1) We have audited the attached Balance sheet of PREMIER INDUSTRIES
(INDIA) LIMITED,DEWAS as at 31st March,2012 and the relative Profit
& Loss Account and the Cash Flow Statement for the year ended on that
date, which we have signed under reference to this report. These
financial statements are the responsibility of the management of the
Company. Our responsibility is to express an opinion on these financial statements based on our audit.
2) 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 mis-state- ment. 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 principals used and significant estimates made
by 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) We have obtained all the information and explana- tions which, to
the best of our knowledge and belief, were necessary for the purpose of
4) 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
5) The Balance Sheet and Profit & Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
6) In our opinion the Balance Sheet and the Profit & Loss Account and
the Cash Flow Statement dealt by this report are in compliance with the
Accounting Standards referred to in Section 211 (3c) of the Companies
7) On the basis of written representation received from ail the
Directors of the Company as on 31st March, 2012 and the information and
explanation as made available, we report that none of the Directors of
the Company prima facie have any disqualification as referred to in
Clause (g) of Sub-Section (1) of the Section 274 of the Companies Act,
8) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with and
subject to :-
i. Note No. 8(c) in respect of non-transfer of funds to Investors
Education and Protection Funds.
ii. Note No. 10 (Fixed Assets Schedule) regarding non-provision of
depreciation on certain machine and regarding non-provision in accounts
for extra shift depreciation on the amount of revaluation of fixed
iii. Note No. 33 in respect of adopting of revised AS-15 to some extent
iv. Note No. 38 regarding contingant liabilities in respect of
non-provision of demand of Central Excise & Sales Tax.
v. Note No. 41 regarding accounts of the Company prepared on going
We further report that without considering item mentioned at (i),
(iii), (iv), (v) above the effect of which is not there, had the
observations made by us in paragraphs (ii) above been considered, the
Loss for the year would have been Rs. 2,53,87,679 (as against the
reported Loss of Rs. 2,33,39,799), debit balance of Profit & Loss
Accounts would have been Rs. 44,02,18,824 (as against the reported
figures of Rs. 43,81,70,944), and read together with other notes there
on give the information required by the Com- pany Act, 1956 in the
manner so required and give a true and fair view, in confirmaty with
the accounting principles generally accepted in India.
(a) In the case of Balance Sheet, of the state of affairs of the
Company as at 31st March,2012.
(b) In the case of Profit & Loss Account of the Loss of the Company for
the year ended on that date. and
(c) In the case of Cash Flow statement of the Cash Flows for the year
ended on that date.
As required by the Companies (Auditors''Report) order, 2003 issued by
Central Government Of India in terms of Sub-Section (4A) of Section 227
of the Companies Act, 1956, we further report that:
i. a) The nature of the Companie''s business/activities during the
year was such that clause (xii),(xiii) and (xiv) of the paragraph 4 of
the Companies (Auditors Report) Order 2003 are not applicable to the
ii. a) The Company has maintained proper records show- ing full
particulars, including quantitative details and unit wise situation of
b) Physical verification of fixed assets was carried out during the
year in accordance with the Company''s policy. In our opinion the
frequency of verification is at reasonable intervals having regard to
the size of the company and nature of assets. According to the infor-
mation and explaination given to us no materials dis- crepancies were
noticed on such verification.
c) During the year, in our opinion, a substantial part of fixed assets
has not been disposed off by the Com- pany.
iii. a) The inventory of the Company has been physically verified by
the management during the year and at the year end. In our opinion the
frequency of verifica- tion is resonable.
b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of inventory
followed by the management were found reasonable and adequate in
relation to the size of the Company and nature of its business,
c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory and
discrepancies noticed on physical verification between the physical
stock and the book records were not material in relation to the
operation of the Company.
iv. a) In our opinion and according to the information and
explanations given to us, the Company has taken loans during the year
from two parties listed in the Register maintained under section 301 of
the Compa- nies Act, 1956, .The outstanding balance as on 31.03.12 was
Rs.22,06,31,004/- and the maximum balance outstanding was Rs.
b) The terms & condition of such loan was not preju- dicial to the
interest of the Company.
c)In our opinion and according to the explanation given to us the
company is regular in paying the principal and interest wherever
(d) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans to parties listed in
the Register maintained under section 301 of the Companies Act, 1956,
except has maintained a Current A/c with one of its Group Company,
hence sub clause (iii) (b), (c) and (d) of the Order are not applicable
in respect of loans granted.
