| We have audited the accompanying financial statements of PARAMOUNT
PRINTPACKAGING LIMITED ("the Company"), which comprise the Balance
Sheet as at March 31, 2014, and the Statement of Profit and Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management responsibility for the financial Statement
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 notified under the Companies Act, 1956 ("the
Act") read with the general circular 15/2013 dated September 13, 2013
of the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. 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
from 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:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
b) in the case of the Profit and Loss Account, of the loss for the year
ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, as amended
by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by
the Central Government of India in terms of sub-section (4A) of section
227 of the Act (hereinafter referred to as the "Order"), and on the
basis of such checks of the books and the records of the Company as we
considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
2. Qualifying our report, we draw attention to, note no. 30 for
pending reconciliation with excise authorities and note no. 28 for
pending confirmation and reconciliation, if any, of some of the parties
appearing under Sundry Debtors, Loans and Advances and Sundry
Creditors.
3. As required by section 227(3) of the Act, 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 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards notified under
the Companies Act 1956 read with the general circular 15/2013 dated
September 13, 2013 of the Ministry of Corporate Affairs in respect with
section 133 of the Companies Act 2013.
e) on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITOR'S REPORT TO THE MEMBERS OF PARAMOUNT
PRINTPACKAGING LIMITED FOR THE YEAR ENDED 31ST MARCH, 2014
(Referred to in paragraph 1 of our report of even date)
1)
a) The company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets on the
basis of available information.
b) Physical verification of the fixed assets is done by the management
as per regular programme of verification, which in our opinion needs to
be strengthened having regards to the size of company and nature of
assets. As informed, no material discrepancies were noticed on such
verification.
c) In our opinion, the company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
company is not affected.
2)
a) As explained to us, the inventories were physically verified by the
management at reasonable intervals during the year:
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 the nature of its business.
c) In our opinion and according to the information and explanation
given to us, the company has maintained adequate records of its
inventories and the discrepancies noticed on such physical verification
between physical stock and the book records have been adequately dealt
with in the books of account.
3) In respect of the loans secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
a) The company has granted interest bearing unsecured loan to 2 parties
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount involved during the year is Rs. 6,136,014/-
and the year-end balance is Rs. 5,636,014/- .
b) In our opinion and according to the information and explanation
given to us, the rate of interest and other terms and conditions of the
loans given by the company, are not prima facie, prejudicial to the
interest of the company.
c) The Loan granted is repayable on demand and we are given to
understand that these loans have not yet been recalled.
d) The company has taken interest free unsecured loan from one party
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount involved during the year is Rs. 3,000,000/-
and the year-end balance is Rs. 750,000/-.
e) In our opinion and according to the information and explanation
given to us, terms and conditions on which loans have been taken from
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.
f) The Loan taken is repayable on demand.
4) In our opinion, and according to the information and explanations
given to us, the company is having inadequate internal control systems
commensurate with the size of the Company and the nature of its
business with regards to purchase of fixed assets, sale of goods and
services. During the course of our audit, we have noticed inadequate
internal control system with respect to (a) review and reconciliation
of book balances of customers, vendors, Loan and Advances given and (b)
reconciliation of balance with excise authorities and hence in our
opinion, internal control system of the company needs to be
strengthened.
5)
a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the particulars of the contracts and arrangements that
need to be entered in the register maintained in section 301 of the Act
have been so entered.
b) The transaction of purchase of goods and material and sale of goods,
material and services, made in pursuance of contracts or arrangements
entered in the register maintained under section 301 of the act and
exceeding the value of rupees five lacs in respect of any party during
the year, have been made at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
6) In our opinion and according to the information and explanation
given to us, the company has complied with the directives issued by the
Reserve Bank of India and the provisions of section 58A and 58AA or any
other relevant provisions of the act and rules framed there under, with
regard to the deposits accepted from the public.
7) In our opinion, the company has its in house internal audit system.
In our opinion, the scope and coverage of Internal audit needs to be
strengthened to commensurate with the size of the Company and nature of
business.
8) The company is covered under the cost audit rules from F.Y. 2013-14
and we are informed that the audit is under progress.
9) a) Based on verification of the records of the company, we are of
the opinion that the company is not regular in depositing undisputed
statutory dues including Provident fund, employees' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess and other statutory dues with the appropriate authorities.
