To the Members of M/s. Victory Paper and Boards (India) Limited Report on the Audit ofthe standalone Financial Statements
I have audited the accompanying Standalone financial statements of M/s. Victory Paperand Boards (India) Limited (fhe Company") which comprises the Balance Sheet asat March 312019 the Statement of Profit and Loss (statement of changes in equity) 'andstatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information(hereinafter referred to as the standalone financial statements").
In my opinion and to the best of my information and according to the explanations givento me the aforesaid standalone financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 the profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
I conducted my audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Myresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of myreport. I am independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to my audit of the standalone financial statements underthe provisions of the Act and the Rules made there under and I have fulfilled my otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. I believe that the audit evidence I have obtained is sufficient and appropriate toprovide a basis for my audit opinion on the standalone financial statements.
Key audit matters
Key audit matters are those matters that in my professional judgment are of mostsignificance in my audit of the standalone financial statements of the current period.These matters are addressed in the
context of my audit of the standalone financial statements as a whole and in formingmy opinion thereon and I do not provide a separate opinion on these matters. I havedetermined the matters described below to be the key audit matters to be communicated inmy report.
|S.no ||Key Audit Matter ||Auditor's response |
|1. ||Amount written off on Cessation of liability ||Liability to the extent of Rs.583.56 lakhs has been written off as these are no longer required to be paid. This is due to change in the shareholdings (ownership) and the management of the company after the takeover. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and my auditor's report thereon.
My opinion on the standalone financial statements does not cover the other informationand I do not express any form of assurance conclusion thereon.
In connection with my audit of the standalone financial statements my responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or my knowledgeobtained during the course of my audit or otherwise appears to be materially misstated.
If based on the work I have performed I conclude that there is a materialmisstatement of this other information; I am required to report that fact. I have nothingto 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 totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe 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 areoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements 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 or to cease operations or has norealistic alternative but to do so.
The Board of Directors is responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
My objectives are to obtain reasonable assurance about whether the standalone financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes my 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 standalone financial statements.
As part of an audit in accordance with SAs I exercise professional judgment andmaintain professional skepticism throughout the audit. I also:
1. Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for my opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
2. Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3) (i) of the Act I am also responsible for expressing my opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
4. 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 doubt on the Company'sability to continue as a going concern. If I conclude that a material uncertainty existsI am required to draw attention in my auditor's report to the related disclosures in thestandalone financial statements or if such disclosures are inadequate to modify myopinion. My conclusions are based on the audit evidence obtained up to the date of myauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
5. Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent 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 financial statements may be influenced. I considerquantitative materiality and qualitative factors in (i) planning the scope of my auditwork and in evaluating the results of my work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
I 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 I identify during my audit.
I also provide those charged with governance with a statement that I have complied withrelevant ethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on my independenceand where applicable related safeguards.
From the matters communicated with those charged with governance I determine thosematters that are of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. I describe these matters inmy auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances I determine that a matter should not becommunicated in my report because the adverse consequences of doing so would reasonably beexpected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on my audit I report that:
a) I have sought and obtained all the information and explanations which to the best ofmy knowledge and belief are necessary for the purposes of my audit.
b) In my opinion proper books of account as required by law have been kept by theCompany so far as it appears from my examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.
d) In my opinion the aforesaid standalone financial statements comply with the Ind ASspecified 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 as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 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 myseparate Report in Annexure A". My report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In my opinion and to the best of my information and according to the explanations givento us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
2. As required by the Companies (Auditor's Report) Order 2016 (the Order")issued by the Central Government in terms of Section 143(11) of the Act I give inAnnexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
| ||G. V. Sukumar |
| ||Chartered Accountant |
|Date: 30.05.2019 ||Mem. No. 207748 |
|Place: Thrissur. || |
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1(f) under Report on Other Legal & RegulatoryRequirement' section of my report to the Members of Victory Paper & Boards (India)Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act)
I have audited the internal financial controls over financial reporting of VICTORYPAPER AND BOARDS (INDIA) LIMITED ("the Company) as of March 31 2019 inconjunction with my audit of the standalone financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. 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 respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
My responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on my audit. I conducted my audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that I comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.
My audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. My 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 the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
I believe that the audit evidence have obtained is sufficient and appropriate toprovide a basis for my audit opinion on the internal financial controls system overfinancial reporting of the Company.
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.
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 my opinion to the best of my information and according to the explanations given tous the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting Ire operating effectively as at March 312019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
G. V. Sukumar
Mem. No. 207748
ANNEXURE B' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal and Regulatory
Requirements' section of my report to the Members of Victory Paper and Boards
(India) Limited of even date)
i. In respect of the Company's fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets with regard to assets.
b) The Company has a program of verification to cover all the items of fixed assets ina phased manner which in my opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to me no material discrepancies were noticed on such verification. Ihave not physically verified the fixed assets during the course of audit.
c) According to the information and explanations given to me the records examined byme and based on the examination of the conveyance deeds / registered sale deed provided tome i report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate.
ii. In respect of Company's Inventory:
a) Physical verification of inventory has been conducted at reasonable interval by themanagement.
b) And as per the explanations and information given to me no material discrepancieshas been noticed on such verification by the management.
iii. The Company has not granted any unsecured loans to companies firms and otherparties covered in the Register maintained under section 189 of the Act. Accordingly theprovisions of clause (iii) (a) fo (C) of the Order are not applicable to the Company andhence not commented upon.
iv. In my opinion and according to the information and explanations given to me theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.
v. The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2019 and therefore the provisions of the clause 3 (v)of the Order are not applicable to the Company.
vi. The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013 for the business activities carried out bythe Company. The reporting under clause 3(vi) of the order is not applicable to theCompany.
vii. According to information and explanations given to me and on the basis of myexamination of the books of accounts and records the Company has been regular in paymentof statutory dues.
viii. The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause 3(viii) of the Order is not applicable to the Company.
ix. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments). The term loan which was raised during the year wasapplied for the purpose it was raised.
x. To the best of my knowledge and according to the information and explanations givento me no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year.
xi. In my opinion and according to the information and explanations given to me theCompany has not paid/provided for any managerial remuneration during the year hencereporting under clause 3 (xi) of the Order is not applicable to the Company.
xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable to the Company.
xiii. In my opinion and according to the information and explanations given to me theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.
xiv. During the year the Company has not made any preferential allotment or privateplacement of
xv. shares or fully or partly paid convertible debentures and hence reporting underclause 3 (xiv) of the Order is not applicable to the Company.
xvi. In my opinion and according to the information and explanations given to meduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.
xvii. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
G. V. Sukumar