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Auditor Report of Prakash Industries Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Prakash Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31,2015, 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.

2. Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation 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 principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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.

3. Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls systems over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, 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 on the standalone financial statements.

4. 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 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, of the state of affairs of the Company as at March 31, 2015 and its profit and its cash flows for the year ended on that date.

5. Emphasis of matter

We draw attention to the following matters:-

(a) Refer Note No. 1(n), the provision of tax made by the Company is subject to assessment by the tax authorities and set off of MAT credit entitlement is subject to availability of taxable income to the Company in future within the prescribed time limit as per the Income Tax Act, 1961.

(b) Refer Note No. 4(d), The Company has shown Foreign Currency Convertible Bonds of Rs. 37554 lacs going to be matured on April 30, 2015 under the head 'Long Term Borrowings'. Had this been shown as 'Other Current Liabilities', Current liabilities of the Company would have been higher to that extent.

(c) Refer Note No. 28, in terms of a court order, the deferred tax liability for the year has been adjusted against Securities Premium account. Had the deferred tax liabilities for the year been accounted for pursuant to Accounting Standard-22' Accounting for Taxes on Income', profit after tax for the year would have been lower by Rs. 361 lacs.

(d) Refer Note No. 31, no adjustment has been made by the Company in the book values of the Investments made in mining assets as the amount of compensation receivable for the coal mines cancelled vide the Hon'ble Supreme Court order, is not ascertained at present.

(e) Refer Note No. 49, remuneration paid to the Chairman and the Managing Director aggregating to Rs. 708.39 lacs is subject to approval by the members of the Company and the Central Government.

Our opinion is not qualified in respect of these matters.

6. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

(a) we have sought and obtained all the informaztion 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) subject to our comments in above para, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) on the basis of the written representations received from the directors as on March 31, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164(2) of the Act.; and

(f) with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements-Refer Note no.24(b) & 33;

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses;

iii. There were no amounts, which were required to be transferred to the Investor Education and Protection Fund by the Company. annexure referred to in our independent auditors' report of even date to the members of prakash industries limited on the standalone financial statements for the year ended march 31, 2015

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable having regard to the size of the company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed by the management on such verification.

2. (a) The inventory has been physically verified at reasonable intervals by the management. In our opinion, 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 inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. As explained to us, the discrepancies noticed on physical verification of inventory as compared to the book records were not material and the same have been properly dealt with in the books of account.

3. According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

4. 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 purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in the internal control system.

5. In our opinion and according to information and explanations given to us, the Company has not accepted any deposit where the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder are applicable. No order against the Company has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

6. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 for the maintenance of cost records under section 148(1) of the Act in respect of the Company's products and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

7. (a) As per records of the Company and according to the information and explanations given to us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income- tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues, as applicable with the appropriate authorities. There are no arrears of statutory dues as at March 31, 2015 which were outstanding for a period of more than six months from the date they became payable.

(b) According to the information and explanations given by the management and relied upon by us, there were no disputed amounts payable in respect of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax or cess as at March 31, 2015 except for the following:

Nature of Amount Forum where the dispute is pending the dues (Rs.in lacs)

Excise Duty 123.88 CESTAT, New Delhi

36.15 Appellate Authority- Addl. Commissioner

6.29 Appellate Authority- Dy. Commissioner

0.11 Appellate Authority- Asst. Commissioner

5.09 Appellate Authority- Jt. Commissioner

Income Tax 362.26 Commissioner of Income Tax (Appeals)

(c) According to the information and explanations given to us, no amount is required to be transferred by the Company to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956 ) and rules made there under.

8. The Company has no accumulated losses as at March 31, 2015. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

9. The Company has been regular in repayments to financial institution and banks during the year under review except amount of Rs. 1444 lacs due on December 31, 2014 and Rs. 2575 lacs due on March 31, 2015 outstanding in arrears as at March 31, 2015. As informed to us, Company's request to the concerned financial institution and bank for restructuring of the loans are under their consideration. The Company does not have any outstanding debentures at the end of the year.

10. 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 during the year.

11. According to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose, where applicable, for which the loans were taken.

12. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under review.

for Chaturvedi & Partners Chartered Accountants

(Registration No. 307068E)

New Delhi (L.N. Jain)

25th May, 2015 Partner

M.No. 72579




Mar 31, 2014

We have audited the accompanying financial statements of Prakash Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, 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.

