Mar 31, 2015
We have audited the accompanying financial statements of Shree Bhawani
Paper Mills Limited, ("the Company"), which comprise the Balance Sheet
as at March 31,2015 the Statement of Profit and Loss and 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
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 and presentation 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 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 the assets of the
Company and for preventing and detecting frauds and others
irregularities; selection and application of appropriate accounting
policies; making judgements 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.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143 (10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statement
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 financial control relevant to the Company's
preparation of the financial statements that give true and fair view in
order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place and adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the Company's Directors 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 of Qualified Opinion
(a) As mentioned in Note No 41 of financial statements, the balances of
some of the trade receivables, trade payables, lenders, and loans and
advances are subject to confirmation / reconciliation and subsequent
adjust- ments, if any. As such, we are unable to express any opinion as
to the effect thereof on the financial statements for the year.
(b) As mentioned in Note No. 43 of financial statements, the Company
became a sick industrial company within the meaning of Section 3 (1)
(O) of the Sick Industrial Companies (Special Provisions) Act, 1985
(SICA) due to erosion of its entire net worth and the Company was
declared a sick Industrial company by BIFR on 26th September 2013. The
Company has provided interest on Term Loan and other Bank Loans of
Indian Bank and Bank of Baroda @ 10.50% with effect from 1st January
2013. Had the liability of interest been considered at the rate as
sanctioned by the Banks the Loss for the year would have been Rs.
66,85,89,531/- as against the reported loss of Rs. 55,51,30,637/-.
(c) As mentioned in Note No. 29 of financial statements, the Company
has not recognized additional net Deferred Tax Asset during the year.
Net Deferred Tax Assets of Rs.14 crores was recognized for the year
ended 31.03.2012 based on the future profitability projections by the
management. We are unable to express our opinion in this respect.
Opinion
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 31,2015.
(b) In case of the Profit & Loss A/c of the loss for the period ended
on that date, and
(c) In case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("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 paragraphs 3 and 4 of the Order.
2. As required by Section 143 (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. 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;
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. In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards specified
under Section 133 of the Act read with Rule 7 of the Companies
(Accounts) Rules, 2014.
e. Note No. 33 the liability for Gratuity has been made on the basis
of liability determined by the management.
f. On the basis of written representations received from the Directors
as on March 31,2015, and taken on record by the Board of Directors,
none of the Directors is disqualified as on March 31,2015, from being
appointed as a Director in terms of Section 164 (2) of the Act and
g. 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 statement - Refer Note 23 and 44 to
the financial statements.
ii. The Company has no long-term contracts as at March 31,2015.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in paragraph 1 of our report of even date on accounts for
the year ended March 31,2015 of Shree Bhawani Paper Mills Limited
(i) (a). The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b). The Company has physically verified certain assets during the year
in accordance with a programme of verification which, in our opinion,
is reasonable having regard to the size of the Company and the nature
of its assets. No material discrepancies were noticed on such
verification.
(ii) (a). The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b). The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) . The Company is maintaining proper records of inventory. We are
informed that the discrepancies identified on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) As informed to us, the Company has not granted any loans, secured
or unsecured to Companies, firms or other parties covered in the
register maintained under Section 189 of the Companies Act, 2013.
Consequently, the requirements of clauses (iii) (a) and (b) of
paragraph 3 of the Order are not applicable for the current year.
(iv) 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 for the
purchase of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal control
system.
(v) The Company has not accepted any deposits from the public during
the year. As informed 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.
(vi) The Central Government has prescribed maintenance of cost records
under Section 148 (1) of the Act in repect of the products of the
Company. We have broadly reviewed the books of account and records
maintained by the company in this connection and are of the opinion
that prima facie the prescribed accounts and records have been made and
maintained. However, we have not made a detailed examination of the
same.
(vii) (a) According to the records of the Company, undisputed statutory
dues including Provident Fund, Employees' State Insurance, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Value
Added Tax, Cess and other statutory dues have not generally been
regularly deposited with the appropriate authorities.Further details of
such dues which were outstanding for a period of more than six months
from the date they became payable are as follows.
