ToTheMembers of Shree Ajit Pulp and Paper Limited Report on the Audit of the StandaloneFinancial Statements Opinion
We have audited the accompanying standalone financial statements of Shree Ajit Pulp andPaper Limited ("the Company'') which comprise the Balance Sheet as at 31 March 2020and the Statement of Profit and Loss (including Other Comprehensive Income) the Statementof Cash Flows and the Statement of Changes in Equity for the year then ended and asummary 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 financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of rite Company as at 31 March 2 020 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of th.:: Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of lndia (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our ocher ethicalresponsibilities in accordance with th ese requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professionaljudgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter ||Auditor's Response |
|Existence of inventory of Raw materials Work-inprogress Finished goods Stores and spares Consumables and Packing material stock [Refer Note No. 8 to the StandaloneFinancialStatements] ||We performed the following alternate audit procedures to audit the existence of inventcries as per the guidance provided in SA 501 "Audit Evidence - Specific Considerations for Selected Items" as at the year-end since we were not able to physically observe the physical stock verification: |
|The Company has its inventory located in factory premises and in godowns. The Company has a policy of performing yearly count of its inventory. Due to travel restrictions imposed because of COVID-19 in the month of March 2020 we were unable to participate ||a) Understood and evaluated the management's internal controls process to establish the existence of inventory such as (i) the process of physical verification carried out by the Management the scope and coverage of the verification programme the results of such verification including analysis of discrepancies if any; (ii) maintenance of stock records at all locations; |
|physically in the physical verification of inventory performed by the Management subsequent to the year end. In view of the foregoing obtaining sufficient appropriate audit evidence regarding existence of inventories as at the balance sheet date is identified as a ||b) Observed the physical verification of inventories carried out by the Management subsequent to year-end through virtual mediums to verify the compliance with the standard operating procedures issued by the Management for physical verification of inventory to determine existence of inventory. |
|key audit matter. ||c) On a sample basis performed roll back procedures (by inspecting documentation relating to subsequent sales supported by acknowledged lorry receipts purchases stock transfers production records as applicable) from the inventory quantities physically verified by the Management subsequent to the year end to arrive at the quantities at the balance sheet date. Compared such quantities at the balance sheet date based on such roll back procedures with the quantities as per the inventory records and obtained explanations for differences if any. |
| ||d) We have performed alternate procedures to audit the existence of inventory which includes inspection of supporting documentation relating to purchases sales stock transfer records and results of count performed by the Management |
Information Other than the Financial Statements and Auditor's Report Thereon
" The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in
the Directors' report Chairman and Managing Director's message to stake holders andCorporate Governance Report butdoes not include the consolidated financial statementsstandalone financial statements and our auditor's report thereon.
! Our opinion on the standalone financial statements does not coverthe other information and we do not express any form of assurance conclusion thereon .
" In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our auditor otherwise appears to be materiallymisstated.
- If based on the work we have performed we conclude that there is a 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 Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant ro the preparation and presentation of the standalone financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements 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 orto cease operations or has norealistic alternative but to do so.
The Board of Directors are also responsible for overseeingthe Company's financialreporting process.
Auditor's Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 financial statements.
As part ofan audit i naccordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
T Identify and assess the risks of material misstatement of the standalonefinancial 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 basis 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 financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act 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 reasonablenessof accounting estimates and related disclosures made by the 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 standalone 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 standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.
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 them all relationships and odier matters that mayreasonably be thought to bear on our independence and where applicable relatedsafeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicate! in our report because the adverse consequences of doing so would reasonablybe expected to ouweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 0) of the Act based on our auditwe report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and beliefwere necessary for die purposes of our audit.
b) " In our opinion proper books ofaccountas required by law have been kept bythe Company so fer as it appears from our examination of
c) The Balance Sheet the Statement of Profit and Loss including Odier ComprehensiveIncome the Statement of Cash Flows and
Srarement of Changes in Equity dealt with by fo is Report are in agreement with thebooks of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.
e) On die basis of the written representations received from the directors as on March312020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312020 from being appointed as a director in terms of Section 164(2) of theAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controlsoverrinancial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with die requirements of section 197(16) of the Act as amended
In our opinion and to die best of our information and according to die explanationsgiven to us die remuneration paid by die
Company to its directors during the year is in accordance with the provisions ofsection 197 of the Act.
h) With respect to die odier matters to be included in die Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to die best ofourinformation and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements in note33.8
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by die Company.
