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Auditor Report of Prakash Steelage Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of PRAKASH STEELAGE LIMITED ('the Company'), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone 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 standalone 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone 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 misstatement.

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 system 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 the 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 fo r our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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.

Emphasis of matter

We draw attention to note no. 40 of the financial statements regarding non-disclosure of initial disclosures namely total assets, total liabilities, revenue, expenses, net cash flows and pre-tax profit or loss in respect of the ordinary activities attributable to the discontinuing operation and the income tax expense related thereto as required by Accounting Standard (AS) 24 'Discontinuing Operations' in respect of proposed transfer of its seamless business. As stated in aforesaid note, the company is unable to determine the income, expenses, assets and liabilities clearly attributable to the discontinued operations and the management is of the view that the seamless business, a component of the enterprise, cannot be distinguished operationally and for financial reporting purposes for the reasons mentioned therein.

Our opinion is not modified in respect of this matter.

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 Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

(a) We have sought and 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 it 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) In our opinion, the aforesaid standalone 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.

(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 41 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 42 to the financial statements;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company - Refer Note 43 to the financial statements.

Annexure to the Independent Auditors' Report

Annexure referred to in paragraph 1 under the heading of 'Report on Other Legal and Regulatory Requirements' of Independent Auditors' Report to the members of PRAKASH STEELAGE LIMITED ("the Company") for the year ended March 31, 2015. We report that:

(i) a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b) The fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of fixed assets by the management, as informed to us, is at reasonable intervals, having regard to the size of the Company and the nature of the assets physically verified. As explained to us no material discrepancies were noticed on such verification.

(ii) a) Inventory have been physically verified by the management at reasonable intervals. 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 ve rification of inventory followed by the management are generally 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 explanation given to us, the Company is maintaining proper records of inventory. Discrepancies noticed on verification by management between the physical stocks and the book records were not material and the same have been properly dealt with in The books of account.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of clause 3(iii) of Companies (Auditor's Report) Order, 2015 are not applicable to the Company.

(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 purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control systems.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits during the year from the public within the meaning of the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules made thereunder.

(vi) According to information and explanations given to us, the Company has maintained books of account and records required to be maintained pursuant to the rule prescribed by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

(vii) a) Undisputed Statutory dues including Employees' Provident Fund, Employees' State Insurance (ESIC), Value Added Tax, Central Sales Tax, Entry Tax, Tax Deducted at Source (TDS), Wealth Tax, Service Ta x and Profession Tax have generally been regularly deposited with the appropriate authorities except for dues in respect of income- tax where considerable delay has been observed in depositing such dues with the appropriate authorities. According to the information and explanations given to us, there were no undisputed statutory dues which have remained outstanding as at March 31, 2015 for the period of more than six months from the date they became payable.

b) According to the information and explanations given to us, and the records examined by us, the dues in respect of Sales-Tax, Income-Tax, Duty of Customs, Wealth-tax, Service Tax, entry tax, Value Added Tax, Central Sales Tax, Duty of Excise, Cess as at March 31, 2015 that have not been deposited with the appropriate authority on account of any disputes and the forum where the dispute is pending are as under:

c) According to the information and explanations given to us, there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

Sr. Name of Nature of Financial Year No. the Statute the Dues to which amount relates

