| We have audited the accompanying financial statements of
M/s.SERVALAKSHMI PAPER LIMITED ("the company"), which comprise the
Balance Sheet as at 31 March 2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in section 134(5) of the Companies Act, 2013 ("the Act") with respect
to 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 principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes the
maintenance of adequate accounting records in accordance with the
provision of the Act for safeguarding of the assets of the Company and
for preventing and detecting the frauds and other irregularities;
selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of internal financial control, that were
operating effectively for ensuring the accuracy and completeness of the
accounting records, 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 have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. 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 financial control relevant to the Company's
preparation of the financial statements that give true and fair view in
order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on
whether the company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by Company's Directors, 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 on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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, 2015;
b. in the case of the Statement of Profit and Loss, 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.
Emphasis of Matters
We draw attention to the following matter in the Notes to the financial
statements:
Note 3 in the financial statements which indicate that the Company has
accumulated losses and its net worth has been fully eroded, the Company
has incurred a net cash loss during the current and previous year(s)
and, the Company's current liabilities exceeded its current assets as
at the balance sheet date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
order"), issued by the Central Government of India in terms of the
sub-section (11) of section 143 of the Companies Act, 2013, we give in
the Annexure a statement on the matters specified in paragraphs 3 and 4
of the Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) In our opinion proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
c) The Balance Sheet, the 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 aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e) The erosion of net worth as described under the emphasis of matters
paragraph above, in our opinion, may have an adverse effect on the
functioning of the company.
f) On the basis of written representations received from the directors
as on 31 March, 2015, taken on record by the Board of Directors, none
of the directors is disqualified as on 31 March, 2015, from being
appointed as a director in terms of Section 164(2) of the Act.
g) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies ( Audit and
Auditors) Rules 2014, in our opinion and to the best of our information
and according to the explanations given to us :
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 25 to the
financial statements
ii. The Company did not have any long-term contracts including
derivatives contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Auditors' Report
(Referred to in Paragraph 1 of our Report on Other Legal and Regulatory
Requirements)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) Fixed Assets have been physically verified by the Management at
reasonable intervals. No material discrepancies were noticed on such
verification ;
ii) (a) Physical verification of inventory has been conducted at
reasonable intervals by the management
(b) Procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business;
(c) Company is maintaining proper records of inventory and material
discrepancies, if any, noticed on physical verification have been
properly dealt with in the books of account;
(iii) The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act, 2013.
(iv) There is an 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 services.
During the course of our audit, no major weakness has been noticed in
the internal control system;
(v) The Company has not accepted any deposit from the public during the
year.
(vi) We have broadly reviewed the records maintained by the company
pursuant to the rules made by the Central Government for the
maintenance of the cost records u/s. 148(1), of the Act. We are of the
opinion that prima facie the prescribed accounts and records have been
made and maintained. We have not, however, made a detailed examination
of the records with a view to determining whether they are accurate or
complete.
(vii) (a) 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
any other statutory dues with the appropriate authorities. According to
the information and explanation given to us, no undisputed arrears of
statutory dues were outstanding as on 31.3.2015, for a period of more
than 6 months from the date they become payable;
(b) According to the records of the company, the following are disputed
statutory dues remaining unpaid :
Period. to Nature of Amount
Sl. Name of the which the the disputed
No. Statute Amount Demand (Rs. in lakhs)
relates
1. Customs Act 2012-13 Customs 125.09
Duty
2. Tamil Nadu VAT 2013-14 Non rever- 28.93
Act sal of ITC
Penalty 28.93
3. Government of 2012-2015 Electricity 286.66
Tamilnadu Tax
Electricity Act,
2003
Sl. Name of the Amount Forum where
No. Statute paid dispute is
pending
1. Customs Act - CESTAT
2. Tamil Nadu VAT - High court
Act Madurai.
-
3. Government of - Supreme
Tamilnadu Court of India
Electricity Act,
2003
(c) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and protection fund by the
company.
(viii) The accumulated losses of the Company at the end of the
financial year has exceeded 50% of its net worth and the Company has
incurred cash loss in the current year and in the immediately preceding
financial year
(ix) The company has not defaulted in repayment of dues to financial
institution or bank, pending implementation of Corporate Debt
Restructuring scheme.
(x) The Company has not given any guarantee for loans taken by others
from bank or financial institutions;
(xi) The term loan obtained by the company has been applied for the
purpose for which they were availed;
(xii) Based upon the audit procedures performed and information and
explanations given by the management, we report that no frauds on or by
the company has been noticed or reported during the course of our
audit.
For S. Krishnamoorthy & Co.,
Chartered Accountants
(Registration No. 001496S)
Sd/- K. Raghu
Partner, Auditor
Coimbatore Membership No.11178
22.05.2015
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