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Ellora Paper Mills Ltd.

BSE: 502374 Sector: Industrials
NSE: N.A. ISIN Code: INE384H01023
BSE 05:30 | 01 Jan Ellora Paper Mills Ltd
NSE 05:30 | 01 Jan Ellora Paper Mills Ltd

Ellora Paper Mills Ltd. (ELLORAPAPER) - Auditors Report

Company auditors report

To the Members of M/s. ELLORA PAPER MILLS LIMITED Report on the Standalone FinancialStatements Opinion

We have audited the accompanying financial statements of M/s. ELLORA PAPER MILLSLIMITED (the "Company") which comprise the Balance Sheet as at March 312020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows ended on that date and asummary of significant accounting policies and other explanatory information (hereinafterreferred 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 2020 the profit and loss and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing ("SA" s) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India ("ICAI") together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these mattersexcept.

External Confirmations

Non _responses of external confirmations request perpetrated pursuant to SA 505COVID_19 has impacted the procedure of external confirmation request to vendors andcustomers. Postal facilities were not available in the near end of the financial year. Tocombat this we had sent positive external confirmation requests through electronic modes.However due to suspension of business activities of many confirming parties there arefewer confirmations received than anticipated.

In such events in accordance with SA auditors have to revise the assessed risk ofmaterial misstatement at the assertion level and modify the planned audit procedures. SAalso directs the auditors to perform alternative audit procedures.

Auditor's Response

We revised our assessed risk and have modified our audit procedures to mitigate theserisks. We have obtained a reliable assurance pertaining to transactions with confirmingparties in the sense for accurate and complete processing of routine and significantclasses of transactions such as revenue purchases and cash receipts or cash purchases. Weselected samples and tested the effectiveness of controls relating to accuracy andcompleteness of transactions in totality considering the frequency and regularity oftransactions. We performed alternative audit procedures like follow_ up confirmationrequests verification of subsequent payments and receipts to verify part of the balancesappearing in the original confirmation requests.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Business Responsibility ReportCorporate Governance and Shareholder's Information but does not include the financialstatements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express 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 work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibilities 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 changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

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.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Other Matter

Nil

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 scepticism throughout the audit. We also:

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.

Obtain an understanding of internal financial control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act 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.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.

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.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions 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 of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

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

We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.

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.

The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flows dealt with by thisReport are in agreement with the relevant books of account.

In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act.

On the basis of the written representations received from the directors as on March 312020 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct.

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 onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

With respect to the other matters to be included in the Auditor's Report in accordancewith 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.

With respect to the other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information and according to the explanations given to us:

The Company has open legal proceedings under arbitration at various judiciary level forvarious matters with the parties continuing from earlier years which are as under:

Mr. Sachin Eknath Raghorte Reinstatement of contract from 16_04_1993 along with wages and consequential benefits
Mr. Rupchand Gangaram Madavi Reinstatement of contract along with wages and consequential benefits
Mr. Ramchand Shankar Selokar Reinstatement of job along with wages and consequential benefits
Mr. Ramesh H. Bombarde Compensation for accident while on duty
Mr. S.M. Dhanvijay (Dy Director Under Section 21(1)(iv) c of the Factories
Industrial Safety & Health Act'1948 &Rules 115(1) & 115(2) of the
Bhandara) Maharashtra Factories Rules '1963.
Mr. Sunil Pyarelal Gupta Reinstatement of job along with wages and consequential benefits
Mr. Prabhudas Mitthu Reinstatement of contract along with wages and consequential benefits
Mr. Gopichand Ghisu Uikey Reinstatement of contract along with wages and consequential benefits
Mr. Tilak Raghunath Sahare Reinstatement of contract along with wages and consequential benefits
Mr. Bhaurao Nago Meshram Reinstatement of contract along with wages and consequential benefits

Due to complexity involved in these litigation matters management's judgementregarding recognition and measurement of provisions for these legal proceedings isinherently uncertain and might change over time as the outcomes of the legal cases aredetermined. Accordingly it has been considered as a key audit matter.

The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long_ term contracts includingderivative contracts.

There is not required to be transferred to the Investor Education and Protection Fundby the Company.