1 Bombay Sales Sales Tax 1994-95 Tax Act

2 Bombay Sales Sales Tax 1995-96 Tax Act

3 Central Sales Central 1995-96 Tax Act Sales Tax

4 Central Sales Central 2009-10 Tax Act, 1958 Sales Tax

5 Maharashtra Maharashtra 2009-10 VAT Act, 2002 Value Added Tax

6 Maharashtra Maharashtra 2005-06 VAT Act, 2002 Value Added Tax

7 Central Sales Central Sales 2005-06 Tax Act, 1958 Tax

8 Maharashtra Maharashtra 2008-09 VAT Act, 2002 Value Added Tax

9 Central Sales Central Sales 2008-09 Tax Act, 1958 Tax

10 Central Excise Cenvat Credit April 2007 to Act,1944 & Penalty August 2009

Name of the Statute Amount Forum where dispute (Rs.) is Pending

Bombay Sales Tax Act 79,202/- Dy. Comm. Sales Tax (Appeal) IV, Mumbai

Bombay Sales Tax Act 59,317/- Dy. Comm. Sales Tax (Appeal) IV, Mumbai

Central Sales Tax Act 2,85,360/- Dy. Comm. Sales Tax (Appeal) IV, Mumbai

Central Sales Tax Act 42,53,968/- Joint Comm. Sales Tax (Appeal) IV, Mumbai

Maharashtra VAT Act, 2002 1,07,56,527/- Joint Comm. Sales Tax (Appeal) IV, Mumbai

Maharashtra VAT Act, 2002 1,14,78,701/- Joint Comm. Sales Tax (Appeal) IV, Mumbai

Central Sales Tax Act, 1958 1,25,90,800/- Joint Comm. Sales Tax (Appeal) IV, Mumbai

Maharashtra VAT Act, 2002 3,76,000/- Joint Comm. Sales Tax (Appeal) IV, Mumbai

Central Sales Tax Act, 1958 3,82,78,500/- Joint Comm. Sales Tax (Appeal) IV, Mumbai

Central Excise Act, 1944 17,23,624/- Customs Excise & Service Tax Appellate Tribunal, Ahmedabad

(viii) The Company has no accumulated losses at the end of the financial year and has not incurred cash loss in the current financial year or in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank.

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

(xi) In our opinion and according to the information and explanation given to us, the term loans raised during the year have been applied for the purpose for which they were raised.

(xii) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on the Company or by the Company has been noticed or reported during the course of our audit.

FOR KHANDELWAL JAIN & CO. FOR BATLIBOI & PUROHIT

Chartered Accountants Chartered Accountants

Firm's Registration No. 105049W Firm's Registration No. 101048W

sd/- sd/-

(NARENDRA JAIN) (R.D.HANGEKAR)

PARTNER PARTNER

Membership No. 048725 Membership No. 030615

Place: Mumbai

Date: May 30, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Prakash Steelage 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.

Management''s Responsibility for the Financial Statements

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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act")read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 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.

Auditors'' 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (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, 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) 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 subsection (3C) of section 211 of the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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 Act.

Annexure to the Independent Auditors'' Report

Annexure referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of Independent Auditors'' Report to the members of Prakash Steelage Limited ("the Company") for the year ended March 31, 2014. We report that:

i) (a) The Company has maintained proper records showing full particulars, including quantitative details and

situation of fixed assets.

(b) The fixed assets have been physically verified by the management during the year. In our opinion, the

frequency of verification of fixed assets by the management, as informed to us, is at reasonable intervals, having regard to the size of the Company and the nature of the assets physically verified and as explained to us no material discrepancies were noticed on such verification.

(c) During the year, the Company has not disposed off any substantial part of its fixed assets.

ii) (a) Inventory have been physically verified by the management at reasonable intervals. 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 generally 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. Discrepancies noticed on verification by management between the physical stocks and the book records were not material and same have been properly dealt with in the books of account.

iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to any company, firm or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of clause 4 (iii) (b) (c) (d) are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has taken unsecured loans during the year from a company and a director covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.35,00,00,000 and the year-end balance of loans taken from such parties was Rs. 25,00,00,000.

(c) In our opinion, the rate of interest and other terms and conditions on which such loans have been taken from a company and a director listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(d) According to the information and explanations given to us, repayment of principal and interest thereon were in accordance with the terms and conditions of loan.

iv) 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, with regard to the purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements, referred to in section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) In our opinion and according to information and explanations given to us, no public deposits under the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules framed have been accepted by the Company. According to the information and explanations given to us, no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company.