v. According to the information and explanations given to us, there is
an adequate internal control procedure commensurate with the size of
the Company and na- ture of its business, for purchase of raw
materials, stores, components, plant & machinery, equipment and other
vi. a) Based on the Audit procedure applied by us and as per the
information and explainations given to us the particulars of Contracts
or arrangements referred to in Section 301 of the Act are entered in
the register require to be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the Company has pur- chased/sold stores, raw materials,
finished goods and components from / to and also paid rent, processing
charges, interest to Company in which Directors are interested as
listed in the register maintained under section 301 of the Companies
Act, 1956, at prices which are reasonable having regards to prevailing
market prices of such goods, materials or services or the prices at
which transaction for similar goods, ma- terials or services have been
made with other parties.
vii. The Company has not accepted any deposit from public as defined in
section 58-A of the Companies Act, 1956 and the rules framed thereunder
except Inter Corpo- rate deposit from body corporates. No order has
been passed by Company Law Board ,National Company Law Tribunal or any
Court during the year.
viii. In our opinion, the internal audit system is reasonably
commensurate with the size and nature of the busi- ness of the Company.
ix. We have been informed that the prescribed cost records pursuant to
the rule made by the Central Government under section 209 (1) (d) of
the Companies Act, 1956 are being maintained for its Soya Division.
However we have not carried out any detailed examination of such
accounts and records with a view to determine whether they are accurate
x. a) The Company has been regular in depositing during the year
provident fund and employees state insurance dues with the appropriate
b) According to the information and explanations given to us, no
undisputed amount payable in respect of Income Tax, Sales Tax, Custom
Duty,Excise Duty and Service Tax as on 31.03.12 were outstanding for a
period of more than six months (except deferement of Sales Tax and
Entry Tax for the year) from the date they became payable except the
Entry Tax of Rs 1727109 /-due for earlier years and Vat Tax of Rs.
11647041/ - due up to 30.09.2011.
c) As on 31.03.12, according to records of the Company and the
information and explanations given to us, the following are the
particulars of dues on account of Income Tax, Excise Duty,Cess, Sales
Tax, Service Tax,Custom Duty and Wealth tax matters that have not been
deposited on account of any dispute:
No. Name of
the Statute Nature of
the dues Amount
(Rs.In lacs) Forum where
Tax Levies Sales Tax &
Entry Tax 24694662/- Commissioner of
including Sales Tax
1944 Excise Duty 1118153/- Commissioner of
xi. a) In our opinion the company''s accumulated losses as on 31.03.12
exceeds its net worth and it has incurred cash loss during the
financial year ended on that date and had also incurred cash loss in
the immediate preceding financial.
b) According to the information provided by the Company, the Company is
a Sick Industrial Company within the meaning of section 3(1)(XII) of
the Sick Industrial Companies (Special Provision) Act, 1985 and is duly
registered with BIFR.
xii. The Company has defaulted in the repayment of dues to Financial
Institutions. Bank and debenture holders and the period, amount of
default and the explanations furnished by the Company are as follows:
No. Name of
Financial Total Default till
31.03.12 including Period of Default
/Bank/Others principal amount &
Interest (as per
revival package duly
approved by AAIFR)
HOLDERS 9901954 F. Y. 1999-2000
xiii. According to the information and explanations given to us, the
Company has given guarantee to Banks, the terms and conditions whereof,
are not prejudicial to the interest of the Company.
xiv. In our opinion and according to the information and explanations
given to us, the Company has not taken any term loan during the year.
xv. Based on the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, in our
opinion, the funds raised on shortterm basis have prima facie been used
for shortterm purpose only.
xvi. During the year the Company has not made preferential allotment of
shares to parties and Companies covered in the register maintained
under section 301 of the Companies Act, 1956.
xvii. In our opinion and according to the information and explanations
given to us, the Company has not issued any debentures during the year.
xviii. The Company has not raised any money by public issue during the
xix. According to the information and explanations given to us, during
the year, no fraud on or by the Company has been noticed or reported.
FOR M/S M. MEHTA & CO.
Firm Reg. No. 000957C
CA: (P. R.BANDI)
PLACE: INDORE PARTNER