| 1. We have audited the accompanying financial statements SOMA PAPERS &
INDUSTRIES LIMITED which comprise the Balance Sheet as at 31st March,
2014, the profit and loss account and cash flow statement for the year
ended and summary of significant accounting policies and other
explanatory information.
Management's Responsibility for the Financial Statements
2. The Company's 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 referred to in sub-section
(3C) of section 211 of the Companies Act, 1956 ("the Act") read with
general circular 15/2013 dated 13th September, 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013
and in accordance with the accounting principles generally accepted in
India.. 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.
Auditors' Responsibility
3. 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 but not for the
purpose of expressing an opinion on the effectiveness of the company's
internal control. 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
4. 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, subject our following observations:
i) paragraph 4(d)(i) regarding preparation of accounts on the basis of
a 'going concern' having consequential impact on the loss for the year,
reserves and surplus and assets of the Company,
ii) non provision of interest on Sales Tax Loan (SICOM.), Security
Deposit.(The amount remains unascertained. read together with Note
no.16 regarding balances of Sundry debtors, Sundry Creditors, Balance
with Bank and other advances being subject to confirmations/
reconciliation,
iii) and other notes appearing in the said Notes and those appearing
elsewhere in the accounts, 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 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
5. As required by Companies (Auditor's report) (Amendment) Order '2003
issued by the Central Government of India in terms of sub section (4A)
of Section 227 of the Companies Act, 1956 and on the basis of such
checks, as were considered appropriate, we annex hereto a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
6. 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; except para 14 & 16 of Notes on Financial Statement;
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 and proper returns adequate for the purposes of our audit have
been received from branches if any, not visited by us;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are sin 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 referred
to in subsection (3C) of section 211 of the Companies Act, 1956;subject
to,
Policy regarding appropriateness of going concern assumption used for
preparing these accounts because the net worth of the Company is fully
eroded and the Company is a sick industrial company within the meaning
of clause (O) of sub-section (1) of Section 3 of the Sick Industrial
Companies (Special Provisions) Act, 1985 (SICA), the accounts do not
include the adjustments that would arise if these assumption had not
been used in preparing these accounts. (Para 13 of Notes to Accounts)
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.
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR
REPORT OF EVEN DATE
1. In respect of its fixed assets:
a) The Company is maintaining proper records showing full particulars
including quantitative details and situation of fixed assets.
b) As explained to us, the management has physically verified during
the year certain fixed assets in accordance with a phased programmed of
verification, which in our opinion, is reasonable having regard to the
size of the Company and nature of its fixed assets. The discrepancies
noticed by the management on such verification were not material and
have been properly dealt with in the books of account.
c) As we observed, during the year, the Company has not disposed off
substantial part of its fixed assets.
2. In respect of its inventories:
a) As informed to us, there is no inventory lying in the hands of the
Company.
b) Since there no inventory no inventory verified.
c) No stock record is maintained since there is no inventory.
3. According to information and explanations given to us, in respect
of 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 given unsecured loans in previous year is Rs.NIL and
repaid worth Rs.75,463. The Balance of loan taken as on 31.03.2014 is
worth Rs.10,00,000.
b) The loan taken / given is interest free and other terms conditions
of such loans are prima facie not prejudicial to the interest of the
Company.
c) The interest free loan taken / given is repayable on demand.
d) As informed to us, there are no overdue amounts of more than Rs. one
lakh in respect of such loan and as such clause 4(iii)(d) of the
Companies (Auditor's report) (Amendment) Order '2004 is not applicable.
4. In our opinion and according to the information and explanations
given to us, 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, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
5. a) In our opinion and according to the information and explanations
given to us, the Company has not entered into any transactions that
need to be entered into a register in pursuance of Section 301 of the
Companies Act, 1956.
b) As the company not entered in transactions that need to be entered
into a register in pursuance of Section 301 of the Companies Act, 1956,
no comments are called in respect of clause 4(v)(b) of the Companies
(Auditor's report) (Amendment) Order ' 2004 .
6. According to information and explanations given to us, the Company
has not accepted any deposit from the public during the year.
7. There was no internal audit system in the Company during the year.
8. As explained to us, the Central Government has not prescribed
maintenance of cost records under Section 209 (1)(d) of the Act in the
case of the Company.
9. a) According to the records of the Company, the Company has been
generally regular in depositing undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees State
Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Service
Tax, Cess and any other statutory dues, with the appropriate
authorities, except the sales tax liability of different states worth
Rs.16.46 and deferred sales tax liability along with interest due there
on (Unascertained) as on 31/03/2014 outstanding for a period of more
than six months from date it became payable.
b) According to the records of the Company, there are no dues of sales
tax/ income tax / custom duty / wealth tax / service tax / cess, which
have not been deposited on account of any dispute. The disputed amounts
that have not been deposited in respect of excise duty / income tax are
as under:
Description Amount Period to which it Forum where dispute is
pending
Rs. relates
Excise duty 234,761 1988-1989 Excise and Gold
(Control)
Appellate Tribunal
Income Tax 19,38,082 2003-2004 Penalty Proceeding
Before ITAT
10. The accumulated losses of the Company at the end of the financial
year are more than fifty percent of its net worth, and it has incurred
cash losses during the current financial year. In immediately preceding
financial year cash losses has been incurred.
11. According to the information and explanations given to us, the
Company has defaulted in repayment of dues to banks, financial
institutions and debenture holder.
The details of defaults as at 31/03/2014 in repayment of dues to the
financial institutions, banks and debenture holder are as under:
(Amount in Rs.)
Period of
default Overdue Financial Banks *Debenture
towards Institution holder
Amount of default
Upto 1 year Interest Unascertained Nil Nil
Principle Nil
More than 1
year and upto Interest Unascertained Nil Nil
2 years
Principle Nil Nil Nil
More than 2
years and upto Interest Unascertained Nil Nil
5 years Nil
More than 5
years Interest Unascertained Nil Nil
Principle 2,55,65,564
** Refer along with the Auditors report.
*** Interest provided if any, is on estimate basis or considered as
unascertained.
12. Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/ or
advances on the basis of security by way of pledge of shares,
debentures, and other securities
13. According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks and
financial institutions. According to the information and explanation
given to us, we are of the opinion that the terms and conditions
thereof are not prima facie, prejudicial to the interest of the company
14. The Company has not taken any term loan during the year.
15. According to information and explanations given to us and on an
overall examination of the balance sheet of the Company, we are of the
opinion that the funds raised on short-term basis have, prima-facie,
have not been used for long-term investments.
16. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956 during the year.
17. No debentures have been issued by the Company during the year and
hence, the question of creating securities in respect thereof does not
arise.
18. The Company has not raised any money by way of public issue during
the year.
19. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
20. In our opinion, and according to information and explanations
given to us, no comments are called for in the case of clauses (xiii)
and (xiv) of paragraph 4 of the Companies (Auditor's report)
(Amendment) Order '2004 as the same are not applicable to the Company
during the year.
FOR JAIN MAHESHWARY & COMPANY
Chartered Accountants
Dharmesh Shah
PARTNER
Membership No.: 106620
Mumbai, Dated: 31st May,2014
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