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Shree Ambeshwar Paper Mills Ltd.

BSE: 516028 Sector: Industrials
NSE: N.A. ISIN Code: INE616D01019
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Shree Ambeshwar Paper Mills Ltd. (SHAMBESHPAP) - Auditors Report

Company auditors report

SHREE AMBESHWAR PAPER MILLS LIMITED ANNUAL REPORT 2007-2008 AUDITORS' REPORT To The Members of SHREE AMBESHWAR PAPER MILLS LTD. MUMBAI. We have audited the attached Balance Sheet of M/s. SHREE AMBESHWAR PAPER MILLS LTD., as at 31st March 2008, the Profit and Loss Account and also the 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 this financial statement based on our audit. 1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit included 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. 2. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclosed in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 3. 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 purpose 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 these 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 subject to Note No AS, for non provision of Depreciation amounting to Rs. 131.11 lacs, Note No A-8, for non provision of Deferred Tax Asset as per AS-22, and Note No. B-6, for non provisioning of Interest on unsecured Loans and Interest on labour Liability aggregating to Rs.49.38 lacs to that extent the losses are understated; (v) On the basis of written representations received from the directors, as on 31st March 2008 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2008 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 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, 2008. b) In the case of the profit and loss account, of the loss for the year ended on that date; and c) In the case of the cash flow statement, of the cash flows for the year ended on that date. For N.H. VYAS & CO. Chartered Accountants. (NIKHIL WAS) PROPRIETOR. Place: Mumbai M. No.: 14433. Date : 30-06-2008. ANNEXURE TO THE AUDITORS REPORT. Re. SHREE AMBESHWAR PAPER MILLS LTD. Referred to in paragraph 3 of our report of even date, (i) (a) We have been informed that the Fixed Assets Register showing full particulars, including quantitative details and situation of Fixed Assets is to be updated. (b) All the assets have not been physically verified by the management as the plant is shut-down during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification. (c) During the year, the Company has not disposed off any of the Plant & Machinery and hence has not affected the going concern status of the company. (ii) (a) The inventory has not been physically verified during the year by the management. (b) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. (iii) (a) The company has taken loan from 24 parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 143.92 Lacs and the year- end balance of loans taken from such parties was Rs. 83.22 Lacs. The Company has not granted any loans to parties covered in the Register maintained under 301 of the Companies Act, 1956. (b) There are no terms and conditions fixed on which loans have been taken from parties listed in the register maintained under section 301 of the Companies Act, 1956. (c) The company is not regular in repaying the principle amount as stipulated and has neither been regular in the payment of interest. (d) There are interest free advances in the nature of loans to the employees which are generally being recovered /adjusted regularly. (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. During the course of our audit, we have not observed any continuing failure to correct major weakness 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 are being so entered. (b) In our opinion and according to the information and explanations given to us, there are 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) According to the information and explanations given to us, the company is in the process of complying with the provisions of sections 58A and 58AA of the Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules 1975. (vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business. (viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost 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 we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. (ix) (a) The Company is not regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees' state insurance, income tax, Vat, custom duty, excise duty, cess and other material statutory dues applicable to it amounting to Rs. 183.04 lacs. (b) According to the information and explanations given to us, undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31-03-2008 for a period of more than six months from the date they became payable amounting to Rs.183.04 lacs. (c) According to the information and explanation given to us, there are dues of Excise duty Interest & Penalty of Rs. 66 lacs, GEB Interest & Penalty of Rs. 49.33 lacs & Worker dues of Rs. 84 lacs which are disputed. (x) The Company has incurred cash loss during the financial year covered by our audit and the immediately preceding financial year of Rs.11.27 Lacs. The Company has applied its case with AAIFR. (xi) In our opinion and according to the information and explanations given to us, the company has no secured outstanding dues payable to a financial institution. (xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (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 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 are not applicable to the company. (xv) As per the information and explanations given to us the Company has not given guarantees for loans taken by others from bank or financial institutions. (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 the funds raised on short-term basis have been used for long-term investment. Long-term funds have been used to finance short-term assets except permanent working capital. (xviii) The company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. (xix) The company has not received any money through Public Issue of Debentures. (xx) The Company has not received any money through a Public Issue this year. (xxi) To the best of my knowledge and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit. For N.H. VYAS & CO. Chartered Accountants. (NIKHIL WAS) PROPRIETOR Place: Mumbai M. No.: 14433. Date : 30-06-2008.