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

viii) According to information and explanations given to us, the Company has maintained books of account and records required to be maintained pursuant to the rule prescribed by the central government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

ix) (a) Undisputed Statutory Dues including Employees'' Provident Fund, Employees'' State Insurance (ESIC),

Value Added Tax, Central Sales Tax, Entry Tax, Tax Deducted at Source (TDS), Income Tax, Wealth Tax, Service Tax and Profession Tax have generally been regularly deposited with the appropriate authorities, however, there have been delays in depositing such dues in some cases. According to the information and explanations given to us, there were no undisputed statutory dues which have remained outstanding as at March 31, 2014 for the period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, and the records examined by us, dues in respect of Sales-Tax, Income-Tax, Customs Duty, Wealth Tax, Service Tax, Entry Tax, Value Added Tax, Central Sales Tax, Excise Duty, Cess as at March 31, 2014 that have not been deposited with the appropriate authority on account of any disputes and the forum where the dispute is pending are as under:-

Sr. Name of Nature of Period to which No. the Statute the Dues the amount relates

1 Bombay Sales Sales Tax 1994-95 Tax Act

2 Bombay Sales Sales Tax 1995-96 Tax Act

3 Central Sales Central 1995-96 Tax Act Sales Tax

4 Central Sales Central 2009-10 Tax Act, 1958 Sales Tax

5 Maharashtra Sales Tax 2009-10 VAT Act, 2002

Name of Amount Forum where dispute the Statute (Rs.) is pending

Bombay Sales 79,202/- Dy. Comm. Sales Tax (Appeal) Tax Act IV, Mumbai

Bombay Sales 59,317/- Dy. Comm. Sales Tax (Appeal) Tax Act IV, Mumbai

3 Central Sales 2,85,360/- Dy. Comm. Sales Tax (Appeal) Tax Act IV, Mumbai

Central Sales 42,53,968/- Joint Comm. Sales Tax (Appeal) Tax Act IV, Mumbai

Maharashtra1, 07,56,527/- Joint Comm. Sales Tax (Appeal) VAT Act, 2002 IV, Mumbai

x) The Company has no accumulated losses at the end of the financial year and has not incurred cash loss in the current financial year or in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank.

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

xiii) The Company is not a chit fund or nidhi / mutual benefit fund / society.

xiv) In our opinion and according to the information and explanations given to us, the Company has not done dealing or trading in shares, securities, debentures and other investments during the year under audit.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year have been applied for the purpose for which they were raised.

xvii) According to the information and explanations given to us and on an examination of the Balance Sheet of the Company, we report that, on an overall basis, funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

xviii) The Company has not made any preferential allotment of shares during the year.

xix) In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year or in earlier years.

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

xxi) 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.

FOR KHANDELWAL JAIN & CO. FOR D. C. BOTHRA & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS FIRM REGISTRATION NO: 105049W FIRM REGISTRATION NO: 112257W

Sd/- Sd/- NARENDRA JAIN PAWAN BOTHRA PARTNER PARTNER MEMBERSHIP NO. 048725 MEMBERSHIP NO. 031215

PLACE : MUMBAI DATE : 29TH MAY, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Prakash Steelage Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, 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.

Management''s Responsibility For The Financial Statements

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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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.

Auditors'' 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 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, 2013;

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.

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (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, 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) 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 subsection (3C) of section 211 of the Act;

e) On the basis of written representations received from the directors as on March 31, 2013, and 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 clause (g) of sub-section (1) of section 274 of the Act.

Annexure to the Independent Auditors'' Report

Annexure referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of Independent Auditors'' Report to the members of Prakash Steelage Limited ("the Company") for the year ended March 31, 2013. We report that:

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

(b) The fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of fixed assets by the management, as informed to us, is at reasonable intervals, having regard to the size of the Company and the nature of the assets physically verified and as explained to us no material discrepancies were noticed on such verification.

(c) During the year, the Company has not disposed off any substantial part of its fixed assets.

ii) (a) Inventory have been physically verified by the management at reasonable intervals. 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 generally 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. Discrepancies noticed on verification by management between the physical stocks and the book records were not material and same have been properly dealt with in the books of account.

iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to any company, firm or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of clause 4 (iii) (b) (c) (d) are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has not taken any loan during the year from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of clause 4 (iii) (f) (g) are not applicable to the Company.

iv) 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, with regard to the purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements, referred to in section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) In our opinion and according to information and explanations given to us, no public deposits under the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules framed have been accepted by the Company. According to the information and explanations given to us, no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company.

