The Members of
The South India Paper Mills Limited Nanjangud Report on the Audit of the FinancialStatements Opinion
We have audited the financial statements of The South India Paper Mills Limited(the Company) which comprises the Balance Sheet as at 31*t March 2022 theStatement of Profit and Loss (including the statement of Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information. In our opinion and to the best of our information andaccording to the explanations given to us the aforesaid financial statements give theinformation required by the Companies Act 2013 as amended (the Act') in the mannerso required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31*t March 2022and its profits including other comprehensive income its cash flows and the changes inequity for the year ended on that date. Basis for Opinion We conducted our audit inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those SAs are further described in the Auditor'sResponsibilities for the Audit of the financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financial results under the provisions of the Companies Act 2013 andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinionon the financial Statements.
Key Audit Matters Key Audit Matters are those matters that in our professionaljudgement were of most significance in our audit of the Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the FimancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined that there are no key audit mattersto communicate in our report.
Information Other than the Financial Statements and Auditor's Report Thereon TheCompany's Board of Directors is responsible for the preparation of the other information.The other information comprises the information included in the Annual Report but doesnot include the financial statements and our auditor's report thereon.The otherinformation is expectedto be made available to us after the date of the Auditor's report.Our opinion on the financial statements does not cover the other information and we do notexpress 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 formation is materiallyinconsistent with the financial statementsor our knowledge obtained during the course ofour audit 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 for the financial Statements The Company's Board ofDirectors is responsible for the matters stated in Section 134(5) of the Act with respectto the preparation of these financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specified underSection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of 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 financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the financialstatements the Board of Directors is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless the Board of Directors eitherintends to liquidate the Company or to cease operations or has no realistic alternativebut to do so. Those Board of Directors are also responsible for overseeing the Company'sfinancial reporting process. Auditor's Responsibilities for the Audit of the financialStatements Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance 1s a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements. As part of an audit im accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also: ? Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internalcontrol.
* Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)G) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system im place and the operating effectiveness ofsuch controls. ? Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by Board of Directors.
* Conclude on the appropriateness of Board of Directors' 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 financial statements or if such disclosures are inadequate to modify our opmion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern. ? Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achievesfairpresentation. We communicate with those charged with governance regarding among othermatters 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 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. From the matters communicatedwith those charged with governance we determine those matters that were of mostsignificance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication. Report on Other Legal and Regulatory Requirements
1. Asrequired by the Companies (Auditor's Report) Order 2020 (the Order')issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4of the Order to the extent applicable.
2. Asrequired by Section 143(3) of the Act we report that:
) We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of ouraudit;
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 the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with the specified underSection 133 of the Act; e) On the basis of the written representations received from theDirectors as on 31 March2022 taken on record by the Board of Directors none of theDirectors is disqualified as on 31% March 2022 from being appointed as a Director interms of Section 164 (2) of theAct; f) With respect to the adequacy of the internalfinancial controls over financial reporting of the Company with reference to thesefinancial statements and the operating effectiveness of such controls refer to ourseparate Report in Annexure B; g) In our opinion the managerial remunerationfor the year ended 31st March2022 has been paid / provided by the Company to itsdirectors in accordance with the provisions of section 197 read with Schedule V to theAct; and h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given tous;
i) The Company has disclosed the impact of pending litigations on its financialposition 1m its financial statements.
ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv) a)The management has represented that to the best of its knowledge and belief nofunds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the company to or in any other person orentity including foreign entities (Intermediaries) with the understandingwhether recorded in writing or otherwise that the Intermediaries shall whether directlyor indirectly lend or invest in other person or entity identified in any manner whatsoeverby or on behalf of the Company (Ultimate Beneficiaries) or provide anyguarantee security or the like on behalf of the Ultimate Beneficiaries; b) The managementhas represented that to the best of tts knowledge and belief no funds have been receivedby the company from any person or entity including foreign entities (FundingParties) with the understanding whether recorded in writing or otherwise that thecompany shall whether directly or indirectly lend or invest in other person or entityidentified in any manner whatsoever by or on behalf of the Funding Parties (UltimateBeneficiaries) or provide any guarantee security or the like on behalf of theUltimate Beneficiaries; and c) Based on the audit procedures that were consideredreasonable and appropriate in the circumstances nothing has come to our notice that hascaused us to believe that the representations under sub-clause (a) and (b) contain anymaterial misstatement. v) The dividend declared and paid during the year by the Company isin compliance with Section 123 of the Act.
