To the Members of SANGAL PAPERS LIMITED MEERUT
Report on the Financial Statements
We have audited the accompanying standalone financial statements of SANGAL PAPERSLIMITED MEERUT ("the Company") which comprise the Balance sheet as at 31 March2021 the Statement of Profit and Loss including the Cash Flow Statement and the Statementof Changes in Equity for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information.
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 Companies Act 2013 as amended ("the Act") in the manner sorequired 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 March 2021its profit including other comprehensive income its cash flows and changes in equity forthe year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143 (10) of the act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code Ethics. We believethat the audit evidence we have obtained a sufficient and appropriate to provide a basisfor our audit opinion on the Standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS financial statements for the financialyear ended 31 March 2021. These matters were addressed in the context of our audit of theStandalone IND AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.
We have determined the matter described below to the key audit matters to becommunicated in our report. We have fulfilled the responsibilities the described in theAuditor's responsibilities for the audit Standalone Ind AS financial statements section ofour report including in relation to these matters. Accordingly our audit the includedthe performance of procedures designed to respond to our assessment to the risk ofmaterial misstatements of the Standalone Ind AS financial statements. The results of ouraudit procedures including the procedure performed to addressed the matter below providethe a basis for our audit opinion on the accompanying Standalone Ind AS financialstatements.
|Key audit matters ||How our audit addressed the key audit matter |
|Revenue Recognition (as described in note 1j of the standalone Ind AS financial statements) ||Our audit procedures included the following: |
|For the year ended 31 March 2021 the Company has recognized revenue from contracts with customers amounting to Rs. 10591.66 lakhs. Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflect that the consideration to which the Company expects to the entitled in exchange for those goods or services. The Company has generally concluded that as principal it typically controls the goods or services before transferring them to the customers. The variety of terms that defined when control are transfer to the customer as well as the high value of the transactions give rise to the risk that revenue is not recognized in the correct period. Revenue is measured net of return and allowances cash discounts trade discount and volume rebates (collectively1 discount and rebates'). || Assessed the Company's revenue recognition policy prepared as per Ind AS 115 Revenue from contracts with customers'. |
|There is a risk that these discount and rebates are in correctly reported as it also requires in a certain degree of estimation resulting in understatement of the associated expenses and accrual. Revenue is also an important element of how the Company measure its performance. The Company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before the risk and rewards have been transferred. || Assessed the design and tested the operating effectiveness of internal controls related to revenue recognition discounts and rebates. |
|Accordingly due the significant risk associated with revenue recognition in accordance with terms of Ind AS 115 Revenue from contracts with customers' it was determined to be a key audit matter in our audit of the standalone IND AS financial statements. || Performed sample tests of individual sales transaction and traced to sales invoices sales orders and other related documents. Further in respect of the samples checked that the revenue has been recognized as per the shipping terms. |
| || To test cut off selected sample of sales transactions made pre-and post year end agreeing the period of revenue recognition to third party support such as transporter invoice and customer confirmation of receipt of goods. |
| || Tested the provision calculations related to management incentives discounts and rebates by agreeing a sample of amounts recognized to underlying arrangements with customers and other supporting documents. |
| || Performed monthly analytical procedures of revenue by streams to identify any unusual trends. |
| || Obtained confirmations from customers on sample basis to support existence assertion of trade receivables and assessed the relevant disclosures made in the financial statements: to ensure revenue from contracts with customers are in accordance with the requirements of relevant accounting standards. |
We have determined that there are no other key audit matters to communicate in ourreport. Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report 2020-21 but does notinclude the Standalone Ind AS financial statements and our auditor's report thereon.
Our opinion on the Standalone Ind AS Financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
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 Act2013 ("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 Cash Flows and the Statement ofChanges in Equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.
In preparing the Standalone Ind AS financial statement management is 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an Auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Ind AS financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatements of the Standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a base for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
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)(1)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsub controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof 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 opinion. 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 the Standalone IndAS financial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
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 communicate with them allrelationships and other matters that may reasonably be thought to bear on our independenceand 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 Standalone Ind AS financialstatements for the financial year ended March 31 2021 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on Other Legal and Regulatory Requirements
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 Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 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 Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account;
d. In our opinion the aforesaid Standalone Ind AS financial statements comply with theAccounting Standards specified under section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
e. On the basis of written representations received from the directors as on March 312021 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of section 164 (2) ofthe Act;
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure B" to this report;
g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to explanations givento us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
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 as amended inour opinion and 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 in its Standalone Ind AS financial statements - Refer Note 36 to the StandaloneInd As financial statements;
(ii) The Company did not have any long term contracts including derivatives contractsfor which 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.
ANNEXURE A TO THE AUDITORS' REPORT
The annexure referred to in our report to the members of SANGAL PAPERS LIMITED MEERUT
(the Company') for the year ended 31 March 2021. We report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative
details and situation of property plant & equipment.
(b) According to the information and explanations given to us physical verification ofproperty plant & equipment have been carried out by the management and no materialdiscrepancies were noticed on such verification. In our opinion the frequency ofverification is reasonable having regard to the size of the company and nature of itsassets.
(c) In our opinion and according to the information and explanations given to us thetitle deeds of immovable properties are held in the name of the company.
(ii) The inventory has been physical verified at reasonable intervals by the managementduring the year. As explained to us no material discrepancies were noticed on physicalverification as compared to book records.
(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 Companies Act 2013.
(iv) In our opinion and according to the information and explanations given to us thecompany has not given any loans or guarantees/made any investments within the meaning ofSection 185 & 186 of the Companies Act 2013.
(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposit from the public.
(vi) The Cost record has been specified by the Central Government under sub-section (1)of section 148 of the Companies Act 2013. We have broadly reviewed the accounts andrecords of the Company in this connection and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not howevercarried out a detailed examination of the records with a view to determine whether theyare accurate or complete
(vii) (a)According to the records of company and information and explanation given tous the
company is regular in depositing undisputed statutory dues including provident fundemployees' state insurance income-tax duty of customs goods and service tax and anyother statutory dues with the appropriate authorities during the year. There is noundisputed amounts payable as at 31.03.2021 for a period of more than six months from thedate they became payable.
(b) According to the information and explanations given to us there are no dues ofincome tax duty of customs goods and service tax which have not been deposited with theappropriate authorities on account of any dispute.
(viii) In our opinion and according to the information and explanations given to usthe company has not defaulted in repayment of loans or borrowing to financial institutionbanks during the year.
(ix) In our opinion and according to the information and explanations given to us thecompany did not raise any money by way of initial public offer or further public offer(including debt instrument). The Company has taken term loan from bank and have beenapplied to the purpose for which they were raised.
x) According to information and explanation given to us no material fraud by theCompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to information and explanation given to us and based on our examinationof the records of the Company the Company has paid / provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act; 2013.
(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company.
(xiii) In our opinion and according to the information and explanations given to ustransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 and the details of such transactions have been disclosed in theFinancial Statements as required by the applicable accounting standards.
(xiv) According to the information and explanations provided to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) of the Order are notapplicable to the Company.
(xv) According to the information and explanations provided by the management theCompany has not entered into any non-cash transactions with directors or persons connectedwith him as referred to in section 192 of Companies Act 2013.
(xvi) According to the information and explanations provided to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
ANNEXURE B TO THE AUDITORS' REPORT
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 SANGALPAPERS LIMITED MEERUT (the company') as of 31 March 2021 in conjunction with ouraudit of the standalone Ind As financial statements of the Company for the year ended onthat 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 were 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 auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor 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 standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) 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 authorizations of the Management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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.
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 2021 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.