Rainbow Papers Ltd.
|BSE: 523523||Sector: Industrials|
|NSE: RAINBOWPAP||ISIN Code: INE028D01025|
|BSE 00:00 | 03 Feb||Rainbow Papers Ltd|
|NSE 05:30 | 01 Jan||Rainbow Papers Ltd|
|BSE: 523523||Sector: Industrials|
|NSE: RAINBOWPAP||ISIN Code: INE028D01025|
|BSE 00:00 | 03 Feb||Rainbow Papers Ltd|
|NSE 05:30 | 01 Jan||Rainbow Papers Ltd|
THE MEMBERS OF
RAINBOW PAPERS LIMITED.
Report on theInd AS Financial Statements
We have audited the accompanying Ind AS financial statements of RAINBOW PAPERSLIMITED ("the Company") which comprise the Balance Sheet as at March 312018 the Statement of Profit and Loss Statement of Changes in Equity and Cash FlowStatement for the year then ended and a summary of significant accounting policies andother explanatory information (hereinafter referred to as "Ind AS financialstatements")
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these Ind AS Financial Statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the Ind AS Financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on theseInd AS Financial statements basedon our audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement. An audit involves performingprocedures to obtain audit evidence about the amounts and the disclosures in the Ind ASfinancial statements. The procedures selected depend on the auditors judgmentincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Companys preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls.
An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Companys Directorsas well as evaluating the overall presentation of the financial statements.
We broadly believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.
1. We draw attention to Note No. 46 of the accompanying financial statements inrespect of non-provision of interest on NPA accounts of banks of Rs.280.17Crore. The exactamounts of the said non provisions are not determined and accounted by the company.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaidInd-AS financial statements give the information required by theAct 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 March 31 2018its loss changes in equity and cash flows for the year ended on thatdate.
Matter of Emphasis:
1. We draw attention to Note No. 45(a)&(e) of the accompanying FinancialStatement in respect of Winding up Notices and Notices under the Securitization andReconstruction of Financial Assets and Enforcement of Security Interest Act 2002(SARFAESI Act 2002).
2. We draw attention to Note No. 51(a)&(f) of the accompanying FinancialStatement in respect of the accounts of Loan Liabilities & borrowings Currentliabilities Trade receivables Loans and advances given (Including Advance for Land)Balance with Revenue Authority Statutory Dues Long outstanding advances for Capital Goodsand Various other Advances are subject to confirmation.
3. We draw attention to Note No. 48 of the accompanying Financial Statement in respectof assignment/treatment of Debts by Axis Bank.
4. We draw attention to Note No. 40 of the accompanying Financial Statement inrespect of cessation of production on account of Non-Supply of Electricity and further inview of various points under the Head "Matter of Emphasis" the going concern ofthe company is seriously affected.
5. We draw attention to Note 44 to the standalone financial statements which describesthe status of Corporate Insolvency Resolution Process that the Company underwent with theHonble National Company Law Tribunal (NCLT) the matter is yet to be decided on thedate of signing the Financial statements.
Report on Other Legal and Regulatory Requirements
1. 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 on the basis of information given to us we give in the AnnexureA statement on the matters specified in the paragraph 3 and 4 of the Order to theextent applicable for the year under consideration.
2. As required by Section 143 (3) of the Act we broadly report (except otherwisestated) 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 and the cash flow statementdealt with by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid financial statements comply with the 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 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (2) of the Act;
(f) With respect to adequacy of the internal financial controls over the financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in
(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. TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements; ii. there are no long term contracts including derivative contractsand accordingly no provision is required to be made for any loss from the same; iii. Thereis no fund which is pending to be transferred to the Investor Education and ProtectionFund by the Company;
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
[ANNEXURE A REFERRED TO IN PARAGRAPH 1 OF REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENT OF OUR REPORT OF EVEN DATE FOR THE YEAR ENDED ON 31ST MARCH 2018] i.(a) The Company has maintainedproper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As informed to us the fixed assets arephysically verified by the Management atregular intervals however during the year no physical verification is undertaken by thecompany and therefore we are unable to comment on any discrepancies between the recordsand physical verification.
