Mar 31, 2014
We have audited the accompanying financial statements of Vapi
Enterprise Limited ("the Company- Formerly Known as Vapi Paper Mills
Limited"), which comprise the Balance Sheet as at March 31, 2014, and
the Statement of Profit and Loss and Cash Flow Statement for the year
ended March 31, 2014, and a summary of significant accounting policies
and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s 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 flows of the Company in
accordance with the Accounting Standards notified under 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 and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and fair 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 disclosures and amounts 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 for Qualified Opinion
i. In our opinion, the following accounting standards are not complied
by the company:
1. Accounting Standard (AS-15) on "Employee Benefits"; regarding non
provisioning of employee benefits
2. Accounting Standard (AS-24) on "Discontinuing Operations"
3. Accounting Standard (AS-28) on "Impairment of Assets".
4. Accounting Standard (AS-22) on "Deferred tax".
The effect of the above on assets and liabilities, as well as loss and
reserves is not ascertainable.
ii. We are unable to form an opinion about the realisability of:
a. Balance of Rs.31,09,647/- of long term trade payables is subject to
confirmation and adjustment, if any, required upon such confirmations
are not determinable.
b. Balance of Rs.54,75,000/- of Long term borrowings from others is
subject to confirmation and adjustment, if any, required upon such
confirmations are not determinable.
The effects of the matters referred to para above on assets and
liabilities, as well as profit and reserves could not be ascertainable.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, (subject to the possible effects of the
matter described in the Basis for Qualified Opinion paragraph), 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:
1) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
2) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
3) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter:
We draw attention that the Company''s accumulated losses as on March 31,
2014 were Rs.15,90,82,708/- as against paid up capital and reserves of
Rs.9,02,08,547/-. Hence, Company''s net worth is negative. However, the
accounts are prepared on the basis that Company is a going concern. In
our opinion, the ability of the Company to continue as a going concern
is dependent upon the surplus that may be generated out of present
activity as well as promoters bringing in funds to finance losses. Our
opinion on this matter is not qualified.
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 under provisions of section 227(3) of the Companies Act,
1956, 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 notified under
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 subject to those mentioned under "basis for
qualified opinion".
e) On the basis of written representations received from the directors
as on March 31, 2014, 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 Section 274(1)(g) of the Act.
ANNEXURE TO AUDITORS'' REPORT
[Referred to in paragraph 1 of our report on Other Legal and Regulatory
Requirements]
(i) In respect of fixed assets:
a. The Company has not maintained proper records showing full
particulars including quantitative details and situation of Fixed
Assets.
b. The fixed assets have not been physically verified by the
management. In the absence of physical verification, we are not in a
position to comment on the discrepancies, if any, between physical and
book balances and the impact thereof.
c. In our opinion, the Company has not disposed off substantial part
of fixed assets during the year, and the going concern status of the
company is not affected.
(ii) In respect of Inventories:
a. Since the company is not having inventory, the para 4(ii)(a) of the
order is not applicable.
b. Since the company is not having inventory, the para 4(ii)(b) of the
order is not applicable.
c. Since the company is not having inventory, the para 4(ii)(c) of the
order is not applicable.
(iii) In respect of loans, secured or unsecured, granted or taken by
the company to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act,1956
a. The company has not granted any loan to companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act, 1956 and therefore, reporting requirement:
1. Under clause 4(iii)(a) of the order is not applicable to the
company.
2. Under clause 4(iii)(b) of the order is not applicable to the
company.
3. Under clause 4(iii)(c) of the order is not applicable to the
company.
4. Under clause 4(iii)(d) of the order is not applicable to the
company.
b. The company has taken loan from two companies and two individuals
listed in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs.
8,33,52,967/- and the year- end balance of loans taken from such
parties was Rs. 8,17,24,555/- c. In our opinion, the rate of interest
and other terms and conditions on which loans have been taken from
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956 are not, prima facie,
prejudicial to the interest of the company. d. In respect of loans
taken by the company the principal amount is repayable on demand. As
per information and explanation given to us, no demand of the
interest/principal amount has been made during the financial year.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal controls.
(v) In respect of the contracts or arrangements referred to in section
301 of the Companies Act, 1956:
a. According to the information and explanations given to us, we are of
the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
b. In our opinion and according to the information and explanations
given to us, transactions made in pursuance of such contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs.5,00,000/- in
respect of any party during the year have been made at prices which are
reasonable having regard to market prices prevailing at the relevant
time or compared to prices at which purchases were made from other
parties.
