| 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 companys 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 (Auditors Report) Order, 2003 issued
by the Centra! 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
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE
MEMBERS OF R.S.PETROCHEWUCALS 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 on 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 Rs.)
a) i) inter State Sales
against C form were
considered as Local
Sales of Gujrat and
charged to tax @
15% instead of 4% 1,89,52,797/-
ii) -do- 1,64,11,276/-
iii) -do- 4,97,58,003/-
b) i) Penalty U/s 45(b) of 1,13,71,678/-
The Gujrat Sale Tax
Act.
ii) -do- 1,47,70,148/-
iii) -do- 6,71,74,520/-
c)i) Penalty U/s 45 (2C) of 84,12,258/-
the G.S.T. Act, 1,52,34,300/-
ii) -do-
d) I) Interest U/s 47 (4A) of 1,60,57,520/-
GSTAct, 1,08,31,458/-
3,08,50.518/-
Period Forum where dispute
to which pending
amount
relates
Appeal pending before
Gujrat Sale Tax Tribunal
Ahmedabad
1997-98
1998-99 -do-
1999-2K -do-
1997-98 -do-
1998-99 -do-
1999-2K -do-
1998-99 -do-
1999-2K -do-
1997-98 -do-
1998-99 -do-
1999-2K -do-
(C) Demand Raised under the Centra! Sale Tax Act,
Nature of the dues Amount (in Rs.)
Non Production of C
Forms - Tax Charged 2,14,396/-
-do- 2,01,470/-
Interest charged 1,92,960/-
-do- 1,24,930/-
Penalty U/s 45 (6) of 1,28,638/-
GST Act read with 2,71,985/-
Section 9(2) of CST Act.
Period to Forum where dispute
which pending
amount
relates
Appeal pending before
1997-98 Gujrat Sale Tax Tribunal
Ahmedabad
1999-2K -do-
1997-98 -do-
1999-2K -do-
1997-98 -do-
1999-2K -do-
(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 sub section (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,
Employees state insurance, income tax, Sales tax, Wealth tax, Custom
Duty, Excise duty, Cess and other materia! 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, Employees 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 Centra! Excise Act, 1944
Nature of the Amount
dues (in Rs.)
U/s 11A 16,64,644/
including Penalty
of Rs. 1,00,000/-
Period to Forum where dispute pending
which the
amount
relates
Order dated
Appeal filed before the Custom
22.08.2000 Excise Service Tax appellant
Tribunal WZB Mumbai who
remanded back the case to Addl.
Commissioner Central Excise
Vadodara for reexamination
vide order-dated
07.07.2003.
However according to the information & explanation given to us a sum of
Rs, 2,50,000/- was deposited as per direction of the Honble Gujrat
Sale Tax Tribunal as pre-requisite before admitting of second appeal by
the Honble 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 (Auditors 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 (Auditors 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
Date : 01.09.2007 M. No 80377 | 