Home  »  Company  »  Mysore Paper  »  Quotes  »  Auditor Report
Enter the first few characters of Company and click 'Go'

Auditor Report of Mysore Paper Mills Ltd.

Mar 31, 2014

This report is supplementary to our earlier audit report dated 3rd September, 2014 in light of the revision of financial statements consequent to the audit observations of the Comptroller and Auditor General of India. This report supersedes our earlier audit report dated 3rd September,2014.

Report on Financial Statements:

We have audited the accompanying financial statements of THE MYSORE PAPER MILLS LIMITED, ("the Company") which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of Significant Accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and Cash Flow of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act")read with general circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors'' Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion

1. As stated in note 2.12(b) Company has not identified the non moving stores & spares and has made the provision of Rs.640.86 lacs for the same on adhoc basis instead of making provision on determined non moving stores and spares as stated in significant accounting policy 1.02 (iv). In the absence of details, the impact of the same on the financial statement of the company can not be quantified.

2. As stated in Note 3.03 Rs. 201.47 lacs interest on purchase tax is not provided in the books. Hence the loss for the year and other current liability is under stated to that extent.

3. An alleged fraud on the company perpetrated by an employee reported during the year vide office memo FPR/507/DSP/2013-14 dtd: 28/10/2013 and 5/ 2/2014 amounting to Rs.48.05 lacs for the years 2008 to 2014. The alleged fraud is not reflected in the books of the company pending finality of the enquiry. Hence we are unable to quantify the impact of the same on the financial statements of the company for the year

4. Reference is drawn to Note 3.06, wherein no provision has been made towards the disputed interest amounting to Rs. 1042.86 Lacs. As a result Loss for the current year is under stated to that extent and correspondingly the current liabilities is under stated to that extent.

5. During the year the company has accounted and capitalized Interest and Guarantee Commission amounting to Rs.287.35 Lacs on loan borrowed towards Rotary Lime Kiln Project. As the said project''s active development is interrupted the same should have been charged to profit and Loss Account instead of debit to Capital Work in Progress. Due to which Loss for the year is under stated to that extent and Capital work in progress is overstated to that extent.

6. The Consequential effect of the above comments on financial Statements to the extent ascertainable is understatement of loss by Rs. 1531.68 Lacs, understatement of Current liabilities by Rs. 1244.33 Lacs and overstatement of work in progress by Rs. 287.35 Lacs.

Qualified Opinion

Subject to observations stated above, in our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014; and

b) In the case of the Statement of Profit and Loss of the Loss for the year ended on that date and

c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date

Emphasis of Matter

1. Attention is drawn to Note 3.11 (Employee Benefits) wherein deficit between plan assets and actuarial liabilities of employee benefit plans under gratuity and leave encashment obligations are substantial. As the company is sick and referred to BIFR, the company has not stated its plan to meet this deficit.

2. The company is incurring cash losses continuously and net worth of the company is fully eroded. However in the opinion of the management the company is a going concern as the Govt. of Karnataka (GOK), the main promoter, has been continuously supporting by way of financial assistance. The company believes that Government of Karnataka will extend financial support in the coming years also. The rehabilitation proposal for revival of the company is under preparation.

3. The confirmations of Sundry Debtors, Creditors & Advances received are yet to be reconciled (note 2.13 (a)). The company has not received confirmations from majority of the parties, though confirmation letters have been sent by the company.

Our opinion is not qualified in respect of the above matters

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) Subject to our observations stated in the Basis for Qualified Opinion, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) Subject to our observations stated in the Basis for Qualified Opinion, in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE

TO THE MEMBERS OF THE MYSORE PAPER MILLS LIMITED

Referred to in Paragraph 1 of our report of even date

i) The Company has maintained proper records showing full particulars of quantitative details and situation in respect of fixed assets.

ii) The Company has a regular program of physical verification of plant and machinery & vehicles only. In our opinion, the periodicity of physical verification is reasonable for these assets having regard to the size of the Company and nature of its assets. Accordingly, the fixed assets were verified by the Management during the year and according to information and explanations given to us, no material discrepancies were noticed on such verification.

