We have audited the accompanying financial statements of M/s. Prashant
India Limited (''the Company'') which comprise the Balance Sheet as at
31st March 2014, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial perfnance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 (the Act). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to'' the best of our information and according to the
explanations given to us, subject to the matters emphasized here in
below, the financial statements give the information required by the
Act 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, 2014;
(ii) in the case of the Statement of Profit and Loss, of the profit /
loss for the year ended on that date; AND
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date. Emphasis of Matter
Note no.2(a) :
Regarding non accounting for gratuity, leave encashment & bonus
liability contrary to sec.209 of the Companies Act, 1956 and AS-15
issued by the ICAI.
Regarding accounts of the comp any having been prepared on ''Going
Concern Basis'', despite operations of Agro Division of the Company
having stood suspended, since 1998, '' net losses / cash losses incurred
by the Company for last several years including the current financial
year, net worth of the Company having been totally eroded and
substantial losses having been carried forward as at 31st March, 2014,
BIFR having held the Company as sick under the provisions of
sec.3(1)(o) of the Sick Industrial Companies (Special Provisions) Act,
1985 and ordered for winding up of the Company, which is upheld by the
AAIFR in the absence of adequate data and information for its
compilation on an alternative basis and consequently no adjustments
having been made in the accounts relating to the recoverability of
recordedasset amounts and in respect of recorded liabilities and
contingent liabilities that might devolve on the company.
Note no.24(b): Regarding non provision of liabilities of Rs.6852.95
lacs Note no.24(k) :
Regarding certain balances being subject to confirmation the effect of
which could not be quantified, Report on Other Legal and Regulatory
1. As required by the Companies (Auditor''s Report) Order, 2003 (the
Order), as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the informatiort and explanations which to the
best of our knowledge and belief were necessary for the purpose 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 and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
d. in our opinion, the Balance Sheet the Statement ot Profit and Loss
and Cash, Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
e. on the basis of written representations receivemfthe directors as
on. 31st March, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2014, from
being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Companies Act, 1956;
f. Since the Central Government has not issued any not ification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.(3)
ANNEXURE TO THE AUDITOR''S REPORT REFERRED TO IN PAR AGRAPH ''2'' OF OUR
AUDIT REPORT OF EVEN DATE ON ACCOUNTS OF PRASHANT INDIA LTD. FOR THE
YEAR ENDED ON 31st MARCH, 2014.
In terms of the information and explanations given to us and the books
and records examined by us in the normal course of our audit and to the
best of our knowledge and belief, we state that in our opinion: 1
(a) The company has been maintaining proper records showing full
particulars including quantitative details and situation of Fixed
(b) Fixed assets have been physically verified by the management at
reasonable intervals and that no material discrepancies were noticed by
the management on such verification.
(c) No substantial part of fixed assets has been disposed off during
the year, which has affected the going concern assumption (Also refer
Note 1(b) of our Audit Report).
(a) Physical verification of inventory (except stocks lying with third
parties, confirmation for which has been obtained and in stocks in
transit) has been conducted at reasonable intervals during the year by
(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 the nature of its business.
(c) The Company has been maintaining proper records of inventory and
discrepancies noticed on physical verification as compared to book
record s were not material and have been properly dealt with in the
books of accounts.
(a) The Company has not granted any loans, secured or unsecured, to
Companies, Firms or other parties listed in the register maintained
u/s. 301 of the Companies Act, .1956 (1 of 1956). The Company has taken
secured loans from Companies, Firms or other parties listed in the
register maintained u/s 301 of the Companies Act, 1956 (1 of 1956) and
number of such party is one wherein the balance repayable as at the end
of the year is Rs. 11,22,86,903/- plus interest payable on account of
loan/debt assignments. ( Maximum balance during the year Rs.
11,32,86,903/- plus interest payable and number of party is two)
(b) Since there are no transactions of loans given by he company,
clauses (b) to (d) of paragraph 3 of the order are not applicable.
(c) In our opinion, the rate of interest and other terms and conditions
of secured loans taken by the company are prima facie not prejudicial
to the company.
