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Auditor Report of Prabhav Industries Ltd.

Mar 31, 2014

We have audited the accompanying financial Statement of Prabhav Industries Limited(the Company) which comprises the Balance Sheet as at 31st March 2014, and the statement of Profit & Loss and Cash Flow Statement for the year ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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 flow 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") and in accordance with the accounting principles generally accepted in India. 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the Annual Report 2013-14 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 for the year ended on that date ; and

c) in the case of the Cash Flow Statement, the cash flows for the year ended on that date.

Report on other legal and Regulatory Requirement

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of subsection (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 Order.

2. As required by section 227(3) of the Act, we report that:

a) 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.

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 books.

c) The Balance Sheet, and Statement of Profit and Loss, dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, and Statement of Profit and Loss, 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 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.

Annexure to Independent Auditor''s Report

(Referred to in paragraph 1 under ‘Report on Other Legal & Regulatory

Requirements'' section of our report of even date)

(i) Having regard to the nature of the Company''s business/activities/results/during the year, clause (vii),(xi),(xii),(xiii),(xix) of paragraph 4 of the Order are not applicable to the Company.

(ii) In Respect of its Fixed Assets:

(a) As informed to us, the Company is in the process of compiling records to showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets, according to the practice of the Company are physically verified by the management at reasonable intervals, in a phased verification-programme, which, in our opinion, is reasonable, looking to the size of the Company and the nature of its business. As informed to us, no material discrepancies have been noticed on verification;

(c) The Fixed Assets disposed of Off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the company and such disposal has, in our opinion, not affected the going concern status of the company. Further the company is in the process of disposing all the Plant &Machinery in the next financial year, which might affect the going concern of the company in one segment.

(ii) In Respect of its Inventory:

(a) As informed to us, the Inventory of Finished and semi finished goods and raw materials at works were physical verified by the management at reasonable intervals during the year. In our opinion, having regard to the nature and location of stock, the frequency of verification is reasonable.

(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 nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory, and no material discrepancy were noticed on physical verification.

(iii) The Company has granted unsecured loans to 6companies and 1 Interested Party listed in the register maintained under Section 301 of the Companies Act, 1956. The year balance of loans granted to these was Rs.364.36Lacs. (P.Y.RS.527.81Lacs.)

In our opinion and according to the information and explanations given to us, the terms and condition of loan given to the parties covered under in the register maintained under section 301of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

According to the information and explanations given to us, no repayment schedule has been specified and accordingly the question of regularity in payment of principal amount and interest wherever applicable does not arise. However the said loan is repayable on demand.

The Company has taken unsecured loans from 2 company and 2 Directors listed in the Register maintained under Section 301 of the Companies Act, 1956. The year balance of loans taken from these was Rs..435.18Lacs. (P.Y. Rs.280.67Lacs)

In respect of above Loans taken, no repayment schedule has been specified with regard to the Interest / Repayment or any other terms and conditions.

(iv) 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 and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) According to the information and explanations given to us, the details of transaction that needed to be entered in the register in pursuance of section 301 of the Company Act. 1956, have been so entered. According to information and explanations given to us, the transactions of purchase and sale of goods/services made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted deposits from other corporate which attracting the provisions of section 58A and 58AA of the Companies Act, 1956, and the rules framed there under.

(vii) The system of internal audit of the Company needs to be strengthened and commensurate with the size and nature of its business.

(viii) In respect of statutory dues:

(a) According to the information, explanation and records verified by us the Company has generally been regular in depositing Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Cess, other material statutory dues applicable to it with the appropriate authorities. We are informed that the company intends to obtains exemption from Provident Fund, Employees state insurance Act.

(b) There were no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Custom Duty,Cess and other material statutory dues in arrears as at 31March,2014 for a period of more than six months for the date they become payable.

(x) Accumulated losses at the end of financial year ended on 31st March, 2014 is Rs.5,59,10,545.86/- which does not exceed 50% of its net worth and it has not incurred cash losses in the financial year ended on the date and in the immediately preceding financial Year.

(xi) The Company is dealing in or trading in share, securities, Debenture or other investment. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. Further such securities have been held by the Company in its own name or are in the process of transfer in its own Company name.

(xii) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xiii) According to the information and explanations given to us and as per records made available for our verification, the Company has not taken any term loan during the year.

(xiv) In our opinion and according to the information and explanation given to us and overall examination of the balance sheet of the company, we report that funds raised on short term basis have, prima facie, not been used during the year for long term investment.

(xv) As the Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of the Act, the provisions of clause 4(xviii) of the Order are not applicable to the Company.

(xvi) The Company has not raised any money by public issue during the year.

(xvii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud was noticed or reported during year.

For Sheetal Samriya & Associates

Chartered Accountants,

(Firm Registration No.:011478C)

SD/-

Abhitesh Dubey

Partner

Membership No.: 147923

Vadodara, 30 May, 2014.


