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Seshasayee Paper & Boards Ltd.

BSE: 502450 Sector: Industrials
NSE: SESHAPAPER ISIN Code: INE630A01024
BSE 00:00 | 01 Jul 198.80 11.00
(5.86%)
OPEN

190.95

HIGH

203.40

LOW

190.00

NSE 00:00 | 01 Jul 198.10 11.55
(6.19%)
OPEN

188.50

HIGH

203.00

LOW

188.00

OPEN 190.95
PREVIOUS CLOSE 187.80
VOLUME 6569
52-Week high 238.95
52-Week low 133.95
P/E 12.16
Mkt Cap.(Rs cr) 1,253
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 190.95
CLOSE 187.80
VOLUME 6569
52-Week high 238.95
52-Week low 133.95
P/E 12.16
Mkt Cap.(Rs cr) 1,253
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Seshasayee Paper & Boards Ltd. (SESHAPAPER) - Auditors Report

Company auditors report

TO THE MEMBERS OF

M/s SESHASAYEE PAPER AND BOARDS LIMITED

Report on the audit of Standalone Financial Statements Opinion

We have audited the accompanying Standalone Financial Statements of SESHASAYEE PAPERAND BOARDS LIMITED ("the Company") which comprise the Balance Sheet as at March31 2021 and the Statement of Profit and Loss (including

Other Comprehensive Income) Statement of Changes in Equity and the Statement of CashFlows for the year then ended and Notes to the Financial Statements including a summaryof the Significant Accounting Policies and other explanatory information hereinafterreferred to as Financial Statements. In our opinion and to the best of our information andaccording to the explanations given to us the aforesaid Standalone Financial Statementsgive the information required by the Companies Act 2013 ("Act") in the mannerso required and give a true and fair view in conformity with the Indian AccountingStandards prescribed under Section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amendedresults ("Ind AS") and otheraccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2021 the Profit

(Including Other Comprehensive Income) the changes in Equity and its cash flows forthe year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing

(SAs) specified under section 143 (10) of

Companies Act 2013. Our responsibilities under those Standards are further describedin the Auditors' Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of theCompanies Act 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficientand appropriate to provide a basisfor our opinion.

Emphasis of Matter

Attention is invited to note no 1 B (1.2) (g) of the financial statements which isextracted below :

"The Company has considered the possible effects that may result from the COVID-19pandemic on the carrying amounts of Property Plant and Equipment InvestmentsInventories receivables and other current assets. In developing the assumptions relatingto the possible future uncertainties in the global economic conditions because of thispandemic the Company as at the date of approval of these financial has used internal andexternal sources on the expected future performance of the Company. The Company hasperformed sensitivity analysis on the assumptions used and based on current estimatesexpects the carrying amount of these assets will be recovered." Our opinion on theFinancial Statements is not modified in respect of the above matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the Financial Statements of the current period. These matterswere addressed in the context of our audit of Financial Statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matters Response to Key Audit Matters & Conclusion
1. As on 31st March 2021 the Finished Goods inventory of Paper (Note no 6 - Carrying value Rs 148.94 crores) are valued at lower of cost and net realizable value. We understood and tested the design and operating effectiveness of controls as established by the management in maintenance of stock records maintained and physical verification procedure instructions and the results of the year end physical verification.
We considered the value of Finished goods as
key audit matter considering the relative size of it in the financial statements and significant judgments involved in the consideration of factors such as the physical existence of the stock cost determination selling prices and determination of net realizable value. We applied standard audit procedures during physical verification including recheck of the physical stock.
We have broadly verified the cost accounting records. Based on the records maintained we verified the cost calculations including basis for determination of unabsorbed fixed overheads due to lower production than normal levels.
We have verified the selling prices from the price lists / subsequent invoices and also the estimate of the selling expenses for arriving at the net realizable value.
Based on the above audit procedures we have concluded that the management's determination of the finished goods is reasonable and in accordance with Ind AS 2 – Inventories.
2. As on 31st March 2021 the Company carries cash and bank balances of Rs 205.80 crores. We considered the amount of cash and bank balance as a key audit matter given the relative size of the balance in the financial statements. We have verified and tested the design and operating effectiveness of controls with regard to maintenance of cash balances and preparation of bank reconciliation statements.
We have verifiedthe cash balance at the end of the year as well as the bank reconciliation statements.
We have also received confirmation of balances from banks directly which corroborates with the results of our audit procedures.
3. The addition to Property Plant and Equipment (PPE) during the year is Rs 100.99 crores. The additions being significant value of PPE we have considered this as a key audit matter. We have verified the project report as approved by the Board.
We have tested the internal control procedures for purchases receipts issues of capital items direct and indirect expenditure technical certification on "ready for use". Based on the test checks and audit procedures applied by us we are satisfied on the additions to PPE.

