To the Members of
EPL Limited (formerly Essel Propack Limited)
Report on the Audit of the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of EPL Limited(formerly Essel Propack Limited) (the Company') which comprise the BalanceSheet as at 31 March 2021 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (Ind AS') specified under Section 133 of the Act of thestate of affairs (financial position) of the Company as at 31 March 2021 its profit(including other comprehensive income) its cash flows and the changes in equity for theyear ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the 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') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
5. We have determined the matter described below to be the key audit matter to becommunicated in our report.
|Key audit matter ||How our audit addressed the key audit matter |
|Revenue recognition on sale of products by the Company || |
|Revenue for the Company consists primarily of sale of packaging products and service charges recognised as per the accounting policy described in Note 2(II)(J) to the standalone financial statements. Refer Note 28 and Note 55 for details of revenue recognized during the year. ||Our audit work included but was not restricted to the following: |
|Revenue of the Company is recognized in accordance with Indian Accounting Standard 115 Revenue from contracts with customers' (Ind AS 115). Owing to the multiplicity of the Company's products volume of sales transactions and varied terms of contracts with customers and in line with the requirements of the Standards on Auditing revenue is determined to be an area involving significant risk and hence requiring significant auditor attention. ||a) Considered the appropriateness of revenue recognition policy and its compliance in terms of Ind AS 115 'Revenue from contracts with customers'. |
|The terms of sales arrangements including the timing of transfer of control the nature of discount arrangements and delivery specifications create complexity in determining revenue from sales. Further the management considers revenue as one of the key measures for evaluation of its performance. || |
|Considering the significance to our audit and the stakeholders revenue recognition has been determined to be a key audit matter in our audit of the standalone financial statements for the current year's audit. ||b) Assessed the design and tested the operating effectiveness of key internal controls related to sales related discounts and cut off assertion including general and specific application of information technology controls. |
| ||c) Performed sample tests of individual sales transaction and traced to individual contracts sales invoices customers' purchase orders transportation documents and other related documents using statistical sampling to ensure that the revenue has been appropriately recognised. |
| ||d) Performed analytical review procedures on revenue recognised during the year to identify any unusual and/or material variances. |
| ||e) Performed confirmation procedures on selected invoice balances outstanding as at the year end. |
| ||f) Selected sample of sales transactions made pre and post year end and agreed the period of revenue recognition to underlying documents. |
| ||g) Obtained balance confirmations for samples of customers selected and reviewed the reconciling items if any. |
| ||h) Evaluated the appropriateness and adequacy of disclosures in the financial statements in respect of revenue recognition in accordance with the applicable requirements. |
Information other than the Financial Statements and Auditor's Report thereon
6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisReport and Directors' Report but does not include the standalone financial statements andour auditor's report thereon. Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we 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.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
7. The accompanying standalone financial statements have been approved by the Company'sBoard of Directors. The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS specified under Section 133 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding 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 design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring 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.
8. 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.
9. Those Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
10. 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 withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism 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 controls relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls;
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by 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; and
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.
12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant de_ciencies in internal control that we identify during our audit. 13. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when 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.
15. The standalone financial statements of the Company for the year ended 31 March 2020were audited by the predecessor auditor Ford Rhodes Parks & Co. LLP who haveexpressed an unmodified opinion on those standalone financial statements vide their auditreport dated 22 May 2020. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
16. Based on our audit we report that the Company has paid remuneration to itsdirectors during the year in accordance with the provisions of and limits laid down underSection 197 read with Schedule V to the Act.
