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Directors Report of Prabhav Industries Ltd.

Mar 31, 2014

Dear members,

The Directors have pleasure in presenting the Report on the business and operations of the Company together with the Audited Accounts for the year ended 31st March, 2014.

1. FINANCIAL RESULTS: (Amt. in Rupees)

Year Ended Year Ended Particulars March 31, 2014 March 31, 2013

Turnover 19,85,91,743.70 42,80,01,884.00

Other Income 46,85,096.81 3,63,36,805.00

Expenditure 25,51,72,026.98 46,30,83,301.00

Profit(Loss) Before Taxes (5,19,75,367.86) 12,55,388.00

Provision for Taxes

Current Tax NIL 2,39,200.00

Deferred Tax NIL 4,30,550.00

Profit after Tax available for (5,19,75,367.86) 5,85,638.00 appropriation

Dividend NIL NIL

Balance carried forward to Balance (5,19,75,367.86) 5,85,638.00 Sheet

2. DEPOSITS:

The Company has not accepted any deposit from Public. Therefore provisions of section 58(A) of Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975 are not applicable to the Company.

3. DIVIDENDS:

In the view of long run interest of the company, your Directors do not recommend any dividend.

4. INSURANCE:

Movable and fixed Assets are adequately insured.

5. CORPORATE GOVERNANCE:

The Company has been following the principles and practices of good Corporate Governance and has ensured compliance of the requirements stipulated under Clause - 49 of the Listing Agreement with the Stock Exchanges.

A detailed report on Corporate Governance along with Certificate issued by Practicing Chartered Accountants in terms of Clause - 49 of the Listing Agreement is attached which forms part of this Report.

6. MANAGEMENT DISCUSSION AND ANALYSIS:

A report on Management Discussion and Analysis forms part of this Report and it deals with the Business, Operations and Financial Performance etc.

7. PARTICULARS OF EMPLOYEES:

The company did not employ anybody drawing remuneration of Rs.60, 00,000/-or more per annum or Rs.5, 00,000/- or more per month and hence the question of providing information under section 217(2A) of the companies Act, 1956 does not arise.

8. DIRECTORS:

Mr. Chandrakant Gaikwad, Directors will retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Your Directors recommend their reappointments for your approval.

Mrs.Ami Jigar Motta, Mr. Nilesh Shivram Mistry and Mr. Ketan Babubhai Patel are being proposed to be re-appointed as Independent Directors in terms of the applicable provisions of the Companies Act, 2013. The Board recommends their re-appointment.

9. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING/OUTGO:

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is provided separately as an annexure to the Director''s Report.

10. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provision of Sub-Section (2AA) of section 217 of the companies Act, 1956 your directors confirm:

I. That in the preparation of the annual accounts for year ended on31st March, 2014, the applicable accounting standards had been followed with no departures there from;

II. That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended on 31st March, 2014 and of the loss of the Company for that period;

III. That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities ;

IV. That the Directors had prepared the annual accounts for the year ended on 31st March, 2014 on a going concern basis.

11. AUDITORS:

M/s. Sheetal Samriya & Associates, Chartered Accountants the present Auditors of the Company have furnished a certificate regarding their eligibility for re- appointment. You are requested to appoint auditors of the company and fix their remuneration.

12. AUDITORS REPORT:

There are no qualifications or adverse remarks in the Auditors'' Report which requires any clarifications / explanations. The notes to accounts forming part of the financial statements are self explanatory.

13. ACKNOWLEDGEMENT:

The Board wishes to thank the Employees, Business partners, Bankers, Clients and shareholders, for their continued support and for faith they have respond in the Company.

For, Prabhav Industries Limited

Date: 30/05/2014 SD/- Place: Vadodara Jayesh R. Thakkar Chairman


Mar 31, 2011

To The Members of PRABHAV INDUSTRIES LIMITED

The Directors are pleased to present the Annual Report of your Company Along with the Audited Financial Statements for the year ended 31st March, 2011.

FINANCIAL RESULTS:

Key aspects of your Company's financial performance for the year 2010- 11 are tabulated below:

Particulars As on As on 31st March 2011 31st March 2010 (Amount in Rs) (Amount in Rs) Income 84,11,40,587 2,95,35,648

Expenses 83,16,32,020 2,80,56,135

Net Profit before Depreciation and Tax 95,08,567 14,79,512

Depreciation 56,52,475 4,73,387

Net Profit before Tax 38,56,092 10,06,126

Provision for Taxation 21,19,400 93,089

Net Profit after Tax 17,36,692 9,13,037

Earnings Per Share 0.04 0.02

OPERATIONAL REVIEW:

After witnessing a worldwide downturn in all spheres of business including in the steel industry in second half of 2008-09, your company remained focused on its fundamentals including expansion plans. It was only the result of the concerted and collective action undertaken by your Company's Management that your Company could achieve such an handsome growth in revenues during the year under review.

The revenues of the Company improved significantly across its businesses with an upshot in the gross revenue to Rs. 84,11,40,587 as compared to Rs. 2,95,35,648 in the preceding year, thus registering an impressive growth of about 28 times.