Name. of Statute Period to which Due Date
amount relates
Employees State Insurance June 2013 to Sept. July 2013 to Oct.
2014 2014
Employees Provident Fund Aug. 2012 to Sept. Sept. 2012 to Oct
2014 2014
Finance Act, 1994 April 2013 to Sept. May 2013 to Oct.
Service Tax 2014 2014
Income Tax Act, 1961 TDS March 2014 to Sept. April 2014 to Oct
2014 2014
Name. of Statute Amount Date of payment
(Rupees)
Employees State Insurance 33,41,092 Not yet deposited
Employees Provident Fund 1,65,86,121 Rs. 4,00,00/- paid
on 28/4/2015
Finance Act, 1994 7,67,247 Rs. 2,40,392/- paid
Service Tax on 28/4/2015
Income Tax Act, 1961 TDS 26,33,255 Rs. 8,500/- paid on
28/4/2015
Total 2,33,27,715
(b) According to the information and explanations given to us, the
amounts which were required to be transferred to the investor education
and protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made there under has been
transferred to such fund within time.
(viii) The accumulated losses of the Company at the end of the year are
more than its net worth. It has incurred cash losses, both in the
financial year under report and the immediately preceeding financial
year.
(ix) On the basis of the records and as per the information and
explanations given by the management, the Company has delayed in
repayments of dues to the Banks during the year ended March 31,2015.
Details of such dues are as follows.
(Amount in Rupees)
Name of Banks Instalments due as Interest due as
on March 31,2015 on March 31,2015
Bank of Baroda T/L-III 8,25,00,000/- 5,98,08,330/-
Bank of Baroda T/L-IV 70,70,723/- 62,75,081/-
Indian Bank T/L-IV 54,68,750/- 58,07,763/-
Indian Bank T/L-III 8,25,00,000/- 5,98,18,755/-
Bank of Baroda T/L-V 2,12,50,000/- 2,95,64,207/-
Bank of Baroda WCTL (New) Installment will be 6,55,50,950/-
due from June 2015
Bank of Baroda Corporate 1,00,00,000/- 3,44,95,431/-
Loan (New)
Indian Bank T/L-V 2,12,50,000/- 2,94,43,328/-
Indian Bank T/L-VI 2,00,00,000/- 5,41,46,555/-
Bank of Baroda (CC A/c) - -
Indian Bank (CC A/c) - -
Name of Banks Total overdue as on
March 31, 2015
Bank of Baroda T/L-III 14,23,08,330/- Instalment paid
upto June 2012 interest paid
upto July 2012.
Bank of Baroda T/L-IV 1,33,45,804/- instalment paid
upto June 2012 interest paid
upto July 2012.
Indian Bank T/L-IV 1,12,76,513/- Instalment paid
upto June 2012 interest paid
upto July 2012.
Indian Bank T/L-III 14,23,18,755/- Instalment paid
upto June 2012 interest paid
upto July 2012.
Bank of Baroda T/L-V 5,08,14,207/- Instalment paid Nil,
commenced from 1st quarter of
2013-14 Interest paid upto July
2012.
Bank of Baroda WCTL (New) 6,55,50,950/- Interest paid upto
July 2012
Bank of Baroda Corporate 4,44,95,431/- Instalment paid Nil,
Loan (New) commenced from 1st quarter of
2013-14 Interest paid upto July
2012.
Indian Bank T/L-V 5,06,93,328/- Instalment paid Nil,
commenced from 1st quarter of
2013-14 Interest paid upto July
2012.
Indian Bank T/L-VI 7,41,46,555/- Interest paid upto
July 2012-
Bank of Baroda (CC A/c) 16,12,74,248/-
Indian Bank (CC A/c) 51,21,43,369/-
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
Banks or financial institutions.
(xi) Based on our examination of records and information and
explanations given to us, no fresh term loan has been obtained by the
Company during the year. According to the information and explanations
given to us and on an overall examination of the Balance Sheet of the
Company, we report that the Company has used short term funds during
the year for financing the operating losses of the Company.