2. Management''s Responsibility for the Financial Statements The CompanyRs.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 flows of the Company in accordance with the accounting principle generally accepted in India including Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 ("the Act")(which continue to be applicable in respect of Section 133 of the Companies Act,2013 in terms of General Circular 15/2013 dated 13th September,2013 of the Ministry of Company Affairs). 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.

3. AuditorsRs. 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 misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditorRs.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 CompanyRs.s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the CompanyRs.s internal control. 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.

4. Emphasis of matter

We draw attention to the following matters:-

(a) As stated in Note No. 28, in terms of a court order, the deferred tax liability for the year has been adjusted against Securities Premium account. Had the deferred tax liabilities for the year been accounted for pursuant to Accounting Standard-22Rs. Accounting for Taxes on Income, profit after tax for the year would have been lower by Rs. 554 lacs.

(b) As stated in Note No. 1 (m), the provision of tax made by the company is subject to assessment by the tax authorities and set off of MAT credit entitlement is subject to availability of taxable income to the company in future within the prescribed time limit as per the Income Tax Act, 1961.

Our opinion is not qualified in respect of these matters.

5. 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 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 Statement of Profit and Loss, of the profit 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.

6. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (AuditorRs.s Report Order, 2003 ("the Order") issued by the Central Government of India in terms of Section 227(4A) 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) Subject to our comment in para 4(a) above, in our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in section 211 (3C) of the Act (which continue to be applicable in respect of Section 133 of the Companies Act,2013 in terms of General Circular 15/2013 dated 13th September,2013 of the Ministry of Company Affairs).

(e) On the basis of the written representations received from the directors as on March 31, 2014, 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 Section 274(1 )(g) of the Act.

Annexure to Independent Auditors''. Report

REFERRED TO IN PARAGRAPH 6(1) OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF PRAKASH INDUSTRIES LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2014

1. (a) The Company has maintained proper records showing all particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, the fixed assets have been physically verified by the management in a phased periodical manner, 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 by the management on such verification.

(c) Fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and going concern status of the Company is not affected.

2. (a) The inventory, except stock in transit or lying with the third parties has been physically verified by the management during the year. For stocks lying with the third parties at the year end, written confirmations have been obtained. In our opinion, 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 inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. As explained to us, the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

3. The Company has neither granted nor taken any loan, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. 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 purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in the internal control system.

5. Based upon the audit procedures applied by us and according to the information and explanations given to us, there are no transactions which are required to be entered in the register maintained under Section 301 of the Companies Act,1956.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public during the year within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business

8. The Central Government has prescribed maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have been informed that such accounts and records have been maintained by the Company.

9. (a) As per records of the Company and according to the information and explanations given to us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, EmployeesRs. State Insurance, Income Tax, Sales Tax, Entry Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess or any other material statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no undisputed statutory dues at the year end outstanding for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given by the management and relied upon by us, there are following statutory dues which have not been deposited by the Company on account of some dispute and same are pending before appropriate authorities:-

Nature of Amount Forum where the dispute is pending the dues (Rs. in lacs) Excise Duty 123.88 CESTAT, New Delhi 6.29 Appellate Authority- Dy. Commissioner 0.11 Appellate Authority- Asst. Commissioner 5.09 Appellate Authority- Jt. Commissioner Income Tax 358.45 Commissioner of Income Tax (Appeals) Energy Cess 747.00 Supreme Court of India

10. The Company has no accumulated losses as at 31st March, 2014. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution or bank during the year.

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

13. In our opinion and according to the information and explanations given to us, the provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ society are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made in respect of CompanyRs.s dealings in its investments. The investments held by the Company as at 31st March, 2014 are in its own name.

15. 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 during the year.

16. In our opinion and according to the information and explanations given to us, the Company has not taken any term loans from any bank or financial institution during the year.

17. According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, we are of the opinion that the Company has not raised any funds on short-term basis, which have been used for long-term investments

18. The Company has not made any preferential allotment of shares during the year to the parties and companies covered in the Register maintained under Section 301 of the Company Act, 1956.

19. The Company has not issued any debentures during the year under review.

20. The Company has not raised any money by way of public issue during the year under review.

21. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year under review.

for Chaturvedi & Partners Chartered Accountants (Registration No. 307068E)

New Delhi (L.N. Jain) 28th May, 2014 Partner M.No. 72579


Mar 31, 2013

1. Report on the Financial Statements

We have audited the accompanying financial statements of Prakash Industries Limited ("the Company^, which comprise the Balance Sheet as at March 31,2013, the Statement of Profit and Loss, and Cash Flow Statementfortheyearthen ended and a summaryof significant accounting policies and other explanatory information.

