Servalakshmi Paper Ltd.
|BSE: 533401||Sector: Industrials|
|NSE: SERVALL||ISIN Code: INE431L01016|
|BSE 00:00 | 22 May||Servalakshmi Paper Ltd|
|NSE 05:30 | 01 Jan||Servalakshmi Paper Ltd|
|BSE: 533401||Sector: Industrials|
|NSE: SERVALL||ISIN Code: INE431L01016|
|BSE 00:00 | 22 May||Servalakshmi Paper Ltd|
|NSE 05:30 | 01 Jan||Servalakshmi Paper Ltd|
The Members of M/s. Servalakshmi Paper Limited
Report on the Financial Statements
We have audited the accompanying financial statements of SERVALAKSHMI PAPER LIMITED(the Company') which comprise the balance sheet as at 31 March 2016 the statementof profit and loss and the cash flow statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Managements Responsibility for the 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 preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding 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 design implementation and maintenance of adequate internalfinancial controls and ensuring their operating effectiveness for the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial 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 is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
a) in the case of the Balance Sheet of the state of affairs of the Company as at March31 2016;
b) in the case of Statement of Profit and Loss the Loss for the year ended on thatdate; and
c) in the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.
Emphasis of Matters
We draw attention to the following matter in the Notes 3 to the financial statements:
Note 3 in the financial statements which indicate that the Company has accumulatedlosses and its net worth has been fully eroded the Company has incurred a net cash lossduring the current and previous year(s) and the Company's current liabilities exceededits current assets as at the balance sheet date.
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 of the Act we give inthe Annexure A
a statement on the matters specified in the paragraph 3 and 4 of the order to theextent 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 and the cash flow statementdealt with by this Report are in agreement with the books of account;
(d) in our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
(e) The Erosion of Net Worth as described under the Emphasis of Matters paragraphabove in our opinion may have an adverse effect on the functioning of the Company.
(f) on the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act;
(g) 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 B; 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 to us:
i. the Company does not have any pending litigations which would impact its financialposition - Refer Note 25 to the 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 to the Auditors Report
The Annexure A referred to in paragraph 1 of Report on Other Legal and RegulatoryRequirements
In terms of the information and explanation sought by us and given by the Company andthe books and records examined by us in the normal course of audit and to the best of ourknowledge and belief we report the following:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets of the company have been physically verified by the managementduring the year at reasonable intervals having regard to size of the company and nature ofits assets. No material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the company.
(ii) The stocks of finished goods stores spares and raw materials of the Company atits different locations have been physically verified by the management during the year atreasonable intervals. In our opinion the frequency of such verification is reasonable andmaterial discrepancies noticed on physical verification of inventory has resulted indifference in book stock and physical stock (physical stock being lower than book stock)aggregating to Rs.31.51 Crores. Such difference has been fully reckoned appropriately inthe statement of profit and loss ( as part of increase/decrease in work-in-progress and/or consumption of raw materials/other materials as the case may be) and as such thephysically verified stocks have been considered in the financial statements for the periodended 31st March2016.
(iii) The company has not granted any secured / unsecured loan to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.
(iv) The company has not granted any loan to directors or to any other person in whomthe director is interested or given any guarantee or provided any security in connectionwith any loan taken by the director or such other person as contemplated in section 185 ofthe Act. The company has also not given any loan or made any investment as contemplatedunder section 186 of the Act.
(v) The company has not accepted deposits during the year.
(vi) We have broadly reviewed the records maintained by the company pursuant to therules made by the Central Government for the maintenance of the cost records u/s. 148(1)of the Act. We are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have not however made a detailed examination of therecords with a view to determining whether they are accurate or complete.
(vii) (a) The company is not 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 to theappropriate authorities .No undisputed arrears of outstanding statutory dues as on31.03.2016 for a period of more than 6 months from the date they become payable exceptthe following;
(b) There are no dues of Income Tax or Sales tax or Service tax or duty of customs orduty of excise or value added tax which have not been deposited on account of any disputeexcept the following;
(viii) The company has not availed any loan from financial institutions and has notissued any debentures till date. The Company has defaulted in repayment of dues to banksas under.
(ix) The company has not raised any money by initial public offer or further publicoffer (including debt instruments) and has not availed any term loan during the year.
(x) Based upon the audit procedures performed and information and explanation given bythe management no frauds by the company or on the company by its officers or employeeshas been noticed or reported during the course of our audit.
(xi) The Company has not paid managerial remuneration during the year.
(xii) In our opinion the company is not a nidhi company.
(xiii) In our opinion transactions with related parties are in compliance with section177 and 188 of the Act. Details of such transactions have been disclosed in the financialstatements as required by the applicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year.
(xv) The company has not entered into non cash transactions with directors or personsconnected with them.
(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
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 ofSERVALAKSHMI PAPER LIMITED (the Company) as of 31 March 2016 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.
Managements 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the Guidance Note) and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the 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 (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with 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.
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 2016 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.