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Chemplast Sanmar | Auditor's Report > Petrochemicals > Auditor's Report from Chemplast Sanmar - BSE: 506355, NSE: CHEMPLAST
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Chemplast Sanmar
BSE: 506355|NSE: CHEMPLAST|ISIN: INE488A01027|SECTOR: Petrochemicals
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Chemplast Sanmar is not traded in the last 30 days
Chemplast Sanmar is not traded in the last 30 days
Mar 11
Auditor's Report (Chemplast Sanmar) Year End : Mar '12
1.  We have audited the attached Balance Sheet of Chemplast Sanmar
 Limited (the company) as at March 31, 2012, and the related Statement
 of Profit and Loss 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
 company''s 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 (Auditor''s Report) Order, 2003, as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
 (together the Order), 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 Order.
 
 4.  We draw your attention to recognition of net deferred tax assets as
 at March 31, 2012 amounting to Rs.8137 lacs in view of unabsorbed tax
 depreciation and carry forward tax losses of the company, instead of
 writing down the deferred tax assets relating to earlier years
 amounting to Rs.6041 lacs and not recognising deferred tax assets
 during the year amounting to Rs.2096 lacs, in the absence of virtual
 certainty supported by convincing evidence of sufficient tax profits as
 required by Accounting Standard 22 - Accounting for Taxes on Income.
 Had the aforesaid been affected the reported Deferred Tax Asset would
 have been nil instead of the reported amount of Rs.8137 lacs and the
 Tax Expense and the Loss after Tax for the year ended March 31, 2012
 would have been higher by Rs.8137 lacs.
 
 5.  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, except for the effect of the matter referred in
 paragraph 4 above 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, Statement of Profit and Loss and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (d) Except for the effect of the matter referred in paragraph 4 above,
 in our opinion, the Balance Sheet, Statement of Profit and Loss 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 March 31, 2012 and taken on record by the Board of
 Directors, none of the directors is disqualified as on March 31, 2012
 from being appointed as a director in terms of clause (g) of
 sub-section (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, except for the effect of
 the matter referred in paragraph 4 above, 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 March 31, 2012;
 
 (ii) in the case of the Statement of Profit and Loss, of the loss 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.
 
 
 
 Annexure to the Auditors'' Report
 
 Referred to in paragraph 3 of the Auditors'' Report of even date to the
 members of Chemplast Sanmar Limited on the financial statements for the
 year ended March 31, 2012.
 
 1.  (a) The company is maintaining proper records showing full
 particulars, including quantitative details and situation, of fixed assets.
 
 (b) The fixed assets of the company have been physically verified by
 the Management during the year and no material discrepancies between
 the book records and the physical inventory 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, a substantial part of fixed assets has not been disposed
 of by the company during the year.
 
 2.  (a) The inventory (excluding stocks with third parties) has been
 physically verified by the Management during the year. In respect of 
 inventory lying with third parties, these have substantially been 
 confirmed by them. 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 noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  (a) The company has not granted any loans, secured or unsecured, to
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.
 
 (b) The company has not taken any loans, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.
 
 4.  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 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, no major weakness have been noticed or
 reported.
 
 5.  According to the information and explanations given to us, there
 have been no contracts or arrangements referred to in Section 301 of
 the Act during the year that are required to be entered in the register
 to be maintained under that section. Accordingly the question of
 commenting on transactions made in pursuance of such contracts or
 arrangements does not arise.
 
 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.  We have broadly reviewed the books of account maintained by the
 company in respect 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) of Section 209 of the
 Act, and are of the opinion that prima facie, the prescribed accounts
 and records have been made and maintained. We have not, however, made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.
 
 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 regular in depositing the undisputed statutory dues including
 provident fund, investor education and protection fund, employees''
 state insurance, income tax, sales tax/ value added tax, wealth tax,
 service tax, customs duty, excise duty and other material statutory
 dues, as applicable, with the appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the company examined by us, the particulars of dues of
 income tax, sales tax/ value added tax, wealth tax, service tax,
 customs duty and excise duty as at March 31, 2012 which have not been
 deposited on account of a dispute are as follows:
 
 Name of the Statute        Nature of the         Period to which
                            dues                  the amount relates
 
 TN Value Added Tax, 2007   VAT/ Penalty          2004 to 2008
 
 Central Sales Tax Act,     Sales Tax/ Penalty    1994 to 1996
 1956
 
 Customs Act, 1962          Customs duty          2002
 
 Customs Act, 1962          Customs duty          2011
 
 Income Tax Act, 1961       Income Tax            2003 to 2008
 
 Income Tax Act, 1961       Income Tax            2005 to 2006
 
 Income Tax Act, 1961       Income Tax            2008 to 2009
 
 Central Excise Act, 1944   Excise Duty/ Penalty  1994 to 1999
 
 Central Excise Act, 1944   Excise Duty/ Penalty  2005 to 2007
 
 Central Excise Act, 1944   Excise Duty           1979 to 1984
 
 Central Excise Act, 1944   Excise Duty           1981 to 1984
 
 
 Name of the Statute        Amount       Forum where dispute is pending 
                            Rs. Lacs
 
 TN Value Added Tax, 2007     71         Additional Commissioner - 
                                         Commercial Taxes
 
 Central Sales Tax Act,      415         Assistant Commissioner - 
 1956                                    Commercial Taxes
 
 
 Customs Act, 1962            12         Customs, Excise and Service 
                                         Tax Tribunal
 
 Customs Act, 1962             3         Commissioner of Customs 
                                         (Appeals) 
 
 Income Tax Act, 1961       1210         Income tax Appellate 
                                         Tribunal
 
 Income Tax Act, 1961         73         Commissioner of Income 
                                         Tax (Appeals)
 
 Income Tax Act, 1961         15         Commissioner of Income 
                                         Tax (Appeals)
 
 Central Excise Act, 1944   3005         Customs, Excise and Service 
                                         Tax Tribunal
 
 Central Excise Act, 1944     30         Commissioner of Central 
                                         Excise (Appeals)
 
 Central Excise Act, 1944      4         High Court of Madras
 
 Central Excise Act, 1944      3         Deputy Commissioner of 
                                         Central Excise
 
 10.  The accumulated losses of the company as at March 31, 2012 have
 exceeded fifty percent of its net worth.  The company has not incurred
 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 or debenture
 holders as at the balance sheet date.
 
 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 loans have been applied for
 the purposes for which they were obtained.
 
 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, funds raised on a short term basis, being the
 excess of current liabilities over current assets as at the balance
 sheet date, aggregating Rs.85149 lacs have been used for long term
 assets (i.e. non-current assets).
 
 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 debentures during the year; and
 does not have any debentures outstanding as 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.
 
 
 
                                          For PRICE WATERHOUSE & CO
                                  Firm Registration Number: 007567S    
                                              Chartered Accountants
 
                                                  SUBRAMANIAN VIVEK
                                                            Partner
                                          Membership Number: 100332
 
 Chennai 
 May 29, 2012
Source : Dion Global Solutions Limited
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