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South India Paper Mills Ltd.

BSE: 516108 Sector: Industrials
NSE: SIPAPER ISIN Code: INE088G01014
BSE 00:00 | 10 Jul 60.45 0
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NSE 05:30 | 01 Jan South India Paper Mills Ltd
OPEN 60.00
PREVIOUS CLOSE 60.45
VOLUME 11808
52-Week high 99.00
52-Week low 32.60
P/E 5.69
Mkt Cap.(Rs cr) 91
Buy Price 59.05
Buy Qty 1.00
Sell Price 60.95
Sell Qty 60.00
OPEN 60.00
CLOSE 60.45
VOLUME 11808
52-Week high 99.00
52-Week low 32.60
P/E 5.69
Mkt Cap.(Rs cr) 91
Buy Price 59.05
Buy Qty 1.00
Sell Price 60.95
Sell Qty 60.00

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

Company auditors report

To the Members of

The South India PaperM ills Limited Nanjangud

R eport on the Audit of the Ind AS Financial Statements

Opinion

We have audited the Ind AS financial statements of The South India Paper Mills Limited("the Com pany") which comprises the Balance Sheet as at March 31 2019 theStatement of Profit and Loss (including Other Comprehensive Income) Statement of Changesin Equity and Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 2019 and profit/loss changes in equity and its cash flows forthe year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the "Auditor's Responsibilities for the Audit ofthe Financial Statements" section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on the IndAS financial statements.

Key Audit M atters

Key Audit Matters are those matters that in our professional judgement were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and informing our opinion thereon and we do not provide a separate opinion onthese matters.

We have determined that there are no key audit matters to communicate in our report.Inform ation O ther than the Financial Statements and A uditor's R eport Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the Ind AS financialstatements and our auditor's report thereon.

Our opinion on the Ind AS financial statements does not cover the other information andwe do not 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 Ind AS financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information; we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of M anagem ent and those charged with governance for Ind AS thefinancial statements The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income change inequity and cash flows of the Company in accordance with the Indian Accounting Standards(Ind AS) and accounting principles generally accepted in India. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements the Board of Directors are responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intend to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the company's financialreporting process. A uditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS 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 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.

A further description of the auditor's responsibilities for the audit of the Ind ASfinancial statements is included in A nnexure A. This description forms part o f ourauditor's report.

Report on O ther Legal and Regulatory Requirem ents

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Companies Act 2013 we give in Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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 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 the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid Ind AS financial statements comply with the Ind ASspecified under Section 133 of theActread with Rule 7 of the Companies (Accounts) Rules2014.

e) On the basis of the written representations received from the Directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors aredisqualified as on 31st March 2019 from being appointed as a Director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the Internal Financial Control over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure C.

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.

ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;

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

for M urthy Swamy & Associates LLP
Chartered Accountants.
Firm Registration Number: S200065
Date : 23rd May 2019 N arayana Swamy T S
Place : Bengaluru Partner
M No.: 241535

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENT

As part of the audit in accordance with SAs we exercise professional judgment andmaintain 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 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness 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 auditor's report to the related disclosures inthe Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's 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.

for M urthy Swamy & Associates LLP
Chartered Accountants
Firm Registration Number: S200065
Date : 23rd May 2019 N arayana Swamy T S
Place : Bengaluru Partner
M No.: 241535

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT

Annexure B referred to in clause 1 of paragraph on the ‘Report on Other Legal& Regulatory Requirement' of our report of even date to the Financial Statements ofthe Company for the year ended March 31 2019:

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 o f Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed there under 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(l)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 N ature of the Dues Am ount in dispute not acknowdeged F. Y. to which the am ount relates Forum where the dispute is pending
Central Excise Act 1944 / CENVAT Excise Duty 815339 2008-09 CESTAT Bangalore
Credit Rules 2004 Penalty 50000
Finance Act 1994 Penalty 359506 2003-04 to Commissioner
2006-07 Appeals Mysore

Except dues stated above there are no other dues of income tax or sales tax or wealthtax or service tax or duty of customs or duty of excise or value added tax or cess whichhave 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 given to us and based on ourexamination of the records of the

Company the Company has paid/provided for managerial remuneration pending approval ofshareholders in accordance with the requisite approvals mandated by the provisions ofSection 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 M urthy Swamy & Associates LLP
Chartered Accountants
Firm Registration Number: S200065
Date: 23rd May 2019 N arayana Swamy T S
Place: Bengaluru Partner
M No.: 241535

ANNEXURE C TO THE INDEPENDENT AUDITORS' REPORT

Annexure C referred to in "clause f of paragraph 2" on the ‘Report onOther Legal & Regulatory Requirement' of our report o f even date to the FinancialStatements of the Company for the year ended March 31 2019:

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 The SouthIndia Paper Mills Limited ("the Company") as of March 31 2019 in conjunctionwith our audit of the Financial Statements of the Company for 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 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 auditor's 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 Company's internal financial controls systemover 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: i. pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; ii. 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 iii. provide reasonable assurance regarding prevention or timely detectionof unauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls O ver 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 2019 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.

for M urthy Swamy & Associates LLP
Chartered Accountants
Firm Registration Number: S200065
Date : 23rd May 2019 N arayana Swamy T S
Place : Bengaluru Partner
M No.: 241535