NAYAGARA PAPER PRODUCTS (INDIA) LIMITED
ANNUAL REPORT 2004-2005
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
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
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.,
Place : Nellore M.G RAO
Date : 10.08.2005 Proprietor
Annexure to the Auditors' Report Referred to paragraph 3 of our Report of
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
(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
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
(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
(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
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
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.,
Place : Nellore Sd/-
Date : 10-08-2005 M. G Rao