iii) The Company has not disposed off substantial part of fixed assets during the year.

iv) According to the information and explanations given to us, the Management of the Company has conducted physical verification of Inventory during the year except for standing crops, which is estimated on yield-based formulae.

v) In our opinion the procedures of physical verification of inventory followed by management is reasonable & adequate having regard to the size of the Company and nature of its business.

vi) In our opinion, the Company is maintaining proper records of inventory and according to the information and explanations given to us the discrepancies noticed, during physical verification are not material in nature and the same have been properly dealt with in the books of account of the Company.

vii) According to the information and explanations given to us the company has neither granted nor taken any loans, secured or unsecured to/from Companies, firms or other parties covered in the register maintained under section 301 of the Act.

viii) In our opinion and according to the information and explanations given to us, there is an adequate internal control system, commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit except in the case of labour payments made by cash towards captive forest plantation activities.

ix) According to the information and explanations given to us there are no transactions that need to be entered in pursuance of section 301 of the Companies Act, 1956.

x) According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

xi) In our opinion and according to the explanations and information given to us, the Company has an internal audit system commensurate with the size and nature of its business. However, timely compliance is not done and the monitoring has to be more effective.

xii) The maintenance of cost records has been prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956. According to the information & explanations given to us, such accounts and records have been made and maintained by the Company.

xiii) According to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees State Insurance, Income tax, VAT, Service Tax, Custom Duty, Excise Duty, Cess, Wealth Tax, and any other statutory dues applicable with the appropriate authorities except VAT & CST of Rs. 1355.19 lacs and Purchase Tax on sugar cane amounting to Rs 498.50 lacs are outstanding for a period more than six months from the date they became payable.

xiv) According to the information and explanations given to us there are no disputed dues in respect of Income Tax, VAT, Wealth Tax, Customs Duty, Excise Duty, Cess, except service Tax of Rs.49.00 lacs for which the appeal is pending before the Commissioner of central Excise and Service Tax.

xv) The accumulated losses of the Company as at the end of financial year are more than 50% of its net worth and the company has incurred cash loss during the current financial year and in the immediately preceding financial year.

xvi) On the basis of verification of relevant records and documents and according to the explanations and information given to us, the Company has defaulted in repayment of dues to financial institutions, Banks & Debenture Holders as below:

Sl. NAME Defaulted Default since No. Amount Rs. In lacs

1. Axis Bank Limited 997.91 30-09-2010

2. SBM 4765.53 01-07-2012

3. SBI 3796.36 01-07-2012

4. Karnataka Bank 130.72 01-07-2012

5. Indian Bank 1944.30 01-07-2012

6. Vijaya Bank 1120.77 01-07-2012

Note: Interest on all loans accounted up to 31-03-2014.

xvii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xviii) The Company is not a chit fund or nidhi or mutual benefit fund Company and hence the provisions of the same are not applicable to the Company.

xix) The Company is not dealing or trading in shares, securities, debentures and other investments.

xx) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xxi) In our opinion and on the basis of information and explanations given to us, the fund raised through Bonds of Rs. 50 crores in July 2010 out of which Rs. 42.92 crores has not been applied for the purpose for which it has been obtained.

xxii) On the basis of review of utilization of funds, which is based on overall examination of the Balance sheet and cash flows of the Company, related information as made available to us and as represented to us by the Management, in our opinion, the Company has not utilized the funds raised on the short-term basis for long-term investments.

xxiii) The Company has not made any preferential allotments of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956.

xxiv) According to the information & explanations given to us and the records examined by us, the debentures/bonds have been issued against Govt. of Karnataka guarantee. Hence no security or charge is created.

xxv) The Company has not raised any money from public issue and hence the disclosure of the same is not applicable.

xxvi) According to the information and explanations given to us and on the basis of examination of records, an alleged fraud perpetrated by an employee was reported during the year vide office memo FPR/507/DSP/2013-14 dtd: 28/10/2013 and 5/2/2014 amounting to Rs. 48.05 lacs for the years 2008 to 2014.

