1. We have audited the attached Balance Sheet of Prakash Industries
Ltd. as at 31st March, 2012 and the Statement of Profit & Loss and the
Cash Flow Statement of the Company for the year ended on that date,
annexed thereto. 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 have conducted audit in accordance with Auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance 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 the 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, issued
by the Government of India in terms of section 227(4A) of the Companies
Act, 1956 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 annex here to a statement
on the matters specified in paragraphs 4 & 5 of the said order.
4. As stated in Note No.28, in terms of a Court order, the deferred
tax liability for the year has been adjusted against Securities Premium
account. Had the deferred tax liabilities for the year been accounted
for pursuant to Accounting Standard-22''Accounting for Taxes on Income'',
profit after tax for the year would have been lower by Rs. 42 lacs;
5. As stated in Note No.1(m), the provision of tax made by the Company
is subject to assessment by the tax authorities and set off of MAT
credit entitlement is subject to availability of taxable income to the
Company in future, as per the provisions of the Income Tax Act, 1961.
6. 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
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
c) The Balance Sheet, the Statement of Profit & Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
d) Subject to our comments in para 4 above, in our opinion, the Balance
Sheet, the Statement of Profit & Loss and Cash Flow Statement dealt
with by this report, comply with the mandatory Accounting Standards,
referred to in sub-section (3C) of Section 211 of the Companies Act,
1956, to the extent applicable.
e) On the basis of written representations received from the Directors
as on 31st March, 2012 and taken on record by the Board of Directors,
we report that 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) of Section 274 of the Companies Act, 1956.
Subject to our comments in para 4 above and their consequential impact
on the profit for the year, in our opinion and to the best of our
information and according to the explanations given to us, the said
accounts read together with the significant accounting policies and the
notes thereon 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 the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(ii) in the case of the Statement of Profit & Loss, 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.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS'' REPORT OF EVEN
DATE TO THE MEMBERS OF PRAKASH INDUSTRIES LIMITED ON THE ACCOUNTS FOR
THE YEAR ENDED 31ST MARCH, 2012.
1. (a) The Company has maintained proper records showing all
particularsincluding quantitative details and situation of fixed assets
on the basis of available information.
(b) As explained to us, the fixed assets have been physically verified
by the management in accordance with a phased programme, which in our
opinion is reasonable having regard to the size of the company and the
nature of its assets. During the year, no material discrepancies were
noticed by the management on such verification.
(c) Fixed assets disposed off during the year, in our opinion, do not
constitute a substantial part of the fixed assets of the Company and
going concern status of the Company is not affected.
2. (a) The inventory, except stock in transit or lying with the third
parties has been physically verified by the management during the year.
For stocks lying with the third parties at the year end, written
confirmations have been obtained. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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) In our opinion, the Company is maintaining proper records of
inventory. As explained to us, the discrepancies noticed on physical
verification of inventory as compared to the book records were not
material and have been properly dealt with in the books of account.
3. The Company has neither granted nor taken any loan, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
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
purchases of inventory and fixed assets and for the sale of goods.
During the course of our audit, we have not come across any continuing
failure to correct major weaknesses in the internal control system.
5. Based upon the audit procedures applied by us and according to the
information and explanations given to us, there are no transactions
which are required to be entered in the register maintained under
Section 301 of the Companies Act,1956.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit from the public
during the year within the meaning of the provisions of Section 58A and
58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. The Central Government has prescribed maintenance of cost records
under Section 209(1)(d) of the Companies Act,1956 in respect of certain
manufacturing activities of the Company. We have been informed that
such accounts and records have been maintained by the Company.
9. (a) As per records of the Company and according to the information
and explainations given to us, in our opinion, the Company is generally
regular in depositing the undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income Tax, Sales Tax, Entry Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty, Cess or any other material statutory dues
applicable to it with the appropriate authorities. According to the
information and explanations given to us, there are no undisputed
statutory dues at the year end outstanding for a period of more than
six months from the date of becoming payable.
(b) According to the information and explanations given by the
management and relied upon by us, there are following statutory dues
which have not been deposited by the Company on account of some dispute
and same are pending before appropriate authorities:-
Nature of Amount Forum where the dispute is pending
the dues (Rs. in lacs)
Excise Duty 223.88 CESTAT, New Delhi
6.29 Appellate Authority- Dy. Commissioner
0.11 Appellate Authority- Asst. Commissioner
5.09 Appellate Authority- Jt. Commissioner
32.45 Appellate Authority- Addl. Commissioner
Energy Cess 639.00 Supreme Court of India
10. The Company has no accumulated losses as at 31st March, 2012. The
Company has not incurred cash losses during the financial year covered
by the audit and in the immediately preceding financial year.
11. Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to any financial institution or bank
during the year.
12. According to the information and explanations given to us, 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. In our opinion and according to the information and explanations
given to us, the provisions of any special statute applicable to chit
fund / nidhi / mutual benefit fund/ society are not applicable to the
14. In our opinion and according to the information and explanations
given to us, proper records have been maintained of the transactions
and contracts and timely entries have been made in respect of Company''s
dealings in its investments. The investments held by the Company as at
31st March, 2012 are in its own name.
15. 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 taken by the Company
during the year have been applied for the purpose for which they were
obtained, other than temporary deployment pending application.
17. According to the information and explanations given to us and on
an overall examination of Balance Sheet of the Company, we are of the
opinion that the Company has not raised any funds on short-term basis,
which have been used for long-term investments.
18. The Company has not made any preferential allotment of shares
during the year to the parties and companies covered in the Register
maintained under Section 301 of the Company Act,1956.
19. The Company has not issued any debentures during the year under
20. The Company has not raised any money by way of public issue during
the year under review.
21. In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed or
reported during the year under review.
for CHATURVEDI & PARTNERS
(Registration No. 307068E)
New Delhi (L.N. Jain)
29 th May, 2012 Partner