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Malu Paper Mills Ltd.

BSE: 532728 Sector: Industrials
NSE: MALUPAPER ISIN Code: INE383H01017
BSE 00:00 | 19 May 31.30 -1.65
(-5.01%)
OPEN

31.70

HIGH

32.50

LOW

30.60

NSE 00:00 | 19 May 31.85 -1.25
(-3.78%)
OPEN

32.80

HIGH

32.80

LOW

31.35

OPEN 31.70
PREVIOUS CLOSE 32.95
VOLUME 390
52-Week high 43.80
52-Week low 26.10
P/E
Mkt Cap.(Rs cr) 53
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 31.70
CLOSE 32.95
VOLUME 390
52-Week high 43.80
52-Week low 26.10
P/E
Mkt Cap.(Rs cr) 53
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Malu Paper Mills Ltd. (MALUPAPER) - Auditors Report

Company auditors report

To The Members MALU PAPER MILLS LIMITED

Report on Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of MALUPAPER MILLS LIMITED("the Company") which comprises of Balance Sheet as on31st March2021Statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity and Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed u/s. 133 of the Act read with the Companies (Indian Accounting Standards)Rules 2015 as amended ("IND AS") and other accounting principles generallyaccepted in India of the state of affairs of the company as at 31st March 2021 the lossand total comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs)specified under section 143(10) of the Act.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAl's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Emphasis of Matter-

We draw attention on Note. No. 37 of the standalone IND AS financialstatement which explains the uncertainties and the management assessment of the financialimpact related to COVID-19 pandemic situation for which a definitive assessment of theimpact in subsequent period is highly dependent on future economic developments andcircumstances as they evolve. Our opinion is not modified on the same.

Key Audit Matters

Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone financial statementsof the current period. 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.

Key Audit Matters How our audit addressed the key audit matter
Deferred Tax.
As disclosed in Note 7 the company has recognised deferred tax assets in respect of certain deductions on account of provision for Post- Retirement the extent that it is probable that the company get tax benefits in future. This requires management judgement in estimating futuretaxable income and is accordingly a key audit matter. We have reviewed the assumptions made by management for uncertain current and deferred tax liability/asset to assess whether appropriate current and deferred tax provisions have been recognised and are based on the most probable outcome. We found the disclosures relating to the income tax and deferred tax balances to be appropriate.
Post Retirement Defined benefit obligation for Gratuity
The Company has recognized long term employee benefit liabilities as per Acturial Valuation Report now obtained from Registered Valuer consisting of Gratuity and defined benefit obligations receivable (net of plan asset against funded gratuity obligation and post-employment benefits.) In testing the valuation we have examined the reports of external actuarial valuer to review the key actuarial assumptions used both financial and demographic and considered the methodology utilized to derive these assumptions. Furthermore we have examined the sensitivity analysis adopted by the external party viz. actuarial on the key assumptions in valuing the defined benefit obligations.
The valuation of employee benefit obligations is dependent on market conditions and assumptions made. The key audit matter specifically relates to the following key assumptions: discount rate inflation expectations and life expectancy assumptions. The setting of these assumptions is complex and requires the exercise of significant management judgement with the support of third party actuary
We would like to comment that on the methodology and assumption applied in relation to determination of liability is acceptable

Other Information

The company's management and Board of Directors are responsible for thepreparation of the other information. The other information comprises the informationincluded in the Company's Annual Report but does not include the standalonefinancial statements and our auditor's report thereon. Our opinion on the standalonefinancial statements does not cover the other information and we do not express any formof assurance conclusion thereon. In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone 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 thereis a material misstatement 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 theStandalone Financial Statements

The company's management and Board of Directors areresponsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance total comprehensive income changes in equity and cash flows of thecompany in accordance with the IND AS and other accounting principles generally acceptedin India. 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 judgements 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.

In preparing the standalone financial statements management isresponsible for assessing the company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors areresponsible for overseeing the company's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectiveis to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 Act. We are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the 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 company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave compiled with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards. From the matters communicatedwith those charged with governance we determine those matters that are of mostsignificance in the audit of the standalone financial statements of the current period andare therefore the key audit matters. We describe these matters in our auditor's reportunless law or regulation precludes public disclosure about the matter or when in extremelyrare circumstances we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh thepublic interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("theorder") issued by the Central Government of India in terms of Section 143 (11) of theAct we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143 (3) 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 itappears from our examination of those books.

c) The Balance Sheet Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flows dealt with by thisReport are in agreement with the relevant books of accounts.

d) In our opinion the aforesaid standalone financial statements comply with the IND ASspecified 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 31stMarch2021 taken on record by the Board of Directors none of the directors is disqualified ason 31stMarch 2021 from being appointed as a director in terms of 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 B".

g) In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i)The company has disclosed the impact of pending litigations on its financial positionin its standalone financial statements.