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

viii) According to information and explanations given to us, the Company has maintained books of account and records required to be maintained pursuant to the rule prescribed by the central government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

ix) (a) Undisputed Statutory Dues including Employees'' Provident Fund, Employees'' State Insurance (ESIC), Value Added Tax, Central Sales Tax, Entry Tax, Tax Deducted at Source, Income Tax, Wealth Tax, Service Tax, and Profession Tax have generally been regularly deposited with the appropriate authorities, however, there have been delays in depositing such dues in some cases. According to the information and explanations given to us, there were no undisputed statutory dues which have remained outstanding as at March 31, 2013 for the period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, and the records examined by us, dues in respect of Sales-Tax, Income-Tax, Customs Duty, Wealth Tax, Service Tax, Entry Tax, Value Added Tax, Central Sales Tax, Excise Duty, Cess as at March 31, 2013 that have not been deposited with the appropriate authority on account of any disputes and the forum where the dispute is pending are as under:-

Sr. Name of Nature of Period to which No. the Statute the Dues the amount relates

1 Bombay Sales Sales Tax 1994-95 Tax Act

2 Bombay Sales Sales Tax 1995-96 Tax Act

3 Central Sales Central 1995-96 Tax Act Sales Tax

Name of the Statute Amount Forum where dispute (Rs.) is pending

Bombay Sales Tax Act 79,202/- Dy. Comm. Sales Tax (Appeal) IV, Mumbai

Bombay Sales Tax Act 59,317/- Dy. Comm. Sales Tax (Appeal) IV, Mumbai

Central Sales Tax Act 2,85,360/- Dy. Comm. Sales Tax (Appeal) IV, Mumbai

x) The Company has no accumulated losses at the end of the financial year and has not incurred cash loss in the current financial year or in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank.

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

xiii) The Company is not a chit fund or nidhi / mutual benefit fund / society.

xiv) In our opinion and according to the information and explanations given to us, the Company has not done dealing or trading in shares, securities, debentures and other investments during the year under audit.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year have been applied for the purpose for which they were raised.

xvii) According to the information and explanations given to us and on an examination of the Balance Sheet of the Company, we report that, on an overall basis, funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

xviii) The Company has not made any preferential allotment of shares during the year.

xix) In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year or in earlier years.

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

xxi) 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.

FOR KHANDELWAL JAIN & CO. FOR D. C. BOTHRA & CO.

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

FIRM REGISTRATION NO: 105049W FIRM REGISTRATION NO: 112257W

NARENDRA JAIN PAWAN BOTHRA

PARTNER PARTNER

MEMBERSHIP NO. 048725 MEMBERSHIP NO. 031215

PLACE : MUMBAI

DATE : 30th MAY, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of PRAKASH STEELAGE LIMITED as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, both 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure 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 (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub section (4A) of Section 227 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 during the course of the audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

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 and in so far as it appears from our examination of those books, proper books of account as required by law have been kept by the Company

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the 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 representation 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 are 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;

f) In our opinion, and to the best of our information and according to the explanations given to us, they said accounts and read together 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 :-

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012,

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 Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to the Auditors' Report

(REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF PRAKASH STEELAGE LIMITED FOR THE YEAR ENDED MARCH 31, 2012)

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

(b) The fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of fixed assets by the management, as informed to us, is at reasonable intervals, having regard to the size of the Company and the nature of the assets physically verified and as explained to us no material discrepancies were noticed on such verification.

