Auditors Report to the Members of Phillips Carbon Black Limited
1. We have audited the attached Balance Sheet of Phillips Carbon Black Limited (the"Company") as at 31st March, 2012, and the related Statement of Profit and Lossand Cash Flow Statement for the year ended on that date annexed thereto, which we havesigned under reference to this report. These financial statements are the responsibilityof the Companys Management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by Management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as amended by theCompanies (Auditors Report) (Amendment) Order, 2004 (together the "Order")issued by the Central Government of India in terms of sub-section (4A) of Section 227 ofThe Companies Act, 1956 of India (the Act) and on the basis ofsuch checks of the books and records of the Company as we considered appropriate andaccording to the information and explanations given to us, we further report that:
(i) (a) The Company is maintaining proper records showing full particulars, includingquantitative details and situation, of fixed assets.
(b) The fixed assets of the Company have been physically verified by the Managementduring the year and no material discrepancies between the book records and the physicalinventory have been noticed. In our opinion the frequency of verification is reasonable.
(c) In our opinion, and according to the information and explanations given to us, asubstantial part of fixed assets has not been disposed of by the Company during the year.
(ii) (a) The inventory (excluding stocks with third parties) has been physicallyverified by the Management during the year. In respect of inventory lying with thirdparties, these have substantially been confirmed by them. In our opinion, the frequency ofverification is reasonable.
(b) In our opinion, the procedures of physical verification of inventory followed bythe Management are reasonable and adequate in relation to the size of the Company and thenature of its business.
(c) On the basis of our examination of the inventory records, in our opinion, theCompany is maintaining proper records of inventory. The discrepancies noticed on physicalverification of inventory as compared to book records were not material.
(iii) (a) The Company has granted unsecured loans, to two companies covered in theregister maintained under Section 301 of the Act. The maximum amount involved during theyear and the year-end balance of such loans aggregated to Rs.4966 lakhs and Rs. Nil,respectively.
(b) In our opinion, the rate of interest and other terms and conditions of such loansare not prima facie prejudicial to the interest of the Company.
(c) In respect of the aforesaid loans, the parties have repaid the principal amounts,as stipulated, and were also regular in payment of interest, as applicable.
(d) In respect of the aforesaid loans, there is no overdue amount more than Rupees OneLakh.
(e) The Company has not taken any loans, secured or unsecured, from companies, firms orother parties covered in the register maintained under Section 301 of the Act.
(iv) 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 andthe nature of its business for the purchase of inventory and fixed assets and for the saleof goods .The Company has not sold any services during the year. Further, on the basis ofour examination of the books and records of the Company, and according to the informationand explanations given to us, no major weakness have been noticed or reported.
(v) (a) In our opinion, and according to the information and explanations given to us,the particulars of contracts or arrangements referred to in Section 301 of the Act havebeen entered in the register required to be maintained under that section.
(b) In our opinion, and according to the information and explanations given to us, thetransactions made in pursuance of such contracts or arrangements and exceeding the valueof Rupees Five Lakhs in respect of any party during the year have been made at priceswhich are reasonable having regard to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public within the meaning ofSections 58A and 58AA of the Act and the rules framed there under.
(vii) In our opinion, the Company has an internal audit system commensurate with itssize and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the Company inrespect of products where, pursuant to the rules made by the Central Government of India,the maintenance of cost records has been prescribed under clause (d) of sub-section (1) ofSection 209 of the Act, and are of the opinion that, prima facie, the prescribedaccounts and records have been made and maintained. We have not, however, made a detailedexamination of the records with a view to determine whether they are accurate or complete.
(ix) (a) According to the information and explanations given to us and the records ofthe Company examined by us, in our opinion, the Company is generally regular in depositingundisputed statutory dues in respect of income tax, professional tax, sales tax and Valueadded tax, though there has been a slight delay in a few cases, and is regular indepositing undisputed statutory dues, including provident fund, investor education andprotection fund, employees state insurance, wealth tax, service tax, customs duty,excise duty and other material statutory dues, as applicable, with the appropriateauthorities.