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 Funds of the Company.

For R. A.Kuvadia& Co.
Chartered Accountants
FRN: 105487W
Place: Mumbai
Date: 21.06.2021 R. A. Kuvadia
(Proprietor)
M. No.040087
UDIN:21040087AAAAOC4152

"Annexure A" to the Auditors' Report

(Referred to in Paragraph 1 under ‘Report on other Legal andRegulatory Requirements section of our report of even date)

1. (a) The Company is in the process of updating records showing particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management at the year endand no material discrepancies were noticed on such physical verification.

(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 freehold immovableproperties are held in the name of the Company and those taken on lease and disclosed asfixed asset in the financial statements the lease agreements are in the name of theCompany where the Company is the lessee in the agreement.

2. (a) The stock of Finished Goods Raw materials Stores and consumables werephysically verified by the Management at year end; the same is reasonable in relation tosize of the company.

(b) In our opinion and according to the information and explanations given to us theprocedure of physical verification of stocks followed by the management is reasonable andadequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventories. The discrepancies noticedon verification between the physical stocks and book records were not material and havebeen properly dealt with in the books of account.

3. The company has not granted unsecured loans to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section189 of theCompanies Act2013. Accordingly paragraph 3 (iii) of the order is not applicable.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.

5. According to the information and explanations given to us the Company has notaccepted any deposit during the year and there are no outstanding/unclaimed deposits andhence compliance of the provisions of Sections 73 to 76 or any other relevant provisionsof the Companies Act 2013 does not arise.

6. We have broadly reviewed the cost records maintained by the Company pursuant to therules prescribed by the Central Government for the maintenance of the cost records underSection 148(1) of the Companies Act 2013 and are of the opinion that prima facie theprescribed cost records have been maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

7. (a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of Goods & Service Tax Provident FundEmployees' State Insurance Income Tax Duty of Customs Duty of Excise Cess andother material statutory dues as applicable with the appropriate authorities.

The Provisions related to Sales Tax Service Tax Duty of Excise and Value Added Taxare not applicable to the company.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of Goods & Service Tax Provident Fund Employees' StateInsurance Income Tax Duty of Customs Duty of Excise Cess and other material statutorydues were in arrears as at 31st March 2021 for a period of more than sixmonths from the date they became payable.

The Provisions related to Sales Tax Service Tax Duty of Excise and Value Added Taxare not applicable to the company.

(c) According to the information and explanations given to us no disputed payables inrespect of provident fund employees' state insurance income tax sales tax valueadded tax service tax duty of customs duty of excise cess and other material statutorydues were in arrears as at 31st March 2021.

8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government and dues to debenture holders.

9. The Company has not raised any moneys by way of initial public offer further publicoffer (including debt instruments) and term loans. Accordingly the provisions of Clause3(ix) of the Order are not applicable to the company.

10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.

11. 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.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

13. According to the information and explanation given to us the Company has enteredinto transaction with related parties in compliance with the provisions of Sections 177and 188 of the Act. The details of such related party transactions have been disclosed inthe standalone financial statements as required by the applicable accounting standards.

14. 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 CARO 2016 is not applicable to the Company.

15. 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 persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

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

For R. A.Kuvadia& Co.
Chartered Accountants
FRN: 105487W
Place: Mumbai
Date: 21.06.2021 R. A. Kuvadia
(Proprietor)
M. No.040087
UDIN:21040087AAAAOC4152

"Annexure B" to the Auditors' Report

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 over financialreporting of MALU PAPER MILLS LIMITED ("the Company") as of 31stMarch 2021 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(‘ICAI').

These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31stMarch2021 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For R. A.Kuvadia& Co.
Chartered Accountants
FRN: 105487W
Place: Mumbai
Date: 21.06.2021 R. A. Kuvadia
(Proprietor)
M. No.040087
UDIN:21040087AAAAOC4152

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