(xii) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
FOR P.L. GUPTA & CO.,
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO. 011575C
PLACE : ALLAHABAD (P.L. GUPTA)
DATE : 30th MAY, 2015 PARTNER
Membership No. 009444
Mar 31, 2014
We have audited the accompanying financial statements of Shree Bhawani
Paper Mills Limited, ("the Company"), which comprise the Balance Sheet
as at March 31, 2014 the Statement of Profit and Loss and Cash Flow
Statement for fifteen months period 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
statement that give a true and fair view of the financial position,
financial performance and cash flows 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 the 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.
Auditor''s 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 Company''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 of Qualified Opinion
(a) As mentioned in Note No 41 of financial statements, the balances of
some of the trade receivables, trade payables, lenders, and loans and
advances are subject to confirmation / reconciliation and subsequent
adjust- ments, if any. As such, we are unable to express any opinion as
to the effect thereof on the financial statements for the year.
(b) As mentioned in Note No. 42 of financial statements, the company
became a sick industrial company within the meaning of Section 3 (1)
(O) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA)
due to erosion of its entire net worth and the company was declared a
sick Industrial company by BIFR on 26th September 2013. The Company has
submitted the Draft Rehabilitation Scheme (DRS) to operating agency,
Bank of Baroda. The Company has provided interest on Term Loan and
other Bank Loans of Indian Bank and Bank of Baroda @ 10.50% with effect
from 1st January 2013. Had the liability of interest been considered at
the rate as sanctioned by the Banks the Loss for the year would have
been Rs. 78,28,41,197/- as against the reported loss of Rs.
68,09,45,875/-.
(c) As mentioned in Note No. 29 of financial statements, the company
has not recognized additional net Deferred Tax Asset during the year.
Net Deferred Tax Assets of Rs.14 Crores was recognized for the year
ended 31.03.2012 based on the future profitability projections by the
management. We are unable to express our opinion in this respect.
Opinion
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.
(b) in case of the Profit & Loss A/c of the loss for the period ended
on that date and.
(c) in case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
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. 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. In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow statement comply with the Accounting standards referred to
Sub-section (3C) of Section 211 of the Companies Act, 1956 read with
the General circular 15/2013 dated 13th September 2013 of the Ministry
of Corporate affairs in respect of Section 133 of the Companies Act,
2013 except for comment in para (e) below.
e. Note 33 the liability for Gratuity has been made on the basis of
liability determined by the management.
f. 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 31st March 2014, from being
appointed as a Director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
Referred to in paragraph 1 of our report of even date on accounts for
the year ended 31st March, 2014 of Shree Bhawani Paper Mills Limited
(I) (a). The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b). The Company has physically verified certain assets during the year
in accordance with a programme of verification which, in our opinion,
is reasonable having regard to the size of the company and the nature
of its assets. No material discrepancies were noticed on such
verification.
(c). Fixed assets disposed off during the year were not substantial and
therefore do not effect the going concern status of the Company.
(II) (a). The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b). The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c). The Company is maintaining proper records of inventory. We are
informed that the discrepancies identified on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) (a). As informed to us, the Company has not granted any loans,
secured or unsecured to Companies, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
Conse- quently, the requirements of clauses (iii) (b), (c) and (d) of
paragraph 4 of the Order are not applicable for the current year.
(b). The company has taken loans from the companies, firms or other
parties covered in the Register maintained under Section 301 of the
Companies Act, 1956. Loans taken of Rs. 1287 lacs were outstanding in
case of 3 parties. The maximum amount due during the year was Rs. 1287
lacs.
(c). The rate of interest and other terms and conditions of the loans
taken were prima facie not prejudicial to the interest of the company.
(d). The payment of principal loan and interest are as per terms of the
loans taken.
(iv) 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 for the
purchase of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal control
system.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
that need to be entered in the register in pursuance of Section 301 of
the Companies Act, 1956 have been entered.