For M N S & CO. Chartered Accountants Firm Regn. No. 003968S

Sd/- Place: Bengaluru (CA. NAGABHUSHAN K.S.) Date: 25th November, 2014 PARTNER Membership No: 025390


Mar 31, 2013

Report on Financial Statements:

We have audited the accompanying financial statements of THE MYSORE PAPER MILLS LIMITED, ("the Company") which comprise the Balance Sheet as at March 31, 2013 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of Significant Accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and Cash Flow of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors'' Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion

1. As stated in note 2.12(b) Company has not identified the non moving stores & spares and has made the provision of Rs. 640.86 lacs for the same on adhoc basis instead of making provision on determined non moving stores and spares as stated in significant accounting policy 1.02 (iv). In the absence of details, the impact of the same on the financial statement of the company can not be quantified.

2. As stated in Note 3.03 Rs. 124.16 lacs interest on purchase tax is not provided in the books. Hence the loss for the year and Other current liability is under stated to that extent.

Qualified Opinion

Subject to observations stated above, in our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; and

b) In the case of the Statement of Profit and Loss of the Loss for the year ended on that date and

c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date

Emphasis of Matter

1. Attention is drawn to Note 3.08 ( Employee Benefits) wherein deficit between plan assets and actuarial liabilities of employee benefit plans under gratuity and leave encashment obligations are substantial. As the company is sick and referred to BIFR, the company has not stated its plan to meet this deficit.

2. The company is incurring cash losses continuously and net worth of the company is fully eroded. However in the opinion of the management the company is a going concern as the Govt. of Karnataka (GOK), the main promoter, has been continuously supporting by way of financial assistance. The company believes that GOK will extend financial support in the coming years also. The rehabilitation proposal for revival of the company is under preparation.

3. The confirmations of Sundry Debtors, Creditors & Advances received are yet to be reconciled (note 2.13 (a)). The company has not received confirmations from majority of the parties, though confirmation letters have been sent by the company.

Our opinion is not qualified in respect of the above matters

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure , a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) Except for the effects described in the Basis for Qualified Opinion paragraph, in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) Except for the effects described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; except and

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956.

TO THE MEMBERS OF THE MYSORE PAPER MILLS LIMITED

Referred to in Paragraph 1 of our report of even date

i) The Company has maintained proper records showing full particulars of quantitative details and situation in respect of fixed assets.

ii) The Company has a regular program of physical verification of plant and machinery & vehicles only. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets. Accordingly, the fixed assets were verified by the Management during the year and according to information and explanations given to us, any discrepancies noticed on such verification have been properly dealt with, in the books of account of the Company

iii) The Company has not disposed off substantial part of fixed assets during the year.

iv) According to the information and explanations given to us, the Management of the Company has conducted physical verification of Inventory during the year except for standing crops, which is estimated on yield-based formulae.

v) In our opinion the procedures of physical verification of inventory followed by management is reasonable & adequate having regard to the size of the Company and nature of its business.

vi) In our opinion, the Company is maintaining proper records of inventory and according to the information and explanations given to us the discrepancies noticed, during physical verification are not material in nature and the same have been properly dealt with in the books of account of the Company.

vii) According to the information and explanations given to us the company has neither granted nor taken any loans, secured or unsecured to/from Companies, firms or other parties covered in the register maintained under section 301 of the Act.

viii)In our opinion and according to the information and explanations given to us, there is an adequate internal control system, commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit except in the case of labour payments towards captive forest plantation activities.

ix) According to the information and explanations given to us there are no transactions that need to be entered in pursuance of section 301 of the Companies Act, 1956.

