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Ecoplast Ltd.

BSE: 526703 Sector: Industrials
NSE: N.A. ISIN Code: INE423D01010
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NSE 05:30 | 01 Jan Ecoplast Ltd
OPEN 87.30
PREVIOUS CLOSE 87.30
VOLUME 1
52-Week high 135.00
52-Week low 80.30
P/E 7.81
Mkt Cap.(Rs cr) 26
Buy Price 82.95
Buy Qty 2.00
Sell Price 91.35
Sell Qty 4.00
OPEN 87.30
CLOSE 87.30
VOLUME 1
52-Week high 135.00
52-Week low 80.30
P/E 7.81
Mkt Cap.(Rs cr) 26
Buy Price 82.95
Buy Qty 2.00
Sell Price 91.35
Sell Qty 4.00

Ecoplast Ltd. (ECOPLAST) - Auditors Report

Company auditors report

TO THE MEMBERS OF ECOPLAST LIMITED

Report on the Audit of the Standalone Financial Statements

We have audited the accompanying standalone financial statements of EcoplastLimited ("the Company") which comprise the Balance Sheet as at March 312019 the Statement of Profit and Loss (including Other Comprehensive Income) Statementof Changes in Equity and the Statement of Cash Flows for the year ended on that date anda summary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements"). In ouropinion and to the best of our information and according to the explanations given to usthe aforesaid standalone 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 2019 the profit and total comprehensiveincome changes in cash flows for the . year ended onthat date

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Financial Statementssection 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 theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is toprovide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report:-

1. Impairment testing of Fully Owned Subsidiary Company

As at 31st March 2019 the adjusted carrying amount of theinvestment in fully owned Subsidiary Company viz. Synergy Films Private Limited is र21166099/- after giving effect of first time adoption of IND AS. The actual carryingcost of Investment as per IGAAP was र 8176257/- net of impairment.

The Net Worth of the Subsidiary Company as on 31st March2019 is र 7687815/-.

The Management has considered that losses suffered by the SubsidiaryCompany and erosion of its net worth indicate a possible impairment in the carrying valueof investment. Accordingly the management has performed an impairment assessment and hasestimated the recoverable amount of its investment in the subsidiary using FMV estimate ofits breakdown value which involves the use of significant management estimates andassumptions that are dependent on expected future market and economic conditions. As persuch assessment done by the management the carrying value of the investment impaired by र 7196229/- lakhs in the preceding years does not require any further impairment.and its

Considering the materiality of the amounts involved the significantmanagement judgment required in estimating the quantum of diminution in the value ofinvestment and such estimates and judgments being inherently subjective this matter hasbeen identified as a key audit matter for the current year audit.

Our procedure included but were not limited to the following:

l Obtained an understanding of management's process andevaluated design and tested operating effectiveness of controls around identification ofindicators of impairment under Ind AS and around valuation of the business of theSubsidiary to determine recoverable value of the said investment.

l Assessed the appropriateness appropriate of methodologyand valuation model used by the management to estimate the recoverable value of investmentin the Subsidiary.

l We analysed the Audited Financial Statement of the SubsidiaryCompany to gain an understanding of the Net Worth of the Subsidiary Company as at 31stMarch 2019 for the purpose of the assessment of the carrying amount of investment by theCompany.

l Based on our procedures we also considered the adequacy ofdisclosures in respect of investment in the said Subsidiary in the notes to the standalonefinancial statements.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the standalone financial statementsand our auditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing 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 standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors areresponsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also: o Identifyand assess the risks of material misstatement of the standalone financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficientand 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. o Obtainan understanding of internal financial controls 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.

o Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management. oConclude 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 theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

o Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

o Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

o We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding that we identify any significant during our audit.

o We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

o From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters.

We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 197(16) of the Act we report that thecompany has paid remuneration to its directors during the year is in accordance with theprovisions and limits laid down under Section 197 read with Schedule V of the Act.

2. As required by Section 143(3) of the Act based on our audit wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS 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 thedirectors as on March 31 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2019 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and according tothe explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements.

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.

