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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 2016 the Statement of Profit & Loss the Cash Flow Statement and a Summaryof Significant Accounting Policies and Other Explanatory Information attached there withfor the year then ended.

MANAGEMENT’S RESPONSIBILITY FOR THE 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 preparation of the Act for safeguarding 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 standalone financial statementsbased 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 thereunder.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures 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 and fair presentation of the financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances butnot for the purpose of expressing an opinion on whether the company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made byCompany’s Directors as well as evaluating the overall presentation of the financialstatements.

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

Basis for Modified opinion

(i) 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.

(ii) Some of the balances including old balances appearing under current assets loansand advances and current liabilities are subject to confirmation and reconciliation fromrespective parties. The effect of such non confirmation and non-reconciliation of balanceson the accounts of the company is not ascertainable.

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 Opinionparagraph the financial statements give the information required by the Act in the mannerso required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India:-a) In the case of the Balance Sheet of the State of Affairsof the Company as at MARCH 31ST 2016. b) In the case of the Profit & Loss Account ofthe PROFIT for the year ended on that date; and c) In the case of the Cash Flow Statementof 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 andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b. Except for the effects of thematter described in the Basis for Modified Opinion paragraph above in our opinion properbooks of account as required by law have been kept by the Company so far as it appearsfrom our examination of those books. c. The Balance Sheet the Statement of Profit &Loss and Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount. d. Except for the effects of the matter described in point (i) in the Basis forModified opinion paragraph above in our opinion the aforesaid standalone FinancialStatement comply with the Accounting Standard specified under Section 133 of the Act readwith Rule 7 of Companies ( Accounts ) Rules 2014. e. Except for the effects of the matterdescribed in point (i) and (ii) in the basis for Modified opinion paragraph above in ouropinion the observations and comments of the auditor on the standalone financial mattersor transactions does not have any adverse effect on the company. f. On the basis of thewritten representations received from the directors as on March 31st 2016 taken onrecord by the Board of Directors none of the directors is disqualified as on March 31st2016 from being appointed as a director in Terms of Section-164(2) of the Act. g. We haveaudited the financial statements of the company as stated aforesaid and observed that thecompany has an Internal Control System in place in respect of its financial transactionsduring the year. However the company has not documented the essential components of riskand internal control stated in the guidance note on audit of Internal Financial Controlover financial reporting issued by the Institute of Chartered Accountants of India. Inabsence of such specific documentation of Internal Financial Control system we are unableto conduct specific audit of Internal Financial Controls in place and the operativeeffectiveness of such controls. h. With respect to the other matters to be included in theAuditor’s Report in accordance with Rule 11 of the

Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: a. We are informed that theimpact of pending litigations on the financial position of the company is not material toeffect the standalone financial statements as of March 31st 2016 . b. The Company did nothave any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses. c. There has been no delay in transferring amounts requiredto be transferred to the Investor Education and Protection Fund by the Company.

For MITTAL GUPTA & CO.
Chartered Accountants
Firm Regn. No.: 01874C
AKSHAY KUMAR GUPTA
Place : Kanpur Partner
Date : 03.08.2016 Membership No.70744

ANNEXURE ‘A’ TO THE INDEPENDENT AUDITORS’ REPORT

The Annexure A referred to in our Independent Auditors’ Report to the members ofStandard Surfactants Limited (the Company) on the financial statements for the year ended31st March 2016 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 are under preparation.

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 March2016 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 per details given in noteno. 18 of Notes to accounts.

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 NidhiCompany. Therefore the provisions of clause 3 (xii) of the Order are not applicable tothe 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 ouropinion the company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934 and accordingly the provisions of clause 3 (xvi) of the Order arenot applicable to the company and hence not commented upon.

For MITTAL GUPTA & CO.
Chartered Accountants
Firm Regn. No.: 01874C
AKSHAY KUMAR GUPTA
Place : Kanpur Partner
Date : 03.08.2016 Membership No.70744

Annexure A - of Audit Report

As at 31.03.2016 As at 31.03.2015
(Rs. in Lacs) (Rs. in Lacs)
Contingent Liabilities on account of
(a) Excise Duty Demand in dispute 6.95 17.25
(b) Service Tax demand in dispute 0.00 0.00
(c) Sales/Trade Tax Demand in dispute 29.68 29.01
(d) Entry tax Demand in dispute 1.57 Nil
(e) Electricity Demand in dispute Nil Nil

Details of Pending Cases and disputed amount before Adjudicating Authority of CentralExcise Service Tax and Trade tax/ Sales tax department/ authority

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
2011-12 Dy. Comm. Excise Appeal. Bhopal Mandideep Bhopal 4.70
Total of (A) 6.95
(B) Service Tax in Dispute
Total of (B)
(C) Trade Tax in Dispute 2007-08 Commercial Tax Tribunal Kanpur Rania Kanpur 5.13
2007-08 Commercial Tax Tribunal Kanpur Rania Kanpur 4.22
2008-09 Commercial Tax Tribunal Kanpur Rania Kanpur 3.73
Central Sales Tax Demand under MPST Act. 2001-02 Dy Commissioner (Appeals) Bhopal. (Speciality Div.) Mandieeep Bhopal 1.88
2003-04 Commercial Tax Tribunal Bhopal. (Speciality Div.) Mandieeep Bhopal 3.25
2006-07 Dy Commissioner (Appeals) Bhopal. (Speciality Div.) Mandieeep Bhopal 0.50
2009-10 Dy Commissioner (Appeals) Bhopal. (Speciality Div.) Mandieeep Bhopal 1.80
2010-11 Dy Commissioner (Appeals) Bhopal. (Speciality Div.) Mandieeep Bhopal 5.31
2011-12 Dy Commissioner Commercial Tax Bhopal. (Speciality Div.) Mandieeep Bhopal 2.17
2011-12 Dy Commissioner Commercial Tax Bhopal. (So3.) Mandieeep Bhopal 1.02
2012-13 Commercial Tax officer (Speciality Div.) Mandieeep Bhopal 0.67
Total of (C) 29.68
(D) Entry tax demand in dispute 2007-08 Commercial Tax officer (Speciality Div.) Mandieeep Bhopal 1.57
Total of (D) 1.57
Grand total of A+B+C+D= (E) 38.20