2. ManagemenfsResponsibilityfortheFinancialStatements 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 principle generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act,1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation ofthefinancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors''Responsibility

Our responsibility is fo express an opinion on these financial statements based on our audit. We conducted our audit in accordance with tiie 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 misstatements.

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.

4. Opinion

i. As stated in Note No. 28, in terms of a court order, the deferred tax liability for the year has been adjusted against Securities Premium account. Had the deferred tax liabilities for the year been accounted for pursuant to Accounting Standard-22''Accounting for Taxes on Income'', profit after tax for the year would have been lower by Rs90 lacs.

ii. Aststated in Note No. 1(m), the provision of tax made by the

company is subject to assessment by the tax authorities and set off of MAT credit entitlement is subject to availability of taxable income to the company in future, as per the Income Tax Act 1961.

iii. Subject to our above comments and their consequential impact on the profit for theyear, in our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true andfairviewinconformity with the accounting principles generally accepted in India:

(a) lnthe
(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) lnmecaseofmeCashFlowSteternent,ofthecashf|)wsfor8ie year ended on that date.

5. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s'' Report Order, 2003 ("the Order*) issued by the Central Government of India in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. As required by Section 227(3) of the Act, wereport 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 lawWe have been kept by the Company so far as appears from our examination of those books.

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

(d) Subject to our comments in para 4 above, in our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in section 211(3C) of the Act;

(e) Oh the rja^ of te¥rftten representations received from thedirectors as on March 31,2013, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2013, from being appointed as a director in terms of Section 274(i)(g) of the Ad

Annexure to Independent Auditors'' Report

REFERRED TO IN PARAGRAPH 5(1) OF THE INDEPENDENT AUDITORS'' REPORT OF EVEN DATE TO THE MEMBERS OF PRAKASH INDUSTRIES LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2013

1. (a) The Company has maintained proper records showing all particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, the fixed assets have been physically verified by the management in accordance with a phased programme, which in our opinion is reasonable having regard to the size of the company and the nature of its assets. During the year, no material discrepancies were noticed by the management on such verification.

(c) Fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and going concern status of the Company is not affected.

2. (a) The inventory, except stock in transit or lying with the third parties has been physically verified by the management during the year. For stocks lying with the third parties at the year end, written confirmations have been obtained. In our opinion, 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 inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. As explained to us, the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

3. The Company has neither granted nor taken any loan, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. 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 purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in the internal control system.

5. Based upon the audit procedures applied by us and according to the information and explanations given to us, there are no transactions which are required to be entered in the register maintained under Section 301 of the Companies Act,1956.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public during the year within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. The Central Government has prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act,1956 in respect of certain manufacturing activities of the Company. We have been informed that such accounts and records have been maintained by the Company.

9. (a) As per records of the. Company and according to the information and explanations given to us, in. our opinion, the Company is generally regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Entry Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess or any other material statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no undisputed statutory dues at the year end outstanding for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given by the management and relied upon by us, there are following statutory dues which have not been deposited by the Company on account of some dispute and same are pendingjjefore appropriate authorities:-

Nature of Amount Forum where the dispute is pending the dues (Rs.in lacs)

Excise Duty 145.14 CESTAT, New Delhi

6.29 Appellate Authority- Dy. Commissioner

0.11 Appellate Authority- Asst Commissioner

5.09 Appellate Authority- Jt Commissioner

Energy Cess 747.00 Supreme Court of India

10. The Company has no accumulated losses as at 31st March, 2013. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution or bank during the year.

12. According to the information and explanations given to us, the Company has not granted any ioans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanations given to us, the provisions of any special statute applicable to chit fund / nidhiY mutual benefit fund/ society are not applicable to the Company.

14. In our opinion and according to the information and explanations ; given to us, proper records have been maintained of the transactions

and contracts and timely entries have been made in respect of Company''s dealings in its investments. The investments held by the Company as at 31st March, 2013 are in its own name.

15. According to the information and explanations given to us, the Cortipany has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. In our opinion and according to the information and explanations given to us, the Company has not taken any term loans from any bank or fiananctal institution during the year.

17. According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, we are of the opinion that the Company has not raised any funds on short-term basis, which have been used for long-term investments.

18. The Company has not made any preferential allotment of shares during the year to ttie parties and companies covered in the Register maintained under Section 301 of the Company Act,1956.