17. As required by the Companies (Auditor's Report) Order 2016 (the Order')issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder. 18. Further to our comments in Annexure A as required by Section 143(3) of theAct based on our audit we report to the extent applicable that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit of the accompanying standalonefinancial statements; b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books; c) Thestandalone financial statements dealt with by this report are in agreement with the booksof account; d) In our opinion the aforesaid standalone financial statements comply withInd AS specified under Section 133 of the Act; e) On the basis of the writtenrepresentations received from the directors and taken on record by the Board of Directorsnone of the directors is disqualified as on 31 March 2021 from being appointed as adirector in terms of Section 164(2) of the Act; f) We have also audited the internalfinancial controls with reference to financial statements of the Company as on 31 March2021 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date and our report dated 20 May 2021 as per Annexure Bexpressed an unmodified opinion; and g) With respect to the other matters to be includedin the Auditor's Report in accordance with rule 11 of the Companies (Audit and Auditors)Rules 2014 (as amended) in our opinion and to the best of our information and accordingto the explanations given to us: i. the Company as detailed in Note 45(A) and Note 46 tothe standalone financial statements has disclosed the impact of pending litigations onits financial position as at 31 March 2021; ii. the Company did not have any long-termcontracts including derivative contracts for which there were any material foreseeablelosses as at 31 March 2021; iii. there has been no delay in transferring amounts requiredto be transferred to the Investor Education and Protection Fund by the Company during theyear ended 31 March 2021; and iv. the disclosure requirements relating to holdings as wellas dealings in specified bank notes were applicable for the period from 8 November 2016 to30 December 2016 which are not relevant to these standalone financial statements. Hencereporting under this clause is not applicable.
| ||For Walker Chandiok & Co LLP |
| ||Chartered Accountants |
| ||Firm's Registration No.: 001076N/N500013 |
| ||Rakesh R. Agarwal |
| ||Partner |
|Place: Mumbai ||Membership No.: 109632 |
|Date: 20 May 2021 ||UDIN: 21109632AAAAEO3028 |
Annexure A to the Independent Auditor's Report of even date to the members of EPLLimited (formerly Essel Propack Limited) on the standalone financial statements for theyear ended 31 March 2021
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that: (i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property plant andequipment.
(b) The Company has a regular program of physical verification of its Property plantand equipment under which Property plant and equipment are verified in a phased mannerover a period of three years which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. In accordance with this program certainProperty plant and equipment were verified during the year and no material discrepancieswere noticed on such verification. (c) The title deeds of all the immovable properties(which are included under the head Property plant and equipment') are held in thename of the Company.
(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year except for goods-in-transit and stocks lying withthird parties. For stocks lying with third parties at the year-end written confirmationshave been obtained by the management. No material discrepancies were noticed on theaforesaid verification.
(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable. (iv) In our opinion the Company hascomplied with the provisions of Section 186 of the Act in respect of investments andguarantees. Further in our opinion the Company has not entered into any transactioncovered under Section 185 and 186 of the Act in respect of loans and security. (v) In ouropinion the Company has not accepted any deposits within the meaning of Sections_73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable. (vi) We havebroadly reviewed the books of account maintained by the Company pursuant to the Rules madeby the Central Government for the maintenance of cost records under sub-section (1) ofSection 148 of the Act in respect of Company's products and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. However we havenot made a detailed examination of the cost records with a view to determine whether theyare accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax goods and service tax sales-tax service tax duty of customsduty of excise value added tax cess and other material statutory dues as applicablehave generally been regularly deposited to the appropriate authorities though there hasbeen a slight delay in a few cases. Further no undisputed amounts payable in respectthereof were outstanding at the year-end for a period of more than six months from thedate they became payable.
(b) There are no dues in respect of service tax and duty of customs that have not beendeposited with the appropriate authorities on account of any dispute.
