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Orient Paper & Industries Ltd.

BSE: 502420 Sector: Industrials
NSE: ORIENTPPR ISIN Code: INE592A01026
BSE 00:00 | 10 Jul 19.70 -0.40
(-1.99%)
OPEN

19.95

HIGH

20.15

LOW

19.70

NSE 00:00 | 10 Jul 19.70 -0.40
(-1.99%)
OPEN

20.15

HIGH

20.20

LOW

19.50

OPEN 19.95
PREVIOUS CLOSE 20.10
VOLUME 63054
52-Week high 34.75
52-Week low 11.60
P/E 20.96
Mkt Cap.(Rs cr) 418
Buy Price 19.70
Buy Qty 42.00
Sell Price 20.00
Sell Qty 103.00
OPEN 19.95
CLOSE 20.10
VOLUME 63054
52-Week high 34.75
52-Week low 11.60
P/E 20.96
Mkt Cap.(Rs cr) 418
Buy Price 19.70
Buy Qty 42.00
Sell Price 20.00
Sell Qty 103.00

Orient Paper & Industries Ltd. (ORIENTPPR) - Auditors Report

Company auditors report

To

The Members of

Orient Paper & Industries Limited

Report on the audit of the Standalone financial statements

Opinion

1. We have audited the accompanying standalone financial statements of Orient Paper& Industries Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2019 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of cash Hows for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

2. 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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2019 and total comprehensive income(comprising of profit and other comprehensive income) changes in equity and its cashflows for the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditors' 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 Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Key audit matters

4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These mattersare addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matteRs.

Key audit matter How our audit addressed the key audit matter
Management's assessment relating to litigation in respect of levy of excess usage of water and impact on the financial statements (Refer Note 51(c) to the financial statements) We performed the following procedures in this regard:
• Understood and evaluated the design and tested the operating effectiveness of controls around the assessment of the matter.
Amount of H 98248.03 lacs (including interest and penalty of H 96835.10 lacs) has been disclosed as 'contingent liability' in the financial statements which represents excess water consumption charges levied by Madhya Pradesh State Government (period up to April 2009) against the Company. • Discussed the status and likelihood of the outcome of the litigation with the external legal counsel engaged by the management.
The Company is contesting the said demand and had filed writ petition in the High Court of Madhya Pradesh and obtained interim stay in year 2015. The Company has obtained external legal opinion to support their assessment around the outcome of the litigation that has led to the management's conclusion that no provision is required to be made against the demand. • We also evaluated the independence and competency of the management's legal expert.
• Obtained and tested evidence to support the management assessment with regard to nonprovisioning against the demand.
• Assessed the appropriateness of disclosures made under the head 'contingent liabilities' in the financial statements.
We considered this to be a key audit matter as the final outcome of the litigation in case same is decided against the Company is likely to have significant financial impact. Based on the above procedures management's assessment with regard to litigation in respect of levy of excess usage of water under contingent liabilities is considered reasonable.

Other Information

5. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Director's report but does notinclude the financial statements and our auditors' 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 the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact.

We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the financialstatements

6. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash Hows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

7. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditors' responsibilities for the audit of the financial statements

8. 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 auditors' 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.

9. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism 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 Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness 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 Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditors'report. However future events or conditions may cause the Company to cease to continue asa 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.

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

11. We also provide those charged with governance with a statement that we havecomplied 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.

12. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matteRs. We describe these matters inour auditors' report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

13. As required by the Companies (Auditors' Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

14. 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 (including other comprehensiveincome) the Statement of Changes in Equity and Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors taken onrecord by the Board of Directors none of the directors is disqualified as on March 312019 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 A.

(g) With respect to the other matters to be included in the Auditors' 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 financial statements - Refer Note 51 to the financial statements.

ii. The Company has long-term contracts as at March 31 2019 for which there were nomaterial foreseeable losses. The Company did not have any derivative contracts as at March31 2019.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2019.

For Price Waterhouse & Co
Chartered Accountants LLP
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Avijit Mukerji
New Delhi Partner
May 2 2019 Membership Number 056155

Annexure A to Independent Auditors' Report

Referred to in paragraph 14(f) of the Independent Auditors' Report of even date to themembers of Orient Paper & Industries Limited on the financial statements for the yearended March 31 2019

Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financialstatements of Orient Paper & Industries Limited ("the Company") as of March31 2019 in conjunction with our audit of the financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

2. 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. 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 deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 auditors'judgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

5. 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

6. A company's internal financial controls with reference to financial statements 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 controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. 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 controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2019 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.