x) The company has accepted deposits from PF Trust of the company. The directives issued by the Reserve Bank of India and the provisions of section 58A, 58-AA or any other

relevant provisions of the Companies Act, 1956 and the rules framed there under have not been complied with. We have been informed that, no order has been passed by the Company Law Board, or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

xi) In our opinion and according to the explanations and information given to us, the Company has an internal audit system commensurate with the size and nature of its business. However, timely compliance is not done and the monitoring has to be more effective.

xii) The maintenance of cost records has been prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956. According to the information & explanations given to us, such accounts and records have been made and maintained by the Company.

xiii) According to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees State Insurance, Income tax, VAT, Service Tax, Custom Duty, Excise Duty, Cess, Wealth Tax, and any other statutory dues applicable with the appropriate authorities except VAT, CST & Entry Tax dues of Rs. 886.12 lacs and Purchase Tax on sugarcane amounting to Rs 389.05 lacs are outstanding for a period more than six months from the date they became payable.

xiv) According to the information and explanations given to us there are no disputed dues in respect of Income Tax, VAT, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, which are not deposited to authorities. There were no dues on account of cess under section 441A of the Companies Act, 1956 since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

xv) The accumulated losses of the Company as at the end of financial year are more than 50% of its net worth and the company has incurred cash loss during the current financial year and in the immediately preceding financial year.

xvi)On the basis of verification of relevant records and documents and according to the explanations and information given to us, the Company has defaulted in repayment of dues to financial institutions, Banks & Debenture Holders as below:

Sl. NAME Defaulted Default since No. Amount Rs. In lacs

1. Axis Bank Limited 912.31 30-09-2010

2. IFCI 578.98 01-01-2012

3. SBM 4140.12 01-07-2012

4. SBI 3297.24 01-07-2012

5. Karnataka Bank 108.53 01-07-2012

6. Indian Bank 1612.85 01-07-2012

7. Vijaya Bank 926.89 01-07-2012

Note: Interest on all loans accounted up to 31-03-2013.

xvii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xviii) The Company is not a chit fund or nidhi or mutual benefit fund Company and hence the provisions of the same are not applicable to the Company.

xix) The Company is not dealing or trading in shares, securities, debentures and other investments.

xx) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xxi) In our opinion and on the basis of information and explanations given to us, the fund raised through Bonds of Rs. 50 crores in July 2010 out of which Rs. 42.92 crores has not been applied for the purpose for which it has been obtained.

xxii) On the basis of review of utilization of funds, which is based on overall examination of the Balance sheet and cash flows of the Company, related information as made available to us and as represented to us by the Management, in our opinion, the Company has not utilized the funds raised on the short-term basis for long-term investments.

xxiii) The Company has not made any preferential allotments of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956.

xxiv) According to the information & explanations given to us and the records examined by us, the debentures/bonds have been issued against Govt. of Karnataka guarantee. Hence no security or charge is created.

xxv) The Company has not raised any money from public issue and hence the disclosure of the same is not applicable.

xxvi) According to the information and explanations given to us and on the basis of examination of records, there were no material frauds on or by the Company noticed or reported during the year.

For M/s MNS & Co.

Chartered Accountants

Firm Reg. No. 003968S

Sd/-

Place: Bangalore (CA MADHAVA MURTHY K.S.)

Date: 20th December, 2013 Partner.

Membership No. 029946


Mar 31, 2010

We have audited the attacdhed Balance Sheet of THE MYSORE PAPER MILLS LIMITED, Bangalore as at 31st March 2010 and the Profit and Loss Account and also the cash flow statement for the year ended on that dated aneexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is io express an opinion on these financial statements based on our audit.

We have conducted our audit in accordance with Auditing Standards generally accepted . in India. Those Standards require that we pian and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1 As required by Companies(Auditors Report) Order, 2003 and further as amended by the Companies (Auditors Report) Amendement Order, 2004, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we give in the annexure astatement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in Paragraph-1 above, we report that:

We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) in our opinion, proper books of account as required by Law have been kept by the Company, so far as appears from our examination of the books.

iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in Agreement with the books of account.

iv) In our opinion, the Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by his report comply with the Accounting Standards referred to in sub- section (3C) of Section 211 ofthe CompaniesAct, 1956 to the extent they are applicable to the Company.

v) Being a Government Company, the Company is exempt from provisions of Section 274(1 )(g) of the CompaniesAct, 1956 relating to Directors.