(vi) According to information and explanations given to us, the company
has not accepted any deposits from public during the concerned
financial year. However, in respect of unsecured loans from parties
obtained in earlier years and outstanding as on March 31, 2014, the
Company has not complied with the provisions of sections 58A of the
Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules,
1975 (hereinafter referred to as Rules), as mentioned hereunder:
a. The Company has not maintained liquid assets as required by Rule 3A
of the Rules.
b. The Company has not filed statement in lieu of advertisements with
the Registrar of Companies under Rule 4A (1) of the Rules, and
c. The Company has not filed returns of deposits with the Registrar of
Companies, under Rule 10 of the Rules.
Further, we are informed that no Order has been passed by the Company
Law Board (''the CLB'') or National Company Law Tribunal (''the NCLT'') or
Reserve Bank of India (''the RBI'') or any Court or any other Tribunal.
(vii) The Company does not have formal internal audit system.
(viii) As per the information and explanation given to us, the company
is not required to maintain cost records pursuant to the Companies
(Cost Accounting Records) Rules, 2011 prescribed by the Central
Government under Section 209 (1) (d) of the Companies Act, 1956.
(ix) In respect of statutory dues:
a. In our opinion and according to the information and explanation
given to us, the company has been generally regular in depositing
undisputed statutory dues including Provident Fund, Sales Tax, Income
Tax, Wealth Tax, Investor Education and Protection Fund, Custom duty,
Excise duty, and other statutory dues as may be applicable to the
company except in case of Professional tax . Income Tax deducted at
Source and Service Tax dues there were paid late. The companies
contribution towards profession tax is not provided for and the staff
profession tax of Rs.80,715/- is outstanding for a period more than six
months from the date they become payable. b. According to the
information and explanation given to us, there are no dues of sale tax,
income tax, customs duty, wealth tax, excise duty and cess which have
not been deposited on account of any dispute.
(x) In our opinion, the company has been registered for a period more
than five years, the accumulated losses of the company are more than
fifty percent of its net worth and it has not incurred cash loss in the
current year and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not raised loans from financial
institution or bank neither issued debentures therefore the reporting
requirement of clause 4(xi) of the Order is not applicable.
(xii) The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the reporting requirement under clause 4(xii) the Order is
not applicable to the company.
(xiii) In our opinion, the company is not a chit fund or a nidhi mutual
benefit fund / society. Therefore the reporting requirement under
clause 4(xiii) the Order is 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
reporting requirement under clause 4(xiv) the Order is not applicable
to the company.
(xv) We are informed that, the company has not given any guarantee for
loans taken by others from banks or financial institutions.
Accordingly, the reporting requirement under clause 4(xiv) the Order is
not applicable to the company.
(xvi) According to the information and explanations given to us, the
company has not availed any term loans during the year. Accordingly,
the reporting requirement under clause 4(xvi) of the order is not
applicable to the company.
(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 no funds raised on short term basis have been used for long term
investment.
(xviii)According to the information and explanations given to us, the
company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, the
company has not issued debentures during the year.
(xx) According to the information and explanations given to us, the
company has not raised any money by way of 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 Chirag N Shah & Associates
Chartered Accountants
FRN.118215W
Sd/-
Hetal C. Shah
Partner
Membership No: 111610
Place: Mumbai
Date : 31st May, 2014, 2014
Mar 31, 2012
1. We have audited the attached Balance Sheet of VAPI PAPER MILLS
LIMITED as at 31st March 2012, and also Statement of Profit and Loss
for the year ended on that date annexed thereto and the cash flow
statements for the year ended on that date. 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 (The
Order) issued by the Central Government of India in terms of
sub-section (4A) of section 227 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. The Company's accumulated losses as on March 31, 2012 were Rs
146,240 thousands as against paid up capital and reserves of Rs 90,209
thousands. Hence Company's net worth is negative. However the accounts
are prepared on the basis that Company is a going concern. In our
opinion the ability of the Company to continue as a going concern is
dependent upon the surplus that may be generated out of present
activity as well as promoters bringing in funds to finance losses as
mentioned in note no. 23.
5. Subject to the foregoing and 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 accounts as required by law, have
been kept by the Company so far as appears from our examination of
those books. The Company has no branches.