Information Other Than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information in the AnnualReport comprising of the Director's report and its annexures but does not include thestandalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon. In connection with ouraudit of the standalone financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that if there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management Responsibility and Those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the

Companies Act 2013 ("the Act") with respect to the preparation of theseStandalone Financial Statements that give a true and fair view of the Financial PositionFinancial Performance (including Other Comprehensive Income) Changes in Equity and CashFlows of the Company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards specified under

Section 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 Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the Financial Statements the Board of Directors 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 unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibilities for the Audit of the Financial Statements

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 auditors' 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 whendoubt it exists. Misstatements can arisefrom fraud 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 in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also: Identify and assess therisks of material misstatement of the Financial Statements whether due to fraud or errordesign and perform audit procedures responsive to those risks and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resultingfrom error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.

Obtain an understanding of internal controls relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143 (3) (i) ofthe Companies Act 2013 we are also responsible for expressing our opinion on whether theCompany has adequate Internal Financial Controls system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant on the Company's abilityto continue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditors' report to the related disclosures in theStandalone 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 ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern. Evaluate the overall presentation structure and content ofthe Financial Statements including the disclosures and whether the Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation. Materiality is the magnitude of misstatements in the Standalone FinancialStatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the Financial Statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the Financial Statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant deficiencies in Internal Controlthat 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143 (11) of the CompaniesAct 2013 we give in "Annexure B" a statement on the matters specified inparagraphs 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 andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c) The Balance Sheet the Statement of Profit and Loss(including Other

Comprehensive Income) the Statement of Changes in Equity and the Cash Flow Statementdealt with by this Report are in agreement with the books of account. d) In our opinionthe aforesaid Standalone Financial Statements comply with the Indian Accounting Standardsprescribed under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. e) On the basis of the written representations received from the Directors ason 31st March 2021 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2021 from being appointed as a Director in terms of Section164(2) of the Act. f) With respect to the adequacy of the Internal Financial Controls overfinancial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure A". g) With respect to the othermatters to be included in the Auditors' Report in accordance with the requirements ofSection 197 (16) of the Act as amended: In our opinion and to the best of our informationand according to the explanations given to us the remuneration paid by the Company to itsdirectors during the year is in accordance with the provisions of Section 197 of the Act.h) With respect to the other matters to be included in the Auditors' Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us: i. The Company hasdisclosed the impact of pending litigations on its financial position in its financialstatements. ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses. iii. There has been nodelay in transferring amounts required to be transferred to the Investor Education andProtection Fund by the company.

MAHARAJ N R SURESH AND CO LLP R SUBRAMANIAN AND COMPANY LLP
Firm Regn. No. 001931S/S000020 Firm Regn. No. 004137S/S200041
N R Jayadevan N Krishnamurthy
Membership No. 023838 Membership No. 019339
Partner Partner
Chartered Accountants Chartered Accountants
UDIN : 21023838AAAAAK2617 UDIN : 21019339AAAAFV7240
Place : Chennai
Date : May 08 2021

ANNEXURE ‘A' TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONEIND AS FINANCIAL STATEMENTS OF SESHASAYEE PAPER AND BOARDS LIMITED.

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 SESHASAYEEPAPER AND BOARDS LIMITED ("the Company") as of March 31 2021 in conjunctionwith our audit of the Standalone Ind AS Financial Statements of the Company for the yearended 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 Controlstated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued 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.

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 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 ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate Internal Financial Controls over FinancialReporting was established and maintained and if such controls operated effectively in allmaterial 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 Auditors' judgement 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 of records that in reasonable detail accurately andfairly reflect the 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 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 transactionsanddispositionsof misstatements due to error orfraud may occur and not be detected. Also projections of any evaluation of the InternalFinancial Controls over Financial Reporting to future periods are subject to the risk thatthe Internal Financial Control over Financial Reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or procedures maydeteriorate.

