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Emami Paper Mills
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« Mar 12
Auditor's Report (Emami Paper Mills) Year End : Mar '13
REPORT ON THE FINANCIAL STATEMENTS
 
 We have audited the accompanying financial statements of Emami Paper
 Mills Limited (the company) which comprises the Balance Sheet as at
 31st March 2013, and the Statement of Profit and Loss and the Cash Flow
 Statement for the year ended on that date annexed thereto in which are
 incorporated the accounts of Gulmohar unit audited by Branch Auditors,
 and a summary of significant accounting policies and other explanatory
 information.
 
 MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
 
 Management is responsible for the preparation of these financial
 statements that give a true and fair view of the financial position,
 financial performance and cash flows of the Company in accordance with
 the Accounting Standards referred to in sub-section (3C) of section 211
 of the Companies Act, 1956 (the Forming an Opinion and Reporting on
 Financial Statements Act). This responsibility includes the design,
 implementation and maintenance of internal control relevant to the
 preparation and presentation of the financial statements that give a
 true and fair view and are free from material misstatement, whether due
 to fraud or error.
 
 AUDITOR''S RESPONSIBILITY
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free of
 material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and disclosures in the financial statements. The procedures
 selected depend on the auditor''s judgment, including the assessment of
 the risks of material misstatement of the financial statements, whether
 due to fraud or error. In making those risk assessments, the auditor
 considers internal control relevant to the Company''s preparation and
 fair presentation of the financial statements in order to design audit
 procedures that are appropriate in the circumstances.  An audit also
 includes evaluating the appropriateness of accounting policies used and
 the reasonableness of the accounting estimates made by management, as
 well as evaluating the overall presentation of the financial
 statements.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion.
 
 OPINION
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the financial statements give the information
 required by the Act in the manner so required and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 i) In the case of the Balance Sheet, of the State of Affairs of the
 Company as at 31st March, 2013
 
 ii) In the case of the Statement of Profit and Loss, of the Profit for
 the year ended on that date; and
 
 iii) In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Act, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 2.  As required by section 227(3) of the Act, we further report that:
 
 a) the report on the accounts of Gulmohar Unit audited by Branch
 Auditors have been received and properly dealt with in preparing our
 Report.
 
 b) 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;
 
 c) 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.
 
 d) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account;
 
 e) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
 Cash Flow Statement comply with the Accounting Standards referred to in
 subsection (3C) of section 211 of the Companies Act, 1956;
 
 f) on the basis of written representations received from the directors
 as on March 31, 2013, and taken on record by the Board of Directors,
 none of the directors is disqualified as on March 31, 2013, from being
 appointed as a director in terms of clause (g) of sub- section (1) of
 section 274 of the Companies Act, 1956.
 
 In our opinion and according to the information and explanations given
 to us, the nature of the Company''s business/ activities during the year
 are such that clauses (xiii) and (xix) of Companies (Auditor''s Report)
 Order, 2003, are not applicable to the Company. In respect of the other
 clauses, we report as under:
 
 1.  a. The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b.  The fixed assets were physically verified during the year by the
 management in accordance with a program of verification, covering all
 fixed assets over a period of three years, which in our opinion
 provides for physical verification of all major items of fixed assets
 at reasonable intervals.
 
 c.  Fixed assets disposed of during the year were not substantial, and
 therefore, do not affect the going concern assumption.
 
 2.  a. The inventories have 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 explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and nature of its business.
 
 c.  In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its inventory
 and no material discrepancies were noticed on physical verification.
 
 3.  a. The Company has given unsecured loan to a company listed in the
 register maintained under Section 301 of the Companies Act, 1956
 against whom the maximum amount outstanding during the year was Rs
 334.42 lacs and the year end balance of such loan amounted to Rs. 334.42
 lacs. The rate of interest and other terms and conditions of the loan
 are not prima facie prejudicial to the interest of the Company.  The
 principal amounts and interest are repayable on demand, therefore the
 question of overdue amounts does not arise.
 
 b.  The Company has taken unsecured loan from a company listed in the
 register maintained under Section 301 of the Companies Act, 1956
 against whom the maximum amount payable during the year was Rs 4699.53
 lacs and the year end balance of such loan amounted to Rs. Nil. The rate
 of interest and other terms and conditions of the loan are not prima
 facie prejudicial to the interest of the Company. The principal amounts
 and interest are repayable on demand, therefore the question of overdue
 amounts does not arise.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods.
 
 5.  In respect of contracts or arrangements referred in Section 301 of
 the Companies Act, 1956:
 
 a.  In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements, that need to be entered in the Register maintained under
 section 301 of the Companies Act, 1956 have been so entered.
 
 b.  In our opinion and according to the information and explanations
 given to us, the transactions referred to above and exceeding the value
 of Rs. 5 lakh with any party during the year have been made at prices
 which are reasonable having regard to the prevailing market prices.
 