(c) During the year, the Company has not disposed off any substantial part of its fixed assets.

ii) (a) Inventory have been physically verified by the management at reasonable intervals. 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 generally 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. Discrepancies noticed on verification by management between the physical stocks and the book records were not material and same have been properly dealt with in the books of account.

iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to any company, firm or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of clause 4 (iii) (b) (c) (d) are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has not taken any loan during the year from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of clause 4 (iii) (f) (g) are not applicable to the Company.

iv) 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, with regard to the purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements, referred to in section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) In our opinion and according to information and explanations given to us, no public deposits under the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules framed have been accepted by the Company. According to the information and explanations given to us, no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company.

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

viii) According to information and explanations given to us, the Company has maintained books of account and records required to be maintained pursuant to the rule prescribed by the central government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

ix) (a) Undisputed Statutory Dues including Employees' Provident Fund, Employees' State Insurance (ESIC), Value Added Tax, Central Sales Tax, Tax Deducted at Source, Income Tax, Wealth Tax, Service Tax, and Profession Tax have generally been regularly deposited with the appropriate authorities, however, there have been some delays in depositing such dues. According to the information and explanations given to us, there were no undisputed statutory dues which have remained outstanding as at 31st March, 2012 for the period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, and the records examined by us, dues in respect of Sales-Tax, Income-Tax, Customs Duty, Wealth Tax, Service Tax, Entry Tax, Value Added Tax, Central Sales Tax, Excise Duty, Cess as at 31st March, 2012 that have not been deposited with the appropriate authority on account of any disputes and the forum where the dispute is pending are as under:-

Sr. Name of Nature of Period to which Amount Forum where dispute No. the Statute the Dues the amount relates (Rs.) is pending

1 Bombay Sales Sales Tax 1994-95 1,19,669/- Dy. Comm. Sales Tax Tax Act (Appeal) IV, Mumbai

2 Bombay Sales Sales Tax 1995-96 69,317/- Dy. Comm. Sales Tax Tax Act (Appeal) IV, Mumbai

3 Central Sales Central 1995-96 2,90,360/- Dy. Comm. Sales Tax Tax Act Sales Tax (Appeal) IV, Mumbai

4 Income Tax Act Income Tax 2003-04 2,70,898/- Comm.of Income Tax (Appeal)-37 Mumbai

5 Income Tax Act Income Tax 2007-08 15,20,795/- Comm.of Income Tax (Appeal)-37 Mumbai

6 Income Tax Act Income Tax 2008-09 66,52,232/- Comm.of Income Tax (Appeal)-37 Mumbai

x) The Company has no accumulated losses at the end of the financial year and has not incurred cash loss in the current financial year or in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank.

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

xiii) The Company is not a chit fund or nidhi / mutual benefit fund / society.

xiv) In our opinion and according to the information and explanations given to us, the Company has not done any dealing or trading in shares, securities, debentures and other investments during the year under audit.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year have been applied for the purpose for which they were raised.

xvii) According to the information and explanations given to us and on an examination of the Balance Sheet of the Company, we report that, on an overall basis, funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

xviii) The Company has not made any preferential allotment of shares during the year.

xix) In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year or in earlier years.

xx) The Management has disclosed the end-use of the money raised by the public issue of shares (Refer Note 28 to the Financial Statements). The same has been verified by us.

xxi) 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.

For Khandelwal Jain & Co. For D. C. Bothra & Co.

Chartered Accountants Chartered Accountants

Firm Registration No: 105049W Firm Registration No: 112257W

Narendra Jain Pawan Bothra

Partner Partner

Membership No. 048725 Membership No. 031215

Place : Mumbai

Date : 28th May, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of PRAKASH STEELAGE LIMITED as at 31ST March, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure 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 (as amended) issued by the Central Government of India in terms of sub section (4A) of Section 227 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 during the course of the audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

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 and in so far as it appears from our examination of those books, proper books of account as required by law have been kept by the Company

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the 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 representation received from the directors, as on 31ST March, 2011 and taken on record by the Board of Directors, we report that none of the directors are 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) Note No.9 of Schedule P (II) to the accounts, regarding non-provision of penalty under the Income Tax Act 1961 on income declared at the time of search operation carried out by the income tax authorities during the year 2008-09, as the same has not yet been quantified, the resulting impact on the accounts is not ascertainable.

g) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts subject to our comment in Paragraph (f) above and read together with the significant accounting policies and 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 :- a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31ST March, 2011,

b) in the case of Profit and Loss Account, of the profit for the year ended on that date, and

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

Annexure to the Auditors Report (REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF PRAKASH STEELAGE LIMITED FOR THE YEAR ENDED 31ST MARCH, 2011)

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

(b) The fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of fixed assets by the management, as informed to us, is at reasonable intervals, having regard to the size of the Company and the nature of the assets physically verified and as explained to us no material discrepancies were noticed on such verification.

(c) During the year, the Company has not disposed off any substantial part of its fixed assets.

ii) (a) Inventory have been physically verified by the management at reasonable intervals. 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 generally 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. Discrepancies noticed on verification by management between the physical stocks and the book records were not material and same have been properly dealt with in the books of account.

iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to any company, firm or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of clause 4 (iii) (b) (c) (d) are not applicable to the Company.

(b) The Company has taken unsecured loans from four parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.178,700,000 /- and the year end balance of loans taken from such parties was Rs. Nil/-.

(c) In our opinion and according to the information and explanations given to us the rate of interest and other terms and conditions on which these loans have been taken are not prima facie prejudicial to the interest of the Company.

(d) The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest wherever stipulated.

iv) 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, with regard to the purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements, referred to in section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) In our opinion and according to information and explanations given to us, no public deposits under the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules framed have been accepted by the Company. According to the information and explanations given to us, no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company.

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

viii) According to information and explanations given to us, the Company has maintained books of account and records required to be maintained pursuant to the rule prescribed by the central government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

ix) (a) Undisputed Statutory Dues including Employees Provident Fund, Employees State Insurance (ESIC), Value Added Tax, Central Sales Tax, Tax Deducted at Source, Income Tax, Wealth Tax, Service Tax, and Profession Tax have been regularly deposited with the appropriate authorities, however, there have been some delays in depositing such dues. According to the information and explanations given to us, there were no undisputed statutory dues which have remained outstanding as at 31st March, 2011 for the period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, and the records examined by us, dues in respect of Sales-Tax, Income-Tax, Customs Duty, Wealth Tax, Service Tax, Entry Tax, Value Added Tax, Central Sales Tax, Excise Duty, Cess as at 31st March, 2011 that have not been deposited with the appropriate authority on account of any disputes and the forum where the dispute is pending are as under-

Sr Name of Nature of Period to which Amount Forum where dispute No the Statue the Dues the amount relates (Rs.) is pending

1 Bombay Sales Sales Tax 1994-95 1,19,669/- Dy. Comm. Sales Tax Tax Act (Appeal) IV, Mumbai

2 Bombay Sales Sales Tax 1995-96 69,317/- Dy. Comm. Sales Tax Tax Act (Appeal) IV, Mumbai

3 Central Sales Central 1995-96 2,90,360/- Dy. Comm. Sales Tax Tax Act Sales Tax (Appeal) IV, Mumbai

4 Bombay Sales Sales Tax 2004-05 9,04,730/- Dy. Comm. Sales Tax Tax Act

5 Central Sales Central 2004-05 25,32,191/- Dy. Comm. Sales Tax Tax Act Sales Tax

6 Gujarat Sales Entry Tax 2009-10 16,23,702/- Commercial Tax Tax Act Officer (3)

Interest on 2009-10 3,08,997/- Commercial Tax Entry Tax Officer (3)

7 Gujarat Sales Entry Tax 2010-11 1,50,47,060/- Commercial Tax Tax Act Officer (3)

Interest on 2010-11 14,31,930/- Commercial Tax Entry Tax Officer (3)

x) The Company has no accumulated losses at the end of the financial year and has not incurred cash loss

in the current financial year or in the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the Company has not

defaulted in repayment of dues to a financial institution or bank.

