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Chadha Papers Ltd.

BSE: 531946 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Chadha Papers Ltd. (CHADHAPAPERS) - Auditors Report

Company auditors report

CHADHA PAPERS LIMITED ANNUAL REPORT 2010-2011 AUDITOR'S REPORT 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 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 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. Chartered Accountants F.R.N0.: 4921N (Rakesh Kumar) Partner M.No.: 083911 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 physical verification. (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 not affected. (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 owned subsidiary) 2. Adie Broswon Distillers & Bottlers Pvt. Ltd. 3,00,000 3,21,021 5,87,11,554 (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 demand. 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. MAXIMUM 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 TOTAL 34,77,79,769 (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 entered. 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 financial year. (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 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 (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 period. (xx) The Company has not raised any money through public issues during the period. (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. Chartered Accountants F.R.N0.: 4921N (Rakesh Kumar) Partner M.No.: 083911 Place : New Delhi Dated : 02/09/2011.

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