Mar 31, 2011

1. We have audited the attached Balance Sheet of Parham Industries Ltd. as at 31st March, 2011, the Profit and Loss Account and also 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 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 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 and the Companies (Auditor's Report) (Amendment) Order, 2004 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 matters specified in paragraphs 4 and 5 of the said Order, subject to notes on accounts.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that-

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(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 the books;

(c) The Balance Sheet, the 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 Balance Sheet, the Profit and Loss and Cash Flow Statement Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, subject to notes on accounts.

(e) On the basis of written representations received from the directors as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 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 explanations given to us, the said accounts read 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:

i. in the case of the Balance Sheet, of the state of affairs of the Company as on 31st March 2011;

ii. in the case of the Profit and Loss Account, of the profit of the company for the year ended on that date; and

iii. in the case of the Cash Flow Statement, of the Cash Flow of the company for the year ended on that date.

(i) (a) As informed to us, The Company is still in the process of compiling records to showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets, according to the practice of the Company are physically verified by the management at reasonable intervals, in a phased verification-programmed, which, in our opinion, is reasonable, looking to the size of the Company and the nature of its business. As informed to us, no material discrepancies have been noticed on verification;

(c) No disposal of a substantial part of fixed assets of the company has taken place during the year.

(ii) (a) As informed to us, The Inventory were physical verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, company has reasonable and adequate procedure for physical verification of inventories 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 has maintained proper records of inventory, and no major discrepancy reported by the management.

(iii) The Company has granted unsecured loans to 7 companies, and 4 Interested Party listed in the register maintained under Section 301 of the Companies Act, 1956. The year balance of loans granted to these was Rs. 484.43 Lacs.

In our opinion and according to the information and explanations given to us, the terms and condition of interest free loan given to the parties covered under in the register maintained under section 301of the Companies Act, 1956 are not prima facie prejudicial to the interest of the company.

According to the information and explanations given to us, no repayment schedule has been specified and accordingly the question of regularity in payment of principal amount and interest wherever applicable does not arise.

The Company has taken unsecured loans from 1 company, 2 Directors and 18 Interested Party listed in the register maintained under Section 301 of the Companies Act, 1956. The year balance of loans taken from these was Rs. 2608.13 Lacs.

In respect of above Loans taken, no repayment schedule has been specified with regard to the Interest / Repayment or any other terms and conditions.

(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.

(v) According to the information and explanations given to us, the details of transaction that needed to be entered in the register in pursuance of section 301 of the Company Act. 1956, have been so entered.

According to information and explanations given to us, the transactions of purchase and sale of goods/services made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from other corporate which attracting the provisions of section 58A and 58AA of the Companies Act, 1956, and the rules framed there under.

(vii) The system of internal audit of the company needs to be strengthened and commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act; 1956.

(ix) In respect of statutory dues:

(a) Account to the records of the Company examined by us, Company is not liable to Pay Provident Fund, Investor Education and Protection fund, Employees State Insurance, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Cess no undisputed amounts payable in respect of such statutory dues which have remained outstanding as on 31st march 2011 for a period of more than Six Month from the day they become payable except Income tax for the year 97-98 Rs.54156/-

(b) According to the Information and explanation given to us there are no dues of Sales Tax, Provident Fund, Investor Education & protection Fund, Employee State Insurance, Custom Duty, Wealth Tax, Services Tax, Excise Duty and Cess Which have not been deposited on account of any dispute except Income tax for the year 97-98 Rs.54156/-.

(x) Accumulated losses at the end of financial year ended on 31st March,2011 is Rs. 57,75,305/ - which does not exceed 50% of its net worth and it has not incurred cash losses in the financial year ended on the date and in the immediately preceding financial Year.

(xi) According to the information and explanations given to us and records of the company examined by us, the Company has not defaulted during the year in repayment of dues to its bankers or to any financial institution. The company did not have any outstanding debenture during the year.

(xii) According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) As the Company is not a chit fund or a niche / mutual benefit fund / society to which the provisions of special statute relating to chit fund are applicable, the provisions of clause 4(xiii) of the Order are not applicable.

(xiv) The company is dealing in or trading in share, securities, Debenture or other investment. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. Further such securities have been held by the company in its own name or are in the process of transfer in its on company name.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us and as per records made available for our verification, the Company has not taken any term loan during the year

(xvii) According to the information and explanations given to us and 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, this clause is not applicable.

(xviii)As the Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of the Act, the provisions of clause 4(xviii) of the Order are not applicable to the Company.

(xix) As the Company has not issued any debentures, the provisions of clause 4(xix) of the Order are not applicable to the Company.

(xx) The Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during year.

For N. R. PARIKH & CO. Chartered Accountants FRN No. 107563W

Sd/- C.A. N. R. Parikh

Date: 1st September, 2011 (Partner)

Place: Vadodara Membership No.007854

 
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