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 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 ICAI.

MAHARAJ N R SURESH AND CO LLP R SUBRAMANIAN AND COMPANY LLP
Firm Regn. No. 001931S/S000020 Firm Regn. No. 004137S/S200041
N R Jayadevan N Krishnamurthy
Membership No. 023838 Membership No. 019339
Partner Partner
Chartered Accountants Chartered Accountants
UDIN : 21023838AAAAAK2617 UDIN : 21019339AAAAFV7240
Place : Chennai
Date : May 08 2021

ANNEXURE ‘B' TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE STANDALONEIND AS FINANCIAL STATEMENTS OF SESHASAYEE PAPER AND BOARDS LIMITED.

The Annexure referred to in Paragraph 1 under the heading ‘Report on Other Legaland Regulatory Requirements' of our Report of even date : (i) (a) The Company ismaintaining proper records showing full particulars including quantitative details andsituation of fixed assets;

(b) These fixed assets have been physically verified by the Management at the year endand 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 Management has conducted physical verification of inventory at reasonable intervalsand no material discrepancies were noticed.

(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) The Company has complied with the provisionsof Sections 185 and 186 of the Companies Act 2013 in respect of loans investmentsprovided by the Company. The Company has not provided any guarantee or security to anyCompany covered under Section 185.

(v) The Company has not accepted any deposits from the public.

(vi) The Central Government has prescribed maintenance of Cost Records under Sub-section(1) of Section 148 of the Companies Act 2013 and such accounts and records have been madeand maintained. (vii) According to the information and explanations given to us in respectof Statutory dues : (a) The Company is regular in depositing undisputed Statutory duesincluding Provident Fund Employees' State Insurance Income Tax Duty of Customs CessGoods and Service Tax and any other Statutory Dues to the appropriate authorities andthere were no undisputed amounts payable which were in arrears as at 31st March 2021 for aperiod of more than six months from the date they became payable.

(b) Details of dues of Income Tax or Sales Tax or Service Tax or Duty of Customs orDuty of Excise or Value Added Tax Cess and Goods and Service Tax have not been depositedas on 31st March 2021 on account of disputes are given below :

Name of the Statute Nature of dues Amount Rs crores Forum where the dispute is pending Period to which the dues belong
Central Excise Act 1944 Excise Duty 0.02 Hon'ble High Court of Madras 07 12 2008
Service Tax (Finance) Act 1994 Service Tax 0.10 CESTAT April 2016 - June 2017
Name of the Statute Nature of dues Amount Rs crores Forum where the dispute is pending Period to which the dues belong
Customs Act 1962 Customs Duty 6.24 CESTAT March 2012 - January 2013
- do - - do - 0.19 - do - 13 12 2002
- do - - do - 0.09 - do - 18 01 2018
- do - Cenvat 3.71 - do - April 2012 to January 2016

(viii) The Company has not defaulted in repayment of loans or borrowing to a financialinstitution bank Government. The Company has not issued any Debentures.

(ix) The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year. (x) The Company has not noticedor reported during the year any fraud by the Company or any fraud on the Company by itsOfficers or employees. (xi) The managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act 2013. (xii) The Company is not a Nidhi Company andhence complying with the provisions of the

Nidhi Rules 2014 does not arise.

(xiii) All transactions with the related parties are in compliance with Sections 177and 188 of the Companies Act 2013 where applicable and the details have been disclosedin the Financial Statements etc. as required by the applicable Accounting Standards.(xiv) The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. (xv) The Companyhas not entered into any non-cash transactions with Directors or persons connectedwith him. (xvi) The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934.

MAHARAJ N R SURESH AND CO LLP R SUBRAMANIAN AND COMPANY LLP
Firm Regn. No. 001931S/S000020 Firm Regn. No. 004137S/S200041
N R Jayadevan N Krishnamurthy
Membership No. 023838 Membership No. 019339
Partner Partner
Chartered Accountants Chartered Accountants
UDIN: 21023838AAAAAK2617 UDIN: 21019339AAAAFV7240
Place : Chennai
Date : May 08 2021

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