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JK Paper Ltd.

BSE: 532162 Sector: Industrials
NSE: JKPAPER ISIN Code: INE789E01012
BSE 00:00 | 15 Oct 117.00 1.60
(1.39%)
OPEN

116.05

HIGH

118.70

LOW

111.15

NSE 00:00 | 15 Oct 117.15 1.70
(1.47%)
OPEN

115.70

HIGH

118.65

LOW

115.20

OPEN 116.05
PREVIOUS CLOSE 115.40
VOLUME 85144
52-Week high 189.70
52-Week low 93.10
P/E 4.36
Mkt Cap.(Rs cr) 2,085
Buy Price 116.50
Buy Qty 5.00
Sell Price 117.00
Sell Qty 100.00
OPEN 116.05
CLOSE 115.40
VOLUME 85144
52-Week high 189.70
52-Week low 93.10
P/E 4.36
Mkt Cap.(Rs cr) 2,085
Buy Price 116.50
Buy Qty 5.00
Sell Price 117.00
Sell Qty 100.00

JK Paper Ltd. (JKPAPER) - Auditors Report

Company auditors report

To

The Members of JK Paper Limited

Report on the Audit of the Standalone Financial Statements

OPINION

We have audited the accompanying standalone financial statements of JK Paper Limited("the Company") which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss (including Other Comprehensive Income) Statement of Changesin Equity and the Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of the significant accounting policies and otherexplanatory information (herein after referred to as "financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2019 its Profit including OtherComprehensive income changes in equity and its cash flows for the year ended on thatdate.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further

Description of Key Audit Matter

1. Revenue Recognition

Recognition of Revenue measurement presentation and disclosure as per Ind AS-115"Revenue from Contracts with Customers".

(Refer Note No.1(III)(i) of Accounting Policy)

There is possibility for material misstatement within revenue particularly in relationto revenue being recorded in the different period due to cut off errors or managementbias.

We considered this to be a key audit matter.

Described 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 together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and the Rules made thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended March 31 2019. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report. For each matter belowour description of how our audit addressed the matter is provided in that context:

Audit procedures to addressed the key audit matter

Our response to the risk

Our audit procedures includes:

• On a sample basis we performed testing to verify physical deliveries of productin the year to ascertain transfer of control.

• We performed revenue cut-off testing by reference to shipment / bill dates ofsales recorded either side of the financial year end had legally completed.

• Selected a sample of sales contracts and read analysed and identified thedistinct performance obligations in these contracts ; and

• We performed walkthroughs to understand the key processes and identify keycontrols related Ind AS 115 "Revenue from Contracts with Customers".

Description of Key Audit Matter

2. Valuation of financial instruments (held at fair value including securities andfinancial Guarantees)

The company has given letter of comfort to banker against borrowing facilities extendedto a step subsidiary of H166 crs . The Company has also invested H111 crs in to preferenceshare capital of a subsidiary where dividend rate is not at par with market instruments .

Hence we have considered valuation of financial instruments as key audit matterconsidering complexities and financial impact involved over financial statements.

Audit procedures to addressed the key audit matter

Our audit procedures includes:

Control testing:

• We tested the design and operating effectiveness of key Controls.

• Controls over the validation completeness implementation and usage ofvaluation models.

Independent reperformance:

• Our own valuation specialists independently challenged management on thevaluations where they were outside our expected range.

Methodology choice:

• In the context of observed industry practice our own valuation specialistsassisted us in challenging the appropriateness of significant models and methodologiesused in calculating fair values risk exposures completeness of risk factors and incalculating FVAs.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon. In connection with our audit of thefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact.

We have nothing to report in this regard.

RESPONSIBILITY OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONEFINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative 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 STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

• Identify and assess the risks of material misstatement of the 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 todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

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 Companies Act2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Companies Act 2013 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 Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (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 B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) The managerial remuneration for the year ended 31st March 2019 has been paid/provided for by the Company to its directors in accordance with the provisions of Section197 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 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.;

ii. The Company has made provision as required under the applicable law or IndianAccounting Standards for material foreseeable losses if any on long-term contractsincluding derivative contracts.;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For LODHA & CO.
Chartered Accountants
Firm's Registration No.301051E
(N. K. Lodha)
Place: New Delhi Partner
Date: 8th May 2019 Membership No. 85155

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 31st March 2019 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 been physically verified by the management according to theprogram of periodical verification in phased manner which in our opinion is reasonablehaving regard to the size of the company and the nature of its fixed assets. Thediscrepancies noticed on such physical verification 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 (H In Crore) Net Book Value (H 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 other parts ofthis 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 31st March 2019.

(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 basis of records and information and explanations made available and basedon our examinations of the records of the company the company has paid / providedmanagerial remuneration in accordance with the requisite approvals mandated under Section197 read with Schedule V of the Act. (Refer Note no.50(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.50).

(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.

For LODHA & CO.
Chartered Accountants
Firm's Registration No.301051E
(N. K. Lodha)
Place: New Delhi Partner
Date: 8th May 2019 Membership No. 85155

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 31st March 2019 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 Board of Director of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India ('ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct 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.

AUDITORS' 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") 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.

OPINION

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 31st March 2019 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
Firm's Registration No.301051E
(N. K. Lodha)
Place: New Delhi Partner
Date: 8th May 2019 Membership No. 85155