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Huhtamaki PPL Ltd.

BSE: 509820 Sector: Industrials
NSE: PAPERPROD ISIN Code: INE275B01026
BSE 00:00 | 23 Oct 308.70 10.05
(3.37%)
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302.20

HIGH

310.20

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302.20

NSE 00:00 | 23 Oct 308.65 9.30
(3.11%)
OPEN

302.00

HIGH

310.95

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301.00

OPEN 302.20
PREVIOUS CLOSE 298.65
VOLUME 6306
52-Week high 336.00
52-Week low 165.00
P/E 15.12
Mkt Cap.(Rs cr) 2,331
Buy Price 306.00
Buy Qty 10.00
Sell Price 310.55
Sell Qty 100.00
OPEN 302.20
CLOSE 298.65
VOLUME 6306
52-Week high 336.00
52-Week low 165.00
P/E 15.12
Mkt Cap.(Rs cr) 2,331
Buy Price 306.00
Buy Qty 10.00
Sell Price 310.55
Sell Qty 100.00

Huhtamaki PPL Ltd. (PAPERPROD) - Auditors Report

Company auditors report

To the Members of Huhtamaki PPL Limited

Report on the Audit of the Ind AS Financial Statements

Opinion

fulfilled our We have audited the accompanying Ind AS financial statements of HuhtamakiPPL Limited ("the Company") which comprise the Balance sheet as at December 312019 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at December 31 2019 its profitincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements' section of our report.We are independent of the Company in accordance with the ‘Code of Ethics' issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our audit opinion on the Ind ASfinancial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements for the financial year endedDecember 31 2019. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matte For each matter below our description of how our auditaddressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Ind AS financial statements section of ourreport including in relation to these matte Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Ind AS financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
Revenue recognition (as described in Note 33 of the Ind AS financial statements)
As part of our audit procedures we:
Revenue is recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods to a customer. The revenue recognition occurs at a point in time when the control of the goods is transferred to the customer. Read the Company's accounting policy for revenue recognition and assessed compliance with the requirements of Ind AS 115.
We focused on this area as a key audit matter due to the amount of Revenue being regarded by Management as a key performance indicator in assessing performance. We believe there exists a risk of revenue being recognized before the control is transferred including risk of incorrect timing of estimation related to recording the discounts and rebates. Evaluated the design tested the implementation and operating effectiveness of the Company's internal controls including general IT controls and key IT application controls over recognition of revenue and measurement of rebates discounts and returns.
On a sample basis tested supporting documentation for sales transactions and rebates/discounts recorded during the year which included sales invoices customer contracts shipping documents and customer correspondences for rebates/discounts.
Tested revenue samples focused on sales recorded immediately before the year-end obtained evidence as regards timing of revenue recognition based on terms and conditions of sales contracts and delivery documents.
Compared current year sales discounts and rebates with historical trends.
Tax litigations Provisions and contingencies (as described in Note 44 of the Ind AS financial statements) Assessed disclosures in financial statements in respect of revenue as specified in Ind AS 115.
As of December 31 2019 the Company has matters under litigation relating to positions adopted in the return of income filed by the Company in earlier yea Management assesses the need to recognize a provision for income-tax or disclose a contingency on a case-to-case basis having regard to the underlying facts of each matter. As part of our audit procedures we:
Evaluation of the outcome of such litigation and whether the risk of loss is remote possible or probable requires significant judgment by Management. The range of outcomes can be wide and Management's assessment could result in incorrect provisions in the books of account or inappropriate disclosures in the Company's financial statements. Obtained and read the Company's accounting policies in respect of income-taxes and related litigations provisions and contingencies to assess compliance with accounting standards
The evaluation of Management's judgments including those that involve estimations in assessing the likelihood that a pending claim will succeed or a liability will arise and the quantification of potential financial impact has been a matter of significance in our audit of the Company's financial statements and hence we consider this to be a key audit matter. Evaluated the design and tested the operating effectiveness of internal controls relating to the identification and evaluation of income-tax litigations and how this information is considered in Management's estimates of income-tax provisions and contingencies relating thereto.
Obtained a list of litigations from the Company. We identified material litigations from the list and performed inquiries on Management's evaluation thereof including recalculating tax impact and accruals.
Obtained and read opinions sought by the Management from experts in respect of income-tax positions adopted by the Company.
Involved our tax specialists to assess the reasonableness or appropriateness of positions adopted by Management in estimating the Company's income-tax liabilities and in respect of litigations on income-tax matters on the merits of the matte
Assessed in accordance with accounting standards the provisions in respect of taxes on income and assessed disclosures relating thereto including those

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 Annual report but does not includethe Ind AS financial statements and our auditor's report thereon.

Our opinion on the Ind AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether such other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Ind AS

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 Ind AS financial statementsthat give a 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 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 Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.

In preparing the Ind AS financial statements management is responsible for assessingthe Company'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 Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Ind AS

Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS 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 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 Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

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.