2. As require! by die Companies (Auditor's Report) Order 2016 ("die Order")issue! by die Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
| ||For Deloitte Haskins and Sells LLP |
| ||Chartered Accountants |
| ||(Firm's Registration No. 1I7366W/W-100018) |
| ||Rupen K. Bhatt |
|Place: Mumbai ||(Partner) |
|Date: June 26 2020 ||(Membership No. 46930) |
| ||(UDIN: 20046930MAADF3998) |
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph l(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financial reporting of Shree AjitPulp and Paper Limited ("the Company") as of March 31 2020 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.
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 Instirute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) oftheCompanies Act 2013 to the extent applicable to an audit ofinternal financialcontrols.Those Standards and the Guidance Note requirethat 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 judgement including the assessment of therisks ofmaterial misstatement of thefinancial statements whether due tofraud 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 InternalFinancial Controls Over FinancialReporting
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 to the best of our information and accordingto the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March31 2020 based on the criteria forinternal financial control over financial reporting established bythe 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 oflndia.
| ||For Deloitte Haskins and Sells LLP |
| ||Chartered Accountants |
| ||(Firm's Registration No.117366W/W-100018) |
|Place: Mumbai ||Rupen K. Bhatt |
|DaterJune 26 2020 ||(Partner) |
| ||(Membership No. 046930) |
| ||(UDIN: 20046930AAAADF3998) |
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) The property plant and equipment were physically verified by the Managementsubsequent to year end in accordance with a regular programme of verification which inour opinion provides for physical verification of all the property plant and equipmentat reasonable intervals. According to the information and explanation given to us nomaterial discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / ocher documentsevidencing title provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date.
(ii) As explained to us the inventories were physically verified during the year/subsequent to the year end by the Management at reasonable intervals and no materialdiscrepancies were noticed on physical verification.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited LiabilityPartnerships 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 complied with the provisions of Sections 185 and 186 of the Companies Act2013 inrespect of grant of loans making investments andproviding guarantees andsecurities as applicable.
(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year in terms of provisions of Sections 73 to 76 or anyother relevant provisions ofthe Companies Act 2013 and hence reporting under clause (v)of the CA RO 2016 is not applicable.
(vi) The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Goods and Services TaxCustoms Duty cess and other material statutory dues applicable to it to the appropriateauthorities.
(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Goods and Services Tax Customs Duty cess and other materialstatutory dues in arrears as at 31 March 2020 for a period of more than six months fromthe date they became payable.
(c) There were no dues of Income Tax and Goods and Services Tax which have not beendeposited as on 31 March 2020 on account of disputes. Details of dues of Service Tax andCustoms Duty which have not been deposited as on 31 March 2020 on account of disputes aregiven below:
|Name of Statute ||Nature of Dues ||Forum where Dispute is Pending ||Period to which the Amount Relates ||Amount Involved (Rs. In lakh) ||Amount Unpaid (Rs In lakh) |
|Finance Act 1994 ||Service Tax ||Additional Commissioner ||April 2014- March 2015 ||9.30 ||9.30 |
|The Customs Act 1962 ||Custom Dury ||CESTAT ||April 2011- March 2013 ||62.07 ||56.54 |
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks. TheCompany has not issued any debentures.
(ix) In our opinion and according to the information and eqilanations given to us theterm loans have been applied by the Company during the year for the purposes for whichthey were raised. The Company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments).
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with ScheduleV to the CompaniesAct 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to theCompany.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank oflndia Act 1934.
| ||For Deloitte Haskins and Sells LLP |
| ||Chartered Accountants |
| ||(Firm's Registration No.117366W^r-100018) |
| ||Rupen K. Bhatt |
|Place: Mumbai ||(Partner) |
|Date:June 26 2020 ||(Membership No. 046930) |
| ||(UDIN: 20046930AAAADF3998) |