Prakash Ceramics Ltd Auditors Report.

PRAKASH CERAMICS LIMITED ANNUAL REPORT 2011-2012 AUDITORS REPORT TO THE MEMBERS OF PRAKASH CERAMICS LIMITED We have audited the annexed Balance Sheet of PRAKASH CERAMICS LIMITED as on 31st March 2012 and also the Profit & Loss Account for the period ended on that date annexed thereto. These Financial Statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with accounting 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. (1) As required by the Companies (Auditor Report) Order, 2003 issued by the Department of Company Affairs in terms of Section 227(4A) of the Companies Act 1956, we give in the Annexure a statement on the matters specified in the said order to the extent applicable. (2) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit. (3) 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 such books. (4) The Balance sheet and Profit and Loss Account dealt with by the report are in agreement with the books of accounts. (5) In our opinion, the Balance Sheet, Profit & Loss Account, and Cash Flow statement dealt with by this report comply with the Accounting Standard referred to in sub-section (3c) of Section 211 of the Companies Act, 1956. (6) On the basis of written representation received from the Directors and taken on records by the Board of Directors, we report that none of the Directors is disqualified as at 31st March 2012 from being appointed as a director in terms of clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956. (7) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Notes thereon, particularly the note no 4 regarding inter corporate investment and Loans thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view: (a) In case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012 and; (b) In case of Profit and Loss Account, of the Profit of the Company for the year ended on that date. (c) In case of Cash Flow Statement, of the cash flows for the year ended on that date. For, Y. D. & Co CHARTERED ACCOUNTANTS FRN: 018846N CA RAKESH PURI PLACE: LUDHIANA PARTNER DATE : 01.09.2012 M. No.: 092728 ANNEXURE TO THE AUDITORS REPORT: Annexure referred to in Paragraph 3 of the Auditors Report of Even date to the Member of PRAKASH CERAMICS LIMITED 1. The fixed assets register was not made available to us for verification, However as explained to us the fixed assets have been physically verified by the management at reasonable intervals and no materials discrepancies have been noticed on such verification. 2. (a) As explained to us, inventories have been physically verified by the management at regular intervals during the year. (b) In our opinion, the procedures of physical verification of stocks followed by the management are 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. 3. (a) As per information and explanation given to us, the company has not granted loans to parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence, clause (iii)(a), (b), (c) & (d) are not applicable to the company. (b) As per information and explanation given to us, the company has not taken loans from parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence, clause (iii)(e), (iii)(f) and (iii)(g) are not applicable to the company. 4. In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inventory and for the sale of goods. During the course of audit, we have not observed the continuing failure to correct major weakness in internal controls. 5. In opinion and according to the information and explanation given to us, there are no transactions of purchase and sales or services of goods and materials and made in pursuance of contracts or arrangements entered in the Registers maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs. 50000/- or more in respect of each party. 6. The company has not accepted any deposits from public within the meaning of provisions of section 58A & Section 58AA of the Companies Act, 1956. 7. In our opinion the company has an adequate internal audit system commensurate with the size and nature of its business. 8. As informed to us the company is not required to maintain cost accounts and records as prescribed by Central Government under section 290(1)(d) of the Companies Act 1956. 9. According to the records of the company, statutory dues including Investor Education and Protection fund, Income Tax and other statutory dues have been generally deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as on 31st March, 2002 for a period of more than six months from the date of becoming payable. 10. The accumulated losses of the Company are not more than fifty percent of the net worth and the company has incurred cash loss in current financial year, The Company has also incurred cash loss in the previous financial year. 11. In our opinion and according to the information and explanations given to us, Company has not defaulted in Repayment of any dues to financial institutions or banks. 12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit/society. Therefore, clause 4(xiii) of the Companies (Audit Report) Order, 2003 is not applicable to the company. 14. In our opinion the Company has maintained records of transactions and contracts in respect of investment in shares, mutual funds and other investments and generally timely entries have been made therein. All the shares, mutual funds and other investments held by the companies are in its own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956. 15. In our opinion The Company has not given any guarantee for loans taken by others from banks or financial institutions. 16. The Company has not raised any new term loans during the year. 17. On the basis of an overall examination of the Balance Sheet of the Company and according to the information and explanations given to us, in our opinion, funds raised on short term basis have not been used during the year for long term investment and vice versa. 18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year. 19. The Company has not issued any debentures till date. 20. The Company has not raised any money by public issue during the year. 21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted audit practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, not have we been informed of such case by the management. For, Y. D. & Co CHARTERED ACCOUNTANTS FRN: 018846N CA RAKESH PURI PLACE: LUDHIANA PARTNER DATE : 01.09.2012 M. No.: 092728