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Vapi Paper Mills Ltd.

BSE: 502589 Sector: Industrials
NSE: N.A. ISIN Code: INE464D01014
BSE 00:00 | 21 Jan 46.50 2.20
(4.97%)
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NSE 05:30 | 01 Jan Vapi Paper Mills Ltd
OPEN 46.50
PREVIOUS CLOSE 44.30
VOLUME 1037
52-Week high 46.50
52-Week low 14.70
P/E 47.45
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 46.50
CLOSE 44.30
VOLUME 1037
52-Week high 46.50
52-Week low 14.70
P/E 47.45
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Vapi Paper Mills Ltd. (VAPIPAPERMILLS) - Auditors Report

Company auditors report

To

the members of

Vapi Enterprise Limited (Formerly known as Vapi Paper Mills Limited)

Report on the Audit of the Standalone Financial Statements

1. Qualified Opinion

We have audited the financial statements of Vapi Enterprise Limited ("theCompany") which comprise the balance sheet as at 31st March 2021 and thestatement of Profit and Loss statement of changes in equity and statement of cash flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31st 2021 and profit/losschanges in equity and its cash flows for the year ended on that date.

2. Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the "Auditor's Responsibilities for the Audit of the FinancialStatements" section of our report. We are independent of the Company in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

3. Basis for Qualified Opinion

i. In our opinion the following accounting standards are not complied by the company:

a. Indian Accounting Standard (Ind AS-19) on "Employee Benefits"; regardingnon-provisioning of employee benefits

b. Indian Accounting Standard (Ind AS-105) on "Non-current Assets Held for Saleand Discontinued Operations"

c. Indian Accounting Standard (Ind AS-12) on "Income tax".

The effect of the above on assets and liabilities as well as loss and reserves is notascertainable.

ii. We are unable to form an opinion about the obligations of:

a. Rs.4748076/- is Long term borrowings from inter corporate which is subject toconfirmations.

b. Balance of Rs.1059605/- of long-term trade payables are subject to confirmationand adjustment if any required upon such confirmations are not determinable.

c. Gratuity Expense of Rs.539637 and Leave Encashment Expense of Rs. 122139 duringthe year are recorded on cash basis and no provisions were done for the same. The Gratuityand Leave Encashment Expenses are recorded on cash basis.

d. Balance of Rs.970405/- of long-term Trade receivables are subject to confirmationand adjustment if any required upon such confirmations are not determinable.

The effects of the matters referred to Para above on assets and liabilities as well asLosses and reserves could not be ascertainable.

4. Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matter described in the Basis for Qualified Opinion section we havedetermined the matters described below to be the key audit matters to be communicated inour report.

Key Audit Matters- Going Concern How our audit addressed the key
Assumption and financial planning audit matter
The availability of sufficient funding and the testing of whether the company will be able to continue meeting its obligations are important for the going concern assumption and as such are significant aspects of our audit. This test or assessment is largely based on the expectations of and the estimates made by management. The expectations and estimates can be influenced by subjective elements such as estimated future cash flows forecasted results and margins from operations. Estimates are based on assumptions including expectations regarding future developments in the economy and the market. Our audit procedures included:
• We have specifically devoted attention to the assumptions made with respect to future operability by verifying revenue generating agreements entered into by the company with various parties.
• We have inquired and have also been provided written representations from the management regarding not having any future plan for closure of the business or sale of major assets.
• We have performed review analytical procedures with respect to revenue accrued after the reporting date in order to ascertain viability of the business in the near future.

5. Information other than the Financial Statements and Auditor's Report thereon

The Company's Board of Directors and Management is responsible for the preparation ofthe other information. The other information comprises the information obtained at thedate of this auditor's report but does not include the financial statements and ourauditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the 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 there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

6. Responsibilities of Management and Those Charged with Governance for the FinancialStatements

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 preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance changes in equity 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. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

7. Auditor's 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 auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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 misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves 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 to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters in our auditors' report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

8. Report on Other Legal and Regulatory Requirements

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

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.

e. On the basis of the written representations received from the directors as on 31stMarch 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

1. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements (Refer Note - 24 to the financial statements;

2. The Company did not have long-term contracts including derivative contracts - henceprovision for material foreseeable losses is not applicable.

