| We have audited the accompanying financial statements of PRATIKSHA
CHEMICALS LIMITED, which comprises the Balance Sheet as at March 31
2014, and 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 performance 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") read with the General circular
15/2013 dated 13th September 2013 of the Ministry Of Corporate Affairs
in respect of section 133 of the companies Act, 2013. 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.
Auditor's Responsibility
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 as evaluating 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.
Basis for Qualified Report
(i) Adhering to significant accounting policy, the company is
accounting for Gratuity & Leave encashment on cash basis. This is not
in according with Accounting Standard - 1 on "Disclosure of Accounting
Policies and 15 on "Accounting for Retiring Benefits" prescribed by the
Institute of Chartered Accounting of India and contrary to provision
contained in Section 209(3) of The Companies Act, 1956. The extent of
non-compliance in terms of value is not ascertainable.
(ii) Accounting Standard - 2 relating valuation of Inventories has not
been followed. The technical valuation claimed by company is not
quantifiable hence; we are not in a position to quantify the effect on
the profit and loss account and balance sheet.
(iii) Balances of Unsecured Loans, Other Liabilities, Creditors,
Debtors, Loans and Advances are subject to confirmation by the parties
concerned and reconciliation thereof in subsequent years.
Opinion
Subject to the above observation, in our opinion and to the best of our
information and according to the explanations given to us, 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Profit and Loss Account, of the profit/ 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, 1956 and sub-section (11)
of section 143 of the Companies Act, 2013, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanation which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. With subject to Basis for Qualified 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;
c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of 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 read with the
General Circular 15/2013 dated 13th September 2013 of the Ministry Of
Corporate Affairs in respect of section 133 of the companies Act,
2013.; Except point no. (i), (ii), (iii) of Basis for qualified
Opinion.
e. On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956 and sub- section (2) of section
164 of the Companies Act, 2013.
f. Since the Central Government has not issued any notification 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.
The annexure referred to in the Auditors Report to the members of
Pratiksha Chemicals Limited for the year ended 31st March 2014, we
report that:
1. (a) The Fixed Asset Register showing particulars including
quantitative details and
situation of fixed assets is under compilation and updation.
(b) According to the information and explanation furnished to us, the
company has not physically verified all of its fixed assets. Since the
fixed assets records are still under compilation no comparison with the
book records have been made. In the absence of such comparison, opinion
as to discrepancies, if any, cannot be given.
(c) During the year, the company has not disposed off any substantial
part of fixed assets.
2 (a) The Inventory have not been physically verified during the year
by the management as informed to us.
(b) In our opinion, the procedures of physical verification of stocks
followed by the Management are not reasonable and adequate in relation
to the size of the Company and the nature of its business.
(c) On the basis of our examination of inventories records, in our
opinion, the company is not maintaining the reasonable records of
inventories. AS - 2 relating valuation of Inventories has not been
followed. The technical valuation claimed by company is not
quantifiable hence; we are not in a position to quantify the effect on
the profit and loss account and balance sheet.
3 (a) The Company has not granted any loans, secured or unsecured, to
companies,
firms or other parties covered in the Register maintained u/s.301 of
the Companies Act, 1956. Accordingly the clauses 4(iii)(b), 4(iii)(c)
and 4(iii)(d) of the report are not applicable.
(b) (i) As per the information and explanations given to us, the
Company has taken unsecured loans having closing balance as on
31-03-2014 of Rs. 132.38 Lacs from three parties covered in the
register maintained u/s 301 of the Companies Act, 1956 and
(ii) In our opinion, the terms and conditions on which loans have been
taken from companies, firms or other parties listed in the registered
maintained under section 301 of the Companies Act, 1956 are not prima
facie prejudicial to the interest of the company
(iii) The company is regular in repaying the principle amounts as
stipulated.
4. In our opinion and according to information and explanation given to
us, there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business. However the
same needs to be strengthened on a priority basis.
5. (a) According to information and explanations provided by the
management, the particulars of contracts or arrangements referred to
in section 301 of the act have been entered in the register required
to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions exceeding Rs. 5 lacs made in pursuance of
contracts or arrangements entered in the register maintained under
section 301 of the Companies Act, 1956 have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
6. The company has not accepted any deposits from the public within the
meaning of Section 58A and 58AA of the act and the rules framed there
under.
7. In our opinion the company does not have internal audit system
commensurate with the nature and the size of the business.
8. We have broadly reviewed the Cost Records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under section 209 (1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records.
9 (a) According to information and explanation given to us, and on the
basis of our
examination of the books of accounts, the company is generally regular
in depositing with appropriate authorities undisputed statutory dues
and the company has no arrears except the liabilities of statutory dues
as per schedule of current liabilities of such outstanding dues as at
31st March, 2014 for a period more than six months from the date they
became payable.
(b) According to the information and explanation given to us, there are
no disputed outstanding dues as at 31st March 2014.
10. The accumulated losses of the company exceeds fifty percent of net
worth as at 31st March, 2014 after considering qualifications, as
reported in the audit report, the effect of which could be ascertained.
It has not incurred cash loss in the financial year ended on that date.
11. According to the records of the company examined by us and the
basis of information and explanations given to us, the company has not
defaulted in repayment of dues to any financial or bank or debenture
holders.
12. The company has not granted any loans and advances on the basis of
securities by way pledge of shares, debentures and other securities.
13. The provisions of any special statue applicable to Chit fund,
Nidhi, Mutual Benefit Funds or a Society are not applicable to the
company.
14. In our opinion, the company is not dealing in or trading in shares,
securities, debentures and other investments.
15. In our opinion and according to the information and explanation
given to us, the company has not given any guarantee for loans taken by
others from banks and financial institutions during the year.
16. In our opinion and according to the information and explanations
given to us, the company has not obtained any term loans. Accordingly,
clause 4(xvi) of the order is not applicable.
17. As per the information and explanation given to us, the company has
not raised any funds on short-term basis, which have been used for
long-term investments and vice- versa.
18. The company has not issued any preferential allotment of shares to
parties and companies covered under register maintained under section
301 of The Companies Act, 1956.
19. During the year covered by audit report, the company has not issued
any debentures.
20. The company has not raised any money by public issues during the
year under review.
21. According to the information and explanations given to us, no fraud
by the company has been noticed or reported during the course of our
audit.
For, H. K. Shah & Co.
Chartered Accountants
Firm Registration No.: 109583/W
H.K.Shah
Place: Ahmedabad (Partner)
Date: 30/05/2014 M. No.: 042758 |