CHADHA PAPERS LIMITED
ANNUAL REPORT 2010-2011
The Members of
CHADHA PAPERS LIMITED
1. We have audited the attached Balance Sheet of Chadha Papers Limited as
at March 31, 2011 and also the Profit and Loss Account and 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)
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
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
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 read together with the
Significant Accounting Policies and other notes thereon give the
information required by the Companies Act, 1956, in the manner so required
and give a true and fair view in conformity with the accounting principles
generally accepted in India;
a) In so far as it relates to Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
b) In so far as it relates to Profit and Loss Account, of the Loss of the
Company for the year ended on that date; and
c) In so far as it relates to the Cash Flow Statement, of the cash flows of
the Company for the year ended on that date.
For SNMG & Co.
Place : New Delhi
Dated : 02/09/2011.
Annexure referred to in paragraph 3 of our report of even date:
Re: CHADHA PAPERS LIMITED
(i) (a) As per our information and explanations given to us, the Company
is in the process of updating fixed assets register showing full
particulars, including quantitative details and situation of fixed assets.
(b) We are informed that the fixed assets have been physically verified by
the management during the year in phased periodical manner, which in our
opinion is reasonable, having regard to the size of the company and the
nature of its business. No material discrepancies were noticed on such
(c) In our opinion, the company has not disposed off any substantial part
of fixed assets during the year and going concern status of the company is
(ii) (a) As explained to us, inventories have been physically verified by
the management at regular intervals during the year.
(b) In our opinion and according to the information and explanations given
to us, procedures of physical verification of inventory 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 has maintained proper records of inventory. As explained to
us, no material discrepancies were noticed on physical verification of
inventory as compared to the books record.
The Company has given unsecured loan to two companies covered in the
register maintained under section 301 of the Companies Act, 1956. The loans
given to parties during the year and year end balances are as follows:
LOAN GIVEN DURING OUTSTANDING AS ON
SR. PARTY NAME THE YEAR 31.03.2011
1. Manorama Papers Private
Limited (Wholly 62,87,713 5,83,90,533
2. Adie Broswon Distillers &
Bottlers Pvt. Ltd. 3,00,000 3,21,021
(b) In our opinion and according to information and explanation given to
us, the above loans and are not prima facie prejudicial to the interests of
the company. The said loan is repayable on demand.
(c) The said interest free loan is repayable on demand.
(d) In respect of the loan given by the Company, the same is repayable on
The Company has taken unsecured loan from thirteen parties covered in the
Register maintained under Sec. 301 of the Companies Act, 1956. The maximum
amount outstanding during the year and the year end balance of loan taken
from such parties are as follows.
SR. PARTY NAME OUTSTANDING O/S AS ON 31.03.2011
1. Harjas Enterprises
Pvt. Ltd. 170,530,010 170,530,010
2. G.S.R Leasing Limited 16,938,910 16,935,211
3. Chadha Boards Limited 34,322,181 34,318,932
4. Rado Enterprises
Pvt. Ltd. 28,000,000 28,000,000
5. A.B. Grain Spirits
Pvt. Ltd. 8,14,84,867 8,14,84,867
6. Mr. Gurdeep Singh
Chadha 5,903,169 5,903,169
7. Mr. Hardeep Singh
Chadha 21,363,081 2,484,640
8. Mr. Kulwant Singh
Chadha 345,954 345,954
9. Mr. Rajinder Singh
Chadha 5,890,889 5,890,889
10. Smt. Dinita Chadha 1,193,364 1,193,364
11. Smt Prakash Kaur 295,275 295,275
12. Smt. Jitender Kaur 397,282 397,282
13. Smt. Jasdeep Kaur 177 177
(f) The said loans are unsecured, interest free and repayable on demand and
hence in our opinion and according to our information and explanations
given to us, the aforesaid loans are not prima facie prejudicial to the
interests of the company.
(g) Since the loans does not carry interest and are repayable on demand,
the question of amount being overdue does not arise.
iv) In our opinion and according to our information and explanations given
to us, generally 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.
However, the internal control procedures with regard to documentation with
respect to (a) procurement's of fixed assets pertaining to the
modernization of plant (b) review and reconciliation of book balances of
(iv) customers/vendors and (c) compliance with input CENVAT/Service Tax
claims needs to be strengthened considering the procedural and technical
issues involved therein.