The dues outstanding in respect of income-tax sales-tax value added tax excise dutyand provident fund on account of any dispute are as follows: Statement of Disputed Dues
|Name of the statute ||Nature of dues ||Amount (INR in million) ||Amount paid under Protest (INR in million) ||Period to which the amount relates ||Forum where dispute is pending |
|Income tax Act 1961 ||Income tax ||3.53 ||- ||A.Y. 2007-08 ||Commissioner of Income Tax (Appeals) |
|Value added Tax Dadra & Nagar haveli || ||22.81 ||- ||F.Y. 2002-03 2003-04 2004-05 ||Commissioner of VAT |
|Value Added Tax Act Goa || ||1.06 ||0.10 ||F.Y. 2013-14 ||Commissioner of Commercial Taxes |
|Value Added Tax Act Goa || ||1.54 ||0.15 ||F.Y. 2012-13 2016-17 ||Assistant Commissioner of Commercial Taxes |
|Central Sales Tax Act 1956 Maharashtra ||Sales tax ||100.57 ||5.55 ||F.Y. 2006-07 2007-08 2008- 09 2012-13 ||Maharashtra State Tribunal |
|Sales Tax Act Maharashtra || ||103.07 ||7.09 ||F.Y. 2002-03 2003-04 2004- 05 2011-12 2013-14 2015- 16 2016-17 ||Deputy/Joint Commissioner Of Sales Tax (Appeals) |
|Sales Tax Act Himachal Pradesh || ||0.34 ||0.05 ||F.Y. 2008-09 ||Himachal Pradesh Sales Tax Tribunal |
|Sales tax Act Gujarat || ||0.90 ||0.35 ||F.Y. 2016-17 2017-18 ||Assistant Commissioner of Sales Tax |
|Central Excise Act 1944 ||Excise duty ||10.64 ||0.71 ||F.Y. 2009-10 2010-11 2013- 14 2014-15 ||Customs Excise & Service Tax Appellate Tribunal |
|Central Excise Act 1944 || ||3.71 ||0.19 ||F.Y. 2016-17 2017-18 ||Commission of Central Excise (Appeals) |
|Industrial Disputes Act 1947 ||Provident Fund ||2.80 ||1.13 ||F.Y. 2013-14 ||Assistant Provident Fund Commissioner Thane |
(viii) The Company has not defaulted in repayment of loans or borrowings to anybank or government or any dues to debenture-holders during the year. The Company has noloans or borrowings payable to any financial institution during the year.
(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained though idle funds which were not required forimmediate utilisation have been invested in liquid investments payable on demand.
(x) According to information and explanation given to us no fraud by the Company or onthe Company by its officers or employees has been noticed or reported during the periodcovered by our audit. (xi) Managerial remuneration has been paid by the Company inaccordance with the requisite approvals mandated by the provisions of Section 197 of theAct read with Schedule V to the Act. (xii) In our opinion the Company is not a NidhiCompany. Accordingly provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS. (xiv)During the year the Company has not made any preferential allotment or private placementof shares or fully or partly convertible debentures. (xv) In our opinion the Company hasnot entered into any non-cash transactions with the directors or persons connected withthem covered under Section 192 of the Act. (xvi) The Company is not required to beregistered under Section 45-IA of the Reserve Bank of India Act 1934.
| ||For Walker Chandiok & Co LLP |
| ||Chartered Accountants |
| ||Firm's Registration No.: 001076N/N500013 |
| ||Rakesh R. Agarwal |
| ||Partner |
| ||Membership No.: 109632 |
| ||UDIN: 21109632AAAAEO3028 |
|Place: Mumbai || |
|Date: 20 May 2021 || |
Annexure B to the Independent Auditor's Report of even date to the members of EPLLimited (formerly Essel Propack Limited) on the standalone financial statements for theyear ended 31 March 2021
Independent Auditor's Report on the internal financial controls with reference to thestandalone financial statements under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 (the Act')
1. In conjunction with our audit of the standalone financial statements of EPL Limited(formerly Essel Propack Limited) (the Company') as at and for the year ended 31March 2021 we have audited the internal financial controls with reference to financialstatements of the Company as at that date.
Responsibilities of Management and Those Charged with Governance for Internal FinancialControls
2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (the Guidance Note') issued by the Institute ofChartered Accountants of India (the ICAI'). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of the Company'sbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
Auditor's Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements
3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the ICAI prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controlswith reference to financial statements and the Guidance Note issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements were established and maintainedand if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
5. 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 statements.
Meaning of Internal Financial Controls with Reference to Financial Statements
6. A company's internal financial controls with reference to financial statements 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 controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements
7. Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements and such controls were operatingeffectively as at 31 March 2021 based on the internal financial controls with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the ICAI.
|For Walker Chandiok & Co LLP |
|Chartered Accountants |
|Firm's Registration No.: 001076N/N500013 |
|Rakesh R. Agarwal |
|Membership No.: 109632 |
|UDIN: 21109632AAAAEO3028 |
|Place: Mumbai |
|Date: 20 May 2021 |