(c) As informed to us and on the basis of the records of the company the title deedsof immovable properties as disclosed in Note 4on fixed assets to the financialstatements are held in the name of the Company.
ii. The physical verification of inventory hasbeen conducted at reasonable intervals bytheManagement during the year. In our opinion the frequency of verification isreasonable. As informed to us the discrepancies noticed on physical verification ofinventory as compared to book records were not material and have been properly dealt within the books of accounts.
iii. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013 (the Act) and accordingly the para iii (a) (b) and (c) of the Order arenot applicable.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisionsof Section 185 and 186 of the Companies Act 2013in respect of the loans and investments made and guarantees and securityprovided by it.
v. The Company has not accepted any deposits from the public (Other than exempteddeposit) within the meaning of Sections 73 74 75 and 76 of the Act andthe Rules framedthere under to the extent notified. vi. Pursuant to the rules made by the CentralGovernment of India the Company is required to maintain cost records as specifiedunderSection 148(1) of the Act in respect of its products. We have broadly reviewed the sameand are of the opinion thatprima facie the prescribed accounts and records have beenmade and maintained. We have not however made a detailedexamination of the records witha view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinionthe Company is not regular in depositingundisputed statutory duesincludingprovident fund employees state insurance PensionFund income tax service tax duty of customs duty of excise cess and othermaterialstatutory dues as applicable with the appropriate authorities.
There are undisputed amounts payable in respect of above dues which were in arrears asat 31st March 2018 for a period of more than six months from the date theybecame payable.
*In absence of evidence if any Payment made during the year are apportioned on FIFObasis to determine the outstanding liabilities. Further the amount of interest on theabove outstanding amount and the penalty thereon are not included in the above amounts.
(b) According to the information and explanations given to us and the records of theCompany examined by us following are the details of outstanding dues which have not beendeposited on account of any dispute:-
* Taken based on the claims submitted by the respective departments under CIRP Process.**Net of Rs 6.50 Lacs paid under protest. viii. According to the records of the Companyexamined by us and the information and explanation given to us by the management theCompanyhas defaulted in repayment of loans or borrowings to financial institution and bankas at the balance sheet date. Details of which are as below:
*The above table does not include the interest which bank has not provided after theaccount has been classified Non Performing Assets. ix. In our opinion and according tothe information and explanations given to us during the year company has not raised moneyby way of initial public offer/ further public offer/ debt instruments and term loan.Accordingly the provisions of Clause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Companycarried out in accordance with the generallyaccepted auditing practices in India andaccording to the information and explanations given to us we have neither comeacross anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reportedduring the year nor have we been informed of any such case by theManagement. xi. According to the information and explanations given by the management themanagerial remuneration has been paid/provided in accordance with provisions of section197 read with Schedule V to the Companies Act 2013.
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 theOrder are not applicable to the Company.
xiii. According to the information and explanations given by the managementtransactions with related parties are in compliance with the provisions of Sections 177and 188 of Companies Act 2013 where applicable and the details of such related partytransactions have been disclosed in the notes to thefinancial statements as required bythe applicable accounting standards.
xiv. According to the information and explanations given by the managementand onoverall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debenturesduringthe year under review. Accordingly the provisions of Clause 3(xiv) of the Order are notapplicable to the Company and not commented upon.
xv. According to the information and explanations given by the managementthe Companyhas not entered into any non-cash transactions with its directors or persons connectedwith him. Accordingly theprovisions of Clause 3(xv) of the Order are not applicable tothe Company.
xvi. According to the information and explanations given by the management theprovision ofSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to theCompany.
ANNEXURE - B TO THE INDEPENDENT AUDITORS REPORT
[ANNEXURE B REFERRED TO IN PARAGRAPH 2 OF REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENT OF OUR REPORT OF EVEN DATE FOR THE YEAR ENDED ON 31ST MARCH 2017]
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 RainbowPapers Limited ("the Company") as of 31 March 2017 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors 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 Companys internal financial controlssystem over 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 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 Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 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.