(d) In respect of loans taken by the company, payment of principal
amount and interest is not regular, as stipulated
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
purchase of inventory, fixed assets and for the sale of goods and
services''. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
5. Based on Audit procedures applied by us and according to the
information ana explanations given to us, we report that
(a) the particulars of contracts or arrangements referred to u/s 301 of
the Companies Act, 1956 (1 of 1956) have been recorded in the register
maintained for the purpose. '' (b) these transactions prima facie
appear to have been made at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
6. During the year, the company has not accepted deposits from the
7. Due to meager turnover and huge losses, the comparfy does not
afford to have an internal audit system.
8. As informed to us, maintenance of cost records in accordance with
the provisions sec. 209(1 )(d) of the Companies Act, 1956 is not
applicable for job work activity and power generation activity
undertaken by the Company
(a) The provisions of the Provident Fund Act, Investor Education &
Protection Fund and Employees'' State Insurance Act as applicable are
duly complied with. There were no undisputed amount payable in respect
of Income tax, Wealth tax, Sales tax, Service tax, Customs duty, Excise
duty, Cess or any other statutory due which were outstanding as at
31-03-2014 for a period of more than six months from the date they
became payable, except as mentioned
Nature of statute- Nature of dues Amount Remarks
Authority Rs. lacs
Customs Act, 1962 & Custom duty 77.03 Nil
Central Excise Act, 1944
Land Revenue ct Land rev. 4.87 Nil
(b) The disputed dues of Income tax, Wealth tax, Sales tax, Service
tax, Customs duty, Excise duty or CesS as on 31/03/2014 are as follows
Nature of statute- Nature of Amount Forum where dispute is
Authority dues rs lacs pending
G.S.T. Act, 196 Sales tax 544.68 AC, Bhavnagar
I.T.Act, 1961 Income Tax- Not High Court, Gujarat
A.Y. 1992-93 fixed
10. The Company has accumulated losses of Rs.4468.46 lacs as at the end
of the financial year, which is in excess of 50% of its net worth. The
com pany has Incurred cash losses in the current financial year but not
in the immediately preceding financial year.
11. According to the information and explanations given to us and based
on our audit checks, we report that the company in the current
financial year has not made repayment to any banks or financial
institutions. The company has defaulted in repayment of dues to various
banks and financial institutions. The company had been declared sick
u/s 3(1 )(0) of the Sick Industrial Companies (Special Provisions) Act,
1985 by the BIFR vide order dt.20-09-2005 and has been held to be wound
up u/s 20(1) of the said Act by the BIFR vide order dt. 14-09-2006. The
entire outstanding of all financial institutions/banks is overdue since
long. Please refer to Audit note no.5 & 7 also.
12. Since the company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities, paragraph 4(xii) of the Order is not applicable.
13. Since the company is not a chit fund or a nidhi/mutual benefit
fund/society, paragraph 4(xiii) of the Order is not applicable.
14. Since the company is not dealing in or trading in shares,
Securities, debentures and other investments, paragraph 4(xiv) of the
Order is not applicable.
15. According to the information and explanations given to us,''the
Company has not given guarantees for loans taken by others from banks
and financial institutions.
16. On the overall examination of the Balance Sheet of the Company, we
report that term loans have been applied for the purpose for which they
17. On an overall examination of the Balance Sheet of the Company, we
report that no funds raised on short-term basis have been used for
long- term investment.
18. Since the company has not made any preferential allotments of
shares to any parties or companies covered in the register maintained
under Section 301 of the Companies Act, 1956, paragraph 4(xviii) of the
Order is not applicable.
19. Since the company has not issued any debentures, paragraph 4(xix)
of the Order is not applicable.
20. Since the company has not raised money by way of public issue
during the year, paragraph 4(xx) of the Order is not applicable.
21. Based upon the audit procedures performed and the information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
For DEVENDRA GHEEWALA & CO.
Place : Surat. D.M.GHEEWALA
Date : 20-06-2014 PROPRIETOR