|Date ||26 May 2022 ||for Murthy Swamy & Associates LLP |
|Place ||Mysore ||Chartered Accountants |
| || ||Firm Registration Number: 8200065 |
| || ||Narayana Swamy TS |
| || ||Partner |
| || ||MNo. 241535 |
| || ||UDIN :22241535AJRKOH5698 |
Annexure A referred to in paragraph 1 under the heading Report on Other Legal andRegulatory Requirements of our report of even date On the basis of such checks as weconsidered appropriate and in terms of the information and explanations given to us westate that: (1) In respect of the Company's property plant and equipment& intangibleassets -
(a) (i) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(ii) The Company has maintained proper records showing full particulars of intangibleassets.
(b) According to the practice of the Company all items of property plant andequipment are physically verified by the management in a phased manner which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Accordingly a portion of the fixed assets has been physically verified by theManagement during the year and the Management has confirmed that no material discrepancieswere noticed on such verification.
(c) According to the information and explanations given by the management and on thebasis of our examination of the records of the Company the title deeds of immovableproperties included in property plant and equipment are held in the name of the Company.
(d) The company has not revalued its property plant and equipment or intangible assetsduring the year.
(e) No proceedings have been initiated or are pending against the company for holdingany benami property under the Prohibition of Benami Property Transactions Act 1988 andrules made thereunder.
(i) (a) The inventory has been physically verified during the year by the management.In our opinion the frequency of verification is reasonable and the discrepancies noticedwere not material. Discrepancies noted on physical verification of inventories have beenproperly dealt with in the books of account.
(b) During the year the Company has a sanctioned working capital limits in excess ofRs. 5 crores in aggregate from banks on the basis of security of current assets. Detailsof current assets mentioned in the quarterly monitering reports filed with the Bank are inagreement with books of account.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintamed under Section 189 of theAct. Accordingly the provisions of clause 3(111) (a) (b) (c) (d) (e) and (f) of theOrder are not applicable.
(iv) According to the information and explanations given to us the Company has notgranted any loans investments or provided guarantees and security for which theprovisions of Section 185 and 186 of the Act are applicable.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the cost accounts and records maintained by the Companypursuant to the Rules made by the Central Government for the maintenance of cost recordsunder Section 148(1) of the Act and we are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have however not made adetailed examination of the records with a view to determine whether they are accurate.
(vii) According to the records of the Company:
a) the Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax duty of custom goods and services tax cess and other statutory duesapplicable to it.
b) On the basis of our examination of the documents and records disputed statutorydues to the extent which have not been deposited with the appropriate authorities are asunder :
|Statute ||Nature of the Dues ||Amount (in Lakhs) dispute not acknowledged ||FE Y.to in which the amount _ relates ||Forum where the dispute is pending |
|Central Excise Act 1944 ||Excise Duty ||8.15 ||2008-09 ||CESTAT Bangalore |
|CENVAT Credit Rules 2004 ||Penalty ||0.50 || || |
|Goods and Service Tax 2017. ||GST ||68.76 ||2017-18 ||DCCT (Audit-4) |
| ||Interest ||65.22 || ||Mysuru |
Except dues stated above there are no other dues of income tax sales-tax servicetax custom duty excise duty value added tax goods and services tax and cess which havenot been deposited on account of any dispute.
(vii) The Company has not surrendered or disclosed any transaction previouslyunrecorded in the books of account in the tax assessments under the Income Tax Act 1961as income during the year. Accordingly the provisions of clause 3(vii1) are notapplicable.
(1x) (a) According to the information and explanations given to us the Company has notdefaulted in repayment of loans and borrowing or in the payment of interest thereon to anylender during the year.
(b) The Company has not been declared as a wilful defaulter by any bank or financialinstitution or government or any government authority at any time during the year or afterthe end of the reporting period but before the date when the financial statements areapproved.
(c) According to the information and explanations given to us term loans were appliedfor the purpose for which the loans were obtained.
(d) According to the information and explanations given to us no funds raised on ashort term basis have been used for long term purposed by the Company.
(e) The company has no subsidiaries joint ventures or associate companies.Accordingly the provisions of clause 3(1x) (e) and (f) are not applicable.
(x) The company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments). Accordingly provisions of clause 3(x)(a) arenot applicable. The company has not made any preferential allotment or private placementof shares/convertible debentures during the year. Accordingly provisions of clause3(x)(b) are not applicable.