(iii)The Balance Sheet, Profit & Loss Account and Cash flow statement
dealt with by this report are in agreement with books of account
(iv) in our opinion, the balance sheet, statement of profit and loss
and cash flow statement dealt with by this report comp with the
accounting standards referred to in sub-section (3C) of section 212 of
the Companies Act 1956 except: section 211I
a) Accounting Standard (AS-15) on "Employee Benefits"; regarding non
provisioning of employee benefits (Refer Note 26).
b) Accounting Standard (AS-17) on "Accounting for Segment
Reporting."
C) Accounting Standard (AS-24) on "Discounting Operations" (Refer Note
35).
d) Accounting Standard (AS-28J on "Impairment of Assets".
The effect of the above on assets and liabilities, as well as loss and
reserves is not ascertainable. well loss and
(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 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) a) We are unable to form an opinion about the realisability or
otherwise of long term loans and advances of Rs. 9,251 thousands as no
payment is received since long time and the confirmation of balances
have not been obtained from the parties.
b) We are unable to form an opinion about the realisability or
otherwise of trade receivables of Rs. 6,053 thousands as no payment is
received since long time and the confirmation of balances have not
been obtained from the parties.
c) We are unable to form an opinion about the realisability or
otherwise long term trade advances to other suppliers of Rs. 4,750
thousands as no services are rendered or payment is received since long
time and the confirmation of balances have not been obtained from the
parties.
d) Balance of Rs. 1,000 thousands of Share Application Money is sublet
confirmation and adjustment, if any required upon such confirmations
are not determinable.
e) Balance of Rs. 4,964 thousands of long term trade payables is
subject confirmation and adjustment, if any required upon such
confirmations are not determinable.
f) Balance of Rs. 1190 thousands of Trade Deposits is subject
confirmation and adjustment if any required upon such confirmations are
not determinable.
(vii) The effect of the matters referred to para (vi) above on assets
and liabilities, as well as loss and reserves could not be quantified.
(viii) Subject to our remarks in Para 4, 5 (iv), (vi) and (vii) above,
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 Balance Sheet of the state of affairs of the Company
as at 31 st March, 2012
b) in the case of statement of Profit & Loss of the Profit for the year
ended on that date; and
c) in case of cash flow statement, of the cash flows for the year ended
on that date.
ANNEXURE TO AUDITORS' REPORT
(Referred to in paragraph (3) of our report of even date)
(i) (a) The Company has not maintained proper records showing full
particulars including quantitative details and situation of Fixed
Assets.
(b) The fixed assets have not been physically verified by the
management. In the absence of physical verification, we are not in a
position to comment on the discrepancies, if any, between physical and
book balances and the impact thereof.
(c) In our opinion, the Company has not disposed off substantial part
of fixed assets during the year.
(ii) (a) The inventory has been physically verified at regular
intervals during the year by the management, In our opinion this
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. As informed
to us, the discrepancies noticed on verification between the physical
stocks and the book records were not material.
(iii) (a) The company has not granted any loan to companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956 and therefore, reporting requirement under
clause 4(iii} (a) to (d) of the Order are not applicable to the
company.
(b) The company had taken loan from two companies and four individuals
listed in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs. 84,254
thousands and the year-end balance of loans taken from such parties was
Rs. 82,932 thousands.
(c) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from companies, firms or other parties
listed in the register maintained under section 301 of the Companies
Act, 1956 are not, prima facie, prejudicial to the interest of the
company.
(d) In respect of loans taken by the company the principal amount is
repayable on demand.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal controls.
(v) (a) According to the information and explanations given to us we
are of the opinion that the transactions that need to be entered into
the register maintained under section 301 of the Companies Act 1956
have been so entered.
(b) In our opinion and according to the information and explanations
given to us, transactions made in pursuance of such contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs 5,00,000/- in
respect of any party during the year have been made at prices which are
reasonable having regard to market prices prevailing at the relevant
time or compared to prices at which purchases were made from other
parties.
(vi) During the year the Company has not accepted deposits from public
However in respect of unsecured loans from parties obtained in earlier
years and outstanding as on March 31, 2012, the Company has not
complied with the provisions of sections 58 A of the Companies Act 1956
and the Companies (Acceptance of Deposit) Rules, 1975 (hereinafter
referred to as Rules), as mentioned hereunder:
a) The Company has not maintained liquid assets as required by Rule 3A
of the Rules.
b) The Company has not filed statement in lieu of advertisements with
the Registrar of Companies under Rule 4A (1) of the Rules, and
c) The Company has not filed returns of deposits with the Registrar of
Companies, under Rule 10 of the Rules.
