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Standard Surfactants Ltd.

BSE: 526231 Sector: Consumer
NSE: N.A. ISIN Code: INE307D01015
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Standard Surfactants Ltd. (STDSURFACTANTS) - Auditors Report

Company auditors report

To

The Members of

STANDARD SURFACTANTS LIMITED

Kanpur

REPORT ON THE STANDALONE FINANCIAL STATEMENTS :

We have audited the accompanying standalone financial statements of M/S STANDARDSURFACTANTS LTD ("the company") which comprise the Balance Sheet as at MARCH31ST 2017 the Statement of Profit & Loss the Cash Flow Statement and a Summary ofSignificant Accounting Policies and Other Explanatory Information attached there with forthe year then ended

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on ouraudit and to express an opinion on the Company’s internal financial controls overfinancial reporting based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act and the Guidance Note on Audit of Internal Financial Controlsover Financial Reporting. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Basis for Modified opinion

The retirement and other benefits to employees are not ascertained disclosed andprovided for in accordance with AS-15 issued in terms of Companies (Accounting Standard)Rules 2006 read with Rule 7 of Companies (Accounts) Rules 2014

. We are unable to comment on the adequacy of provision for gratuity and retirementbenefits in absence of actuarial valuation.

MODIFIED OPINION:

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis of Modifiedopinion paragraph the financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:-a) In the case of the Balance Sheet of the Stateof Affairs of the Company as at MARCH 31ST 2017. b) In the case of the Profit & LossAccount of the PROFIT for the year ended on that date; and c) In the case of the CashFlow Statement of the Cash Flows of the Company for the year ended on that date.

Emphasis of Matter

The contingent liabilities as mentioned in Note No. 18 are confirmed by the managementand accordingly relied upon by us. Our opinion is not qualified in this respect.

REPORT ON OTHER LEGAL & REGULATORY REQUIREMENTS :

1. As required by the Companies (Auditor’s Report) Order 2016 issued by theCentral Government of India in terms of section 143(11) of the Companies Act 2013 we givein the "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order.

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 bestof our knowledge and belief were necessary for the purposes of our audit.

b. Except for the effects of the matter described in the Basis for Modified Opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books.

c. The Balance Sheet the Statement of Profit & Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

d. Except for the effects of the matter described in the Basis for Modified opinionparagraph above in our opinion the aforesaid standalone Financial Statement complieswith the Accounting Standard specified under Section 133 of the Act read with Rule 7 ofCompanies (Accounts) Rules 2014.

e. Except for the effects of the matter described in the basis for Modified opinionparagraph above in our opinion the observations and comments of the auditor on thestandalone financial matters or transactions does not have any adverse effect on thecompany.

f. On the basis of the written representations received from the directors as on March31st 2017 taken on record by the Board of Directors none of the directors isdisqualified as on March 31st 2017 from being appointed as a director in Terms ofSection-164(2) of the Act.

g. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such Controls refer to ourseparate report in Annexure – ‘B’

h. With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

a. We are informed that the impact of pending litigations on the financial position ofthe company is not material to effect the standalone financial statements as of March 31st2017.

b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

c. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

i. The Company has provided requisite disclosures in Note 36 to these (standalone)financial statements as to holdings of Specified Bank Notes on November 8 2016 andDecember 30 2016 as well as dealings in Specified Bank Notes during the period fromNovember 8 2016 to December 30 2016. Based on the audit procedures performed and relyingon the management representation regarding the holding and nature of cash transactionsincluding Specified Bank Notes we report that these disclosures are in accordance withthe books of accounts maintained by the company and produced to us by the Management.

For MITTAL GUPTA & CO.
Chartered Accountants
Firm Regn. No.: 001874C
AKSHAY KUMAR GUPTA
Place : Kanpur Partner
Date : 31st May 2017 Membership No.70744

"ANNEXUREA" TO THE INDEPENDENTAUDITORS’ REPORT

The Annexure- "A" referred to in our Independent Auditors’ Report to themembers of Standard Surfactants Limited (the Company) on the financial statements for theyear ended 31st March 2017 we report that:

1) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The management has adopted rotational policy of verification of fixed assets insuch a way that all the fixed assets are physically verified during a period of threeyears. In our opinion the frequency of verification of the fixed assets is reasonablehaving regard to the size of the company and nature of fixed assets. No materialdiscrepancies were noticed on such verification.

(c) The title deeds of immovable property are held in the name of the company.

2) As explained to us the stock of raw materials work-in-progress and finished goodshave been physically verified by the management at reasonable intervals during the year.No material discrepancies were noticed on such verification.

3) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (c) of theOrder are not applicable to the Company and hence not commented upon.

4) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013in respect of loans investments guarantees and security.

5) The company has not accepted any deposits as defined in Companies Act 2013.

6) Central Government has prescribed maintenance of Cost Records U/s-148 (1) of theCompanies Act 2013 for the products or services rendered by the company. We have beeninformed that these records have not been maintained by the company.

7) (a) The Company is regularly depositing the undisputed statutory dues includingProvident Fund Employees’ State Insurance Income-tax Sales-tax (VAT) Service-taxduty of excise and other material statutory dues applicable to it with some delay to theappropriate authorities. There are no undisputed statutory dues as referred to above as at31st March2017 outstanding for a period of more than six months from the date they becomepayable.

(b) According to the information and explanations given to us details of dues ofIncome tax Service-tax Sales-tax (VAT)Stamp duty and other statutory material dueswhich have not been deposited on account of any dispute are as follows:

Particulars Financial Year to which matter pertains Adjudicating authority where dispute is pending Unit Amount (Rs. in lacs)
(A) Central Excise duty/ 2004-05 Hon’ble High Court Rania 2.25
Penalty in dispute Allahabad Kanpur
Total of (A) 2.25
(B) Service Tax in Dispute
Total of (B)
(C) Trade Tax 2007-08 Commercial Tax Rania 5.13
(CST) Kanpur Tribunal Kanpur Kanpur
2007-08 Commercial Tax Rania 4.22
Tribunal Kanpur Kanpur
2008-09 Commercial Tax Rania 3.73
Tribunal Kanpur Kanpur
Total (C) 13.08
(D) Trade Tax (CST) Mandideep 2001-02 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 1.88
2003-04 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 3.25
2006-07 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 0.50
2009-10 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 0.02
2010-11 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 3.15
2011-12 CTO Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 1.87
2012-13 CTO Commissioner Commercial Tax Bhopal. (So3.) Mandieeep Bhopal 0.67
2013-14 CTO Commissioner Commercial Tax (Speciality Div.) Mandieeep Bhopal 1.09
2013-14 CTO Commissioner Commercial Tax (Speciality Div.) Mandieeep Bhopal 4.87
Total of (D) 17.30
(E) Trade Tax State (MPST) Mandideep 2009-10 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 0.02
2010-11 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 0.92
2011-12 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 0.30
2011-12 CTO Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 1.02
Total of (E) 2.26
(F) Entry tax demand in dispute 2009-10 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 1.76
2013-14 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 1.25
Total of (F) 3.01
Grand total of A+B+C+D+E+F = (G) 37.90

8) According to the information and explanations given to us the Company has notdefaulted in repayment of dues to a bank or financial institutions during the year.

9) According to the information and explanations given to us the Company did not raiseany money by way of initial public offer or further public offer and did not avail anyterm loan during the year.

10) To the best of our knowledge and belief and according to the information andexplanations given to us no material fraud on or by the Company was noticed or reportedduring the year.

11) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013;

12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Order are not applicable to the Company.

13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.

14) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.

15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the company and hence not commented upon.

16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the company and hence not commented upon.

For MITTAL GUPTA & CO.
Chartered Accountants
Firm Regn. No.: 001874C
AKSHAY KUMAR GUPTA
Place : Kanpur Partner
Date : 31st May 2017 Membership No.70744

Annexure - ‘B’ to the Independent Auditor’s Report

(The Annexure – ‘B’ referred to in our Independent Auditors’ Reportto the members of the Company on the standalone financial statements for the year ended31st March 2017)

Report on the Internal Financial Control under clause (i) of sub-section 3 of section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial control over financial reporting of STANDARDSURFACTANTS Limited ("the Company") as of 31 March 2017 in conjunction with ouraudit of the standalone financial statements of the company for the year ended on thatdate.

Management’s Responsibility for internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal controls over financial reporting criteriaestablished by the Company considering the essential components of internal controlsstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India ("ICAI").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company’s polices thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information as required under the Companies Act 2013 ("the Act").

Auditor‘s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrol over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Control Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlsystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial controls over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statement for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial controlsover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and disposition of the assets of the company; (2) provide reasonableassurance that transaction are recorded as necessary to permit preparation of financialstatement in accordance with generally accepted accounting principles and that receiptand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statement.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial control overfinancial reporting were operating effectively as at 31 March 2017 except certain areaswhich are under process of implementation based on the internal controls over financialreporting criteria established by the Company considering the essential components ofinternal controls stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by ICAI.

For MITTAL GUPTA & CO.
Chartered Accountants
Firm Regn. No.: 001874C
AKSHAY KUMAR GUPTA
Place : Kanpur Partner
Date : 31st May 2017 Membership No.70744