For Price Waterhouse & Co
Chartered Accountants LLP
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Avijit Mukerji
New Delhi Partner
May 2 2019 Membership Number 056155

Annexure B to Independent Auditors' Report

Referred to in paragraph 13 of the Independent Auditors' Report of even date to themembers of Orient Paper & Industries Limited on the Ind AS financial statements as ofand for the year ended March 31 2019

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

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the Management during the year and no material discrepancies have been noticedon such verification.

(c) The title deeds of immovable properties as disclosed in Note 3 on property plantand equipment Note 4 on investment properties and Note 18 on assets classified as heldfor sale to the Ind AS financial statements are held in the name of the Company exceptfor the cases below:

Asset category Gross Block as at March 31 2019 (Rs. in lacs) Net Block as at March 31 2019 (Rs. in lacs) Remarks
Freehold Land Leasehold Land 243.33 2.17 243.33 2.17 Correction in land records in Company's name is pending.
Buildings 47.10 38.38 Held in joint ownership registration in the name of the Company is pending
Investment Properties 432.94 432.94 Registration in the name of the Company is pending

ii. The physical verification of inventory have been conducted at reasonable intervalsby the Management during the year. The discrepancies noticed on physical verification ofinventory as compared to book records were not material.

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. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.

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 Companies Act 2013in respect of the loans and investments made and guarantees and security provided by it.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion except for dues in respect of IndustrialLicense Fees under Orissa Municipal Act the Company is generally regular in depositingundisputed statutory dues in respect of income tax professional tax and goods and servicetax though there has been a slight delay in a few cases and is regular in depositingundisputed statutory dues including provident fund employees' state insurance valueadded tax sales tax service tax duty of customs duty of excise cess and othermaterial statutory dues as applicable with the appropriate authorities. The extent ofthe arrears of statutory dues outstanding as at March 31 2019 for a period of more thansix months from the date they became payable are as follows:

Name of the statute Nature of dues Amount (I in lacs) Period to which the amount relates Due date Date of Payment
Orissa Municipal Act Industrial License Fees 32.39 1996-97 to 2018-19 Beginning of the respective years Not yet paid

Also refer note 47(iv) to the financial statements regarding management's assessment oncertain matters relating to provident fund.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income-tax service-tax duty of customs andgoods and service tax which have not been deposited on account of any dispute. Theparticulars of dues of sales tax duty of excise and value added tax as at March 31 2019which have not been deposited on account of a dispute are as follows:

Name of the statute Nature of dues Amount (I in lacs) Period to which the amount relates Forum where the dispute is pending
Central Sales Tax Act 1956 Sales Tax 0.50 1986-87 High Court
6.27 1995-96 Sales Tax Tribunal
83.27 2001-022007-08 and 2010-11 to 2012-13 Appellate and Revision Board
0.12 1979-80 to 1982-83 Sales Tax Commissioner
98.13 2015-16 Additional Commissioner
12.22 1985-86 and 1999-2000 Assistant Commissioner
West Bengal Value Added Tax Act 2003 Value Added Tax 40.82 2007-08 West Bengal Commercial Taxes Appellate and Revision Board
Bihar Finance Act 1981 Sales Tax 39.74 1994-95 to 1996-97 Commissioner of Commercial Tax
7.90 1994-95 to 1997-98 Joint Commissioner of Commercial Taxes
Orissa Sales Tax Act 1947 Sales Tax 2.06 1985-86 and 1986-87 High Court
0.02 1983-84 Assistant Commissioner
Madhya Pradesh VAT Act 2002 Value Added Tax 14.63 2006-07 to 2009-10 High Court
11.11 2008-09 Commercial Tax Appellate Board
M.P Commercial Tax Act 1994 Sales Tax 7.00 2001-02 High Court
M.P Sales Tax Act 1961 Sales Tax 14.65 1998-99 High Court
1.07 1986-87 Commercial Tax Appellate Board
Central Excise Act 1944 Excise Duty 879.07 1975-76 1976-77 1982-83 1989-90 1994-95 1995-96 2005-06 to 2008-09 2010-11 and 2011-12 Customs Excise & Service Tax Appellate Tribunal
23.86 2006-07 to 2008-09 2011-12 2012-13 and 2014-15 Commissioner (Appeals)
0.96 2012-13 and 2013-14 Deputy Commissioner
46.21 1975-76 to 1978-79 and 1986-87 to 1997-98 Assistant Commissioner
Madhya Pradesh Upkar (Sanshodan) Adhiniyam 2004 Energy Development Cess including Surcharge 8242.77 2001-02 to 2017-18 Supreme Court

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date.

ix. In our opinion and according to the information and explanations given to us themoneys raised by way of term loans have been applied on an overall basis for thepurposes for which they were obtained. The Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments).

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standard (Ind AS) 24 Related Party Disclosures specified under Section 133 ofthe Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse & Co
Chartered Accountants LLP
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Avijit Mukerji
New Delhi Partner
May 2 2019 Membership Number 056155