shiva paper mills ltd Auditors report

SHIVA PAPER MILLS LIMITED ANNUAL REPORT 2001-2002 AUDITORS REPORT To the Members of Shiva Paper Mills Limited We have audited the attached Balance Sheet of M/s. Shiva Paper Mills Ltd., as a 30th September, 2002 and also the Profit & Loss Account 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 have 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 from 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. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by 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 and 5 of the said order. 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 account as required by law have been kept by the company so far as appears from our examination of those books. c) The Balance Sheet and the Profit & Loss Account dealt with by this report are in agreement with the books of account. d) In our opinion the Balance Sheet and the Profit & Loss Account dealt with by this report comply with the accounting standards referred to the sub-section (3C) of Section 211 of the Companies Act, 1956. e) On the basis of .written representation received from the Directors and taken on record by the Board of Directors, we report that none of the director(s) is attracting disqualification U/s 274(1)(g) of the Companies Act, 1956. f) Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the accounts subject to Note No.11(c), (d) & (e) regarding nonprovision of interest payable/ recoverable the impact of which is not ascertainable; and read together with other Notes appearing in Schedule `21 give iF, the prescribed manner the information required and also give a true and fair view:- a) in the case of the Balance Sheet, of the state of affairs of the company as at 30th September, 2002 b) in the case of the Profit & Loss Account, of the loss for the year ended on that date. for B, K. SHROFF & CO., Chartered Accountants 3/7-B, Asaf Ali Road, New Delhi - 110002 O.P. SHROFF Dated : 06-12-2002 Partner ANNEXURE REFERRED TO IN PARAGRAPH d OF OUR REPORT OF EVEN DATE 1. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. As explained to us, all the fixed Assets have been physically verified by the management during the year according to a regular programme which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancy was noticed on such verification. 2. None of the fixed assets have been revalued during the year. 3. The stocks of finished goods, spare parts arid raw material except material in transit have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. it : our opinion, the procedures of physical 4. In our opinion the procedures verification of stocks followed by the management are reasonable and adequate s relation to the size of the company and nature of its business. 5. The discrepancies noticed on verification o stocks as compared to book records were not material and these have been properly dealt with in the books of account. 6. On the basis of our examination of stock records, we are of the opinion that the valuation of stocks is fair and proper, in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year. 7. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act 1956, are prima facie not prejudicial to the interest of the company. 8. The rate of interest and other terms & conditions on which unsecured loans have been granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 are prima- facie not prejudicial to the interest of the company. 9. Employees to whom loans or advances in the nature of loans have been given by the company, are repaying the principal amounts as per stipulations, wherever such stipulations exist and are also regular in payment of interest, wherever applicable. 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 the nature of its business with regard to purchase of stores, raw materials including components, plant & machinery, equipment and other assets, and with regard to the sale of goods. 11. There are no transactions of purchase of goods and materials and sale of goods, materials and services aggregating during the year to Rs.50,000/- or more in respect of each party, made in pursuance of contracts or arrangements entered in the registers maintained under Section 301 of the Companies Act, 1956. 12. As explained to us, the company has a regular procedure for determination of unserviceable or damaged stores, raw materials and finished goods. Adequate provision has been made in the accounts for the loss arising on the items so determined. 13. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to deposits accepted by it from the public. 14. In our opinion, reasonable records have been maintained by the company for the sale and disposal of realisable scrap. The company has no by- products. 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 account maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima-facie the prescribed accounts and records have been maintained. 17. According to the records of the company, there have been delays in the deposit of Provident Fund and Employees State Insurance dues with the appropriate authorities. Arrears of Provident Fund dues of Rs. 19,36,427/- are still unpaid and arrears of ESI dues of Rs.3,313/- have been paid on 12-11-2002. 18. According to the information and explanations given to us, no personal expenses of employees or directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with the generally accepted business practices. 19. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax,, sales tax, custom duty were outstanding as at 30th September, 2002 for a period of more than six months from the date they became payable. 20. The company is a sick industrial company within the meaning of Section 3(1) (o) of the Sick Industrial Companies (Special Provisions) Act, 1985, reference to B.I.FR. under section 15 is yet to be made. for B.K. SHROFF & CO., Chartered Accountants 3/7-B, Asaf Ali Road, New Delhi - 110002 O.P. SHROFF Dated : 06-12-2002 Partner