xii) Based on the information and explanations given to us, the Company has not granted any loans and/or

advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit fund or nidhi / mutual benefit fund / society.

xiv) In our opinion and according to the information and explanations given to us, the Company has not done

any dealing or trading in shares, securities, debentures and other investments during the year under audit.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the year have been applied for the purpose for which they were raised.

xvii) According to the information and explanations given to us and on an examination of the Balance Sheet of the Company, we report that, on an overall basis, funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

xviii) The Company has not made any preferential allotment of shares during the year.

xix) In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year or in earlier years.

xx) The Management has disclosed the end-use of the money raised by the public issue of shares (Refer Note 13 of Schedule P (II) to the Financial Statement). The same has been verified by us.

xxi) 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.

For Khandelwal Jain & Co. For D. C. Bothra & Co. Chartered Accountants Chartered Accountants Firm Registration No: 105049W Firm Registration No: 112257W

Narendra Jain Pawan Bothra Partner Partner Membership No. 048725 Membership No. 031215

Place : Mumbai Date : 28TH May, 2011


Mar 31, 2009

1. We have audited the attached Balance Sheet of PRAKASH STEELAGE LIMITED as at 31 st March, 2009, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure 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 (as amended) issued by the Central Government of India in terms of sub section (4A) of Section 227 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 during the course of the audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

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; except for information pertaining to declaration of income as stated in Note no. 9 of Schedule P- II to the accounts.

b) In our opinion and in so far as it appears from our examination of those books, proper books of account as required by law have been kept by the Company subject to the extent of the records relating to the inventories, other income & prior period income, declared, as stated in Note no.9 of Schedule P-llto the accounts.

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the 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 representation received from the directors, as on 31 St March, 2009, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31 st March, 2009, from being appointed as a director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

f) (i) Note No. 3 of Schedule P (II) to the accounts, regarding some of the balances of Sundry

Debtors, Deposits, Loans & Advances, Unsecured Loan taken and Sundry Creditors are subject to confirmation from the respective parties and consequential reconciliation/adjustment arising there from, if any

(ii) Note No. 4 of Schedule P (II) to the accounts, regarding non ascertainment of Creditors falling under Micro, Small and Medium Enterprises Development Act,2006 and consequent non- provision of Interest on amounts due to such creditors, the resulting impact thereof on the accounts is not ascertainable.

(iii)Note No.9 of Schedule P (II) to the accounts, regarding declaration of income of Rs. 7,10,97,351/- at the time of search operations on the Company carried out by the Income Tax Department which could not be verified by us in the absence of relevant records and non- provision of penalty on taxes payable on such declared income as the same has not been quantified, the resulting impact of both on the accounts is not ascertainable.

g) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts Subject to our comments in Paragraph (f) above, the consequential cumulative impact whereof on the financial statements is not ascertainable, and read together with the significant accounting policies and 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 :-

a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009,

b) In the case of Profit and Loss Account, of the profit for the year ended on 31st March, 2009 and

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

ANNEXURE TO THE AUDITORS REPORT (REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF PRAKASH STEELAGE LIMITED FOR THE YEAR ENDED MARCH 31, 2009)

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

(b) The fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of fixed assets by the management, as informed to us, is at reasonable intervals, having regard to the size of the Company and the nature of the assets physically verified and as explained to us no material discrepancies were noticed on such verification.

(c) During the year, the Company has not disposed off any substantial part of its fixed assets.

ii) (a) Inventory have been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the management in relation to the size of the Company and the nature of its business needs improvement in view of the note No. 9 of Schedule P- II to the accounts.

(c) In our opinion, maintenance of records of inventory needs to be further improved, in view of the note No.9 of Schedule P- II to the accounts. Discrepancies noticed on verification during the course of Search Operation carried out by income tax authorities between the physical stocks and the book records were material and same have been dealt with in the books of account.

iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to any company, firm or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of clause 4 (iii) (b) (c) (d) are not applicable to the Company.

(b) The Company has taken unsecured loans from eight parties covered in the register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs.43,06,87,742/- and the year end balance of loans taken from such parties was Rs.16,29,99,742/-.