According to the information and explanation given to us, there are no
undisputed amounts payable in respect of such statutory dues which have
remained outstanding as on 31st March, 2014 for a period of more than
six months from the day they became payable except as referred below:-
Nature of Dues ( Amount Rs. )
Provident Fund 8,909,137
Profession Tax 17,500
Maharashtra Value Added Tax 34,065
Central Sales Tax 5,625,193
Service Tax 1,489,710
Wealth Tax F.Y.2010-2011 45,000
Wealth Tax F.Y.2011-12 38,000
Tax Deducted at Source 6,850,007
Income Tax (Incl. Interest) F.Y. 2011-2012 989,035
ESIC 757,557
Excise Duty 20,288,269
Central Sales Tax (2005-06) 2,841,171
b. According to information and explanation given to us, the details
of disputed sales tax demand that have not been deposited on account of
disputes are given below:-
Name of Status Nature of dues Amount Period to which
amount relates
Maharashtra Value Sales Tax 21,22,504 2003-2004
Added Tax Act
Central Sales Sales Tax 8,56,538 2003-2004
Tax Act
Maharashtra Value Sales Tax 2,683,596 2004-2005
Added Tax Act
Central Sales Sales Tax 1,215,147 2004-2005
Tax Act
Name of Status Forum where dispute pending
Maharashtra Value Added Tax Act Deputy Comm. of Sales Tax (Appeals)
Central Sales Tax Act Deputy Comm. of Sales Tax (Appeals)
Maharashtra Value Added Tax Act Deputy Comm. of Sales Tax (Appeals)
Central Sales Tax Act Deputy Comm. of Sales Tax (Appeals)
Name of Status Nature of dues Amount Period to which
amount relates
Maharashtra Value Sales Tax 20,984,013 2008-2009
Added Tax Act
Central Sales Sales Tax 4,377,379 2008-2009
Tax Act
Name of Status Forum where dispute pending
Maharashtra Value Added Tax Act Deputy Comm. of Sales Tax (Appeals)
Central Sales Tax Act Deputy Comm. of Sales Tax (Appeals)
10) The Company's accumulated losses at the end of Financial year are
more than fifty percent of its net worth. The Company has incurred cash
losses in the current year as well as during the immediately preceding
financial year.
11) On the basis of audit procedures performed by us, and according to
the information, explanation and representation given to us by the
management, we state that the company had defaulted in certain
repayment of dues (including interest) of domestic financial
institutions and banks. The default in principal amount and the
interest aggregates to Rs. 178,001,706/- and Rs. 4,861,851/- respectively.
However upto the date of approval of the accounts, the company has not
paid the principal amount and the interest aggregates with respect to
above stated dues.
12) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of clause 4 (xii) of the order are not
applicable to the Company.
13) As the provisions of any Special Statue applicable to Chit funds,
Nidhis or mutual Benefit funds / Societies are n o t applicable to the
company, the provisions of clause 4(xiii) of the order are not
applicable to the Company.
14) The company is not dealing in or trading in shares, securities,
debentures, or other investments and hence, requirement of paragraph
4(xiv) are not applicable to the company.
15) In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from bank or financial institutions during the year.
Accordingly, the provisions of clause 4 (xv) of the order are not
applicable to the Company.
16) On the basis of the review of the utilization of funds pertaining
to term loans on overall basis and related information as made
available to us by the Company, prima facie, the term loans taken by
the Company were applied for the purpose for which they had been
raised.
17) According to Cash flow statements and other records examined by us
and on the basis of the information and explanation given to us, on an
overall basis, funds raised on short term basis have, prima facie, not
been used for Long Term Investment.
18) According to the information and explanations given to us, the
company has not made preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the
Act. Accordingly the provisions of clause 4 (xviii) of the order are
not applicable to the Company.
19) The company has not issued any debentures during the year and does
not have any debentures outstanding as at the beginning of the year and
at the year end. Accordingly, the provisions of clause 4 (xix) of the
Order are not applicable to the Company.
20) The Company has not raised any money by public issue during the
year.Accordingly, the povisions of clause 4 (xx) of the Order are not
applicable to the Company.
21) 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 Laxmikant Kabra & Co.
Chartered Accountants
Firm Registration No: 117183W
Sd/-
Laxmikant Kabra
(Partner)
Membership No. :101839
Place: Thane
Date: May 17, 2014
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