TO THE MEMBERS OF SWASTIK SURFACTANTS LIMITED
We have audited the,attached Balance Sheet of SWASTIK SURFACTANTS LIMITED
as at 31st March, 2007 and also the Profit & Loss Account for the year ended on that
date annexed thereto and Cash Flow Statement for the year ended on that date. 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 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 of
2. As required, by 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 give in the Annexure hereto a statement on the matters specified in paragraph 4
and 5 of the said Order.
3. Further to our comments in the Annexure referred to in paragraph 2 above, we report
a. We have obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose 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 the books.
c. The Balance Sheet, Profit & Loss Account and Cash Flow statement dealt with by
this report are in agreement with the Books of Accounts.
d. In our opinion, the Balance sheet and Profit and Loss account dealt with by this
report complies with the Accounting Standards referred to in sub-section (3C) of Section
211 of the Companies Act, 1956, as applicable.
e. On the basis of the written representation 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 on 31st March., 2007 from being appointed as a Director in terms
of Clause (g) of Sub Sec (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 subject to :
i. As substantial part of Fixed Assets have been sold by the Company, it has affected
the going concern concept. However, these accounts continue to be prepared on going
ii. Note 3(b) and the final outcome of the litigation between the Company and Ambalal
Sarabhai Enterprises Ltd. (ASE) regarding a claim of approximately Rs.30 Crores by ASE
which is under challenge in the Bombay High Court by the Company.
iii. Note 3(c) regarding loans by Banks and Financial Institutions amounting to Rs.
844.56 lacs disclosed as other liabilities in the Balance Sheet for reasons stated in the
iv. Regarding non-provision of Interest on Loan from Financial Institutions amount
uncertain for reasons stated in the note and total interest due to excise loan amounting
to Rs249.17 lacs (included by the Company as claims not acknowledged as debts under head
Contingent Liabilities); and read with other notes thereon give the information required
by the Companies Act, 1956 in the manner so required give a true and fair view in
conformity with the accounting principles generally accepted in India
a. In the case of Balance Sheet of the state of affairs of the Company as on
b. In the case of Profit and Loss Account of the Loss for the year ended on that date.
c. In the case of Cash Flow Statement of the Cash Flows for the year ended on that
|PLACE : Mumbai
||KULIN V. MUNIM
|DATE : 29th June, 2007
ANNEXURE REFERRED TO IN PARA 2 OF OUR REPORT OF EVEN DATE :
I. a. The records of Fixed Assets are not complete in all respects.
b. Major Fixed Assets have been physically verified by the Management. However, in
absence of complete records, materials discrepancies if any could not be ascertained.
c. Substantial part of Fixed Assets have been disposed off, which has affected the
II. As the company is not having any inventory clause II is not applicable.
III. The Company has not granted or taken any loans from Companies, Firms or other
parties covered in register maintained under Section 301 of the Companies Act, 1956.
IV. The internal control for purchase of inventory and Fixed Assets and for the sale of
goods is adequate, commensurate with the size of the Company and nature of business. We
have not come across any continuing failure to correct major weakness in internal control.
V. There were no Companies, Firms or other parties covered in the register maintained
under Section 301 of Companies Act, 1956.
VI. The Company has not accepted any deposit from the public.
VII. The Company has no internal audit commensurate with the size and nature of its
VIII. The accounts and records as prescribed by the Central Government under clause (d)
of subsection (1) of section 209 of the Companies Act is not maintained as there was no
production during the year.
IX. a. The Company is regular in depositing undisputed statutory dues, b. Disputed
demand not deposited :
||Dy. Commissioner of Sales Tax
||Assistant Commissioner of Central Excise
X. The accumulated losses at the end of the financial year is more than 50% of the
Company's Net worth. The Company is declared a Sick Industrial Company within the meaning
of clause (o) of sub section (1) of section 3 of the Sick Industrial Companies (Special
Provisions) Act. 1985.
XI. The Company has defaulted in repayment of dues to Financial Institution and Banks
amounting to Rs.8,44,55,648/-. In view of what is stated in note 3 (c) and (d) this amount
is disclosed as Other Liabilities in the schedule of Current Liabilities and provisions.
XII. The Company has not granted loans and advances during the year.
XIII. The provisions of any special statute applicable to chit fund / nidhi / mutual
benefit fund / societies are not applicable to the Company.
XIV. The Company is not dealing or trading in shares, securities, debentures and other
XV. The Company has not given guarantee for loans taken by others from Banks or
Financial Institutions during the year.
XVI. The Company has not taken any term loans during the year.
XVII. The Company has not raised any funds on long term or short term basis during the
XVIII. The Company has not made any preferential allotment of shares during the year.
XIX. The Company has not issued any debentures.
XX. The Company has not raised any money by Public issues during the year.
XXI. No frauds on or by the Company were noticed or reported during the year.
|PLACE : Mumbai
||KULIN V. MUNIM
|DATE : 29th June, 2007