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

3. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For Y. B. Desai and Associates
Chartered Accountants
Firm Registration No. 102368W
Mayank Y. Desai
Date :- 27th May 2019 Partner
Place :- Mumbai. Membership No. :- 108310

ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT

of even date to the members of Ecoplast Limited on the standalonefinancial statements for the year ended 31 March 2019

Independent Auditor's report on the Internal Financial Controlsunder Clause (i) of sub-section 3 of Section 143 of the Companies Act 2013 (the"Act")

We have audited the internal financial controls over financialreporting of ECOPLAST LIMITED ("the Company") as of 31st March 2019in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management's Responsibility for the Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to financial controls both applicable to an audit of InternalFinancial Controls and audit of internal both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting isa process 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 controlover financial reporting includes those policies and procedures that (1) pertain to themaintenance 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods over financial reporting may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrolsoverfinancial st March 2019 based on the internal at31 control overfinancial reporting criteria established by the Company considering the essential Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Y. B. Desai and Associates
Chartered Accountants
Firm Registration No. 102368W
Name :- CA Mayank Y. Desai
Partner
Membership No. :- 108310
Date :- 27th May 2019
Place :- Mumbai

ANNEXURE - B TO THE AUDITORS' REPORT

Referred to in paragraph 1 of our Report of even date: Mattersspecified in paragraph 3 of Order

1) In respect of its fixed assets:

a) On the basis of available information the Company has maintainedproper records showing full particulars including quantitative details and situations offixed assets.

b) According to the information and explanation given to us theCompany has formulated a regular program of verification by which all the assets of theCompany shall be verified in a phased manner over a period of once in every three yearswhich in our opinion is reasonable having regard to the size of the Company and nature ofassets and no material discrepancies were noticed on verification conducted during theyear as. compared with the book records

c) According to the information and explanation given to us and on thebasis of our examination of the record of the company the title deeds of the immovableproperties are held in the name of the company.

2) In respect of its inventories:

a) The inventories except goods-in-transit have been physicallyverified during the year by the management. In our opinion the frequency ofverificationis reasonable. As per the information and explanation given to us no materialdiscrepancies were noticed on physical verification.

3) The Company has not granted loans secured or unsecured tocompanies firms and limited liability partnerships or other parties listed in theregister maintained U/s 189 of the Companies Act 2013. Therefore the provisions of subclause 3(a) 3(b) & 3(c) are not applicable to the company.

4) According to the information and explanations given to us theCompany has not given any loan security or guarantee to directors of any other bodycorporate as referred to in section 185 and 186 of the Companies Act 2013. However theCompany had granted Loans to wholly owned subsidiary company under the erstwhile provisionof Section 372A of the Companies Act 2013. As per Rule 11 of the Companies (Meeting ofBoard and its power) Rules 2014 Loans Investments and guarantees given to wholly ownedsubsidiary is exempted from complying the provision of Section 186(3) of the Act.

5) The Company has not accepted any deposits from the public and hencethe directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76or any other relevant provisions of the Act and the Companies (Acceptance of Deposit)Rules 2015 with regard to the deposits accepted from the public are not applicable.

6) We have broadly reviewed the books of account maintained by theCompany in respect of products where pursuant to the Rules made by the Central Governmentof India the maintenance of cost records has been prescribed under subsection (1) ofSection 148 of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. We have not however made a detailedexamination of the records with a view to determine whether they are accurate or complete.

7) In respect of statutory dues:

a) According to the records of the Company undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax WealthTax Service Tax duty of Customs Duty of Excise Value Added Tax Cess and othermaterial statutory dues have been generally regularly deposited with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of the aforesaid dues were outstanding as at 31stMarch 2019 for a period of more than six months from the date of becoming payable.

b) According to the information and explanation given to us there areno dues of income tax sales tax wealth tax service tax custom duty excise duty andCess which have not been deposited on account of dispute. However according toinformation and explanation given to us dues of Service Tax have not been deposited by theCompany on account of disputes are as follows :-

