We have audited the attached Balance sheet of PRIME SOLVENT EXTRACTIONS
LIMITED as at March 31, 2005 and also the Profit & Loss Account of the
company lor the year ended March 31, 2005 annexed thereto these
financial statement are the responsibility of the management of the
company. Our responsibility is to express an opinion on these financial
statements based on our audit.
1. We conducted our audit in accordance with the auditing standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free from any material misstatement. An audit
examination 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
presentation of the financial statements. We believe that our audit
provides a reasonable basis lor our opinion:
2. As required by the Companies (Auditors Report) Order 2003 issued by
the Central Government of India in terms of sub. section (4 A ) of
section 227 of the Companies Act 1956 and subsequently amended we
enclose in the annexure hereto a statement on the matters specified in
paragraph 4 and 5 of the said Order.
3. 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 purpose of our
b. In our opinion, proper books account as required by law have been
kept by the company, so far as appears from our examination of the
books of the Company;
e. The Balance Sheet and the Profit and Loss Account dealt with by this
report are in agreement with the books of account of the Company:
d. In our opinion the Balance Sheet & Profit & Loss Account comply with
the Accounting Standards referred to in sub-section (3C ) of section
211 of the Companies Act 1956, to the extent applicable.
e. The Company has not ascertained from its Directors, whether any of
them is disqualified from being appointed as a directors u/s
274(1)(g)of the Companies Act 1956.
f. In our opinion the Accounts give the information required by
Companies Act 1956 in the manner so required subject to Note to the
In the very nature of things and looking to the circumstances in which
the company was acting the Balance Sheet cannot be said to give a true
and fair view of the state of the company due to the observations made
in Notes to account but the Profit and Loss Account for the year gives
a true and fair view of the affairs of the company during the period
for which it has been made.
For NGS & Co.
Membership No. 104172
PLACE : MUMBAI
DATE : 31st August, 2005
ANNEXURE REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE ON THE
ACCCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2005 OF PRIME SOLVENT
On the basis of the information and explanations furnished to us and
books and records examined by us in the normal, course of audit and to
the best of our knowledge and belief, we report that:
1. (a) The Company has not maintained any records to show quantitative
details and situation of its Fixed Assets
(b) According to the information and explanations given to us, the
Fixed Assets have been physically verified by the management during the
year, and no material discrepancies were noticed on such verification
with book records.
(c) During the year, the company has not disposed off any major part of
the Fixed Assets, so as to affect its going concern.
2. (a) As explained to us, the inventories have been physically
verified by the management at reasonable intervals during the year.
(b) The procedure followed by the management for physical verification
of stock is reasonable and adequate in relation to the size of the
Company and nature of its business.
(c) The Company is maintaining proper records of inventory and the
discrepancies, not material, between the physical verification as
compared to book stock have been properly dealt with in books of
3. The Company has not granted/taken any loans, secured or unsecured
to/from companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act 1956. Consequently
requirement of sub clauses (b), (c), (d), (e), (f) and (g) of paragraph
4 of the order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to the purchase of Taw material, stores, spare
parts, plant and machinery, equipment, other assets and for sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
5. According to the information and explanations given to us, during
the year no transactions have been entered by the Company with the
parties mentioned in the register maintained pursuant to section 301 of
the Companies Act, 1956.
6. The Company has not accepted any deposits from the public
7. The Company has an internal audit system commensurate with its size
and nature of its business.
8. The Central Government has not prescribed maintenance of cost
records under section 209 (1) (d) of the companies act, 1956 for any of
the products of the company.
9. (a) According to the records of the Company, undisputed statutory
dues including, Investor Education and Protection Fund, Sales Tax,
Income Tax, Wealth Tax, Customs Duty, cess and other statutory dues
have not been regularly deposited with appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of the aforesaid dues were
outstanding as at 31st March, 2005 for a period of more than six months
from the date of becoming payable.
(b) There are no disputed statutory dues as at 31st March 2005.
10. The accumulated losses of the company arc more than fifty percent
of its net worth and have incurred cash losses in the financial year
ended 3 1st March 2005. However, the company has not incurred cash
losses in the immediate preceding financial year.
11. According to the information and explanation given to us, the
Company has defaulted in repayments of Term Loans from Financial
Institution & Bank and Bank Over Draft of Rs.22,03,86,418/- as at 31
March 2005 The said default is continuing since April 1999.
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, the Company is not Chit Fund or Nidhi Mutual
Benefit Fund/Society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order 2003 are not applicable to the
14. The Company has maintained proper records of transactions and
contracts in respect of trading in securities, debentures and other
investments and timely entries have been made therein. All shares,
debentures and other investments have been held by the Company in its
own name except to the extent of exemption granted under section 49 of
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 financial institutions/banks
16. The Company has not raised any term loan during the year, therefore
the provisions of clause 4 (xvi) of the Companies (Auditors Report)
Order, 2003 are not applicable to the company.
17. According to the cash flow statement and other records examined by
us and according to the information and explanations given to us and on
an overall basis, funds raised on short term basis have not,
prima-facie been used during the year for long term investments.
18. During the year, the Company has not made any preferential
allotment of shares to parties covered in the register maintained under
Section 301 of the Companies Act, 1956.
19. According to the information and explanations given to us, the
Company had not issued any secured debentures during the year.
20. The Company has not raised any money by public issue during the
year Therefore, the provisions of clause 4 (xx) of the Companies
(Auditors Report) Order, 2003 are not applicable to the company.
21. In our opinion and according to the information and explanations
given to us, no fraud by/against the company has been noticed or
reported during the year.
For NGS & Co.
For Prime Solvent Extractions Ltd.
Membership No. 104172
PLACE : MUMBAI
DATE : 31st August, 2005