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Kuantum Papers Ltd.

BSE: 532937 Sector: Industrials
NSE: N.A. ISIN Code: INE529I01013
BSE 00:00 | 19 Jun 410.00 15.00
(3.80%)
OPEN

395.05

HIGH

413.00

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395.00

NSE 05:30 | 01 Jan Kuantum Papers Ltd
OPEN 395.05
PREVIOUS CLOSE 395.00
VOLUME 848
52-Week high 821.90
52-Week low 376.65
P/E 4.59
Mkt Cap.(Rs cr) 358
Buy Price 398.55
Buy Qty 2.00
Sell Price 410.00
Sell Qty 10.00
OPEN 395.05
CLOSE 395.00
VOLUME 848
52-Week high 821.90
52-Week low 376.65
P/E 4.59
Mkt Cap.(Rs cr) 358
Buy Price 398.55
Buy Qty 2.00
Sell Price 410.00
Sell Qty 10.00

Kuantum Papers Ltd. (KUANTUMPAPERS) - Auditors Report

Company auditors report

To the Members of Kuantum Papers Limited

Report on the Audit of the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Kuantum PapersLimited ("the Company") which comprise the Balance Sheet as at 31 March2018 the Statement of Profit and Loss the Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "the Ind ASfinancial statements").

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matter stated in Section 134(5)of the Companies Act 2013 ("the Act") with respect to the preparation of theseInd AS financial statements that give a true and fair view of the state of affairsprofit/loss (including other comprehensive income) changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards(lndAS) prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safe guarding the as sets 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 of theaccounting records relevant to the preparation and presentation of the Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Auditor's Responsibility

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

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 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 are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor's report. However future events or conditions maycause an entity to cease to continue as a going concern.

We believe that the audit evidence we have obtained 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 theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2018 its profit (including other comprehensive income)changes in equityand its cash flows for the year ended on that date.

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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 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 aud it.

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 Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof 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 as on 31March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 from being appointed as a director in terms of Section164(2) of theAct.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

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 Ind AS financial statements; - Refer Note 39 Ato the Ind AS 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; - Refer Note 37 B(iv)(c) to the Ind AS financial statements.

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

iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made since they donot pertain to the financial year ended 31 March 2018. Howeveramounts as appearing in the audited Ind AS financial statements for the period ended 31March 2017 have been disclosed.

For BSR & Co. LLP
Chartered Accountants
Firm Registration No.: 101248W/W-100022
Pravin Tulsyan
Place: Chandigarh Partner
Date : 25 May 2018 Membership No: 108044

'Annexure A' referred to the Independent Auditor's Report to the Members of KuantumPapers Limited on the Ind AS financial statements for the year ended 31 March 2018 wereport that:

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

(b) According to the information and explanations given to us the Company has aregular programme of physical verification of its fixed assets (including investmentproperty) by which all the fixed assets (including investment property) are verified in aphased manner over a period of three years. In accordance with this programme plant andequipment were verified during the year. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. As explained to us the discrepancies noticed on such verification were notmaterial and have been properly adjusted in the books of account.

(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 the immovable properties areheld in the name of the Company.

(ii) The inventories except goods-in-transit have been physically verified by themanagement during the year. In our opinion the frequency of such verification isreasonable having regard to the size of the Company and the nature of its business. Thediscrepancies noticed on such verification between the physical stocks and the bookrecords were not material and have been properly dealt with in the books of account.

(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 Act. Thus paragraphs 3 (iii) of the Order is not applicable.

(iv) The Company has not given any loans or made any investments or provided anyguarantee or security as specified under Section 185 and 186 of the Act. Accordinglyparagraph 3(iv) of the Order is not applicable.