(b) According to the information and explanations given to us, there is
no transaction (excluding the loans reported in para (iii)(b) above) in
respect of any party and hence the question of reasonable prices in
respect of such transactions with regard to the prevailing market price
does not arise.
(vi) The Company has not accepted any deposits from the public during
the year. 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.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209 (I) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records with a
view to determine whether they are accurate or complete.
(ix) According to the records of the Company, undisputed statutory dues
including provident fund, investors education & protection fund, Income
tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Cess
& material Statutory dues applicable to it have generally been
deposited with the appropriate authorities. Though there has been some
delays in some cases. Further Rs. 1,90,75,604/- of such dues which were
outstanding as on Balance Sheet date are as follows.
Nature of Statute Period to which Due Date
amount relate
Employees State Insurance June 13 to March 14 July 13 to April 14
Employees Provident Fund Aug. 12 to March 14 Sept.12 to April 14
Service Tax Feb. 14 & March 14 March 14 to April 14
Income Tax (TDS) Jan. 14 to March 14 Feb. 14 to April 14
Nature of Statute Amount (Rs.) Remarks
Employees State Insurance 22,75,698 Not yet deposited
Employees Provident Fund 1,29,68,484 Not yet deposited
Service Tax 6,08,413 Rs. 75,128/-
Not yet deposited
Income Tax (TDS) 32,23,009 Not yet deposited
Total 1,90,75,604*
* Including Rs. 88,20,784/- outstanding for more than six months as on
balance sheet date.
X. The accumulated losses of the Company at the end of the period are
more than its net worth. It has incurred cash losses, both in the
financial year under report and the immediately preceeding financial
year.
XI. On the basis of the records and as per the information and
explanation given by the management, the company has delayed in
repayments of dues of Term Loans to the Banks during the period ended
March 31, 2014. Further Rs. 353507853/- of such dues were in arrears as
on 31st March 2014.
XII. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
XIV. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
XV. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
of financial institutions.
XVI. Based on our examination of records and information and
explanations given to us, no fresh term loan has been obtained by the
Company during the year.
XVII. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that the Company has used short term funds during the year for
financing the operating losses of the Company.
XVIII. The Company has not made any preferential allotment of shares
during the year.
XIX. The Company has not issued any secured debentures during the year.
XX. The Company has not raised any money by a public issue during the
year. Accordingly, the provisions of clause 4 (xx) of the Companies
(Auditor''s Report) Order are not applicable.
XXI. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
FOR P.L. GUPTA & CO.
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO. 011575C
PLACE : ALLAHABAD (P.L. GUPTA)
DATE : 30th MAY, 2014 PARTNER
Membership No. 009444
Dec 31, 2012
We have audited the accompanying financial statements of Shree Bhawani
Paper Mills Limited, which comprise the Balance Sheet as at 31st
December, 2012, and the Statement of Profit and Loss and Cash Flow
Statement for the period of nine month ended on that date, 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
statement that give a true and fair view of the financial position,
financial performance and cash flows 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''. The 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 requirment 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 judment, including the
assessment of 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 eveluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the 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.
Opinion
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 December 31, 2012;
(b) In case of the Profit & Loss A/c of the loss for the period ended
on that date, and
(c) in case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditors 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 & 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
audlt.
(b) 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 & Loss and Cash Flow
Statements dealt with by this report are in agreement with the books of
account.
(d) In our opinion, the Balance Sheet, Statement of Profit & Loss and
Cash Flow Statement comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956 except for
comment in para (e) below.
(e) Note No. 36 & 37- The liability for gratuity and leave encashment
has been made on the basis of liability determined by the management.
(f) Without qualifying our opinion, attention is drawn to the follwing
notes:
i. Regarding net deferred tax assets of Rs.14 crore recognized in the
accounts for the year ended 31.03.2012 based on the future
profitability projections made by the management. We are unable to
express any opinion on the said projections and their consequential
effects, if any.
ii. Note No 40- As at the balance sheet date, the accumulated losses of
the Company stand at Rs. 765412542/- which is in excess of the
shareholder''s fund of Rs. 381437871/- as on that date. Based on the
business plan and profitability estimates of the Company, the financial
statements for the period have been drawn up by the management as per
the going concern assumptions.