19. The Company has not issued any debentures during the year under review.

20. The Company has not raised any money by way of public issue during the year under review..

21. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the yearmder review.

for Chaturvedi & Partners

Chartered Accountants

(Registration No. 307068E) New Delhi (L.N.Jain)

22nd May, 2013 Partner

M.No. 72579


Mar 31, 2012

1. We have audited the attached Balance Sheet of Prakash Industries Ltd. as at 31st March, 2012 and the Statement of Profit & Loss and 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 have conducted audit in accordance with Auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance 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 Government of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we annex here to a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. As stated in Note No.28, in terms of a Court order, the deferred tax liability for the year has been adjusted against Securities Premium account. Had the deferred tax liabilities for the year been accounted for pursuant to Accounting Standard-22'Accounting for Taxes on Income', profit after tax for the year would have been lower by Rs. 42 lacs;

5. As stated in Note No.1(m), the provision of tax made by the Company is subject to assessment by the tax authorities and set off of MAT credit entitlement is subject to availability of taxable income to the Company in future, as per the provisions of the Income Tax Act, 1961.

6. 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 those books;

c) The Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) Subject to our comments in para 4 above, in our opinion, the Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement dealt with by this report, comply with the mandatory Accounting Standards, referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable.

e) On the basis of written representations received from the Directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 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.

Subject to our comments in para 4 above and their consequential impact on the profit for the year, 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 significant accounting policies and 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 at 31st March, 2012;

(ii) in the case of the Statement of Profit & Loss, of the profit for the year ended on that date; and

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF PRAKASH INDUSTRIES LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2012.

1. (a) The Company has maintained proper records showing all particularsincluding quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, the fixed assets have been physically verified by the management in accordance with a phased programme, which in our opinion is reasonable having regard to the size of the company and the nature of its assets. During the year, no material discrepancies were noticed by the management on such verification.

(c) Fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and going concern status of the Company is not affected.

2. (a) The inventory, except stock in transit or lying with the third parties has been physically verified by the management during the year. For stocks lying with the third parties at the year end, written confirmations have been obtained. In our opinion, 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 inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. As explained to us, the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

3. The Company has neither granted nor taken any loan, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. 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 purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in the internal control system.

5. Based upon the audit procedures applied by us and according to the information and explanations given to us, there are no transactions which are required to be entered in the register maintained under Section 301 of the Companies Act,1956.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public during the year within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. The Central Government has prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act,1956 in respect of certain manufacturing activities of the Company. We have been informed that such accounts and records have been maintained by the Company.

9. (a) As per records of the Company and according to the information and explainations given to us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Entry Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess or any other material statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no undisputed statutory dues at the year end outstanding for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given by the management and relied upon by us, there are following statutory dues which have not been deposited by the Company on account of some dispute and same are pending before appropriate authorities:-

Nature of Amount Forum where the dispute is pending the dues (Rs. in lacs)

Excise Duty 223.88 CESTAT, New Delhi

6.29 Appellate Authority- Dy. Commissioner

0.11 Appellate Authority- Asst. Commissioner

5.09 Appellate Authority- Jt. Commissioner

32.45 Appellate Authority- Addl. Commissioner

Energy Cess 639.00 Supreme Court of India

10. The Company has no accumulated losses as at 31st March, 2012. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution or bank during the year.

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

13. In our opinion and according to the information and explanations given to us, the provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ society are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made in respect of Company's dealings in its investments. The investments held by the Company as at 31st March, 2012 are in its own name.

15. 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 during the year.

16. In our opinion and according to the information and explanations given to us, on an overall basis, the term loans taken by the Company during the year have been applied for the purpose for which they were obtained, other than temporary deployment pending application.

17. According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, we are of the opinion that the Company has not raised any funds on short-term basis, which have been used for long-term investments.

18. The Company has not made any preferential allotment of shares during the year to the parties and companies covered in the Register maintained under Section 301 of the Company Act,1956.