(v) (a) In our opinion and according to the information and explanations
given to us, the transactions that need to be entered into register in
pursuance of Section 301 of the Companies Act, 1956 have been properly
b) In our opinion and according to the information and explanations given
to us, transactions made in pursuance of such contracts or arrangements
have been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
(vi) During the year, the Company has not accepted any deposits from the
public and consequently, the directives issued by the Reserve Bank of India
and the provisions of Section 58A and 58AA of the Companies Act, 1956 or
any other relevant provisions of the Act and the rules framed there under,
are not applicable.
(vii) The Company was not having an internal audit system during the year.
(viii) The Central Government has prescribed maintenance of Cost Record
under section 209(1)(d) of the Companies Act, 1956 in respect of Paper
Industry. 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 are of the opinion that prima facie, the prescribed accounts and
records have been maintained and the required statements are in the process
of compilation. However, we have not made a detailed examination of the
records with a view to determine whether they are accurate or complete.
According to information and explanations given to us, undisputed statutory
dues including provident fund, investor education and protection fund, or
employees' state insurance, income-tax, sales-tax, wealth-tax, service tax,
custom duty, excise duty, cess have generally been regularly deposited
with the appropriate authorities and outstanding for more than 6 months
from the date, they become payable as on 31.03.2011 are as follows:
Details of Undisputed Statutory Dues Payable as on 31.03.2011:
Sr. Particulars Name of Original Pertaining
Tax Amount. to year
1. Stock Exchange , Kanpur Listing fee 3,44,000 2000-01 TO 2010-11
2. Stock Exchange , Delhi Listing fee 40,000 2000-01 TO 2002-03
3. Stock Exchange , Mumbai Listing fee 2,20,000 2002-03 TO 2010-11
4. Fringe Benefit Tax FBT 2,96,590 2005-06
5. Fringe Benefit Tax FBT 6,42,814 2006-07
6. Fringe Benefit Tax FBT 6,39,582 2007-08
7. Fringe Benefit Tax FBT 5,25,000 2008-09
8. Wealth Tax Wealth Tax 5,55,594 2008-09 TO 2010-11
9. Water Cess Water Cess 23,93,279 2008-09 TO 2010-11
10. TDS TDS 7,79,430 2010-11
11. Entry Tax Entry Tax 74,130 2010-11
12. TCS TCS 96,779 2010-11
According to the information and explanations given to us and records of
the company examined by us, the particulars of dues of central excise,
service tax, sales tax, entry tax etc. which have not been deposited on
account of any dispute are as follows:
Detail of Disputed Statutory Dues as on 31.03.2011:
Sr. Name of Tax Original Interest/ Paid Pertaining
Amount. Penalty under to year
(If any) Protest
1. Central Excise 133,980 2,53,562 - 2003-2004
2. Central Excise 425,801 7,61,109 5,59,781 2003-2004
3. Service Tax 3,655,731 29,17,413 8,00,000 2004-2005
4. UP Trade Tax 16,155 - 16,155 2001-2002
5. Entry tax 82,500 - - 1999-2000
6. Central Sales
Tax 25,000 - 25,000 2001-2002
7. UP Trade Tax 35,000 - 35,000 2001-2002
8. Entry tax 20,000 - 20,000 2001-2002
9. Entry Tax 3,00,000 - 1,20,000 2006-2007
10. U.P Trade
Tax 8,17,476 - 3,26,990 2006-2007
11. UP Trade
Tax (3B Form) 3,40,000 - 1,36,000 2006-2007
(x) The Company has been registered for more than 5 years and has no
accumulated losses at the year end. The Company incurred no cash losses in
current financial year and did have no cash losses in immediately preceding
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks though there have
been some delays in payment of interest to them.
(xii) securities According to the information and explanations given to us
and based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other
(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 (as amended) are not applicable to
(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 (as
amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the Company
has given corporate guarantee aggregating Rs. 5200 lace to banks on behalf
of a group company.
(xvi) Based on our information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained except part of corporate loan used for advance payment
towards investment in a group company.
(xvii) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, short term funds
have not been used for long-term investment.
(xviii) The Company has not made preferential allotment of shares to the
parties covered in the register maintained under section 301 of the Act.
(xix) The Company did not have any outstanding debentures during the
(xx) The Company has not raised any money through public issues during the
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per the
information and explanations given by the management, we report that no
fraud on or by the Company has been noticed or reported during the course
of our audit.
For SNMG & Co.
Place : New Delhi
Dated : 02/09/2011.