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
