South Asian Petrochem Ltd merged Auditor Reports

SOUTH ASIAN PETROCHEM LIMITED ANNUAL REPORT 2008-2009 AUDITORS REPORT To The Members of South Asian Petrochem Limited 1. We have audited the attached Balance Sheet of South Asian Petrochem Limited, as at 31st March 2009, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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. 2. 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. 3. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph 3 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act; e) On the basis of written representations received from the directors, as on 31st March 2009 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2009 from being appointed as a director in terms of clause (g) of subsection (1) of Section 274 of the Act; f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India: i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2009; ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Prabal Kr. Sarkar Partner Membership No.: 52340 For and on behalf of Place: Kolkata Lovelock & Lewes Date : 9th May 2009 Chartered Accountants Annexure to Auditors Report [Referred to in paragraph 3 of the Auditors Report of even date to the members of South Asian Petrochem Limited on the financial statements for the year ended 31st March 2009] 1. a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. b) The fixed assets are physically verified by the management every two years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to such schedule physical verification was carried out during the year and no material discrepancies were found. c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year. 2. a) The inventory (excluding those in transit) have been physically verified by the management during the year. Stock in transit have been verified with relevant documents. In our opinion, the frequency of verification is reasonable. b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noted on physical verification of inventory as compared to book records were not material. 3. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Consequently clause (iii) (b) to (d), (f) and (g) of paragraph 4 of the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 are not applicable. 4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system. 5. a) In our opinion and according to the information and explanations given to us, particulars of contracts and arrangements referred to in Section 301 of the Act have been 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, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lacs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. 6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under. 7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business. 8. The Central Government of India has not prescribed the maintenance of cost records under clause (d) of subsection (1) of Section 209 of the Act for any of the products of the Company. 9. a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable, with the appropriate authorities. Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same. There are no arrear statutory dues outstanding as at 31st March 2009, for a period of more than six months from the date they became payable. b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute except an amount of Rs.68,56,96,315, under the Central Excise Act, 1944 and an amount of Rs.18,12,909, under the Service Tax Rules, 1994, in respect of which demand cum showcause notices have been received by the Company. 10. The Company has no accumulated losses as at 31st March 2009 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. 11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank. The Company has no debenture. 12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to the Company. 14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments. 15. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. 16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loan has been applied for the purposes for which it was obtained. Pending utilisation of a part of the loan for the stated purpose, it is temporarily invested in fixed deposits with bank to reduce the cost of capital. 17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment. 18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. 19. The Company has not issued any debenture and there are no debentures outstanding at the year-end. 20. The Company has not raised any money by public issues during the year. 21. 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, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management. Prabal Kr. Sarkar Partner Membership No.: 52340 For and on behalf of Place: Kolkata Lovelock & Lewes Date : 9th May 2009 Chartered Accountants