|The Central Excise Act 1944 ||CENVAT Claims ||320192 ||1991- 92 to 1992- 93 ||Central Excise & Service Tax Appellate Tribunal New Delhi |
|Income T ax Act 1961 ||Income Tax ||322088 ||AY 2008-09 and 20102011 ||Deputy Commissioner (Appeals) |
viii. Based on our audit procedures and according to the information and explanationgiven to us we are of the opinion that the company has not defaulted in repayment of duesto banks. Based on the audit procedures and on the basis of information and explanationsgiven by the management the company did not have any outstanding debentures or dues tothe financial institution during the year.
ix. According to the information and explanation given to us and based on our overallexamination of the books of accounts we report that the company has not availed any termloan facility during the year. Furthermore the company has neither raised moneys throughinitial public offer nor through further public offer during the year.
x. During the course of our examination of books of account carried out in accordancewith generally accepted auditing practices in India we have neither come across anyincidence of material fraud by the Company or on the Company by its officers or employeesnor have we been informed of any such cases by the management.
xi. According to the information and explanations given to us and based on ourexamination of the records of the Company during the year the Company has paid managerialremuneration which are in compliance of the provisions of section 197 of the Act read withSchedule V of the Act.
xii. In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order isnot applicable to the Company.
xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 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 as required by the applicableaccounting standards.
xiv. According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not made preferential allotmentduring the year. However application money for the same has been received during thefinancial year. The requirements of section 42 of the Act have been complied with and theamount raised is used for the purpose of which the funds were raised.
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 itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the company.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 (vi) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Agio Paper & Industries Ltd. ofeven date)
Report on the Internal Financial Controls with reference to financial statement underClause (i) of Subsection 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls with reference to financial statementof Agio Paper & Industries Ltd. ("the Company") as of March 31 2021 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the company is responsible for establishing and maintaininginternal financial controls based on the internal control with reference to financialstatement criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (Guidance Note) issued by the Institute of Chartered Accountants ofIndia (ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to respective company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls withreference to financial statement based on our audit. We conducted our audit in accordancewith the Guidance Note issued by ICAI and the Standards on auditing prescribed underSection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementwas established and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statement and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatement included obtaining an understanding of internal financial controls withreference to financial statement assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto 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 withreference to financial statement.
Meaning of Internal Financial Controls with reference to Financial Statement
A company's internal financial control with reference to financial statement is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statement includes those policies and procedures that pertain tothe maintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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.
Limitations of Internal Financial Controls with reference to Financial Statement
Because of the inherent limitations of internal financial controls with reference tofinancial statement including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statement to future periods are subject to the risk that theinternal financial control with reference to financial statement may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
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 with reference to financial statement and such internal financial controls withreference to financial statement were operating effectively as at March 31 2021 based onthe internal control with reference to financial statement criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote issued by ICAI.
| ||For LUNIA SINGH MOHANTY & CO Chartered Accountants |
| ||Firm Registration No. 323912E |
| ||NARENDRA KUMAR LUNIA Partner |
|Place: Kolkata ||Membership No. 057660 |
|Date: The 19th day of April 2021 || |