(c) In our opinion and according to the information and explanation given to us the rate of interest and other terms and conditions on which these loans have been taken are not prima facie prejudicial to the interest of the Company.

(d) The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest wherever stipulated.

iv) In our opinion, the internal control system needs to be strengthened so as to make it commensurate with the size of the Company and the nature of its business, with regard to the purchase of inventory, fixed assets and for sale of goods and services, in view of the note No. 9 of Schedule P- II to the accounts. Subject to this, during the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v) (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements, referred to in section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section.

(b) To the best of our knowledge and belief and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotations, the other transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices & other terms which are reasonable having regard to the prevailing market prices at the relevant time.

vi) In our opinion and according to information and explanation given to us, no public deposits under the provisions of Section 58A and 58AA of the companies act, 1956 and rules framed have been accepted by the Company. According to the information and explanations given to us, no order under the aforesaid Sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company.

vii) The Company has an internal audit system, the scope of which in our opinion, needs to be enlarged to be able to plug the weakness in the internal control system as cited in para (iv) above, to make it commensurate with the size and nature of its business.

viii)According to information and explanation given to us, the Company has maintained books of account and records required to be maintained pursuant to the rule prescribed by the central government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

ix) (a) Undisputed Statutory Dues including Employees Provident Fund, Employees State

Insurance,(ESIC), Tax Deducted at Source, Service tax and Profession Tax have not been regularly deposited with the appropriate authorities as there have been some delay in depositing such statutory dues.

Details of the arrears of undisputed statutory dues as on 31st March, 2009 which are outstanding for more than six months from the date they became payable are as given below.

Sr. Nature of Amount Year to which

No Dues amount relates

1 Service tax 41,430/- 2008-2009

(b) According to the information and explanations given to us, and the records examined by us, dues in respect of sales-tax, income-tax, custom duty, wealth-tax, service tax, excise duty, cess as at 31st March, 2009 that have not been deposited with the appropriate authority on account of any disputes and the forum where the dispute is pending are as under :-

Sr. Name of the Nature of Period to Amount Forum where

No. Statute the Dues which the (Rs.) dispute is

amount relates pending

1 Bombay Sales Sales Tax 1994-95 1,19,669/- Dy. Comm. Tax Act Sales Tax (Appeal) IV, Mumbai

2 Bombay Sales Sales Tax 1995-96 69,317/- Dy. Comm. Tax Act Sales Tax

(Appeal) IV, Mumbai

3 Central Sales Central 1995-96 2,90,360/- Dy. Comm. Tax Act Sales Tax Sales Tax

(Appeal) IV, Mumbai

4 Income Tax Act Income Tax 2005-06 8,16,415/- Comm. of Income Tax

(Appeal), Mumbai

x) The Company has no accumulated tosses as at the end of the financial period and has not incurred cash loss in the current financial period or in the immediately preceding financial period.

xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank.

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

xiii) The Company is not a Chit Fund Company or nidhi/mutual benefit fund/society.

xiv) In our opinion and according to the information and explanations given to us, the Company has not done any dealing or trading in shares, securities, debentures and other investments during the year under audit.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

xvi) In our opinion and according to the information and explanations given to us, the term loans raised during the period have been applied for the purpose for which they were raised.

xvii) According to the information and explanations given to us and on an examination of the Balance Sheet of the Company, we report that, on an overall basis, funds raised on short-term basis have, prima facie, not been used during the period for long-term investment.

xviii) The Company has not made any preferential allotment of shares during the period.

xix) In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year or in earlier years.

xx) During the period covered by our Audit Report the Company has not raised any money by public issues.

xxi) 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 during the year.



For KHANDELWAL JAIN & CO. For D.C. BOTHRA & CO.

Chartered Accountants Chartered Accountants

(NARENDRA JAIN) (PAWAN BOTHRA)

PARTNER PARTNER

Membership No. 048725 Membership No. 31215

Place : Mumbai

Dated : 2nd September, 2009

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