1. We have audited the attached Balance Sheet of PRISM CEMENT LIMITED
(the Company) as at March 31, 2012, the Profit and Loss Statement 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 conducted our audit in accordance with the Standards on Auditing
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 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 (Auditor''s Report) Order, 2003 as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
(the Order) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. H & R Johnson (India) and RMC Readymix (India) divisions of the
Company have been audited separately by branch auditors appointed by
the Company. The branch auditors'' reports provided to us have been
considered for overall reporting for the Company.
5. We draw the attention to Note No. 38 to the financial statements
relating to excess managerial remuneration charged to the profit and
loss statement of the current year. The excess of Rs 6.54 Crores is
subject to the approval of the Central Government and Shareholders of
6. Further to our comments in the Annexure referred to in paragraphs 3
to 5 above, we report that:
(i) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
(ii) 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 books of the Company;
(iii) the Balance Sheet, the Profit and Loss Statement and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(iv) in our opinion, the Balance Sheet, the Profit and Loss Statement
and the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956;
(v) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts together with 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(b) in the case of the Profit and Loss Statement, of the loss for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
(vi) on the basis of written representations received from the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that 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 Companies Act, 1956;
ANNEXURE TO THE AUDITORS'' REPORT OF PRISM CEMENT LIMITED
(Referred to in paragraph 3 of our report of even date on the financial
statements for the year ended March 31, 2012)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
(b) According to the information and explanations given to us, the
Company has formulated a programme of verification by which all the
assets of the Company are being verified in a phased manner over a
period of three years, which in our opinion, is reasonable having
regard to the size of the Company and nature of its assets. No material
discrepancies were noticed on verification conducted during the year as
compared with the book records.
(c) Fixed assets disposed off during the year were not substantial to
affect Going Concern Assumption.
(ii) (a) Inventories have been physically verified during the year by
the Management. In our opinion, the frequency of verification is
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on physical verification as compared to the
book records were not material and have been properly dealt with in the
books of account.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
(iv) 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 purchases of inventories and fixed assets and
with regard to the sale of goods. During the course of our audit, we
have not observed any major weakness in the internal control system.
(v) In respect to contracts or arrangements entered in the register
maintained in pursuance to Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us :
a) The particulars of contracts or arrangements referred to Section 301
that need to be entered in the Register maintained under the said
section have been so entered.
b) Where each of such transaction is in excess of Rs five lacs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA of the Companies Act, 1956 and the rules framed there
under with regard to the deposits accepted from the public. We are
informed by the Management that no order has been passed by the Company
Law Board or National Company Law Tribunal or Reserve Bank of India or
any Court or any other Tribunal in this regard.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanations given to us, the
Central Government has prescribed maintenance of cost records under
Section 209(1) (d) of the Companies Act, 1956 for the products
manufactured by the Cement Division of the Company. We have broadly
reviewed the books of account maintained and in our opinion; prima
facie, the prescribed accounts and records have been made and
maintained by the Company. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete.
(ix) (a) According to the information and explanations provided to us,
the Company is generally regular in depositing undisputed statutory
dues including Provident Fund, Investor Education and Protection Fund,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise
duty, Cess and other applicable statutory dues with the appropriate
authorities. No undisputed statutory dues payable were in arrears as at
March 31, 2012, for a period of more than six months from the date they
(b) According to the information and explanations given to us, the
details of statutory dues which have not been deposited with the
concerned authorities on account of dispute are given below :
Nature of dues Period to Forum where
dispute is pending Amount
which the involved
relates (Rs in Crores)
Excise Duty 1997 - 2002 Custom, Excise &
Appellate Tribunal 0.33
2006 - 2010 Commissioner of Appeal 0.02
1997 - 1998 Custom, Excise &
Appellate Tribunal 0.08
2006 - 2011 Joint Commissioner 0.23
2010 - 2011 Commissioner 0.57
2010 - 2011 Asst. Commissioner ##
2005 - 2011 Commissioner 7.64
2005 - 2011 Custom, Excise &
Appellate Tribunal 0.02
2010 - 2012 Deputy Commissioner 0.02
2007 - 2012 Joint Commissioner 0.02
2007 - 2012 Commissioner 0.32
2010 - 2012 Asst. Commissioner 0.01
2006 - 2011 Custom, Excise &
Appellate Tribunal 0.04
(Central & State) 1999 - 2002 &
2004 - 2005 Sales Tax Appellate
2005 - 2006 & Appellate
Deputy Commissioner of
2006 - 2007 Commercial Tax 0.09
2005 - 2006 Deputy Commissioner
of Sales Tax 0.20
2007 - 2008 Deputy Commissioner of
Commercial Tax 0.70
2000 - 2006 The High Court of
2009 - 2011 The High Court of
Madhya Pradesh 0.68
2002 - 2008 Deputy Commissioner
- Appeal 0.91
2002 - 2005 Appellate Commissioner 0.07
Entry Tax 2001 - 2002 &
2007 - 2012 The High Court of
Madhya Pradesh 21.97
2006 - 2007 The Supreme Court 0.18
Entry Tax 2003 - 2010 The High Court of
Uttar Pradesh 3.86
Cess on Land 1990 - 1991 to
2003 - 2004 Tehsildar Court 0.41
Development Cess 2000 - 2006 The Supreme Court 11.90
Limestone mining 1996 - 2011 The High Court 22.87
Income Tax 2006 - 2007,
2007 - 2008 &
2008 - 2009 Commissioner of
Income Tax - Appeal 3.71
Service Tax June 2005 -
December 2006 Service Tax
Appellate Tribunal 0.23
January 2005 -
July 2007 Service Tax Appellate
Entry Tax 2007 - 2008 Deputy Commissioner of
Commercial Tax 0.35
Mining Minerals 2007 - 2010 Appellate Authority,
Mines & Geology
Commercial Tax 2004 - 2008 Appellate Tribunal 0.20
2008 - 2009 Additional Commissioner 0.19
Commercial Tax 1998 - 1999 The High Court 0.07
Commercial Tax 2006 - 2007 Deputy Commissioner -
## denotes amount less than Rs 50,000/-.
(x) The Company does not have accumulated losses as at March 31, 2012
and has not incurred any cash losses during the current financial year
or in the immediately preceding year.
(xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to any financial
institutions or banks.
(xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi/ mutual benefit
fund/society. The provisions of clause 4 (xiii) of the Order,
therefore, are not applicable to the Company.
(xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. The Company, however, has made short-term
investments in units of Mutual Funds during the year. The Company has
maintained proper records of the transactions in respect of its
investments in Mutual Fund units. The said investments are held in the
name of the Company.
(xv) According to the information and explanations given to us, the
Company has given a guarantee for loans taken by one of its wholly
owned subsidiaries from bank. In our opinion, the terms and conditions
of the guarantee are prima facie, not prejudicial to the interest of
the Company, as it is given for the wholly owned subsidiary.
(xvi) In our opinion and according to the information and explanations
given to us, the Company has raised term loans during the year which
have been applied for the purposes for which they were raised.
(xvii) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that funds raised on short-term basis have not been
utilised for long term investment.
(xviii)According to the information and explanations given to us,
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.
(xix) According to the information and explanations given to us and the
records examined by us, securities have been created in respect of the
debentures issued and outstanding at the year end.
(xx) During the year, the Company has not raised any money by way of a
(xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, we report that no fraud on or
by the Company has been noticed or reported, during the year.
For N. M. RAIJI & CO.
J. M. GANDHI
Membership No.: 37924
Firm Registration No.: 108296W
Place : Mumbai
Date : May 10, 2012