(v) In our opinion and according to the information and explanations given to us theCompany has complied with the provision of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder where applicable the directivesissued by the Reserve bank of India as applicable with regard to deposits accepted fromthe public. As informed to us there have been no proceedings before the Company Law Boardor National Company Law Tribunal and Reserve Bank of India or any court or any othertribunal in this matter and no order has been passed by any of the aforesaid authoritiesin this regard.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof the product covered where pursuant to the Rules made by the Central Government themaintenance of cost records has been prescribed under section 148 (1) of the Act inrespect of products covered and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the records with a view to ensuring whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the

Company amounts deducted/ accrued in the books of account in respect of undisputedstatutory dues including Provident Fund Employees' State Insurance Income tax Salestax Value added tax Service tax Duty of customs Duty of excise cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income tax Sales taxValue added tax Service tax Duty of customs Duty of excise cess and other materialstatutory dues were in arrears as at 31 March 2018 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome tax Duty of custom Duty of excise Value added tax Sales tax cess and Servicetax which have not been deposited with the appropriate authorities on account of anydispute except as mentioned below:

Name of the statute Nature of the Dues Amount Disputed* Amount Deposited Period to which the amount relates Forum where the dispute is pending
Rs. lacs Rs. lacs
Income tax Act 1961 Income tax 7.57 - 2005-06 (Assessment year) Commissioner of Income tax (Appeals;)
Income tax Act 1961 Income tax 81.43 - 2015 to 2016 (Assessment year) Commissioner of Income tax (Appeals)
Central Excise Act 1944 Excise duty 447.36 - 2000-01 to 2007-08 Punjab and Haryana High Court
Central Excise Act 1944 Excise duty 65.06 - 2008-09 Commissioner (Appeals) Central Excise and Service
Central Excise Act 1944 Service tax 58.77 2.20 2008-09 Commissioner (Appeals) Central Excise and Service
Central Excise Act 1944 Service tax 54.90 2.05 July 2008 - December 2015 Commissioner (Appeals) Central Excise and Service Tax Ludhiana
The Water (Prevention and Control of Pollution) Cess Act 1977 Water Cess 49.150 28.82 2011-12 to 2013-14 Chairman Appellate Committee Punjab Pollution Control Board

*Amount are as per demand order and include interest and penalty whichever indicatedin the said orders.

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of dues to banks and the financial institution. The Company did nothave any outstanding dues to any government or debenture holders during the year.

(ix) According to the information and explanations given to us the term loan taken bythe Company have been applied for the purposes for which they were raised. However loanamounting to Rs. 1443.92 lakhs which has been disbursed during the year remainedunutilized as at 31 March 2018 and is included in fixed deposits. Also refer to note 13 tothe Ind AS financial statements. As informed to us the Company has not raised any moneysby way of initial public offer (including debt instruments) orfurther public offer.

(x) According to the information and explanations given to us no fraud on or by theCompany by its officers or employees has been noticed or reported during the course ofour audit for the year.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has been paid orprovided by the Company in accordance with the provision of section 197 read with ScheduleV of the Act.

(xii) According to the information and explanations given to us the Company is not aNidhi Company and thus paragraph 3 (xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and the details have beendisclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with the directors or persons connected with them during the year.Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IAofthe Reserve Bank of India Act 1934.

For B S R & Co. LLP
Chartered Accountants
Firm Registration No.: 101248W/W-100022
Pravin Tulsyan
Place: Chandigarh Partner
Date : 25 May 2018 Membership No: 108044

'Annexure B' referred to the Independent Auditor's report to the Members of KuantumPapers Limited being report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof Kuantum Papers Limited ("the Company") as of 31 March 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 with reference to financial statementscriteria 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. 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 Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Act 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 with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the Ind ASfinancial 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

Acompany's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialstatements and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to Financial Statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to the Ind AS financial statements and suchinternal financial controls with reference to the Ind AS financial statements wereoperating effectively as at 31 March 2018 based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

ForBSR&Co. LLP
Chartered Accountants
Firm Registration No.101248W/W-100022
Pravin Tulsyan
Place : Chandigarh Partner
Date : 25 May 2018 Membership No.: 108044