3. There were no amounts which required to be transferred to the Investor Education andProtection Fund by the Company.

4. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2021

h. With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act:

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

"ANNEXURE A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 8 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

i. a The Company has not maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.

b. The fixed assets have not been physically verified by the management. In the absenceof physical verification we are not in a position to comment on the discrepancies ifany between physical and book balances and the impact thereof.

c. According to the information and explanation given to us the title deeds ofimmovable properties included in property plant and equipment are held in the name of thecompany. In respect of immovable properties taken on lease the agreements are in the nameof the company.

ii. The Company does not hold any inventories. Thus paragraph 3(ii) of the order is notapplicable.

iii. According to the information and explanations given to us the company has notgranted any secured or unsecured loan to a firm company limited liability Partnershipsor other parties covered in the section 189 of the Companies Act during the year. Howeverthe register is not maintained as per Sec 189 of the Companies Act 2013. Therefore clause(iii) of the order is not applicable.

iv. In our opinion and according to the information and explanations given to us thereare no loans investments guarantees and securities covered u/s 185 and 186 of theCompanies Act 2013; accordingly clause (iv) of the order is not applicable.

v. According to the information and explanations given to us the Company has notaccepted any deposit from the public. Therefore the provisions of Clause (v) of paragraph3 of the CARO 2016 are not applicable to the Company.

vi. As per the information and explanation given to us the company is not required tomaintain cost records pursuant to the Companies (Cost Records and Audit) Rules 2014prescribed by the Central Government under Section 148(1) of the Companies Act 2013.Therefore the provisions of Clause (vi) of paragraph 3 of the CARO 2016 are notapplicable to the Company.

vii. According to the information and explanations given to us and the the records ofthe Company examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of customs duty of excise value added tax cess goodsand service tax and other material statutory dues as applicable with the appropriateauthorities

According to the records of the Company there are no amounts of dues of Income TaxSales Tax Wealth Tax Service Tax duty of Customs Duty of Excise Value Added Tax Cesswhich have not been deposited as on March 31 2021 on account of disputes except below:

Type of Tax payment Forum under which case is pending Year Amount Details
Sales Tax Appellate Tribunal 2010-2011 Demanded Rs 256503 Paid Rs 185417 Payable Rs 71086 which is challenged hence not provided

viii. Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the Company has not borrowed from any financialinstitutions banks and debenture holders thus paragraph 3(viii) of the order is notapplicable.

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) and term loans during the year. Accordingly paragraph 3(ix)of the order is not applicable.

x. To the best of our knowledge and according to the information and explanations givento us no material fraud on or by the Company has been noticed or reported during thecourse of our audit.

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 Schedule V to the CompaniesAct 2013.

xii. According to the information and explanations given to us in our opinion thecompany is not Nidhi Company as prescribed under section 406 of the Act. Accordinglyparagraph 3(xii) of the order is not applicable to the company.

xiii. According to the information and explanations given to us and based on theexamination of the records of the company all the transactions with related parties arein compliance with section 188 and 177 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableIndian accounting standards.

xiv. According to the information and explanations given to us and based on theexamination of the records of the company the company has not made any preferentialallotment / private placement of shares or fully or partly convertible debentures duringthe year under review thus paragraph 3(xiv) of the order is not applicable.

xv. According to the information and explanations given to us and based on theexamination of the records of the company the company has not entered in to any non-cashtransactions with directors or persons connected with him. Thus paragraph 3(xv) of theorder is not applicable to the company.

xvi. According to the information and explanations given to us the company is notrequired to be registered under section 45IA of the Reserve Bank of India Act 1934 thusparagraph 3(xvi) of the order is not applicable.

"Annexure - B" to the Auditors' Report

(Referred to in paragraph 8 (f) under ‘Report on other legal and regulatoryrequirements' section of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

Qualified Opinion

We have audited the internal financial controls over financial reporting of VapiEnterprise Limited (Formerly Known as "Vapi Paper Mills Limited") as of March31 2021 in conjunction with our audit of the Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management and the board of directors are responsible for establishingand maintaining internal financial controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on the internal control. 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.

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 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 judgement including the financial statements whetherdue 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 withreference to financial statements.

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 Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the Ind ASfinancial statements.

Inherent Limitations of Internal Financial Controls over Financial

Reporting

Due to the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2021 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.

For Chirag N Shah & Associates
Chartered Accountants
FRN: 118215W
SD/-
Chirag Shah
Partner
Membership No: 105145
Place: Mumbai
Date: 04/06/2021
UDIN: 21105145AAAAAX7079

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