Further it has always been your Company's endeavor to continually uphold the interest of its stakeholders and this can be reflected from the increase in the bottom line and the earnings per

share of your Company. The Bottom line of your Company recorded an increase of about 90% as compared to the preceding year. Further the Earnings per share of your Company's Shares have doubled as compared to the preceding year, thus resulting in the overall accumulation of the Shareholders wealth.

The Directors of your Company are Optimistic towards the future plans of the Company and are confident of achieving higher margins in the years to come.

FUTURE OUTLOOK:

Your Company functions in two business segments namely, Manufacturing of Steel Products i.e. M.S. Ingot from M.S. Scrap and Trading in upstream as well as downstream metal products.

The existing business segments enable your company to hedge as well as capitalize on volatility in the raw material prices. The trading division has facilitated us to maintain our profitability in this strenuous phase of uncertainty and anxiety.

In the course of balancing the existing business activity your company has acquired deep insight of commodities and capital markets and thus the Board of Directors considers it desirable to bank on its expertise and commence the Investment Business along with the main objects of the Company.

The core activities of the Investment division shall include acquiring and dealing in various financial securities such as shares, debentures, bonds, obligations, securities issued by various Private as well as statutory authorities.

The aforesaid resolution along with the necessary explanatory statement, for commencing the Investment Business is proposed in the Notice of this Annual General Meeting and the said notice forms the part of this Annual Report.

We commend the resolution for your approval.

DIVIDEND:

After considering the financial results for the financial year, your Directors are of the opinion that it is prudent that no dividend be declared for the year under review so that the profits earned in the financial year can be ploughed back and utilized towards various growth and other expansion plans.

AUDIT COMMITTEE:

The Company has duly constituted its Audit Committee pursuant to the provisions of Section 292A of the Companies Act, 1956 & Clause 49 of the Listing Agreement.

Presently the Audit Committee of your Company comprises of Mr. Chirag Gada, Non-Executive Independent Director as Chairman of the Committee, Mr. Ketan Patel, Non-Executive Independent Director and Mr. Jayesh Thakkar, Managing Director as the Members of the Committee.

Hence the Company has maintained the requisite combination of Independent & Non-Independent Directors in the Composition of the Audit Committee.

It is further stated that the Board of Directors of the Company have accepted all the recommendations of the Audit Committee.

SECRETARIAL AUDIT REPORT:

As a measure of Good Corporate Governance practice, the Board of Directors of the Company has obtained a Certificate from Practicing Company Secretary on the basis of Secretarial Audit of the Company. This is to certify that the Company has complied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreements with the Stock Exchanges, Securities Contracts (Regulation) Act, 1956 and all the Regulations and Guidelines of SEBI as applicable to the Company, including the Securities and Exchange Board (Substantial Acquisition of Shares and Takeover) Regulations, 1997 and the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992.

ACCEPTANCE OF FIXED DEPOSITS:

The Company has not accepted any fixed deposits from general public within the purview of Section 58A, of the Companies Act, 1956, during the year under review.

CHANGES IN COMPOSITION BOARD OF DIRECTORS:

Directors Retiring by Rotation

In accordance with the provisions of section 257 the Companies Act, 1956, Mr. Vinod Shinde and Mr. Chirag Gada, Directors of your Company retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

The Board wishes to place on record their appreciation for the services rendered by them as the Directors of the Company.

The Proposals regarding the re- appointment of the aforesaid Directors are placed for your approval.

Your Directors commends their appointment for their approval.

None of the Directors, except Mr. Vinod Shinde and Mr. Chirag Gada are interested or concerned in the resolution.

Re- appointment of Additional Directors

The Board of Directors of your Company had appointed Mr. Ketan Patel, Mrs. Ami Motta and Mr. Nilesh Mistry as the additional Directors to hold office till the commencement of the Annual General Meeting.

The Board wishes to place on record their appreciation for the services rendered by them as the Directors of the Company and commends their appointment for your approval.

The notice proposing their candidature as the directors of the Company has been already received by the Company.

None of the Directors, except Mr. Ketan Patel, Mrs. Ami Motta and Mr. Nilesh Mistry are interested or concerned in the aforesaid resolution.

Re - appointment of Managing Directors

Mr. Jayesh Thakkar was appointed as a Managing Director of the Company on 23rd November, 2006 for a period of 5 years. Pursuant to this, his Tenure as a Managing Director shall cease on 22nd November, 2011.

He has played a pivotal role in steering your organization and making it accomplish higher horizons of success. It was only under his leadership that your Company could write its success story and reach the place where it stands today.

Your Company wishes to take on record its appreciation for the valuable services rendered by him and considers it as a pleasure to have his valued association with the Company for another period of 5 years, subject to the approval of the Members.

The relevant resolution proposing his re- appointment has been included in the Notice to the annual report.

Your are requested to accord your consent to his re- appointment.

