We have audited the attached Balance Sheet of SANGAL PAPERS LIMITED,
MEERUT as on 31st March, 2006, and also the Profit & Loss Account and
Cash Flow Statement for the year ended on that date, annexed thereto.
These financial statements are the responsibility of the companys
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 our opinion.
1. As required by the Companies (Auditors Report) order, 2003 as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
issued by the Central Goverment of India in terms of Section 227(4-A)
of Companies Act, 1956, we give in the annexure a statement on the
matters specified in pararaph 4 & 5 of the said order.
2. Further to our comments in the Annexure referred to in paragraph 1
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
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 of
those books .
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts
of the Company.
iv) In our opinion, the Balance Sheet and Profit & Loss Account dealt
with by this report comply with the accounting standards referred to in
sub - section 3 ( C ) of section 211 of the Companies Act, 1956 except
AS- 15 Accounting for retirement benefits of employees.
v) On the basis of written representations received from the directors
and taken on record by the Board of Directors, we report that none of
the directors of the company as on 31st. March, 2006, is disqualified
for appointment as director in the aforesaid Company 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
theComps;iy as at 31st March 2006; and
(b) In the case of the Profit & Loss Account, of the Profi t for the
year ended on that date.
(c) In so far as it relates to the Cash Flow Statement, of the cash
flows of the Company for the year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 10FTHE AUDITORS REPORT OF EVEN DATE
TO THE MEMBERS OF SANGAL PAPERS LIMITED ON THE ACCOUNTS FOR THE YEAR
ENDED MARCH, 31st 2006.
(i) IN RESPECT OF FIXEDASSETS:-
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) As explained to us, the fixed assets have been physically verified
by the mangement during the year. In our opinion, the frequency of
verification is reasonable having regard to the size of the Company and
the nature of its business. No material discrepancies were noticed on
(c) During the year, the Company has not made any substantial disposals
of fixed assets during the year.
(ii) IN RESPECT OF INVENTORIES :-
(a) As explained to us, inventories has 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 explanation
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 the nature of its business.
(c) In our opinion and according to the information and explanation
given to us, the Company has maintained proper records of inventories.
The discrepancies noticed on verification between the physical stock
and the book records were not material.
(iii) In respect of loans, secured or unsecured, granted / taken by the
company to or from Companies , firms or other parties covered in the
register maintained u / s 301 of the Companies Act, 1956 :-
(a) The Company had not granted any loan to any one. Accordingly,
clauses (iii) (b) to (iii) (d) of paragraph 4 of the Order are not
applicable to the Company.
(b) The Company had taken loan from three parties. The maximum amount
involved during the year was Rs. 137.00 lacs and the year - end balance
of loans taken from such parties was Rs. 137.00 lacs.
(c) In our opinionand according to the information and explanations
given to us, the rate of interest wherever applicable and other terms
and conditions of loans taken by the company are not prima facie,
prejudicial to the interest of the Company.
(d) The Company is regular in payment of the principal amounts and
interest as stipulated.
( iv ) In our opinion and according to information and explanations
given to us, there is adequate internal control system 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 and
During the course of our audit, we have not observed any major
weaknesses in internal controls.
(v) IN RESPECT OF TRANSACTIONS COVERED U/S 301 OF THE COMPANIES ACT,
(a) According to the information and explanations given to us, we are
of the opinion that the paticulars of contracts or arrangements have
been entered in the register required to be maintained under that
(b) In our opinion , and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time
( vi ) According to the information and explanations given to us, the
company has not accepted any public deposits during the year.
( vii ) In our opinion, the Company has an internal audit system
commensurate with the size and 2^*7 of its business. *~~s~*