In our Opinion and to the best of our information and according to the explanations given to us, the said accounts read togetherwith the notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

(a) In the case of Balance Sheet of the state of affairs of the Company as at 31st March 2010;

(b) In the case of Profit and Loss Account of the Loss of the Company for the year ended on that date and

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT OF THE MYSORE PAPER MILLS LIMITED FOR THE YEAR ENDED 31st MARCH 2010

REFERRED TO IN PARAGRAPH - 1 OF OUR REPORT OF EVEN DATE

i)The Company has maintained proper records showing full particulars of quantitative details and situation in respect of fixed assets. However, the same needs to be updated with regard to additions and deletions for the year.

ii) The Company has a regular program of physical verification of plant and machinery and vehicles only. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets. Accordingly, the fixed assets were verified by the Management during the year and according to information and explanations given to us, any discrepancies noticed on such verification have been properly dealt with, in the books of account of the Company.

iii)The Company has not disposed off substantial part of fixed assets during the year.

iv)According to the information and explanations given to us, the Management of the Company has conducted physical verification of Inventory during the year except for standing crops which is estimated on yield-based formulae.

v) In our opinion, the procedures of physical verification of inventory followed by management is reasonable and adequate having regard to the size of the Company and nature of its business.

vi) In our opinion, the Company is maintaining proper records of inventory and according to the information and explanations given to us, the discrepancies noticed during physical verification are not material in nature and the same have been properly dealt with in the books of account of the Company.

vii) The Company has neither granted nor taken any loans, secured or unsecured to / from Companies, firms or other parties covered in the register maintained under Section 301 of the Act.

viii) In our opinion and according to the information and explanations given to us, there is an adequate internal control system, commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

According to the information and explanations given to us, there are no transactions entered in pursuance of Section 301 of the Companies Act, 1956.

x) According to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies(Acceptance of Deposit) Rules, 1975, where applicable except filing of return with ROC. We have been informed that, no order has been passed by the Company Law Board, or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

xi) In our opinion and according to the explanations and information given to us, the Company has an adequate internal audit system commensurate with the size and nature of its business. However, the Coverage has to be increased.

xii) The maintenance of cost records has been prescribed by the Central Government under section 209(1 )(d) of the Companies Act, 1956. According to the information and explanation given to us, such accounts and records have been made and maintained by the Company. However, we have not carried out a detailed verification of such records.

xiii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xviii) The Company is not a chit fund or nidhi or mutual benefit fund company and hence the provisions of the same are not applicable to the Company.

xix) The Company is not dealing or trading in shares, securities, debentures and other investments.

xx) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

xxi) In our opinion and on the basis of information and explanations given to us, the term loan has been applied for the purpose for which it has been obtained except the term loan of Rs.35 crores raised through non Convertible Bonds during the year has been temporarily applied for the purpose other than for which it has been obtained.

xxii) On the basis of review of utilisation of funds, which is based on overall examination of the Balance Sheet and cash flows of the Company, related information as made available to us and as represented to us by the Management. In our opinion, the Company has not utilised the funds raised on the short term basis for long term investments.

xxiii) The Company has not made any preferential allotments of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956.

xxiv) According to information and explanation given to us and the records examined by us, security or charge has been created in respect of the debentures / bonds issued.

XXV) The Company has not raised any money from public issue and hence the disclosure of the same is not applicable.

xxvi) According to the information and explanations given to us and on the basis of examination of records, there were no material frauds on or by the Company noticed or reported during the year.

For MNS & Co,

CHARTERED ACCOUNTANTS Firm No.0039685

Sd/-

B.DEVENDRASHETTY

PARTNER MEM.No.0207885

Place: Bangalore

Dated: 22-11-2010

 
Subscribe now to get personal finance updates in your inbox!