We have audited the accompanying financial statements of ENCODE PACKAGING INDIA LIMITED previously known
as NOVA PUBLICATIONS INDIA LIMITED ("the Company"), which comprise the Balance Sheet as at 31/03/2024 and
the Statement of Profit and Loss, statement of cash flows and statement of changes in equity for the year then
ended, and notes to financial statements, including a summary of the significant accounting policies and other
explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
financial statements give the information required by the Companies Act, 2013 in the manner so required and give
a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs
of the Company as at 31/03/2024, and its Profit and changes in equity and cash flows for the year ended on that
date.
Basis of Opinion
We conducted our audit of the financial statements in accordance with the Standards on Auditing ("SA"s) specified
under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the
Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI")
together with the ethical requirements that are relevant to our audit of the financial statements under the
provisions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by
us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. We have determined the matters described below to be the key audit matters to be communicated
in our report.
Revenue Recognition
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The Key Audit Matter
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How the Matter was addressed in our audit
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As disclosed in the financial statements, revenue
is measured net of any trade discounts and
volume rebates to customers ("discounts and
rebates"). Certain discounts and rebates for goods
sold during the year are only finalised when the
precise amounts are known, and revenue
therefore includes an estimate of variable
consideration. The variable consideration
represents the portion of discounts and rebates
that are not directly deducted on the invoice and
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Our audit procedures included:
• Understanding the process followed by the Company to
determine the amount of accrual for discounts and rebates.
• Evaluating the design and implementation and testing
operating effectiveness of Company's general IT controls, key
manual and application controls over the Company's IT
systems including controls over rebates agreements /
arrangements, rebate payments / settlements and
Company's review over the rebate accruals.
• Inspecting on a sample basis, key customer contracts.
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involves estimation by the Company in
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Based on the terms and conditions relating to discounts and
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recognition and measurement of such discounts
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rebates, assessing the Company's revenue recognition
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and rebates. This includes establishing an accrual
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policies with reference to the requirements of the applicable
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at year end, particularly in arrangements with
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accounting standards.
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customers involving varying terms which are
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• Performing substantive testing by selecting samples of
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based on annual contracts or shorter-term
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discounts and rebates transactions recorded during the year
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arrangements. In addition, the value and timing of
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as well as period end discounts and rebates accruals and
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promotions for products varies from period to
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matching the parameters used in the computation with the
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period, and the activity can span beyond the year
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relevant source documents.
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end. The unsettled portion of the variable
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• Examining historical rebate accrual together with our
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consideration results in discounts and rebates due
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understanding of current year developments to form an
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to customers as at year end.
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expectation of the rebate accrual as at year end and
comparing this expectation against the actual rebate accrual,
completing further inquiries and obtaining underlying
documentation, on a sample basis, as appropriate.
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Provisions and contingent liabilities relating to taxation, litigations and claims
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The Key Audit Matter
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How the Matter was addressed in our audit
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The provisions and contingent liabilities relate to
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Our audit procedures included:
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ongoing litigations and claims with various
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• Understanding the process followed by the Company for
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authorities and third parties. These relate to direct
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assessment and determination of the amount of provisions
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tax, indirect tax, transfer pricing arrangements,
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and contingent liabilities relating to taxation, litigations and
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claims, general legal proceedings, environmental
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claims.
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issues and other eventualities arising in the
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• Evaluating the design and implementation and testing
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regular course of business. As at the year ended
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operating effectiveness of key internal controls around the
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31 March 2024, the amounts involved are
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recognition and measurement of provisions and re-
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insignificant. The determination of a provision or
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assessment of contingent liabilities.
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contingent liability requires significant judgement
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• Inquiring the status in respect of significant provisions and
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by the Company because of the inherent
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contingent liabilities with the Company's internal tax and
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complexity in estimating future costs. The amount
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legal team, including challenging the assumptions and critical
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recognised as a provision is the best estimate of
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judgements made by the Company which impacted the
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the expenditure. The provisions and contingent
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computation of the provisions and inspecting the
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liabilities are subject to changes in the outcomes
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computation.
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of litigations and claims and the positions taken by
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• Assessing the assumptions used and estimates of outcome
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the Company.
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and financial effect, including considering judgement of the
Company, supplemented by experience of similar decisions
previously made by the authorities and, in some cases,
relevant opinions given by the Company's advisors.
• Testing data used to develop the estimate for completeness
and accuracy.
• Evaluating judgements made by the Company by comparing
the estimates of prior year to the actual outcome.
• Evaluating the Company's disclosures in the financial
statements in respect of provisions and contingent liabilities.
A contingent liability is disclosed unless the possibility of an
outflow of resources embodying economic benefits is
remote. A contingent asset is neither recognized nor
disclosed.
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Information other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the
information included in the Management Discussion and Analysis, Board's Report including annexures to Board's
Report, Business Responsibility Report, Corporate Governance Report, and Shareholder Information, but does not
include the financial statements and our auditor's report thereon. Our opinion on the financial statements does
not cover the other information and we do not express any form of assurance conclusion thereon. In connection
with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information; we are required to
report that fact. We have nothing to report in this regard.
Management's Responsibility for the Financial 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 these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation
of the financial statements that give a true and fair view and are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so. The Board of Directors are responsible for overseeing the Company's financial reporting
process.
Auditor's Responsibility for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the Company has adequate internal financial controls system in place and the
operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the
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's report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes
it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be
influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work
and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the
financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit. We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2020 ('the Order') issued by the Central Government of
India in terms of sub section (11) of section 143 of the Act, we give in the Annexure a statement on the matters
specified in the paragraph 3 and 4 of the Order, to the extent applicable.
As required by Section 143 (3) of the Act, we report that:
(b) We have sought and obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purposes of our audit.
(c) In our opinion, proper books of account as required by law have been kept by the Company so far as it
appears from our examination of those books.
(d) The Balance Sheet, the Statement of Profit and Loss, and dealt with by this Report are in agreement with
the books of account.
(e) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(f) On the basis of the written representations received from the directors as on 31/03/2024 taken on record
by the Board of Directors, none of the directors is disqualified as 31/03/2024 from being appointed as a
director in terms of Section 164 (2) of the Act.
(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company
and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".
(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial
statements.
ii. The Company did not have any long-term contracts for which there were any material foreseeable
losses. The Company has made provision if any, as required under the applicable law or accounting
standards, for material foreseeable losses on derivative contracts to the financial statements;
iii. a) There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company.
b) The management has represented that, to the best of its knowledge and belief, no funds have
been advanced or loaned or invested (either from borrowed funds or share premium or any other
sources or kind of funds) by the Company to or in any other persons or entities, including foreign
entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or provide any
guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;
c) The management has represented that, to the best of its knowledge and belief, no funds have
been received by the Company from any persons or entities, including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall
directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever
("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or
the like from or on behalf of the Ultimate Beneficiaries; and
d) Based on such audit procedures as considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations under sub¬
clause (d)(i) and (d)(ii) contain any material misstatement;
e) No dividend has been declared or paid during the year by the Company is in compliance with
Section 123 of the Act.
(i) With respect to the matter to be included in the Auditor's Report under Section 197(16) of the Act: In our
opinion and according to the information and explanations given to us, the remuneration paid by the
Company to its directors during the current year is in accordance with the provisions of Section 197 of the
Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the
Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act
which are required to be commented upon by us.
M/s. SARNA & AGGARWAL.
(Chartered Accountants)
(Firm's Registration No. 001796C)
Sd/-
CA Ashray Sarna
Partner
Place: Jalandhar Membership No. 544005
Date: 30.05.2024
UDIN:- 24544005BKDHIL7579
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