Name of Statue Nature of the Dues Amount in (र) F. Y. to which the amount relates Forum where dispute is pending
Finance Act 1994 SERVICE TAX CREDIT ON THE SERVICE OF CUSTOM HOUSING AGENT 317688.00 F.Y.2010-11 SUPERINTENDENTC. EX.VALSAD
Finance Act 1994 SERVICE TAX CREDIT ON THE SERVICE OF CUSTOM HOUSING AGENT 51560.00 F.Y.2012-13 SUPERINTENDENTC. EX.VALSAD
Finance Act 1994 SERVICE TAX CREDIT ON THE SERVICE OF CUSTOM HOUSING AGENT 74376.00 F.Y.2013-14 SUPERINTENDENTC. EX.VALSAD
Finance Act 1994 SERVICE TAX CREDIT ON THE SERVICE OF CUSTOM HOUSING AGENT 31164.00 F.Y.2014-15 SUPERINTENDENTC. EX.VALSAD
Finance Act 1994 SERVICE TAX CREDIT ON THE SERVICE OF CUSTOM HOUSING AGENT 55725.00 F.Y.2014-15 SUPERINTENDENTC. EX.VALSAD
Finance Act 1994 SERVICE TAX CREDIT ON THE SERVICE OF CUSTOM HOUSING AGENT 67507.00 F.Y.2015-16 SUPERINTENDENTC. EX.VALSAD
Finance Act 1994 SERVICE TAX CREDIT ON THE SERVICE OF CUSTOM HOUSING AGENT 71358.00 F.Y.2015-16 SUPERINTENDENTC. EX.VALSAD
Finance Act 1994 CENVAT CREDIT OF SERVICE TAX PAID TO COMMISSION AGENT 54075.00 F.Y.2010-11 to F.Y.2013-14 DEPUTY COMMISSIONER C.EX.VALSAD
Finance Act 1994 CENVAT CREDIT OF SERVICE TAX PAID TO COMMISSION AGENT 12400.00 F.Y.2014-15 SUPERINTENDENTC. EX.VALSAD
Finance Act 1994 CENVAT CREDIT OF SERVICE TAX PAID TO COMMISSION AGENT 16769.00 F.Y.2015-16 SUPERINTENDENTC. EX.VALSAD
Finance Act 1994 CENVAT CREDIT OF SERVICE TAX PAID TO COMMISSION AGENT 6235.00 F.Y.2016-17 SUPERINTENDENTC. EX.VALSAD
Total 758857.00

8) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of dues to banks. The Companyhas not taken any loan either from financial institutions or from the government and hasnot issued any debentures.

9) The company has not raised any funds by public offer during theyear. The company has also not raised any term loan during the year therefore thisclause is not applicable.

10) In our opinion and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company has been noticedor reported during the year.

11) According to the information and explanation give to us and basedon our examination of the records of the Company the Managerial remuneration has beenpaid and provided by the Company in accordance with the requisite approvals mandated bythe provisions of Section 197 of the Act read with Schedule V to the Act.

12) In our opinion the Company is not a Nidhi Company. Therefore theprovisions of clause 12 of the Order are not applicable to the Company.

13) According to the information and explanation given to us and basedon our examination of the records the company transaction with the related parties are incompliance with Section 177 and 188 of the Companies Act 2013 where applicable anddetails of such transaction have been disclosed in the Note No. 31 of financial statementas required by the applicable accounting standards.

14) Based upon the audit procedures performed and the information andexplanations given by the management the company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the yearunder review. Accordingly the provisions of clause 14 of the Order are not applicable tothe Company and hence not commented upon.

15) Based upon the audit procedures performed and the information andexplanations given by the management the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly the provisions ofclause 15 of the Order are not applicable to the Company and hence not commented upon.

16) In our opinion the company is not required to be registered undersection 45 IA of the Reserve Bank of India Act 1934 and accordingly the provisions ofclause 16 of the Order are not applicable to the Company and hence not commented upon.

Matters specified in paragraph 4 of Order

…Nil…

For Y. B. Desai and Associates
Chartered Accountants
Firm Registration No. 102368W
Name :- CA Mayank Y. Desai
Partner
Membership No. :- 108310
Date :- 27th May 2019
Place :- Mumbai