A brief profile of all the aforesaid Directors is provided under "Schedule A" of this report. DISCLOSURE OF CHANGES IN THE CAPITAL STRUCTURE OF THE COMPANY:

The present Capital structure of the Company comprises of Rs. 46,08,91,000 divided 4,60,89,100 fully paid Equity Shares of Rs. 10/-.

Pursuant to the decisions taken by the Board in their Meeting held on 27th August, 2010 and the Annual General Meeting held on 30th September, 2010, the Board of Directors in their Meeting held on 18th October, 2010 allotted 25,00,000 (Twenty Five Lacs) Convertible Equity Warrants to Cameron Realty Private Limited, an entity forming part of the Promoter and Promoter Group, on a Preferential Basis.

Each Warrant entitles the holder to apply for and be allotted one equity share of the Company of par value of Rs. 10/- each, at a price of Rs. 102/- per Equity Share, at any time within 18 months from the date of allotment of Warrants, i.e., within 17th April, 2012.

During the year under review, the Warrant holder did not exercise the option to convert any of the Warrants held by it into Equity Shares of the Company.

Post Conversion the Paid- up Share Capital of the Company shall stand at Rs. 48,75,91,000 divided into 4,87,59,100 fully paid Equity Shares of Rs. 10/-.

PROCEEDS OF PREFERENTIAL ALLOTMENT:

During the year, your Company allotted 25,00,000 Convertible Equity Warrants to Cameron Realty Private Limited, an entity forming part of the Promoter and Promoter Group, on a Preferential Basis.

The proceeds received towards the subscription of Warrants are being utilized for the purpose of meeting the working capital requirements of the Company

AUDITORS:

The Company's Auditors M/s. N.R. Parikh & Co. retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Your Company has received confirmation from the Auditors to the effect that their reappointment, if made would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

You are requested to appoint auditors to hold such office from this Annual General Meeting up to the conclusion of next Annual General Meeting and fix their remuneration.

AUDITORS REPORT:

The Statutory Auditors' Report on the Accounts of the Company for the financial year ended 31st March, 2010 does not does not contain any qualification.

Further the observations furnished by the Auditors in their report is self- explanatory and do not call for any further comments.

PARTICULARS OF EMPLOYEES:

During the year under review, no employee of the Company was in receipt of remuneration exceeding the sum prescribed under section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules 1975, hence the requirement for furnishing a separate disclosure does not arise.

CORPORATE GOVERNANCE:

Your Company has documented internal governance policies and put in place a formalized system of Corporate Governance which sets outs the structure, processes and practices of governance within the Company.

A separate section on Corporate Governance forming part of the Annual Report and a certificate from the Statutory Auditor confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is included in the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY:

Corporate Social Responsibility (CSR) is the responsibility of an organization for the impacts of its decisions and activities on society, the environment and its own prosperity. For any organization, CSR begins by being aware of the impact of its business on society.

Parham's Social Objective is synonymous with Corporate Social Responsibility (CSR). Apart from the business of manufacture of Steel Products, the objective of the company is to conduct business in ways that produce social, environmental and economic benefits to the communities in which it operates.

Further your Company also reaffirms its commitment to contribute towards a clean sustainable environment and continually enhancing its environmental performance as an integral part of its business philosophy and values.

HUMAN RESOURCE MANAGEMENT REVIEW:

Your Company has always believed in the ideology of achieving excellence through investing in people and technology simultaneously and thus it continues to work for the development and realization of best potential of its people. To promote motivational climate and achieve growth, your Company has continued to undertake efforts for optimal utilization of manpower with focus on improvement in their productivity.

Further the efforts were also initiated for promoting better employee participation at all the levels. Thus the HR initiatives undertaken mainly focused on building teams with wider spectrum with reference to skill and knowledge.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors responsibility Statement, it is hereby confirmed that:

In the preparation of the accounts for the Financial Year ended 31st March, 2011; the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and the profit of the Company for the year under review;

The Directors have taken proper and sufficient care for the maintenance of the adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

The Directors have prepared the Accounts for the Financial Year ended 31st March, 2011 on a going concern basis.

ENTERPRISE RISK MANAGEMENT:

Enterprise Risk Management (ERM) policy has been framed for identification of key risk areas and formulates appropriate risk mitigation plans for taking corrective action in a time bound manner.

DISCLOSURE OF MATERIAL CHANGES SINCE THE END OF THE FINANCIAL YEAR ENDED 31ST MARCH, 2011

There has not been any material change in the nature of business or operations of the Company since the end of the financial year ended 31st March, 2011 till the date of this Annual Report.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTIONS AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information pursuant to Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is provided separately as an annexure to the Director's Report.

ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude for the continued support and patronage rendered by the Government of India, various State Government departments, Financial Institutions, Banks and various stakeholders, such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company's success. The Directors look forward to their continued support in future.

Registered Office: By Order of the Board of Directors

902, Galav Chambers, Sd/-

opp. Sardar Patel Statue,

Sayaji Gunj, Vadodara -390 005 (Jayesh Thakkar)

Chairman and Managing Director

Place: Vadodara

Date: 1st September, 2011.

 
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