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R S Petrochemicals Ltd.

BSE: 524691 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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R S Petrochemicals Ltd. (RSPETROCHEM) - Auditors Report

Company auditors report

R S PETROCHEMICALS LIMITED ANNUAL REPORT 2006-2007 AUDITORS' REPORT To The Members of R. S. Petrochemicals Limited We have audited the attached Balance Sheet of R. S. Petrochemicals Ltd., as at 31st March 2007, the profit and loss account for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 1. We conducted our audit in accordance with the 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 of 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 2. As required by the Companies (Auditor's Report) Order, 2003 issued by the 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, 3. Further to our comments in the Annexure referred to above, 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 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 appears from our examination of those books; c) The Balance sheet and Profit and loss account dealt with by this report are in agreement with the books of account; d) In our opinion, the Balance sheet and Profit and loss account dealt with by this report comply with the accounting standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956; e) On the basis of written representations received from the directors, as on 31st March 2007 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2007 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; f) In our opinion and to the best of our information and according to the explanations given to us, the said 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: i) In the case of balance sheet, of the state of affairs of the company as at 31st March 2007; and ii) In the case of the profit and loss account, of the loss for the year ended on that date; and For & on behalf of P.C. Goyal & Co., Chartered Accountants Place: Ludhiana CA P.C. Goyal Date : 01.09.2007 (Prop.) M.No. 80377 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF R.S.PETROCHEMICALS LTD., ON THE ACCOUNTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2007. (i) (a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. (b) All the assets have not been physically verified by the management during the year. Earlier there was a regular program of physical verification, which, in our opinion, was reasonable having regard to the size of the company and the nature of its assets, however, during the year since no physical verification was reported to have been conducted by the management, hence it is not possible for us to report whether there is any discrepancy. (c) There was ho substantial disposal of fixed assets during the year. (ii) The company has not carried on any business activities during the year hence in our opinion paragraph (ii) (a) (b) & (c) of the order is not applicable. (iii) The Company has not granted or taken any loans to/from companies, firms or other parties covered in the register maintained Under section 301 of the Companies Act, 1956As the company has not granted/taken any loans, secured or unsecured, to or from parties listed in the register maintained under section 301 of the Companies Act, 1956 paragraphs (iii)(b), (c) and (d) of the order are not applicable (iv) In our opinion and according to the information and explanation given to us, as there are no purchase of inventory and fixed assets as well as the sale of goods nothing can be commented on the adequacy of internal control procedures commensurate with the size of the company and the nature of its business carried oh during the year covered under this report. (v) a) According to the information and explanation given to us, we are of the opinion that there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956. As such clause 4 (v)(b) of the order is not applicable. (vi) In our opinion and according to the information and explanation given to us, the Company has not accepted any deposit from the public within the meaning of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. (B) Demand Raised under the Gujrat Sale Tax Act, Nature of the dues Amount (in A B Rs.) a) i) Inter State Sales Appeal pending before against 'C' form were Gujrat Sale Tax Tribunal considered as Local Ahmedabad Sales of Gujrat and charged to tax @ 15% Instead of 4% 18952797/- 1997-98 ii) -do- 16411276/- 1998-99 -do- iii) -do- 49758003/- 1999-2K -do- b) i) Penalty U/s 45(b) 11371678/- 1997-98 -do- of The Gujrat Sale Tax Act. ii) -do- 14770148/- 1998-99 -do- iii) -do- 87174520/- 1999-2K -do- c) i) Penalty U/s 45 (2C) 8412258/- 1998-99 -do- of the G.S.T. Act, 15234300/- 1999-2K -do- ii) -do- d) I) Interest U/s 47 16057520/- 1997-98 -do- (4A) of GST Act, 10831458/- 1998-99 -do- 30850518/- 1999-2K -do- A = Period to which amount relates B = Forum where dispute pending (C) Demand Raised under the Central Sale Tax Act, Nature of the dues Amount (in A B Rs.) Non Production of 'C' Appeal pending before Forms - Tax Charged 214396/- 1997-98 Gujrat Sale Tax Tribunal Ahmedabad -do- 201470/- 1999-2K -do- Interest charged 192960/- 1997-98 -do- -do- 124930/- 1999-2K -do- Penalty U/s 45 (6) of 128638/- 1997-98 -do- GST Act read with 271985/- 1999-2K -do- Section 9(2) of CST Act. A = Period to which amount relates B = Forum where dispute pending (vii) Since there was no business activities being carried out hence there was nothing to comment regarding internal audit system as required vide this paragraph. (viii) To the best of our knowledge and as explained, the central Government has not prescribed the maintenance of cost records under clause (d) of subsection (1) of Section 209 of the Companies Act, 1956 for the products of the Company. (ix) (a) According to the information and explanations given to us and the books and records examined by us, the company has been regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employee's state insurance, income tax, Sales tax, Wealth tax, Custom Duty, Excise duty, Cess and other material statutory dues applicable to it. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Investor Education and Protection Fund, Employee's state insurance, Income tax, Sales tax, Wealth tax, Custom Duty, Excise duty, Cess were in arrears, as at 31.03.2007 for a period of more than six months from the date they became payable. (c) As at 31st March 2007 according to the records of the company and the information and explanation given to us, the following are the particulars Of dues on account of Excise Duty, sales tax assessment, Interest & penalty matters that have not been deposited on account of any dispute; (A) Demand under the Central Excise Act, 1944. Nature of the Amount A B dues (in Rs.) U/s 11A 1664644/- Order dated Appeal filed before the Custom including Penalty - 22.08.2000 Excise Service Tax appellant of Rs. 100000/- Tribunal WZB Mumbai who remanded back the case to Addl. Commissioner Central Excise Vadodara for re-examination vide order-dated 07.07.2003. A = Period to which the amount relates B = Forum where dispute pending However according to the information & explanation given to us a sum of Rs.2,50,000/- was deposited as per direction of the Hon'ble Gujrat Sale Tax Tribunal as pre-requisite before admitting of second appeal by the Hon'ble Tribunal. (x) The company has accumulated losses at the end of the financial year; however the total amount of accumulated losses does not exceed 50% of its net worth, it has incurred cash Josses of Rs. 1.18 Lac during the financial year covered by our audit. xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution, to its bankers or debenture holders. xii) In our opinion and according to the information and explanations given to us the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company. xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company. xv) According to the information and explanations given to us, the company has not given any guarantee in respect of loans taken by others from banks or financial institutions. xvi) Based on the information and explanations given to us by the management, term loans were applied for purpose for which the loans were obtained. However no term loan was taken during the year covered by this report. xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term finds have been used to finance short-term assets except permanent working capital. xviii) 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. xix) The company has not issued debentures during the period covered by our audit report. xx) The company has not raised any money through a public issue during the period covered by our audit report, xxi) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit. For & on behalf of P.C. Goyal & Co., Chartered Accountants Place: Ludhiana CA P.C. Goyal Date : 01.09.2007 (Prop) M. No.: 80377