(b) According to the information and explanations given to us and the records of theCompany examined by us, the particulars of dues of income tax, sales tax, wealth tax,service tax, customs duty and excise duty as at 31st March, 2012 which have not beendeposited on account of a dispute (there being no such cases with regard to income tax andwealth tax), are as follows:
|Name of the Statute ||Nature of the Dues ||Amount ||Note No. ||Forum where the dipute is pending |
| || ||(Rs. in lakhs) || || |
| || ||99.34 || ||Calcutta High Court |
|Central Sales Tax Act, 1956 ||Central Sales Tax ||918.54 ||1 ||Appellate and |
| || ||138.61 || ||Revision Board Senior Joint Commissioner Commercial Taxes |
| || ||9.14 || ||Additional Commissioner Commercial Taxes |
| || ||41.73 || ||Taxation Tribunal |
|West Bengal Sales Tax Act, 1994 ||Sales Tax ||108.38 ||2 ||Appellate and Revision Board |
| || ||202.76 ||3 ||Commissioner (Appeals) |
|Central Excise Act, 1944 ||Excise Duty ||1268.55 ||4 ||Customs, Excise & Service Tax Appellate Tribunal |
| || ||1.37 ||5 ||High Court, Kerala Commissioner (Appeals) |
| || ||15.13 || || |
|Customs Act, 1962 ||Customs Duty ||24.80 || ||Customs, Excise & Service Tax Appellate Tribunal |
|Finance Act ,1994 ||Service Tax ||80.43 || ||Customs, Excise & Service Tax Appellate Tribunal |
| || ||19.62 || ||Commissioner Appeals |
1. Stay orders for disputed dues aggregating to Rs. 604.45 received.
2. Stay orders for disputed dues aggregating to Rs. 104.75 received.
3. Stay orders for disputed dues aggregating Rs. 24.62 lakhs received.
4. Stay orders for disputed dues aggregating Rs. 357.52 lakhs received.
5. Stay orders for disputed dues aggregating Rs. 1.37 lakhs received.
(x) The Company has no accumulated losses as at 31st March, 2012 and it has notincurred cash losses in the financial year ended on that date or in the immediatelypreceding financial year.
(xi) According to the records of the Company examined by us and the information andexplanations given to us, the Company has not defaulted in repayment of dues to anyfinancial institution or bank or debenture holders, as applicable as at the balance sheetdate.
(xii) The Company has not granted any loans and advances on the basis of security byway of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to chit fund/ nidhi/ mutualbenefit fund/ societies are not applicable to the Company.
(xiv) In our opinion, the Company is not a dealer or trader in shares, securities,debentures and other investments.
(xv) In our opinion, and according to the information and explanations given to us, theCompany has not given any guarantee for loans taken by others from banks or financialinstitutions during the year.
(xvi) In our opinion, and according to the information and explanations given to us,the term loans have been applied, on an overall basis, for the purposes for which theywere obtained.
(xvii) On the basis of an overall examination of the balance sheet of the Company, inour opinion, and according to the information and explanations given to us, funds raisedon a short-term basis, aggregating Rs. 9093.45 lakhs, have been used for long-terminvestment in Tangible Asset.
(xviii) The Company has made preferential allotment of shares to parties and companiescovered in the register maintained under Section 301 of the Act during the year.
In our opinion, and according to the information and explanations given to us, theprice at which such shares have been issued is not prejudicial to the interest of theCompany.
(xix) The Company has not issued any debentures during the year; and does not have anydebentures outstanding as at the year end.
(xx) The Company has not raised any money by public issues during the year.
(xxi) During the course of our examination of the books and records of the Company,carried out in accordance with the generally accepted auditing practices in India, andaccording to the information and explanations given to us, we have neither come across anyinstance of fraud on or by the Company, noticed or reported during the year, nor have webeen informed of any such case by the Management.
4. Further to our comments in paragraph 3 above, we report that:
(a) We have obtained all the information and explanations which, to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt withby this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash FlowStatement dealt with by this report comply with the accounting standards referred to insub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the directors and taken onrecord by the Board of Directors, none of the directors is disqualified as on 31st March,2012 from being appointed as a director in terms of clause (g) of sub-section (1) ofSection 274 of the Act;
(f) In our opinion and to the best of our information and according to the explanationsgiven to us, the said financial statements together with the notes thereon and attachedthereto give, in the prescribed manner, the information required by the Act, and give atrue and fair view in conformity with the accounting principles generally accepted inIndia:
(i) in the case of the Balance Sheet, of the state of affairs of the company as at 31stMarch, 2012; (ii) in the case of the Statement of Profit and Loss, of the profit for theyear ended on that date; and (iii) in the case of the Cash Flow Statement, of the cashflows for the year ended on that date.
| ||For PRICE WATERHOUSE |
| ||Firm Registration Number 301112E |
| ||Chartered Accountants |
| ||Pinaki Chowdhury |
|Kolkata ||Partner |
|29th May, 2012 ||(Membership Number 57572) |