Further, we are informed that no Order has been passed by the Company
Law Board ('the CLB') or National Company Law Tribunal ('the NCLT') or
Reserve Bank of India ('the RBI') or any Court or any other Tribunal.
(vii) The Company does not have formal internal audit system.
(viii) The company has not maintained cost records pursuant to the
Companies (Cost Accounting Records) Rules, 2011 prescribed by the
Central Government under Section 209 (1) (d) of the Companies Act,
(ix) (a) In our opinion and according to the information and
explanation given to us, the company has been generally regular in
undisputed statutory dues including Provident Fund, Sales Tax, Income
Tax Wealth Tax, Investor Education and Protection Fund, Custom duty
Excise duty, Professional tax and other statutory dues as may be
applicable to the company except in case of Income Tax deducted at
Source and Service Tax dues where there was delay.
(b) According to the information and explanations given to us no
undisputed amounts payable in respect of income tax, sales tax, wealth
tax, service tax and custom duty were in arrears as at March 31, 2012
for a period of more than six months from the date they became payable.
(c) According to the information and explanation given to us there are
no dues of sale tax, income tax, customs duty, wealth tax, excise duty
and cess which have not been deposited on account of any dispute. y
(x) In our opinion, the accumulated losses of the company are m ore
than fifty percent of its net worth and it has incurred cash loss both
in the current year and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not raised loans from financial
institution or bank neither issued debentures therefore the reporting
requirement of clause 4(xi) of the Order is not applicable.
(xii) The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities
Therefore, the reporting requirement under clause 4 (xii) the Order is
not applicable to the company.
(xiii) In our opinion, the company is not a chit fund or a nidhi mutual
benefit fund / society. Therefore the reporting requirement under
clause 4(xiii) the Order is 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
reporting requirement under clause 4(xiv) the Order is not applicable
to the company.
(xv) We are informed that, the company has not given any guarantee for
loans taken by others from banks or financial institutions.
Accordingly, the reporting requirement under clause 4(xiv) the Order
is not applicable to the company.
(xvi) According to the information and explanations given to us, the
company has not availed any term loans 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 no funds raised on short term basis have been used for long term
investment.
(xviii) According to the information and explanations given to us, the
company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, the
company has not issued debentures during the year.
(xx) According to the information and explanations given to us, the
company has not raised any money by way of 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 Manubhai & Co.
Chartered Accountants
Firm Reg. No. : 106041W
(K. M. Patel)
Partner
Membership No. 45740
Place: Ahmedabad
Date :29th June, 2012
Mar 31, 2010
1. We have audited the attached Balance Sheet of VAPI PAPER MILLS
LIMITED, as at 31st March 2010, and also Profit and Loss Account for
the year ended on that date annexed thereto and the cash flow
statements for the year ended on that date. 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 (Audi tor s K.S port) Order, 2003
issued by the Central Government of India in terms of sub-section
(4A) of section 227 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 behef were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of accounts as required by law, have
been kept by the Company so far as appears from our examination of
those books. The Company has no branches.
(iii) The Balance Sheet, Profit & Loss Account and Cash flow statement
dealt with by this report are in agreement with 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 except Accounting Standard (AS-15) on "Employee
Benefits"; Accounting Standard (AS-17) on "Accounting for Segment
Reporting"; AS -11 on "Effects of changes in foreign exchange rates Ã
revised 2003" and Accounting Standard (AS-24) on "Discontinuing
Operations" notified under company Accounting SfrmdaM Rules, 2006 the
effect of the same on loss, assets and liabili ascertainable
(v) On the basis of written representations received from the
directors, as on 31 st March 2010 and taken on record by the Board of
Directors, we report that none of 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) We are unable to form an opinion about readability or otherwise of
loans and advances ofRs. 9,250 thousand as no payment was received
since long time and the confirmation of balances have not been obtained
from the said party. The effect of the same on loss, reserves and
assets could not be quantified.