(xi) According to the information and explanations given to us we report that no fraudby the Company or on the Company have been noticed or reported during the year. Accordingto the information and explanations given to us no report under sub-section (12) ofSection 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed underRule 13 of Companies (Audit and Auditors) Rules 2014 with the Central Government.
(c) According to the information and explanations given to us there were no whistleblower complaints received by the company during the year.
(xi) In our opinion and according to the information and explanations given by themanagement the Company is not a nidhi company. Accordingly clause 3(xii) of the Order isnot applicable.
(xiii) According to the information and explanations given by the management and basedon our examination of the records of the Company transactions with the related partiesare in compliance with Section 177 and 188 of the Act where applicable and the detailshave been disclosed in the notes to the financial statements as required by theapplicable accounting standards.
(xiv) (a) The company has an internal audit system commensurate with the size andnature of its business
(b) The internal audit reports of the Company issued till the date of the audit reportfor the period under audit have been considered by us.
(xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with its directors or personsconnected with its directors and hence provisions of Section 192 of the Companies Act2013 are not applicable to the Company.
(xvi) (a) According to the information and explanations given to us the provisions ofSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.Accordingly provisions of Clause 3(xv1) (a) and (b) are not applicable.
(b) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly provisions of Clause 3(xvi) (c) are notapplicable.
(c) There is no Core Investment Company as a part of the Group. Accordingly provisionsof Clause 3(xv1) (d) are not applicable.
(xvi) The company has not incurred cash losses during in the current financial year andin the immediately preceding financial year.
(xvii) There has been no resignation of the statutory auditors during the year.Accordingly provisions of Clause 3(xvili) are not applicable.
(xIx) On the basis of the financial ratios disclosed in Note 43 ageing and expecteddates of realization of financial assets and payment of financial liabilities otherinformation accompanying the financial statements the auditor's knowledge of the Board ofDirectors and management plans we are of the opinion that no material uncertainty existsas on the date of the audit report that the Company is capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.
(xx) In our opinion and according to the information and explanations given to usthere is no unspent amount under sub-section (5) of Section 135 of the Act pursuant to anyproject as disclosed in Note31& 42. Accordingly provisions of Clause 3(xx) (a) and(b) are not applicable. (xx1) The Company is not required to prepare ConsolidatedFinancial statements. Accordingly provisions of Clause 3(xx1) are not applicable.
|Date ||26" May 2022 ||for Murthy Swamy & Associates LLP |
|Place ||Mysore ||Chartered Accountants |
| || ||Firm Registration Number: 8200065 |
| || ||Narayana Swamy TS |
| || ||Partner |
| || ||MNo. 241535 |
| || ||UDIN :22241535AJRKOH5698 |
Annexure B to the Independent Auditor's Report of even date on the financial statementsof The South India Paper Mills Limited Report on the Internal Financial Controls OverFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 (theAct) We have audited the internal financial controls over financialreporting of The South India Paper Mills Limited (the Company) as at 31stMarch 2022 in conjunction with our audit of the financial Statements of the Company forthe year ended on that date. Management's Responsibility for Internal Financial ControlsThe Company's management is responsible for establishing and maintaiming 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 (the Guidance Note).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business mcluding adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act. Auditors' Responsibility Ourresponsibility is to express an opinion on the Company's internal financial controls overfinancial reporting based on our audit. We conducted our audit in accordance with theGuidance Note and the Standards on Auditing issued by ICAI and deemed to be prescribedunder Section 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects. Our audit involves performing procedures toobtain audit evidence about the adequacy of the internal financial controls system overfinancial reporting and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting 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'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany's internal financial controls system over financial reporting. Meaning of InternalFinancial Controls Over Financial Reporting With Reference to these Financial Statements ACompany's internal financial control over financial reporting 1s a process designed toprovide 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 mn reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and Directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements. InherentLimitations of Internal Financial Controls Over Financial Reporting with reference tothese Financial Statements Because of the inherent limitations of internal financialcontrols over financial reporting including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols over financial reporting to future periods are subject to the risk that theinternal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate. Opinion In our opinion the Company has in all material respects anadequate internal financial controls system over financial reporting and such internalfinancial controls over financial reporting were operating effectively as at 318' March2022 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.
|Date ||: ||26 May 2022 ||for Murthy Swamy & Associates LLP |
|Place ||: ||Mysore ||Chartered Accountants |
| || || ||Firm Registration Number: 8200065 |
| || || ||Narayana Swamy TS |
| || || ||Partner |
| || || ||MNo. 241535 |
| || || ||UDIN :22241535AJRKOH5698 |