(g) On the basis of written representations received from the Directors
as on December 31, 2012 and taken on record by the Board of Directors,
none of the directors is disqualified as on December 31, 2012 from
being appointed as a Director in terms of clause (g) of Sub section (1)
of Section 274 of the Companies Act, 1956.
(h) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITORS'' REPORT
RE: SHREE BHAWANI PAPER MILLS LIMITED
Referred to in paragraph 1 of our report of even date;
I. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The Company has physically verified certain assets during the year
in accordance with a program of verification which, in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies were noticed on such
verification.
(c) During the year, the Company has not disposed off a substantial
part of its Fixed Assets, so as to affect its going concern status.
II. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. We are
informed that the discrepancies identified on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
III. (a) As informed to us, the Company has not granted any loans,
secured or unsecured to companies, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
Therefore, the requirements of clauses (III) (b), (c) & (d) of para 4
of the order are not applicable.
(b) The Company has not taken any loans from the companies, firms or
other parties covered in the Register maintained under Section 301 of
the Companies Act, 1956. Unsecured fixed deposits of Rs. 4.20 Lacs were
outstanding in case of 6 parties covered in the register maintained u/s
301 of the Companies Act, 1956, the maximum amount due during the year
was Rs. 4.60 Lacs.
(c) The rate of interest and other terms and conditions of the fixed
deposits were prima-facie not prejudicial to the interest of the
Company.
(d) The payment of principal amount and interest on the aforesaid Fixed
Deposits were regular.
IV. 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 for the
purchase of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal control
system.
V. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
that need to be entered in the register in pursuance of Section 301 of
the Companies Act, 1956 have been entered.
(b) According to the information and explanations given to us, there is
no transaction (excluding the loans reported in para (iii)(b) above) in
respect of any party and hence the question of reasonable prices in
respect of such transactions with regard to the prevailing market price
does not arise.
VI. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A and 58AA or any other relevant provisions of the Act. 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.
VII. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
VIII. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima-facie, the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
IX. According to the records of the Company, undisputed statutory dues
including provident fund, investors education & protection fund, income
Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess
& material Statutory dues applicable to it have generally been regulary
deposited with the appropriate authorities. Though there has been some
delays in some cases. Further, Rs. 6539973/- of such dues which were
outstanding as on balance sheet date are as follows:
Nature of
Statute Period to
which Amount
relate Amount Remarks
Employees State
Insurance Nov. 12 to Dec.12 463749 Not yet deposited
Employees Provi.
Fund Aug. 12 to Dec.12 3915064 Not yet deposited
Income Tax (TDS) July 12 to Dec. 12 2161160* Not yet deposited
Total 6539973
* Including Rs. 102726/- outstanding for more than six months as on
balance sheet date.
X. The accumulated losses of the Company at the end of the period are
more than of its net worth. It has incurred cash losses, both in the
financial year under report and the immediately preceding financial
year.
XI. On the basis of the records and as per the information and
explanation given by the management, the Company has delayed in
repayments of dues of Term Loans to the banks during the period ended
31.12.2012. Further Rs. 96327807/- of such dues were in arrears as on
31st December 2012.
XII. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.
XIV. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
XV. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions. Accordingly, clause 4(xv) of the
Companies (Auditor''s Report) Order, 2003 is not applicable to the
Company.
XVI. According to the information and explanations given to us, we
have to state that the Company has applied the term loans for the
purposes for which they were obtained.
XVII. According to the information and explanations received, the
Company has not applied short term borrowings for long term use and
vice-versa, other than temporary deployment pending application.
XVIII. The Company has not made any preferential allotment of shares
during the period.
XIX. The Company has not issued any debentures during the period.
XX. The Company has not raised any money by public issue during the
period.
XXI. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
period.
