AUDITORS
TO THE MEMBERS OF PRETTO LEATHER INDUSTRIES LIMITED
1) We have audited the attached Balance Sheet of PRETTO LEATHER INDUSTRIES LIMITED as
at 31st March 2013, and also the Profit and 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.
2) We conducted our audit in accordance with the auditing 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 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 (Auditors’ Report) Order, 2003 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
& 5 of the said order.
4) Further to our comments in the Annexure referred to above, 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) In our opinion, proper books of accounts as required by law have been kept by the .
company as far as appears from our examination of those books.
c) The balance sheet, profit and loss account and cash flow statement dealt with by
this report are in agreement with the books of account.
d) In our opinion, the accounts comply with the accounting standards referred to in
section 211 3C of Companies Act, 1956.
e) On the basis of written representations received from the Directors, as on 31st
March, 2013 and taken on record by the Board of Directors, we report that none of the
directors are disqualified as on 31st March, 2013 from being appointed as a Director in
terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to the explanation
given to us, the said Balance Sheet and Profit and Loss Account, together with 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:
I) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st
March 2013.
II) In the case of the Profit & Loss Account, of the profit for the year ended on
that day.
III) In the case of the Cash Flow Statements, of the cash flows for the year ended on
that date.
For I P PASRICHA & CO
Chartered Accountants .
Firm No. 000120N
(CA Rishi Kumar Gup)
FCA - Partner M. No. 086281
Place: New Delhi
Dated: 03/09/2013
ANNEXURE TO THE AUDITORS’ REPORT 31 ST MARCH, 2013.
(Referred to in paragraph (3) of our report of even date)
1. (a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
(b) All the assets have been physically verified by the management during the year.
There is a regular program of verification which, in our opinion, is reasonable having
regard to the size of the company and the nature of its assets. No material discrepancies
were noticed on such verification.
(c) During the year, the company has not disposed off a major part of the plant and
machinery.
2. (a) The inventory has been physically verified during the year by the management. In
our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventories followed by the management
are 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 the records of inventory, we are of the opinion
that the company is maintaining reasonable proper records of inventory. The discrepancies
noticed on verification between the physical stocks and the book records were not
material.
3. i) The company has not repaid the loan to companies, firm or other party covered in
the register maintain under section 301 of the Companies Act, 1956. The company has not
granted any loan to companies, firm or other party covered in the register maintain under
section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanation given to us, there
is adequate internal control system commensurate with the size of the company and the
nature of its business with regard to purchases of inventories, fixed assets and with
regard to the sale of inventory. During the course of our audit, no major weakness has
been noticed in the internal controls.
5. (a) Based on the audit procedures applied by us and according to the information and
explanation provided by the management, we are of the opinion that the particulars of
contracts or arrangements that need to be entered into the register maintained under
Section 301 have been so entered.
(b) In our opinion and according to the information and explanation given to us, the
transactions made in pursuance of contracts or arrangements entered in the registers
maintained under Section 301 of the Companies Act, 1956 and exceeding the value of five
lakhs rupees in respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant time.
6. According to the information and explanation given to us, the company has not
accepted public deposits as per the provisions of sections 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975. No order has been passed by the Company Law Board.
7. In our opinion, the company has an internal audit system commensurate with the size
of the company and nature of its business.
8. As far as we are aware, the Central Government has not prescribed the maintenance of
cost records by the company under section 209 (1) (d) of the Companies Act, 1956.
9. (a) The company is regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, employees state insurance , income tax , sales
tax, wealth tax, custom duty, excise duty and other material statutory dues applicable to
it.
(b) According to the information and explanation given to us, no undisputed amounts
payable in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise
duty, cess were outstanding, as at 31st March, 2013 for a period of more than six months
from the date they become payable.
(c) According to the information and explanation given to us, there are no dues of
custom duty,wealth tax sale tax excise duty/cess, which have not been deposited on account
of any dispute.
10. As per record accumulated losses of the company are not less than 50% of its net
worth. The company has incurred cash losses during the financial year covered by our audit
and there were no cash losses during the immediately preceding financial year.
11. According to the information and explanation 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.
12. In our opinion, the company is not a chit fund or a nidhi mutual benefit
fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s
Report) Order, 2003 are not applicable to the Company.
13. In our opinion company is not dealing in or trading in Shares, Securities or
Debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the
Companies (Auditor’s Report) Order, 2003 are not applicable to the company. Only
investment of Rs. 100000/- has been made in shares of Pretto Sales Private Limited.
14. According to the information and explanation given to us, the company has not given
any guarantee for loans taken by others from bank or financial institutions.
15. In our opinion, there were no term loans raised during the year.
16. In our opinion and according to the information and explanation given to us, the
funds raised on short-term basis have not been used for long-term investments and vice
versa. No long - term funds have been used to finance short-term assets except permanent
working capital.
17. According to the information and explanations given to us, 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.
18. The company has not issued debentures and hence requirement of reporting regarding
creation of securities or charges in respect of debentures issued does not arise.
19. During the financial year covered by our audit, the company has not raised any
money by way of public issue.
20. Based upon the audit procedures performed and as per information and explanation
given by the management, we report that no fraud on or by the company has been noticed or
reported during the course of our audit.
PRETTO LEATHER INDUSTRIES LIMITED
Auditors’ certificate on compliance of conditions of Corporate Governance under
Clause 49 of the Listing Agreement
To the Shareholders of Pretto Leather Industries Limited
We have examined the compliances of conditions of Corporate Governance by M/s Pretto
Leather Industries Limited, during the year ended 31st March 2013, as stipulated in clause
49 of the Listing Agreement of the said Company with the Stock Exchanges where equity
shares of the Company are listed.
. The compliance of conditions of Corporate Governance is the responsibility of the
management. Our examination has been limited to review of procedures adopted by the
Company and implementation thereof, adopted by the Company for ensuring the compliance of
the conditions of Corporate Governance. Our examination may not be construed as an audit
or an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations
given to us, we certify that the Company has complied with the conditions of Corporate
Governance as stipulated in the above mentioned Listing Agreements.
We further state that such compliance is neither an assurance as to the future
viability of the Company nor the efficiency or effectiveness with which the management has
conducted the affairs of the Company.
For I P PASRICHA & CO
Chartered Accountants .
Firm No. 000120N
(CA Rishi Kumar Gup)
FCA - Partner M. No. 086281
Place: New Delhi
Dated: 03/09/2013
+91-9892691696
