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South India Paper Mills Ltd.

BSE: 516108 Sector: Industrials
NSE: SIPAPER ISIN Code: INE088G01014
BSE 00:00 | 15 Feb 82.00 1.40
(1.74%)
OPEN

77.50

HIGH

82.00

LOW

77.50

NSE 05:30 | 01 Jan South India Paper Mills Ltd
OPEN 77.50
PREVIOUS CLOSE 80.60
VOLUME 2153
52-Week high 135.00
52-Week low 77.50
P/E 6.87
Mkt Cap.(Rs cr) 123
Buy Price 77.80
Buy Qty 25.00
Sell Price 84.00
Sell Qty 67.00
OPEN 77.50
CLOSE 80.60
VOLUME 2153
52-Week high 135.00
52-Week low 77.50
P/E 6.87
Mkt Cap.(Rs cr) 123
Buy Price 77.80
Buy Qty 25.00
Sell Price 84.00
Sell Qty 67.00

South India Paper Mills Ltd. (SIPAPER) - Auditors Report

Company auditors report

To the Members of THE SOUTH INDIA PAPER MILLS LIMITED NANJANGUD

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of THE SOUTHINDIA PAPER MILLS LIMITED ("the Company") which comprises of the BalanceSheet as at March 31 2018 the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equity forthe year then ended and a summary of significant explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Ind AS Financial Statements that give a true and fair view of thefinancial position financial performance including other comprehensive changes in equityof the Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of theAct. read with the Companies (Indian Accounting Standards) Rules 2015 as amended.

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 judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS FinancialStatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.We conductedour audit of the Standalone Ind AS Financial Statements in accordance with the Standardson Auditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement. Anaudit involves performing procedures to obtain audit evidence about the amounts and thedisclosures in the financial statements. 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. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of the Ind ASFinancial Statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the Standalone IndAS Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2018 its profit including other comprehensive income its cashflows and the changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended March 31 2017and the transition date opening balance sheet as at April 01 2016 included in these IndAS financial statements are based on the previously issued statutory financial statementsprepared in accordance with the accounting principles generally accepted in Indiaincluding the Companies (Accounting Standards) Rules2006 (asamended) specified underSection 133 of the Act read with the Companies (Accounts) Rules 2014 audited by thepredecessor auditor whose report for the year ended March 31 2017 and March 31 2016dated May 25th 2017 and May 26th 2016 respectively expressed an unmodified opinion onthose financial statements as adjusted for the differences in the accounting principlesadopted by the Company on transition to the Ind AS which have been audited by us.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the "Annexure 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act we report that:

a. we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose 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 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; Balance Sheet theStatement of Profit and Loss and the Cash Flow Statement dealt with by this Report are inagreement with the books of account;

d. in our opinion the aforesaid Stand alone Ind AS Financial Statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

e. On the basis of written representations received from the Directors as on March312018 taken on record by the Board of Directors none of the Directors is disqualifiedas on March 312018 from being appointed as a Director in terms of Section 164 (2) of theAct;

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 2".

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 35 to the Standalone Ind AS FinancialStatements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

for Murthy Swamy & Associates LLP
Chartered Accountants
Firm's Regn. No.: S200065
M D Venkatesha Murthy
Place : Bengaluru Partner
Date : 24th May 2018 Membership No.: 209189

"ANNEXURE 1" TO THE INDEPENDENT AUDITORS' REPORT

Annexure 1 referred to in clause 1 of paragraph on the ‘Report on Other Legal& Regulatory Requirement' of our report of even date to the Standalone Ind ASFinancial Statements of the Company for the year ended March 31 2018:

On the basis of such checks as we considered appropriate and in terms of theinformation and explanations given to us we state that:

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

(b) According to the practice of the Company fixed assets are physically verified bythe management at reasonable intervals which in our opinion is reasonable having regardto the size of the Company and the nature of its assets. Management has confirmed that nomaterial discrepancies were noticed on such 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 immovable properties areheld in the name of the Company.

(ii) The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable and the discrepancies noticedwere 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.

(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) According to the information and explanations given to us the Company has notaccepted any deposits for which the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder are 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 Companies 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 undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues with theappropriate authorities

(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 dispute not acknowdeged Period to which the amount relates Forum where the dispute is pending
Central Excise Act Excise Duty 815339
1944 / CENVAT Penalty 50000 2008-09 CESTAT Bangalore
Credit Rules 2004

Except dues stated in the above para there are no other dues of income tax or salestax or wealth tax or service tax or duty of customs or duty of excise or value added taxor cess which have not been deposited on account of any dispute.

(viii) According to the information and explanation given to us the Company has notdefaulted in repayment of loans or borrowings to the bank as at Balance Sheet date.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. The term loans raised duringthe year have been applied for the purpose for which they were obtained.

(x) According to the information and explanations given to us by the management wereport that no material fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration pending approval of shareholders in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) 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.

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

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

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

(xvi) The Company is not required to be registered under Section 45-1A of the ReserveBank of India Act 1934.

for Murthy Swamy & Associates LLP
Chartered Accountants
Firm's Regn. No.: S200065
M D Venkatesha Murthy
Place : Bengaluru Partner
Date : 24th May 2018 Membership No.: 209189

"ANNEXURE 2" TO THE INDEPENDENT AUDITORS' REPORT

Annexure 2 referred to in "clause f of paragraph 2" on the ‘Report onOther Legal & Regulatory Requirement' of our report of even date to the Standalone IndAS Financial Statements of the Company for the year ended March 31 2018:

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 THESOUTH INDIA PAPER MILLSLIMITED ("the Company") as of March 312018 inconjunction with our audit of the Standalone Ind AS Financial Statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control 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 including 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 Companies Act 2013.

Auditors' Responsibility

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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated 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 auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 financialreporting and thepreparation of financialstatements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that:

i. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

ii. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and Directors of the Company; and

iii. provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial 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.

Opinion

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 March 31 2018 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 Chartered Accountants of India.

for Murthy Swamy & Associates LLP
Chartered Accountants
Firm's Regn. No.: S200065
M D Venkatesha Murthy
Place : Bengaluru Partner
Date : 24th May 2018 Membership No.: 209189