FOR P. L. GUPTA & CO.,
CHARTERED ACCOUNTANTS
REGISTRATION NO. 011575C
PLACE : NEW DELHI (P.L. GUPTA)
DATE : 18TH MARCH, 2013 PARTNER
Membership No. 9444
Mar 31, 2012
1. We have audited the attached Balance Sheet of Shree Bhawani Paper
Mills Limited, as at 31st March, 2012, the Statement of Profit and Loss
and also Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan 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.
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
issued by the Central Government of India in terms of Section 227(4A)
of the Companies Act, 1956, we enclose in the Annexure a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes 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
those books;
(iii) 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;
(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss
and Cash Flow Statement dealt with by this report, comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2012 from being appointed as a Director in terms of
clause(g) of sub-section(1) of Section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with
significant Accounting Policies & Notes on Financial Statements and
attached thereto 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 the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(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.
ANNEXURE TO THE AUDITORS' REPORT
RE: SHREE BHAWANI PAPER MILLS LIMITED
Referred to in paragraph 3 of our report of even date;
I. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The Company has physically verified certain assets during the year
in accordance with a programme of verification which, in our opinion,
is reasonable having regard to the size of the Company and the nature
of its assets. No material discrepancies were noticed on such
verification.
(c) During the year the Company has not disposed off a substantial part
of its Fixed Assets, so as to affect its going concern status.
II. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. We are
informed that the discrepancies identified on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
III. (a) As informed to us, the Company has not granted any loans,
secured or unsecured to companies, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
Therefore, the requirements of clauses (III) (b), (c) & (d) of para 4
of the order are not applicable.
(b) The Company has not taken any loans from the companies, firms or
other parties covered in the Register maintained under Section 301 of
the Companies Act, 1956. Unsecured fixed deposits of Rs. 4.60 Lacs were
outstanding in case of 7 parties covered in the register maintained u/s
301 of the Companies Act, 1956, the maximum amount due during the year
was Rs. 12.70 Lacs.
(c) The rate of interest and other terms and conditions of the fixed
deposits were prima-facie not prejudicial to the interest of the
Company.
(d) The payment of principal amount and interest on the aforesaid Fixed
Deposits were regular.
IV. 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 for the
purchase of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal control
system.
V. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
that need to be entered in the register in pursuance of Section 301 of
the Companies Act, 1956 have been entered.
(b) According to the information and explanations given to us, there is
no transaction (excluding the loans reported in para (iii)(b) above) in
respect of any party and hence the question of reasonable prices in
respect of such transactions with regard to the prevailing market price
does not arise.
VI. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A and 58AA or any other relevant provisions of the Act. 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.
VII. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
VIII. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209(1 )(d) of the Companies
Act, 1956 and we are of the opinion that prima-facie, the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
IX. (a) According to the records of the Company, undisputed statutory
dues including provident fund, investors education & protection fund,
income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess & material Statutory dues applicable to it have generally
been regulary deposited with the appropriate authorities.
(b) According to the information and explanations given to us, TDS
amounting to Rs. 15.10 Lacs was outstanding as at 31st March, 2012 for
a period of more than 6 months from the date it became payable.
X. The accumulated losses of the Company at the end of the financial
year are more than fifty percent of its net worth. It has incurred cash
losses, both in the financial year under report and the immediately
preceding financial year.
XI. The company has since paid aggregating Rs. 261.27 Lacs to
Financial Institutions & Banks against the dues amounting to Rs. 335.27
Lacs which fell due in January-March 2012.
XII. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 are not applicable to
the Company.
XIV. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report)
Order, 2003 are not applicable to the Company.
XV. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions. Accordingly, clause 4(xv) of the
Companies (Auditor's Report) Order, 2003 is not applicable to the
Company.
XVI. According to the information and explanations given to us, we have
to state that the Company has applied the term loans for the purposes
for which they were obtained.
XVII. According to the information and explanations received, the
Company has not applied short term borrowings for long term use and
vice-versa, other than temporary deployment pending application.
XVIII. The Company has made preferential allotment of shares to
parties & companies covered in the register maintained u/s 301 of the
Act and the price at which shares have been issued is not prejudicial
to the interest of the Company.
