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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.
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