dujodwala paper chemicals ltd Auditors report

DUJODWALA PAPER CHEMICALS LIMITED ANNUAL REPORT 2011-2012 AUDITORS REPORT To, The Members of Dujodwala Paper Chemicals Limited. 1. We have audited the attached Balance Sheet of DUJODWALA PAPER CHEMICALS LIMITED as at 31st March 2012, the Statement of Profit and Loss and the 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. 2. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 as amended by the companies (Auditors Report) (Amendment) order, 2004 (the Order) issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956. We enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order. 4. Further to our comments in the annexure referred to in paragraph (3) above, we report that (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit except otherwise stated. (b) In our opinion, proper Books of Accounts as required by law have been kept by the Company so far as appears from our examination of those Books. (c) The Balance Sheet, the Statement of Profit and Loss and cash flow statement dealt with by the report are in agreement with the Books of Account of the Company. (d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash flow statement dealt by this report comply with the Accounting Standards referred to in Sub-section 211 (3C) of the Companies Act, 1956. except AS-15 Employee Benefits (e) In our opinion, and to the best of our information and according to the explanation given to us, the said accounts subject to note no. 27of financial statement regarding sales tax incentives of earlier years and note no 28 of financial statement regarding employee benefit expenses, read together with the accounting policies and other notes thereon, 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2012 and (b) In the case of the Statement of Profit and Loss, of the profits for the year ended on that date and (c) In the case of cash flow statement of the cash flows for the year ended on that date. For and on behalf of A. P. SANZGIRI & CO. Chartered Accountants FRN: 116293W Satish Kumar Gupta Partner (M.N. 101134) Place: Mumbai Date : 30th August, 2012 ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN OUR REPORT OF EVEN DATE TO THE MEMBERS OF DUJODWALA PAPER CHEMICALS LIMITED AS AT 31st MARCH, 2012 1] (a) The Register of fixed Assets showing full particulars, including details and situation of Fixed Assets has neither been updated nor reconciled with the books of accounts. (b) As the information and explanations given to us, all the assets have not been physically verified by the management during the year, and any discrepancies between Fixed Assets as compared to the books records cannot be ascertained in the absence of updated fixed assets register. (c) The company has not disposed off any substantial part of fixed assets during the year, so as to affect the going concern status of the Company 2] (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. The inventories lying with outside parties have been confirmed by the management. (b) 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) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material, and have been properly dealt with in the books of accounts. 3] (a) The Company has not granted any secured or unsecured Loans to Companies or other parties listed in the register maintained under section 301 of the Companies Act, 1956 and hence we do not offer any comment on Para 4 (iii) (a), (b), (c) and (d) of Companies (Auditors Report) Order 2003. (b) (i) The Company has taken interest free Unsecured Loans from a party covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year is Rs. 21,27,00,714/- and year end balance is Rs. 21,06,40,714/-. (ii) In our opinion, other terms and conditions on which loans have been taken from the party listed in the register maintained under Section 301 of the Companies Act, 1956 are not prejudicial to the interest of the Company. (iii) The Company is regular in repaying the principal amounts as stipulated. (iv) There is no overdue amount of loans taken from the party listed in the register maintained under Section 301 of the Companies Act, 1956. 4] 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 weaknesses in internal controls. 5] According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register in pursuance of Section 301 of the Act. 6] In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable. 7] The Company has internal Audit System during the year but it needs to be strengthened. 8] We have broadly reviewed the books of account maintained by the Company Pursuant to the rules made by the Central Government under Section 209(1) (d) of the Companies Act, 1956 in respect of the Companys products to which the said rules are made applicable and are of the opinion that, prima facie the prescribed accounts and records have been made and maintained. 9] (a) According to the records of the Company, the undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income-tax, sales tax, wealth tax, custom duty, excise duty, Cess and other material statutory dues to the extent applicable to it have generally been deposited with the appropriate authorities. Further as on 31st March, 2012 there were no undisputed dues payable for a period of more than six months from the date they become payable except income tax including FBT of Rs 38,31,844 for the AY. 2009-10 and income tax Rs.5,88,855/- for the A.Y. 2010-1 land Rs.91,86,523 for A.Y. 2011-12. (b) According to the information and explanation given to us, the disputed Income Tax and Central Excise liabilities, which have not been deposited, are as given below. Apart from this there are no dues of sales tax, custom duty, wealth tax, service tax, excise duty and Cess, which have not been deposited on account of any dispute. Name of the Year Amount Status statute Income Tax 2001-2002 (A. Y.) 4,95,161 Not available. Income Tax 2002-2003 (A. Y.) 2,90,1124 C.I.T. Appeal Income Tax 2003-2004 (A. Y.) 1,21,169 Income tax Appellate Tribunal Income Tax 2004-2005 (A. Y) 53,906 Income tax Appellate Tribunal Income Tax 2005-2006 (A. Y.) 5,60,775 Income tax Appellate Tribunal Income Tax 2006-2007 (A. Y.) 71,93,922 Income tax Appellate Tribunal Central Excise 2004-05 to 2010-11 5,645,455 CESTAT Central Excise 2010-11 to 2011-12 4,08,886 Deputy Commissioner 10] The Company has no accumulated losses and the Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. 11] In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders. 12] The Company has been granted loans and advances on the basis of security by way of pledge of shares. 13] 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 (Auditors Report) Order, 2003 is not applicable to the company. 14] 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 (Auditors Report) Order, 2003 are not applicable to the company. 15] In our opinion and according to Information and explanation given to us, company has not given any guarantee for loan taken by others from banks or financial institutions. 16] In our opinion, the term loans have been applied for the purpose for which they are raised. 17] According to the information and explanations given to us and on an overall examination of the balance sheet of the Company and related information made available to us, we report that no funds raised on short- term basis have been used for long-term investment 18] The Company has not made preferential allotment of shares to a party covered in the register maintained under Section 301 of the Companies Act, 1956 during the year. 19] The Company has not issued any Secured Debentures during the year. 20] According to the information and explanations given to us, the Company has not raised any money by public issue during the year covered by our audit report. 21] Based upon the audit procedures performed 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 and on behalf of A. P. SANZGIRI & CO. Chartered Accountants FRN: 116293W Satish Kumar Gupta Partner (M.N. 101134) Place: Mumbai Date : 30th August, 2012