XIX. The Company has not issued any debentures during the year.
XX. The Company has not raised any money by public issue during the
year.
XXI. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
FOR P. L. GUPTA & CO.,
CHARTERED ACCOUNTANTS
REGISTRATION NO. 011575C
PLACE : ALLAHABAD (P.L. GUPTA)
DATE : 30th MAY, 2012 PARTNER
Membership No. 9444
Mar 31, 2011
1. We have audited the attached Balance Sheet of Shree Bhawani Paper
Mills Limited, as at 31st March, 2011, the Profit and Loss Account and
also Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan 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.
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
issued by the Central Government of India in terms of Section 227(4A)
of the Companies Act, 1956, we enclose in the Annexure a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes 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
those 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, Profit and Loss Account and
Cash Flow Statement dealt with by this report, comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2011 from being appointed as a Director in terms of
clause(g) of sub-section(1) of Section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts 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 the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
(b) in the case of the Profit and Loss Account, 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.
ANNEXURE TO THE AUDITORS' REPORT
RE: SHREE BHAWANI PAPER MILLS LIMITED
Referred to in paragraph 3 of our report of even date;
I. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The Company has physically verified certain assets during the year
in accordance with a programme of verification which, in our opinion,
is reasonable having regard to the size of the Company and the nature
of its assets. No material discrepancies were noticed on such
verification.
(c) During the year the Company has not disposed off substantial part
of its Fixed Assets, so as to affect its going concern.
II. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. We are
informed that the discrepancies identified on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
III. (a) As informed to us, the Company has not granted any loans,
secured or unsecured to companies, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
(b) The Company has not taken any loans from the companies, firms or
other parties covered in the Register maintained under Section 301 of
the Companies Act, 1956. Unsecured fixed deposits of Rs. 12.70 Lacs
were outstanding in case of 15 parties covered in the register
maintained u/s 301 of the Companies Act, 1956, the maximum amount due
during the year was Rs. 12.70 Lacs.
(c) The rate of interest and other terms and conditions of the fixed
deposits were prima-facie not prejudicial to the interest of the
Company.
(d) The payment of principal amount and interest on the aforesaid Fixed
Deposits were regular.
IV. 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 for the
purchases of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal control
system.
V. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
that need to be entered in the register in pursuance of Section 301 of
the Companies Act, 1956 have been entered.
(b) According to the information and explanations given to us, there is
no transaction (excluding the loans reported in para (iii)(b) above) in
respect of any party and hence the question of reasonable prices in
respect of such transactions with regard to the prevailing market price
does not arise.
VI. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A and 58AA or any other relevant provisions of the Act. 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.
VII. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
VIII. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima-facie, the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
IX. (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees' state insurance,
income tax, sales tax, wealth tax, service tax, custom duty, excise
duty, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income-tax, wealth-tax,
sales-tax, customs duty, excise duty and cess were in arrears, as at
31st March, 2011 for a period of more than six months from the date
they became payable.
X. The accumulated losses of the Company at the end of the financial
year are more than fifty percent of its net worth. It has incurred cash
losses, both in the financial year under report and the immediately
preceding financial year.
XI. The company has since paid aggregating Rs. 177.34 Lacs to
Financial Institutions & Banks against the dues amounting to Rs. 456.44
Lacs which fell due in January-March 2011.
XII. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
XIV. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 are not applicable to the Company.
XV. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions. Accordingly, clause 4(xv) of the
Companies (Auditor's Report) Order, 2003 is not applicable to the
Company.
XVI. According to the information and explanations given to us, we
have to state that the Company has applied the term loans for the
purposes for which they were obtained.
XVII. According to the information and explanations received, the
Company has not applied short term borrowings for long term use and
vice-versa, other than temporary deployment pending application.
XVIII. The Company has not made any preferential allotment of shares
during the year.
XIX. The Company has not issued any debentures during the year.
XX. The Company has not raised any money by public issue during the
year.