 6.  The Company has not accepted any deposits from the public during
 the year.
 
 7.  In our opinion, the Company has an adequate internal audit system
 commensurate with the size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by the
 company pursuant to the rules prescribed by the Central Government
 under clause (d) of sub-section (1) of Section 209 of the Companies
 Act, 1956 for the maintenance of cost records and are of the opinion
 that prima facie the prescribed accounts and records have been made and
 maintained.
 
 9.  According to the information and explanations given to us in
 respect of statutory and other dues:
 
 a.  The Company has been regular in depositing undisputed statutory
 dues, including Provident Fund, Employees State Insurance, Income Tax,
 Service Tax, Sales Tax, VAT, Wealth Tax, Custom Duty, Excise Duty, Cess
 and other statutory dues with the appropriate authorities during the
 year. According to the information and explanations given to us, no
 undisputed amounts payable in respect of the aforesaid dues were
 outstanding as at 31st March, 2013 for a period of more than six months
 from the date of becoming payable.
 
 b.  According to the information and explanations given to us, details
 of dues of Excise Duty, Sales Taxes and Employees State Insurance which
 have not been deposited as on 31st March, 2013 on account of dispute
 are given below:
 
 Particular            Financial 
                       Year to which   Forum where 
                                       matter is         Amount (Rs.
                                                         in Lacs)
                       the matter 
                       pertains 
                       pending
 
 The Central Excise 
 Act, 1944 &           1994-95         ACCE                    0.87
 Service Tax (Finance 
 Act, 1994)            2002-03 to 
                       2006-07         ACCE                    1.10
 
                       2006-07         ACCE                   72.65
 
                       2005-06 to 
                       2007-08         ACCE                   35.28
 
 Central Sales Tax Act 1993-94         Tribunal               16.26
 
                       2004-05         Tribunal                0.53
 
                       2006-07         Addl. Comm.             0.79
 
                       2007-08         Addl. Comm.             3.37
 
                       2008-09         Addl. Comm.            26.25
 
 Values Added Tax 
 Act (Orissa)          2005-06         Addl. Comm.             1.68
 
                       2006-07         Addl. Comm.             0.59
 
                       2007-08         Addl. Comm              0.79
 
                       2009-10         Addl. Comm              0.10
 
 Entry Tax Act
 (Orissa)              2006-07         Addl. Comm.             1.30
 
                       2007-08         Addl. Comm.             0.11
 
                       2008-09         Addl. Comm.            32.00
 
                       2006-07 to 
                       2007-08         Addl. Comm.            69.60
 
 Odisha Sales Tax Act  1989-90         High Court              0.79
 
 ESIC                  1996-97         ESI Court               0.22
 
 Income Tax Act 1961   2011-12         Comm. Appeals          29.53
 
 10.  The Company does not have accumulated losses as at the end of the
 year and the Company has not incurred cash losses during the current
 year and in the immediately preceding financial year.
 
 11.  Based on our audit procedures and on the basis of information and
 explanations given by the management, we are of the opinion that the
 company has not defaulted in the repayment of dues to financial
 institution and banks.
 
 12.  According to the information and explanations given to us, the
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 13.  According to the information & explanations given to us, the
 Company is not dealing in shares, securities debentures and other
 investment.
 
 14.  According to information given to us, the Company has not given
 any guarantee for loans taken by others from banks or financial
 institution.
 
 15.  To the best of our knowledge and belief and according to the
 information and explanations given to us, term loans availed by the
 company were applied for the purpose for which the loans were obtained.
 
 16.  According to the Cash Flow Statement and other records examined by
 us and the information and explanations given to us on an overall
 basis, we report that funds raised on short term basis have, prima
 facie, not been used for long term investments.
 
 17.  The Company has made preferential allotment of Preference Shares
 to parties and companies covered in the Register maintained under
 section 301 of the Companies Act 1956, during the year and the price at
 which shares have been issued is not prejudicial to the interest of the
 Company.
 
 18.  The Company has not raised money by public issues during the year
 and hence the question of disclosure and verification of end use of
 such money does not arise.
 
 19.  To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the Company
 was noticed or reported during the year.
 
                                        For, S. K. AGRAWAL & COMPANY
 
                                               Chartered Accountants 
 
                                            Registration No- 306033E
 
                                                      (S. K. AGRAWAL)
 
 Place: Kolkata                                              Partner
 
 Dated: 30th April, 2013                         Membership No: 9067
Source : Dion Global Solutions Limited
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