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International Paper APPM Ltd.

BSE: 502330 Sector: Industrials
NSE: IPAPPM ISIN Code: INE435A01028
BSE 00:00 | 17 Aug 489.65 6.45
(1.33%)
OPEN

488.00

HIGH

502.70

LOW

482.50

NSE 00:00 | 17 Aug 488.50 3.80
(0.78%)
OPEN

487.40

HIGH

502.50

LOW

482.00

OPEN 488.00
PREVIOUS CLOSE 483.20
VOLUME 80530
52-Week high 502.70
52-Week low 273.40
P/E 17.77
Mkt Cap.(Rs cr) 1,947
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 488.00
CLOSE 483.20
VOLUME 80530
52-Week high 502.70
52-Week low 273.40
P/E 17.77
Mkt Cap.(Rs cr) 1,947
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

International Paper APPM Ltd. (IPAPPM) - Auditors Report

Company auditors report

TO THE MEMBERS OF INTERNATIONAL PAPER APPM LIMITED

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of International PaperAPPM Limited ("the Company") which comprise the Balance Sheet as at March 312018 and the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing 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 Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the Orderissued under section 143(11) of the Act.

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the IndAS and other accounting principles generally accepted in India of the state of affairs ofthe Company as at March 31 2018 and its profit total comprehensive income its cashflows and the changes in equity for the year ended on that date.

Emphasis of Matter

Attention is invited to Note 53(b)(i) of the Ind AS financial statements regarding theongoing litigation with respect to the levy of electricity duty by the State Government onconsumption of electricity by captive generating units and the interim orders of theHon'ble Supreme Court of India on hearing the Special Leave Petition filed by the Companyin respect of which the Company on grounds of prudence and abundant caution created aprovision amounting to Rs. 2357.43 lakhs during the year ended March 31 2017 in view ofthe inherent uncertainty in predicting the final outcome of the above litigation.Additionally an amount of Rs. 1571.62 lakhs has been disclosed as contingent liability.Based on the legal advice obtained in the opinion of the Management no further provisionwould be required in relation to this disputed matter.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit 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 Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors of theCompany as on March 31 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2018 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 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.

g) 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;

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 in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

2. 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 Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
Sumit Trivedi
Hyderabad Partner
May 2 2018 (Membership No. 209354)

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 of even 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 ofInternational Paper APPM Limited ("the Company") as of March 31 2018 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended 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 company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively 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 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 Company's internal financial controls systemover financial reporting.

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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 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 the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2018 based on the internal controlsover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
Sumit Trivedi
Hyderabad Partner
May 2 2018 (Membership No. 209354)

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

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

(b) The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the Management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.

(iv) The Company has not granted any loans made investments or provided guarantees andhence reporting under clause (iv) of the Order is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year.

In respect of unclaimed deposits the Company has complied with the provisions ofSections 73 to 76 or any other relevant provisions of the Companies Act 2013.

(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended and prescribed by the Central Government under sub-section (1) of the Section148 of the Companies Act 2013 and are of the opinion that prima facie theprescribed cost records have been made and maintained. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income-tax Sales Tax Service Tax CustomsDuty Excise Duty Value Added Tax cess and other material statutory dues applicable toit with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Sales Tax Service Tax Customs Duty Excise Duty ValueAdded Tax cess and other material statutory dues in arrears as at March 31 2018 for aperiod of more than six months from the date they became payable.

(c) Details of dues of Income-tax Sales Tax Service Tax Custom Duty Excise Duty andValue Added Tax which have not been deposited as on March 31 2018 on account of disputesare given below:

Name of Statute Nature of Dues Forum where Dispute is pending Period to which the amount relates Amount Involved Amount Unpaid
(Rs. in lakhs) (Rs. in lakhs)
Income Tax Act1961 Tax Commissioner of Income Tax (Appeals) Visakhapatnam 2010-11 and 2011-12 524.87 524.87
Deputy Commissioner of Income Tax (TDS) Hyderabad 2009-10 19.96 19.96
High Court of Andhra Pradesh 2001-02 to 2003-04 12.64 12.64
Income Tax Appellate Tribunal 2001-02 14.26 14.26
Hyderabad 2008-09 40.08 40.08
Income Tax Office TDS 2008-09 2.12 2.12
Rajahmundry 2010-11 1.78 1.78
Interest High Court of Andhra Pradesh 1979-80 24.96 24.96
Central Sales Tax Act 1956 Tax Appellate Deputy Commissioner Visakhapatnam 2008-09 21.54 21.54
Appellate Deputy Commissioner Vijayawada 2013-14 56.37 45.65
Sales Tax Appellate Tribunal Visakhapatnam 2005-06 33.82 16.91
Andhra Pradesh General Sales Tax Act 1957 & Central Sales Tax Act 1956 Tax Sales Tax Appellate Tribunal Visakhapatnam 1995-96 to 1999-2000 27.41 27.41
Andhra Pradesh General Sales Tax Act 1957 Tax High Court of Andhra Pradesh 1990-99 2000-01 to 2004-05 126.78 126.78
Sales Tax Appellate Tribunal Visakhapatnam 1996-97 10.82 6.57

 

AP Value Added Tax Act 2005 Penalty Assistant Commissioner LTU Kakinada 2009-2012 1.81 1.77
Tax Sales Tax Appellate Tribunal Visakhapatnam 2009 - 2012 23.66 17.75
Appellate Deputy Commissioner Visakhapatnam 2009-10 and 2014-15 211.77 105.90
Appellate Deputy Commissioner Vijayawada 2012-2015 21.17 18.52
Madhya Pradesh Value Tax High Court Madhya Pradesh 1997-98 15.00 15.00
Added Tax Act 2002
West Bengal Value Added Tax 2005 Tax Additional Commissioner of Commercial Taxes 2009-10 1.78 1.78
Orissa Entry Tax Act 1999 Tax Deputy Commissioner of Commercial Taxes 2006-07 to 2009-10 4.24 3.38
Central Excise Act 1944 Duty Customs Excise & Service Tax Appellate Tribunal Bangalore 2005-06 to 2008-09 28.18 28.18
Commissioner of Central Excise (Appeals) Visakhapatnam 2008-09 and 2009-10 1.86 1.86
High Court of Andhra Pradesh 1996-97 and 1997-98 97.40 97.40
February 1994 0.36 0.36
2004-05 0.10 0.10
Duty & Penalty Customs Excise & Service Tax 2001 to 2012 2584.26 2541.26
Appellate Tribunal Bangalore 2005-06 to 2008-09 1309.42 1309.42
Commissioner of Central Excise 2015 32.99 32.99
(Appeals) Visakhapatnam 2010-11 to 2015-16 0.96 0.96
High Court of Andhra Pradesh 2000-01 to 2007-08 929.27 633.22
Finance Act 1994 Service Tax High Court of Andhra Pradesh 2004-05 and 2005-06 126.50 126.50
Service Tax & Penalty Commissioner of Central Excise
(Appeals) Visakhapatnam 2004-05 to 2012-13 343.31 343.31
Customs Excise & Service Tax 2004-05 to 2008-09 157.16 157.16
Appellate Tribunal Bangalore March 2012 105.11 105.11

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks andgovernment. The Company has not issued any debentures and does not have any borrowingsfrom the financial institutions.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe Order is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable Indian accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its holding or subsidiary company or persons connected with himand hence provisions of Section 192 of the Companies Act 2013 are not applicable. TheCompany does not have an associate company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
Sumit Trivedi
Hyderabad Partner
May 2 2018 (Membership No. 209354)