XXI. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
FOR P.L. GUPTA & CO.,
CHARTERED ACCOUNTANTS
REGISTRATION NO. 011575C
(P.L. GUPTA)
PARTNER
Membership No. 9444
PLACE : ALLAHABAD
DATE : 30th MAY, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Shree Bhawani Paper
Mills Limited, as at 31st March, 2010, the Profit and Loss Account and
also Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan 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.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
issued by the Central Government of India in terms of Section 227(4A)
of the Companies Act, 1956, we enclose in the Annexure a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes 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
those 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, Profit and Loss Account and
Cash Flow Statement dealt with by this report, comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2010 from being appointed as a Director in terms of
clause(g) of sub-section(1) of Section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts 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 the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
(b) in the case of the Profit and Loss Account, 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.
ANNEXURE TO THE AUDITORS REPORT RE: SHREE BHAWANI PAPER MILLS LIMITED
Referred to in paragraph 3 of our report of even date;
I. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The Company has physically verified certain assets during the year
in accordance with a programme of verification which, in our opinion,
is reasonable having regard to the size of the Company and the nature
of its assets. No material discrepancies were noticed on such
verification.
(c) During the year the Company has not disposed off substantial part
of its Fixed Assets, so as to affect its going concern.
II. (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. We are
informed that the discrepancies identified on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
III. (a) As informed to us, the Company has not granted any loans,
secured or unsecured to companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act, 1956.
(b) The Company has not taken any loans from the companies, firms or
other parties covered in the Register maintained under Section 301 of
the Companies Act, 1956. Unsecured fixed deposits of Rs. 12.70 Lacs
were outstanding in case of 15 parties covered in the register
maintained u/s 301 of the Companies Act, 1956, the maximum amount due
during the year was Rs. 72.95 Lacs.
(c) The rate of interest and other terms and conditions of the fixed
deposits were prima-facie not prejudicial to the interest of the
Company.
(d) The payment of principal amount and interest on the aforesaid Fixed
Deposits were regular.
IV. 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 for the
purchases of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal control
system.
V. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
that need to be entered in the register in pursuance of Section 301 of
the Companies Act, 1956 have been entered.
(b) According to the information and explanations given to us, there is
no transaction (excluding the loans reported in para (iii)(b) above) in
respect of any party and hence the question of reasonable prices in
respect of such transactions with regard to the prevailing market price
does not arise.
VI. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A and 58AA or any other relevant provisions of the Act. 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.
VII. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
VIII. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima-facie, the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of such accounts and records.
IX. (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees state insurance,
income tax, sales tax, wealth tax, service tax, custom duty, excise
duty, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income-tax, wealth-tax,
sales-tax, customs duty, excise duty and cess were in arrears, as at
31st March, 2010 for a period of more than six months from the date
they became payable.
X. The accumulated losses of the Company at the end of the financial
year are less than fifty percent of its net worth. It has incurred
cash losses, both in the financial year under report and the
immediately preceding financial year.
XI. According to the information and explanations given to us, the
Company has been generally regular in repaying its dues to the banks
except some delays due to the financial difficulties. Repayment of
installments in respect of working capital term loan amounting to Rs.
60 Lacs, which became due on 31st March, 2010 has since been paid.
XII. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
XIV. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the Company.
XV. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions. Accordingly, clause 4(xv) of the
Companies (Auditors Report) Order, 2003 is not applicable to the
Company.
XVI. According to the information and explanations given to us, we
have to state that the Company has applied the term loans for the
purposes for which they were obtained.
XVII. According to the information and explanations received, the
Company has not applied short term borrowings for long term use and
vice-versa, other than temporary deployment pending application.
XVIII. The Company has not made any preferential allotment of shares
during the year.
XIX. The Company has not issued any debentures during the year.
XX. The Company has not raised any money by public issue during the
year.
XXI. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
FOR P.L. GUPTA & CO.,
CHARTERED ACCOUNTANTS
REGISTRATION NO. 011575C
PLACE : ALLAHABAD (P.L. GUPTA)
DATE : 29th MAY, 2010 PARTNER
Membership No. 9444