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 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 Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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 Ind AS financial statements forthe financial year ended December 31 2019 and are therefore the key audit matte Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would 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 1" 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:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account; a (d) In ouropinion the aforesaid Ind AS financial statements comply with the Accounting Standardsspecified under Section 133 of the Act read with Companies (Indian Accounting Standards)Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as onDecember 31 2019 taken on record by the Board of Directors none of the directors isdisqualified as on December 31 2019 from being appointed as a director in terms ofSection 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Ind AS financial statements and theoperating effectiveness of such controls refer to our separate Report in "Annexure2" to this report;

(g) In our opinion the managerial remuneration for the year ended December 31 2019has been paid/ provided by the Company to its directors in accordance with the provisionsof section 197 read with Schedule V to the Act;

(h) 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 litigations on its financialposition in its Ind AS financial statements Refer Note 44 to the Ind AS financialstatements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; iii. There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Vinayak Pujare
Partner
Membership Number: 101143
UDIN: 20101143AAAAAO1074
Place of Signature: Mumbai
Date: February 17 2020

Annexure to the Auditor's Report

Annexure 1 Referred to in Paragraph 1 Under the Heading "Report on other Legal andRegulatory

Requirements" of our Report of Even Date

Re: Huhtamaki PPL Limited (‘the Company')

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

(b) Fixed assets have been physically verified by the management during the year and nomaterial discrepancies were identified on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the company.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us theCompany has not advanced loans to directors / to a company in which the Director isinterested to which provisions of section 185 of the Companies Act 2013 apply and hencenot commented upon.

The Company has complied with the provisions of Section 186 of the Act with respect toinvestments. The Company has not provided any loan guarantee or security to the partiescovered under section 186 of the Act.

(v) 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 have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the manufacture of Plastic &Polymers Base Metals Paper & Other Machinery and are of the opinion that primafacie the specified accounts and records have been made and maintained. We have nothowever made a detailed examination of the same.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax duty of custom goods and service tax cess and other statutory duesapplicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax duty ofcustom goods and service tax cess and other statutory dues were outstanding at the yearend for a period of more than six months from the date they became payable.

(c) According to the records of the Company the dues of income-tax service tax dutyof custom duty of excise and Entry tax on account of any dispute are as follows:

Name of Statute Nature of Dues Period to which the amount relates (FY) Forum where dispute is pending Amount (Rs. in Lakhs)
Income Tax Act 1961 Income Tax 2001-2002 ITAT 198.08
2011-2012
2007-2008 High Court 18.56
Finance Act Service Tax 2009-2018 Customs Excise and Service Tax 453.66
1994 - Service Tax Appellate Tribunal
2013-2016 Commissioner (Appeals) 28.47
2016-2018
2004-2010 Commissioner 27.72
2012-2016
2016-2017
2008-2015 Range Superintendent 1.48
Central Excise Act 1944 Excise Duty 2007-2014 Customs Excise and Service Tax 516.21
Appellate Tribunal
2001-2006 High Court 1.57
1997-1999 Commissioner (Appeals) 32.80
2014-2018
2002-2008 Commissioner 490.07
2010-2011
2014-2018
1997-1998 Deputy Commissioner 3.61
2004-2005
2009-2010
2016-2017
2009-2010 Joint Secretary 0.43
Customs Act 1962 Duty of Custom 2010-2011 Customs Excise and Service Tax 6.31
2012-2013 Appellate Tribunal
2004-2008 Commissioner 38.27
Telangana Tax on Entry of Goods Act 2001 Entry Tax 2011-2018 Commissioner 91.40

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institution bank or government or dues to debenture holde

(ix) In our opinion and according to information and explanations given by themanagement the company has utilized the monies raised by way of term loans and debtinstruments in the nature of Commercial papers for the purpose for which they were raised.Further according to the information and explanations given by management the Companyhas not raised any money by way of initial public offer / further public offer.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information explanations givenby the management we report that no fraud by the company or no fraud on the company bythe officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and hence not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Vinayak Pujare
Partner
Membership Number: 101143
UDIN: 20101143AAAAAO1074
Place of Signature: Mumbai
Date: February 17 2020

Annexure to the Auditor's Report

Annexure 2 to the Independent Auditor's Report of even date on the IND AS FinancialStatements of Huhtamaki PPL Limited

Report on the Internal Financial Controls under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of HuhtamakiPPL Limited ("the Company") as of December 31 2019 in conjunction with ouraudit of the Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

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

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these Ind AS financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under section 143(10) of the Companies Act2013 the extent applicable to an audit of internal financial controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting reference to these Ind AS financial statements was established and maintainedand if such controls operated effectively in material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to these Ind ASstatements and their operating effectiveness. Our audit of internal financial controlsover financial reporting included obtaining an understanding of internal financialcontrols over financial reporting with reference to these Ind AS financial statementsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls over financialwith reference to these Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseInd AS Financial Statements

A company's internal financial control over financial reporting with reference to theseInd AS financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these Ind AS financial statements includes 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 Over Financial Reporting WithReference to these Ind

AS Financial Statements

Because of the inherent limitations of internal over financial statements includingthe possibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these Ind AS financial statements to future periods are subject to the risk that theinternal financial control over financial reporting with reference to these Ind ASfinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion with In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting with reference to these Ind ASfinancial statements and such internal financial controls over financial reporting withreference to these Ind AS financial statements were operating effectively as at December31 2019 based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Vinayak Pujare
Partner
Membership Number: 101143
UDIN: 20101143AAAAAO1074
Place of Signature: Mumbai
Date: February 17 2020

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