19. The Company has not issued any debentures during the year under review.

20. The Company has not raised any money by way of public issue during the year under review.

21. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year under review.

for CHATURVEDI & PARTNERS Chartered Accountants

(Registration No. 307068E)

New Delhi (L.N. Jain)

29 th May, 2012 Partner

M.No. 72579


Mar 31, 2010

1. We have audited the attached Balance Sheet of Prakash Industries Ltd. as at 31 st March, 2010 and the Profit & Loss Account and the Cash Flow Statement of the Company for the year 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 have conducted audit in accordance with Auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statement s are free of matrial misstatement. Art 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 Government of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we annex here to a statement on the matters specified in paragraphs 4 & 5 of the said order,

4. As stated in Note No.6, in terms of a Court order, the deferred tax I liability for the year has been adjusted against Securities Premium I account. Had the deferred tax liabilities for the year been accounted for pursuant to Accounting Standard-22Accounting for Taxes onIncome", profit after tax for the year would have been lower by fls. 694,28 lacs;

5. As stated in Note No. 1(l)(ii), set off of MAT credit entitlement is subject to availability of taxable income of the Company in Mure, as per the provisions of the income Tax Act, 1961.

6. Subject to the 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 purpose of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company, so far as appears from our examination of those books;

c) The Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) Subject to our comments in above para 4, h our opinion, the Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt w th by this report, compiy with the Accounting Standards referrec to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the Directors as on 31st March, 2010, and taken on record by the Board of Directors, we reporthat none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms o! Clause (g) of Sub-s action (1) of Section 274 of the Companies Act, 1956.

Subject to our comtnents in Para 4 above and their consequential impact on the profit for the year, 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 significant accounting policies and 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 at 31st March, 2010;

(ii) in the case of the Profit & Loss Account, of the profit of the Company for the year ended on that date; and

(iii) in the case of tie Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF PRAKASH INDUSTRIES LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31 ST MARCH, 2010.

1. (a) The Company is maintaining proper records showing all particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management in accordance with a phased programme, which in our opinion is reasonable having regard to the size of the company and the nature of its assets, During the year, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed 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.

2. (a) The inventory, except stock in transit or lying with third parties has been physically verified by the management during the year, For stocks lying with third parties at the year end, written confirmations have been obtained. In our opinion, 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 inventory followed by the management are reasonable and adequate 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 is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. The Company has neither granted nor taken any loans, secured or unsecured to / from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is 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. 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 any major weakness in the internal control system.

5. Based upon the audit procedures applied by us and according to the information, and explanations given to us, there are no transactions which are required to be entered in the register maintained under Section 301 of the Act.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the year within the meaning of the provisions of sections 58A and 58AA of the Companies Act, 1956, As per the information and explanations given to us, the Company Law Board has passed no order under the aforesaid sections on the Company,

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business,

8. The Central Government has prescribed maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956 In respect oi certain manufacturing activities of the Company. We have broadly reviewed the books of account maintained by the Company pursuant to the order and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of such accounts and records with a view to determine whether they are accurate oi complete.

9. (a) According to the information and explanations given to us and

the records of the company examined by us, the Company is generally regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fond, Employees State Insurance, Sales Tax, Entry Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess oi any other material statutory dues applicable to it with the appropriate authorities.

(b) According to the information and explanations given to us, there are following statutory dues which have not been deposited ty the Company on account of dispute with the concerned authorities and same is being contested by the Company:-

Nature of Amount Forum where the dispute is pending the dues (Rs. in lacs)

Excise Duty 6.29 Appellate Authority- Dy. Commissioner

0.11 Appellate Authority- Asst. Commissioner

6.15 Appellate Authority- Asst. Commissioner

33.94 CESTAT, New Delhi

5.09 Appellate Authority- Jt. Commissioner

28.56 Appellate Authority- Commissioner

Energy Cess 423.00 Supreme Court of India

10. The Company has no accumulated losses as at 31st March, 2010, The Company has not incurred cash losses during the financial year covered by our audit and immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institutions, banks and i " debenture holders during the year.

12. According to the information and explanations 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.

13. in our opinion and according to the information and explanations given to us, the provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company.

14. According to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made in respect of Companys dealings in its investments. The investments have been held by the Company in its own name.

15. 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 during the year.

16. According to the information and explanations given to us, the term i loans taken by the Company during the year have been applied lor the purpose for which they were obtained.

17. Based on the information and explanations given to us and on an overall examination of Balance Sheet of the Company, the Company has not raised any funds on short-term basis, which have been used for long-term investment.

13. The Company has not made any preferential allotment of shares during the year to the parties and companies covered in the Register maintained under Section 301 of the Act.

19. The Company has not issued any debentures during the year under review.

20. The Company has not raised any money by way of public issues during the year under review,

21. During the course of cjur examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information-and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management,



For CHATURVEDI &PARTNERS

Chartered Accountants Registration No.307088E

Place :New Delhi (L.N.Jain)

Dated :28 th May,2010 Partner

 
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