mukerian papers ltd Auditors report

MUKERIAN PAPERS LIMITED ANNUAL REPORT 2000-2001 AUDITORS REPORT To The Members, MUKERIAN PAPERS LIMITED We have audited the attached Balance Sheet of Mukerian Papers Limited, Mukerian as at 31st March, 2001 and the annexed Profit & Loss Account of the Company for the year ending on that date and report that: 1. As required by the Manufacturing and other Companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on matters specified in paragraph 4 & 5 of the said order. 2. Further to our comments in the annexure referred to in paragraph (1) above, a) 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. b) 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 the books. c) The Balance Sheet and Profit & Loss Account dealt with by the Report are in agreement with the books of account. d) In our opinion, the Profit & Loss A/c and the Balance Sheet complies with the Accounting Standard referred to in section 211 (3C) of the Companies Act, 1956 subject to Note No.B(5) of Schedule XXIV regarding non- charging of interest on debentures amounting to Rs.400.94 lacs for the year 2000-2001 (Previous year 400.88 lacs) due to which current financial years loss has been understated by 400.94 lacs, Note No.16 regarding non confirmation of debtors and creditors and Note No.7 & 8 regarding non provisioning on advances and Investment of Companies referred to BIFR. e) i) We report that all the directors of the Company as on 31.03.2001 are disqualified from being reappointed as director as the Company has defaulted in the terms of clause (g) of the sub-section (1) of section 274 of the Companies Act. ii) The written representation (in term of section 274 (1)(g) of the Companies Act) from all the directors in regard to the other companies in which they are also directors have not been received. But all the directors are disqualified from being appointed as director as mentioned in e(i) above. f) In our opinion and to the best of our information and according to the explanation given to us, the said statement of accounts, read with notes thereon (Schedule XXIV give the information required by the Companies Act, 1956 in the manner so required give a true and fair view subject to Note No.5 regarding non-charging of interest on debentures amounting to Rs.400.94 lac for the year 2000-01, Note No.16 regarding non confirmation of debtors and creditors and Note No.7 & 8 regarding non provisioning on advances and investment of companies referred to BIFR. i) In the case of Balance Sheet of the state of affairs of the Company as at 31st March, 2001 and, ii) In the case of Profit & Loss Account of the loss for the year ending on that date. For S. TANDON & ASSOCIATES Chartered Accountants Sd/- PLACE: CHANDIGARH AMARPREET SINGH DATED: 06.07.2001 (Partner) ANNEXURE TO THE AUDITORS REPORT As required by the Manufacturing and other Companies (Auditors Report) Order, 1988 and according to the information and explanations given to us during the course of the audit and on the basis of such checks as were considered appropriate, we report: (Ref. Para 1 of the Report) 1. The Company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets. As informed to us, fixed assets have been physically verified by the management during the year and no discrepancy was noticed on such verification. In our opinion, the frequency of verification was reasonable. 2. None of the fixed assets have been revalued during the year. 3. The stocks of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals during the year. 4. According to the information and explanations given to us, the procedures of physical verification of stocks to followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. 5. The discrepancies noticed on verification between the physical stocks and books record were not material having regard to the size of the operation of the Company and have been properly dealt with in the books of account. 6. In our opinion and on the basis of our examination, the valuation of stocks is fair and proper in accordance with normally accepted accounting principles. The valuation of stock is on the same basis as in the previous year. 7. The Company has not provided interest on the loans which have been granted to the parties listed in the register maintained under section 301 of the Companies Act, 1956 during the year because the Companies to which major amount is granted have been referred to the BIFR. 8. According to the information and explanations given to us, the Company has not taken any loans from Companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. 9. In respect of loans and advances in the nature of loans given by the Company to its employees. they are repaying the amount as stipulated. 10. 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 nature of its business with regards to the purchases of stores, raw materials including components, plant and machinery, equipment and other assets and with regards to sale of goods. 11. In our opinion, the price paid for the purchase of stores, raw materials and sale of goods in excess of Rs.50000/- in value for each type from firms or Companies or other parties in which Directors are interested as listed in the registers maintained under Section 301 of the Companies Act, 1956 are reasonable as compared to the transactions of similar items with other parties. 12. The Company has a system for the determination of unserviceable or damaged trading goods, stores and raw materials and finished goods and in our opinion, adequate provision for loss has been made in the accounts. 13. On the basis of information and explanations given to us, the company has not accepted any deposits from the public to which the provisions of section 58A of the Companies Act, 1956 and rules made there under would apply. 14. In our opinion, the Company has maintained reasonable record for the sale and disposal of significant realisable scrap and by-products granted by Companys operations, 15. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business. 16. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records, under section 209 (1) (d) of the Companies Act, 1956, and of the opinion that the prescribed accounts and records have been maintained. 17. According to the record of the Company, Provident Fund and Employees State Insurance dues have not been regularly deposited during the year with the appropriate authorities 18. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty outstanding as at March, 31, 2001 for a period of more than six months from the date they became payable 19. According to the information and explanations given to us and the records examined by us, no personal expenses have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice. 20. In our opinion, the company is a Sick Industrial Industrial Company within the meaning of clause (O) of Sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. 21. According to the information and explanations given to us, there are no damaged goods in relation to the trading activities during the year. For S. TANDON & ASSOCIATES Chartered Accountants Sd/- PLACE: CHANDIGARH AMARPREET SINGH DATED: 06.07.2001 (Partner)