1. We have audited the annexed Balance Sheet of PRAKASH SOLVENT
EXTRACTIONS LIMITED as at 31st March 2011 and also the annexed profit &
Loss account of the Company for the year ended on that date. These
financial statements are the responsibility of the management of the
company. Our responsibility is to express opinion on these financial
statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes,
examining on 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 presentation of
the financial statements. 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 Central Government in terms of sub section (4A) of Section 227
of the Companies Act 1956, and on the basis of such checks as we may
have considered appropriate and according to the information and
explanations given to us, we set out in annexure a Statement on the
matters specified in the paragraph 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that :-
1. We have obtained all the information and explanation which to the
best of our knowledge and behalf were necessary for the purpose of our
2. In our opinion proper books of accounts as required by law have
been kept by the company so far as appear from our examination of these
3. The Balance Sheet and the profit & Loss account dealt with by the
report are in agreement with the books of accounts
4. In our opinion, these financial statements have been prepared in
compliance with the applicable accounting standards referred to in Sub
Clause [3c] of Section 211 of the Companies Act, 1956.
5. Based on the basis of the written representations made by all the
Directors of the company as on 31st March 2011 and taken on record by
the Board of Directors of the Company and in accordance with the
information and explanations as made available, the Directors of the
company do not, prima facie, have any disqualification as referred to in
clause (g) sub-section 1 to the Section 274 of the Companies Act, 1956.
6. In our opinion and to the best of our information and according to
the explanations given to us, the Balance Sheet and Profit and Loss
account together with the Notes thereon and attached thereto give in
the prescribed manner the information required by the Companies Act,
1956 and give a true and fair view in conformity with the accounting
principles generally accepted in India :
a. In the case of the Balance Sheet of the state of affair of the
company at 31st March 2011and
b. In case of Profit & Loss account, of the profit for the year ended on
c. In case of cash flow as on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS'' REPORT TO THE
MEMBERS OF PRAKASH SOLVENT EXTRACTIONS LIMITED ON THE ACCOUNTS FOR THE
YEAR ENDED 31ST MARCH 2011.
1. In respect of Fixed Assets :
a. The Company has maintained proper records to show full particulars
including quantitative details and situation of the fixed assets.
b. During the year, majority of the fixed assets have been physically
verified by the management on the basis of phased programmed of
verification of the assets over a reasonable time. No material
Discrepancies were noticed on verification of the assets made during the
c. In our opinion, the company has not disposed of substantial part of
fixed assets during the year and the going concern status of the Company
is not affected.
2. In respect of inventories :
a. The management has conducted physical verification of inventory at
b. The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and its nature of business.
c. The company is maintaining proper records of inventory and as
explained to us there were no material discrepancies noticed on
physical verification of inventory, as compared to the book records.
3. In respect of loans, secured or unsecured, granted or taken by the
Company to/from companies, firms or parties covered in the register
maintained under section 301 of the Companies Act, 1956 :
a. The company has not taken loans from any parties covered in the
Register maintained under section 301 of the Companies Act, 1956.
b. The Company has not granted any loans during the year.
c. In our opinion, the rate of interest and other terms and conditions
on which the loans has been obtained and or given from the parties
listed in register maintained under Sec. 301 of the Companies Act, 1956
are prima facial not prejudicial to the interest of the Company.
d. The parties have repaid the Principal amounts as stipulated and
have been regular in Payment of interest.
e. There are no overdue amounts more than one lakhs.
4. In our opinion and as per the information and explanation given to
us there are adequate internal control procedure commensurate with the
size of the company and nature of its business with regards to
purchases of new materials, stores, plant and machinery equipment and
other assets and for sale of goods. During the course of our audit, we
have not observed any continuing failure to correct major weakness in
5. In respect of transactions covered under Section 301 of the
Companies Act, 1956 :
a. In our opinion and according to the information and explanations
given to us, transactions that need to be entered into the Register in
pursuance of section 301 of the Companies Act, 1956 have been so
b. So far we have been able to ascertain, the company has entered into
transactions for purchase of goods an materials and sale of goods,
materials and services in pursuance of contract or agreements entered
in the Register maintained under Sec. 301 of the Companies Act, 1956 as
aggregating during the year to Rs.500,000/ – of more in respect of
each party. These transactions have been made at prices which are
reasonable having regard to prevailing market prices available with the
company for such goods and services or the prices at the relevant time.
6. In respect of Fixed Deposits :
a. In our opinion and as per information and explanation given to us
the Company has not accepted any deposit from public.
7. In respect of internal audit systems : a. In our opinion, the
Company has an internal audit system commensurate with the size and its
nature of business.
8. To the best of our knowledge and according to information given to
us, the Central Government has not prescribed maintenance of cost
records under sec. 209 (i) (d) of the Companies Act, 1956 in respect of
any of the products of the Company.
9. In respect of statutory dues :
a. According to the records of the company, the Company is regular in
depositing undisputed statutory dues including the Provident Fund dues,
ESIS dues, Income tax, Sales tax and other statutory dues applicable to
it with the statutory authorities.
b. According to information and explanation given to us, there are no
undisputed amounts payable in respect of income Tax, Sales Tax, customs
duty and excise duty which have remained outstanding as on 31st March
2011 for a period of more than six months from the date they become
c. According to information and explanations given to us, there are no
statutory dues which have not been deposited as on 31st March 2011 on
account of any dispute.
10. The company has got accumulated losses at the end of the financial
year and it has not incurred any cash losses in the current and
immediately preceding financial year.
11. According to information and explanations given to us, and based
on the documents and records produced before us, the Company has not
defaulted in repayment of dues to financial institution, banks or
12. According to information and explanations given to us, and based
on the documents and records produced before us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities. Therefore the provisions of
clause 4(xii) of the Companies (Auditor''s Report) order,2003 are not
applicable to the Company.
13. In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not attract
any special statute applicable to chit fund and nidhi / mutual benefit
fund / societies. Therefore the provisions of clause 4(xiii) of the
Companies (Auditor''s Report) order,2003 are not applicable to the
14. In our opinion the company is not dealing in or trading in shares,
securities, debentures and other investments. Therefore the provisions
of clause 4(xiv) of the Companies (Auditor''s Report) order,2003 are not
applicable to the Company.
15. Based on our audit procedures and according to information and
explanations given to us the company has not given guarantees for loans
taken by others from a Bank or financial institution.
16. In our opinion the term loans have been applied for the purpose
for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that no funds raised on short term basis have been used for
long term assets. No long term funds have been used to finance short
18. During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
19. The company has not raised any money by public issue and
accordingly the provisions of clause 4 (xx) of the Companies (Auditor''s
Report) order,2003 are not applicable to the Company.
20. The Company has not raised any money by issue of Debentures.
21. In our opinion and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the year that causes the financial statements to be materially
For Ajay B. Garg
Dated : 12th August 2011