(vii) Subject to our comments in Para (vi) above, 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 Balance Sheet of the state of affairs of the Company
as at 31st March, 2010
b) in the case of Profit & Loss Account of the Loss for the year ended
on that date; and
c) in case of cash flow statement, of the cash flows for the year ended
on that date.
ANNEXURE TO AUDITORSREPORT [Referred to in paragraph (3) of our report
of even date]
(i) (a) The Company has not maintained proper records showing full
particulars including quantitative details and situation of Fixed
Assets.
(b) We are informed by the management that all fixed assets were
physically verified during the year. As informed to us, no material
discrepancies have been noticed on such verification as compared to
records maintained by the company.
(c) During the year, the Company has disposed off substantial part of
its assets. However this has not affected going concern.
(ii) (a) The inventory has been physically verified at regular
intervals during the year by the management. In our opinion this
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. As
informed to us, the discrepancies noticed on verification between the
physical stocks and the book records were not material.
(iii) (a) The company has not granted any loan to companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956 and therefore, the provisions of clause 4(iii)
(a) to (c) of the Companies (Auditors Report) Order,2003 are not
applicable to the company.
(b) The company had taken loan from two companies and four individuals
listed in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs. 284.47
lacs and the year-end balance of loans taken from such parties was Rs.
870.56 lacs.
(c) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from companies, firms or other parties
listed in the register maintained under section 301 of the Companies
Act, 1956 are not, prima facie, prejudicial to the interest of the
company.
(d) In respect of loans taken by the company the principal amount is
repayable on demand.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal controls.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into
the register maintained under section 301 of the Companies Act, 1956
have been so entered.
(b) In our opinion and according to the information and explanations
given to us, there were no transactions made in pursuance of contracts
or arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year.
(vi) During the year the Company has not accepted deposits from public.
However in respect of unsecured loans from parties obtained in earlier
years and outstanding as on March 31, 2010, the Company has not
complied with the provisions of sections 58A of the Companies Act, 1956
and the Companies (Acceptance of Deposit) Rules, 1975 (hereinafter
referred to as Rules), as mentioned hereunder:
a) The Company has not maintained liquid assets as required by Rule 3A
of the Rules.
b) The Company has not filed statement in lieu of advertisements with
the Registrar of Companies under Rule 4 A (1) of the Rules, and
c) The Company has not filed returns of deposits with the Registrar of
Companies, under Rule 10 of the Rules.
Further, we are informed that no Order has been passed by the Company
Law Board (the CLB) or National Company Law Tribunal (the NCLT) or
Reserve Bank of India (the RBI) 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) The company is required to maintain cost records under section
209(1 )(d) of the Companies Act, 1956 in respect of paper manufactured
by it. As informed to us, the necessary records as required by the
rules are under preparation.
(ix) (a) The company is not regular in depositing statutory dues with
appropriate authorities viz. Sales Tax, Excise Duty, Service Tax,
Family Pension Fund, Provident Fund and Employees state insurance.
However, no undisputed amounts payable in respect of such dues were in
arrears, as at 31st March, 2010 for a period of more than six months
from the date they became payable.
(b) According to the information and explanation given to us, there are
no dues of sale tax, income tax, customs duty, wealth tax, excise duty
and cess which have not been deposited on account of any dispute.
(x) In our opinion, the accumulated losses of the company are not more
than fifty percent of its net worth. The company has incurred cash
losses during the financial year; however the Company has incurred cash
losses in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
bank.
(xii) The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of clause 4(xii) of the Companies (Auditors
Report) Order, 2003 are not applicable to the company.
(xiii) In our opinion, the company is not a chit fund or a nidhy 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) We are informed that, the company has not given any guarantee for
loans taken by others from banks or financial institutions.
Accordingly, the provisions of clause 4(xv) of the Companies (Auditors
Report) Order, 2003 are not applicable to the company.
(xvi) In our opinion, the term loans have been applied for the purpose
for which they were raised.
(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 short term funds of Rs. 74,286 thousands have been used for long
term purpose.
(xviii) According to the information and explanations given to us, the
company has not made any preferential allotment of shares --to parties
and companies covered in the register maintained under section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, the
company has not issued debentures during the year.
(xx) According to the information and explanations given to us, the
company has not raised any money by way of 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 Manubhai & Co.
Chartered Accountants
Firm Reg. No.: 106041W
(K. M. Patel)
Partner
Membership No. 45740
Place : Ahmedabad
Dated : September 2, 2010