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Nayagara Paper Products (India) Ltd.

BSE: 516044 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Nayagara Paper Products (India) Ltd. (NAYAGARAPAPER) - Auditors Report

Company auditors report

NAYAGARA PAPER PRODUCTS (INDIA) LIMITED ANNUAL REPORT 2004-2005 AUDITORS' REPORT To The Members NAYAGARA PAPER PRODUCTS (INDIA) LIMITED 1. We have audited the attached Balance Sheet of Nayagara paper Products (India) Limited, as on 31st March, 2005 and also the Profit & Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility is to express an opinion on these financial statements based oh 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 also includes examining, on a test basis, evidence supporting the accounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluation of 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, 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 the paragraph 4 and 5 of the said order. 4. Further to our comments in the Annexure referred to in paragraph 1 above: 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 these books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us iii) The Balance Sheet and Profit & Loss account & Cash Flow Statement dealt with by this report are in agreement with books of account. iv) In our opinion, the Balance Sheet and Profit & Loss account dealt with by this report comply with the Accounting Standards referred to in sub- section (3 C) of Section 211 of the Companies Act, 1956. v) On the basis of the written, representation received from the Directors as on 31st March, 2005 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2005 from being appointed as 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 explanation given to us the said accounts, read together with the Company's accounting policies and the notes 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, 2005 b) In the case of Profit & Loss Account, of the profit of the Company for the year ended on that date. c) In the case of the cash flow statement of the cash flow for the year ended on that date. For M.G. Rao & Co., Chartered Accountants Sd/- Place : Nellore M.G RAO Date : 10.08.2005 Proprietor Annexure to the Auditors' Report Referred to 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) All the assets have been physically verified by the management during the year and there is regular programme of verification which in our opinion is reasonable having regards to the size of the Company and nature of assets. (c) During the year, Company has not disposed of any substantial / major part of fixed assets ii). (a) As explained to us, the inventory has been physically verified during the year by the management. In our opinion the frequency of verification is reasonable. (b) In our opinion and according to the information and explanation given to us, the 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) In our opinion and according to the information and explanation given to us, and on the basis of our examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of accounts. iii) (a) According to the information and explanation given to us, the Company has taken unsecured loans from companies listed in the register maintained under Section 301 of the Companies Act, 1956. (b) According to the information and explanation given to us, in our opinion, the rate of interest and other terms and conditions of above loan taken by the Company, are not prima facie, prejudicial to the interest of the Company. (c) According to the information and explanation given to us, the Company to whom loans and advances in the nature of loan have been given, are repaying the principal amounts as stipulated and are irregular in payment of interest. (d) There are over due amount of loans granted to the Company listed in the Register maintained under section 301 of the Companies, Act 1956. iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business with regards to the purchase of inventory and fixed assets, and with regard to the sale of goods. v) In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 (a) Based on audit procedures applied by us, the best of our knowledge and belief and according to the information and explanation given to us, we are of the opinion that the transactions that needed to be entered into register maintained under section 301 have been so entered. (b) According to the information and explanations given to us, and excluding certain transactions of purchase of goods and material of special nature for which alternate quotations are not available, where each of such transactions is in excess of Rs.5.00 lacs in respect of any party, in our opinion, the transactions have been made at price which are prima-facie reasonable having regards to the prevailing market prices at the relevant time. vi) In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public and therefore, the provisions section 58A and 58AA of the Companies Act, 1956 and rules made there under are not applicable to the Company. vii) In our opinion, the Company has no internal audit system commensurate with the size and the nature of its business. viii) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of the cost records under section 209(1)(d) of the Companies Act, 1956. ix) (a) According to the records of the company and information and explanation given to us, the company is not regular in depositing undisputed statutory dues including provident fund, Employee State Insurance, Income Tax, Sales Tax, Wealth Tax, Excise Duty and Cess and other statutory dues with the appropriate authorities during the year. b) According to the records of the company and information and explanation given to us, there are dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute. x) (a) The Company has accumulated losses at the end of the financial year which are exceeding its net worth. (b) The Company has not incurred cash losses during current year and has incurred cash losses in the immediately preceding financial year. (c) According to the information provided by the Company, the Company is a sick Industrial company within the meaning of section 3 (1)(o) of the Sick Industrial Companies (Special) Provisions Act, 1985, the Company has filed an Appeal before AAIFR for Registration. xi) Based on our audit procedures and on the basis of information and explanations given by the management, we are the opinion that the company has defaulted in the repayment of dues to financial institutions and banks. The details are as per the schedules 18(j) of notes to accounts xii) According to the information and explanations given to us, the Company has not granted any loans and advance on the basis of security by the way of pledge of shares, debentures and other securities. xiii) The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit fund / Societies are not applicable to the Company. xiv)(a) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. xv) According to the information and explanations given to us, the Company has given guarantee for loans availed by M/s. Nayagara Technologies Limited from banks and financial institutions to the extent of Rs.294 lakhs to M/s. ICICI Bank Limited xvi) To the best of our knowledge and belief and according to the information,and explanations given to us, there are no new term loans have been availed during the year. xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet or the Company. We report that there are no funds raised on short-term basis have been used for long term investment. No long-term funds have been used to finance short-term assets except permanent working capital. xviii) The Company has not made any preferential allotment to parties and companies covered under register maintained under section 301 of the Companies Act, 1956 during the year and the question of whether the price at which the shares have been issued is prejudicial to the interest of the Company does not arise. xix) According to the information and explanations given to us and the records examined by us, the Company has not issued any securities, hence the question of creation of security does not arise. xx) The Company has not raised money by any public issue during the year and hence the question of disclosure and verification of end use of such money does not arise. xxi) To the best of our knowledge and belief and according to the information and explanation and explanation given to us, no fraud and or by the Company has been noticed or reported during the course of our audit. For M.G RAO & CO., Chartered Accountant Place : Nellore Sd/- Date : 10-08-2005 M. G Rao Proprietor