We have audited the attached Balance Sheet of MALU PAPER MILLS LIMITED
as at 31st March 2012 and also the Statement of Profit & Loss 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 these financial statements based on our audit.
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 includes
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
As required by the Companies (Auditors) Report Order, 2003 read with
the Amendment Order, 2004 issued by the Central Government of India in
terms of sub- section (4A) of section 227 of the Companies Act, 1956 we
enclose in the Annexure a statement on the matters specified in
Paragraphs 4 & 5 of the said order.
Further to our comments in the Annexure referred above, we report that:
1) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
2) In our opinion, proper books of accounts as required by law have
been kept by the company so far as it appears from our examination of
3) The Balance Sheet and the Profit & Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the Books of
4) In our opinion, the Balance sheet and the Statement of Profit 8s
Loss 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.
5) On the basis of written representations received from the Directors,
as on 31st March, 2012 taken on record by the Board of Directors we
report that none of the Directors are disqualified as on 31st March,
2012 from being appointed as a Director in terms of Clause (g) of
subsection (1) of section 274 of the Companies Act, 1956.
6) 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;
i) In the case of the Balance Sheet of the State of affairs of the
Company as at 31st March, 2012 and
ii) In the case of the Statement of Profit 8s Loss of the Loss of the
Company for the year ended on that date.
iii) In the case of Cash Flow Statement of the Cash Flow for the year
ended on that date.
ANNEXURE OF THE AUDITIOR''S REPORT (As referred to in Paragraph 3 of
our report of Even-date)
(i) a) The Company has generally maintained proper records showing full
particulars, including quantitative details and situation of fixed
b) The management has physically verified all its fixed assets at
reasonable intervals and no material discrepancies were noticed on such
c) The Company has not disposed off any substantial part of its fixed
assets so as to affect its going concern status.
(ii) a) As per the information furnished, the inventories have been
physically verified by the management at reasonable intervals during
b) In our opinion and according to the information and explanations
given to us 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, the company is maintaining proper records of
inventory. The discrepancies noticed on physical verification of
inventory as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) a) In our opinion and according to the information and
explanations given to us, the company has not granted any secured or
unsecured loans to companies, firms or other parties covered in the
register maintained u/s 301 of Companies Act, 1956. Hence the clause
iii (a), (b), (c) and (d) of the order are not applicable.
e) The company has taken demand loans from companies, firms or other
parties covered in the register maintained u/s 301 of Companies Act,
1956. The maximum amount involved during the year was Rs.2735.05 lacs
and yearend balance of loans taken from such parties was Rs. 2735.05
f) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from companies, firms and other parties
listed in the register maintained under section 301 of the Companies
Act, 1956 are not prima facie, prejudicial to the interest of the
g) In our opinion and as per the information and explanations given to
us, the company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest.
(iv) In our opinion and according to the information and explanation
given to us, there is generally an adequate internal control system
commensurate with the size of the company and the nature of its
business for purchase of inventory and fixed assets and for the sale of
goods and services. During the course of our audit no major weakness
has been noticed in the internal control system.
(v) In respect of contracts or arrangements to be entered in the
register maintained in pursuance of section 301 of the Companies Act,
1956, to the best of our knowledge and belief and according to the
information and explanations given to us, there were no particulars of
contracts or arrangements referred to in section 301 of the Act have
been entered in the register required to be maintained under that
(vi) According to the information and explanations given to us, the
Company has not accepted deposits in terms of provisions of Sections
58A and 58AA or any other relevant provisions of the Companies Act,
(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 books of accounts maintained by the
company pursuant to the order made by the Central Government for
maintenance of cost records under section 209(l)(d) of the Companies
Act, 1956 and are of the opinion that prima facie, the prescribed
accounts and records have been maintained.
(ix) a) According to the information and explanations given to us and
records examined by us, the company is regular in depositing undisputed
statutory dues including Provident Fund, Income Tax, Sales Tax, Service
tax, Customs duty, Excise duty, Cess and any other statutory dues
wherever applicable with the appropriate authorities. According to the
information and explanations given to us, no undisputed arrears of
statutory dues were outstanding as at 31st March, 2012 for a period of
more than six months from the date they became payable.
b) According to the records of the company there are statutory dues,
which are outstanding on account of certain disputes at the end of the
Nature of (Rs.in Assessment Forum Where
Name of Statute dispute is
the Dues Lacs) Years pending
Central Excise Excise Duty 14.49 2002-03 Tribunal
Central Excise Commissi
Excise Duty 2.63 2003-04
Central Excise Commiss
Excise Duty 4.33 2004-05
Central Excise Commiss
Excise Duty 3.79 2004-05
(x) The company has registered for a period of not less than five years
and it has accumulated losses at the end of the financial year not more
than fifty percent of its net worth. The company has also incurred cash
loss of Rs.2315.00 Lacs in the financial year however the company has
not incurred any cash loss in the immediate preceding financial year.
(xi) During the financial year all the credit facilities utilized from
banks are restructured under the Corporate Debts Restructure (CDR)
mechanism and according to the records of the company examined by us
and the information and explanations given to us, the company has not
defaulted in repayment of dues to any financial institutions or banks.
The company does not have any borrowings by way of debentures.
(xii) The company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
(xiii) The provisions of any special statute applicable to chit funds/
nidhi / mutual benefits funds/ society do not apply to the company.
(xiv) In our opinion, the company is not a dealer or trader in shares,
securities, debentures and other investments.
(xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by its subsidiaries
and associates from banks/ financial institutions.
(xvi) In our opinion, term loans have been applied for the purpose for
which they have been raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet to the company, we report
that no funds raised on short-term basis have been used for long-term
(xviii) The company has not made any preferential allotment of shares
to parties or companies covered in the Register maintained under
Section 301 of the Companies Act, 1956.
(xix) The company has not issued any debentures.
(xx) The Company has not raised any money through a public issue during
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For DEMBLE RAMANI & CO.
Place : NAGPUR Partner
Date : 03.09.2012 Membership No. 30537
Firm Registration No. 102259W