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

For ASHOK BAIRAGRA AND ASSOCIATES. Chartered Accountants Firm Reg. No.: 118677W

Sd/_
Ashok Bairagra
Partner (M.No. 030039)
UDIN: 20030039AAAAAB7801
Date: 30th July 2020
Place: Mumbai

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 to the Members of ELLORA PAPER MILLS LIMITED ofeven 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 of ELLORAPAPER MILLS LIMITED (the "Company") as of March 31 2020 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 Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (the"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 torespective company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the ICAI and the Standardson Auditing prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial 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 We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the Company's internal financial controls system over financial reportingof the risks of material misstatement of the financial statements whether due to fraud orerror.

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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 controlover 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 theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 based on theinternal financial control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For ASHOK BAIRAGRA AND ASSOCIATES. Chartered Accountants Firm Reg. No.: 118677W

Sd/_
Ashok Bairagra
Partner (M.No. 030039)
UDIN: 20030039AAAAAB7801

1

Date: 30th July 2020
Place: Mumbai

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

The annexure referred to in our Independent Auditor's Report to the member of M/SELLORA PAPER MILLS LIMITED for the year ended March 31st March 2020.

In respect of the Company's fixed assets:

The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

The Fixed Assets have been physically verified by the management in a phased mannerdesigned to cover all the items over a period of three years which in our opinion isreasonable having regard to the size of the company and nature of its business. Pursuantto the program a portion of the fixed asset has been physically verified by themanagement during the year and no material discrepancies between the book's records andthe physical fixed assets have been noticed. The title deeds of immovable properties areheld in the name of the company. As explained to us the inventory has been physicallyverified during the year by the Management. In our opinion the frequency of verificationis reasonable having regard to the size of the company and the nature of its business.

The inventory other than stocks lying with third parties has been physically verifiedby the management during the year. Full verification could not be conducted due toCOVID_19 outbreak. However alternate audit procedures were applied for verifying physicalpresence of the balance inventory. In our opinion the frequency of verification isreasonable. In respect of stocks lying with third parties at the year_ end writtenconfirmations have been obtained. The discrepancies noticed on verification between thephysical stocks and the book records were not material and have been properly dealt within the books of account.

In our opinion the procedures of physical verification of inventories followed by theManagement are reasonable and adequate in relation to the size of the Company and natureof its business.

On the basis of our examination of the inventory records in our opinion the Companyhas maintained proper records of inventory. The discrepancies noticed on physicalverification of inventory by management as compared to book records were not material.

The Company has granted unsecured loans to companies covered in the Register maintainedunder section 189 of the Act.

the terms and conditions of the grant of such loans are not prejudicial to thecompany's interest.

The schedule of repayment of principal and payment of interest has been stipulated andthe receipts or repayment are as pre stipulation.

There is no overdue amount remaining outstanding as at the year end.

In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act2013 in respect of loans investments guarantees and security as applicable.

The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub_ section (1) of Section 148 of the Act in respect of theactivities carried on by the company.

According to information and explanations given to us and on the basis of ourexamination of the books of account and records:

a. the Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income_ Tax Sales tax Service TaxDuty of Customs Duty of Excise Value added Tax Cess and any other statutory dues withthe appropriate authorities.

b. According to the information and explanations given to us no undisputed amountspayable in respect of the above were in arrears as of March 31 2020 for a period of morethan six months from the date on when they become payable.

c. According to the information and explanation given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute.

In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks and further company has notissued any debentures. Hence reporting under clause 3 (viii) of the Order is notapplicable to the Company.

Based upon the audit procedures performed and the information and explanations given bythe management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.

Based upon the audit procedures performed and the information and explanations given bythe management we report that no fraud by the Company or on the company by its officersor employees has been noticed or reported during the year.

Based upon the audit procedures performed and the information and explanations given bythe management the managerial remuneration has been paid or provided in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act.

In our opinion the Company is not a Nidhi Company. Therefore the provisions of clause3 (xii) of the Order are not applicable to the Company.

In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.

Based upon the audit procedures performed and the information and explanations given bythe management the company has not made any preferential allotment of shares during theyear under review.

Based upon the audit procedures performed and the information and explanations given bythe management the company has not entered into any non_cash transactions with directorsor persons connected with him. Accordingly the provisions of clause 3 (xv) of the Orderare not applicable to the Company and hence not commented upon.

In our opinion the company is not required to be registered under section 45 IA of theReserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) of theOrder are not applicable to the Company and hence not commented upon.

For ASHOK BAIRAGRA AND ASSOCIATES. Chartered Accountants Firm Reg. No.: 118677W

Sd/_
Manish Bardia
Partner (M.No. 147220)
UDIN: 20030039AAAAAB7801
Date: 30th July 2020
Place: Mumbai

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