The Members of JK Paper Limited
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of JK Paper Limited(the Company') which comprise the Balance Sheet as at March 31 2018 the Statementof Profit and Loss (including Other Comprehensive Income) the Statement of Cash Flows andthe Statement of Changes in Equity for the year then ended and a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas "standalone financial statements").
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE 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 standalone 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 accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with relevant rules issued thereunder.
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 Standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone 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 standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the financialposition of the Company as at March 31 2018 and its financial performance includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.
Corresponding figures for the year ended March 31 2017 included in the standalonefinancial statements were audited by another auditor who expressed an unmodified opiniondated 16th May 2017.
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 section 143(11) of the Act we givein the Annexure A a statement on the matters specified in the paragraph 3 and 4 of theorder.
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 the Statement of Cash Flowsand the Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account.
(d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rule issuedthereunder.
(e) on the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct.
(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 B"; and
(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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of Pending litigations on its Financialposition in its standalone financial statements- Refer Note 35 to the standalone FinancialStatements.
ii. 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.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
Annexure A to the Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of the JK PaperLimited on the standalone financial statements for the year ended March 31 2018 wereport that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) The fixed assets have beenphysically verified by the management according to the program of periodical verificationin phased manner which in our opinion is reasonable having regard to the size of thecompany and the nature of its fixed assets. The discrepancies noticed on such physicalverification were not material.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company as at Balance Sheet date except the following
|Particular ||Total No. of Cases ||Gross Book Value ||Net Book Value |
| || ||(Rs In Crore) ||(Rs In Crore) |
|Freehold Land* ||1 ||20.24 ||20.24 |
*Also Refer Note No. 2(a) of standalone financial statements.
(ii) The inventories of the Company (except stock in transit which has been verifiedfrom receipt of material) have been physically verified by the management at reasonableintervals and the procedures of physical verification of inventory followed by theManagement are reasonable in relation to the size of the Company and nature of itsbusiness. The discrepancies noticed on such physical verification of inventory as comparedto book records were not material and have been properly dealt with in the books ofaccounts.
(iii) The Company has not granted any loans to bodies corporate covered in the registermaintained under section 189 of the Companies Act 2013 (the Act') hence otherparts of this clause are not applicable.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) In our opinion and according to the information and explanations given to us theCompany has complied with the directives issued by the Reserve Bank of India and theprovisions of Section 73 to76 of the Act or any other relevant provisions of the Act andthe rules framed there under with regard to deposits accepted from the public. We havebeen informed that no order has been passed by the Company Law Board or National CompanyLaw Tribunal or Reserve Bank of India or any Court or other Tribunal in this regard.
(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 the cost records undersection 148(1) of the act in respect of the company's products to which the said rules aremade applicable and are on the opinion that prima facie the prescribed cost records havebeen made and maintained. We have however not made a detailed examination of the saidrecords with a view to determine whether they are accurate or complete.
(vii) (a) According to the records of the company the company is regular in depositingundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax custom duty excise duty value added tax entry tax goodsand service tax cess and other material statutory dues with the appropriate authoritiesto the extent applicable and there are no undisputed statutory dues payable for a periodof more than six months from the date they become payable as at March 31 2018.
(b) According to the records and information & explanations given to us there areno dues in respect of income tax sales tax service tax goods and service tax duty ofexcise and value added tax that have not been deposited with the appropriate authoritieson account of any dispute except as given below.
|Name of the statute ||Nature of dues ||Period to which amount relates ||Amount involved ||Forum where dispute is pending |
| || || ||(Rs in Crores) || |
| || ||1981-1983 ||0.70 ||Deputy Commissioner Central Excise Raygada |
| || ||1982-1983 ||0.41 ||Supreme Court |
| || ||1986-1995 ||1.31 ||High Court Cuttack |
| || ||2005-2010 ||0.05 ||CESTAT Ahmedabad |
|Central Excise Act 1944 ||Central Excise || || || |
| || ||2007-2010 ||3.37 ||CESTAT Ahmedabad |
| || ||2008-2010 ||6.22 ||Commissioner Excise Bhubaneshwar |
| || ||2008-2012 ||0.69 ||CESTAT Ahmedabad |
| || ||2009-2010 ||0.08 ||CESTAT Ahmedabad |
| || ||2010-2011 ||0.16 ||CESTAT Ahmedabad |
| || ||2011-2012 ||0.18 ||CESTAT Ahmedabad |
| || ||2011-2012 ||0.08 ||CESTAT Ahmedabad |
| || ||2012-2013 ||0.19 ||CESTAT Ahmedabad |
| || ||2012-2014 ||0.16 ||CESTAT Ahmedabad |
|Central Excise Act 1944 ||Central Excise ||2013-2014 ||0.18 ||CESTAT Ahmedabad |
| || ||2014-2015 ||0.08 ||Commissioner (Appeals) Surat |
| || ||2015-2016 ||0.07 ||Commissioner (Appeals) Surat |
| || ||2014-2015 ||0.10 ||Commissioner (Appeals) Surat |
| || ||2004-2010 ||0.20 ||CESTAT Ahmedabad |
| || ||2011-2015 ||2.59 ||Commissioner (Appeals) Surat |
| || ||2011-2012 & 2012-2013 ||0.69 ||CESTAT Ahmedabad |
|Custom Act 1962 ||Custom Duty || || || |
| || ||2009-2010 ||0.25 ||Commissioner (Appeals) Surat |
| || ||1983-84/ 1987-88 ||0.05 ||Sales Tax Department Delhi |
| || ||1997-98 ||0.10 ||Sales Tax Tribunal Cuttack |
| || ||2002-2003 ||0.01 ||Deputy Commissioner Delhi |
|Sales Tax ||Sales Tax ||2005-2009 ||0.16 ||Sales Tax Tribunal Cuttack |
| || ||2006-2007 ||0.55 ||Gujarat Vat (Tribunal) Ahmedabad |
| || ||2007-2009 ||0.25 ||High Court Allahabad |
| || ||2012-2013 ||5.85 ||Additional Commissioner Cuttack |
|Income Tax Act 1961 ||Income Tax ||FY 2012-13 ||2.51 ||CIT(Appeals) |
(viii) In our opinion on the basis of audit procedures and according to theinformation and explanation given to us the company has not defaulted in repayment ofloans and borrowings to financial institutions and banks. The company has neither takenany loan from the government nor having any outstanding debentures during the year.
(ix) On the basis of information and explanation given to us term loans have beenapplied for the purposes for which they were obtained. The Company did not raise any moneyby way of initial public offer or further public offer (including debt instruments).
(x) Based on the audit procedures performed and on the basis of information andexplanations given to us no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the course of our audit. (xi) On the basisof records and information and explanations made available and based on our examinationsof the records of the company the company has paid / provided managerial remuneration inaccordance with the requisite approvals mandated under Section 197 read with Schedule V ofthe Act. (Refer Note no.49(b))
(xii) On the basis of information and explanation given to us the Company is not aNidhi Company. Accordingly reporting under clause 3 (xii) of the said order is notapplicable.
(xiii) As per the information and explanations and records made available by themanagement of the company and audit procedures performed for the related partiestransactions entered during the year the company has complied with the provisions ofsection 177 and 188 of the Act where applicable. As explained and as per the records /details the related party transactions have been disclosed in the standalone financialstatements as required by the applicable accounting standards (Refer Note no.49).
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause 3 (xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly clause 3(xv) of the Order is notapplicable.
(xvi) According to the information and explanation given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of JK PaperLimited ("the Company") as of March 31 2018 in conjunction with our audit ofthe standalone 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 (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and effcientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated 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 judgment 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.
In our opinion 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 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For LODHA & CO. |
| ||Chartered Accountants |
| ||FRN: 301051E |
| ||N. K. Lodha |
|Place: New Delhi ||Partner |
|Dated:14th May 2018 ||Membership No.085155 |