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Auditor Report of Prashant India Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of M/s. Prashant India Limited (''the Company'') which comprise the Balance Sheet as at 31st March 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 perfnance 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well asevaluating 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, subject to the matters emphasized here in below, 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

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

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date. Emphasis of Matter

Note no.2(a) :

Regarding non accounting for gratuity, leave encashment & bonus liability contrary to sec.209 of the Companies Act, 1956 and AS-15 issued by the ICAI.

Note no.2(b):

Regarding accounts of the comp any having been prepared on ''Going Concern Basis'', despite operations of Agro Division of the Company having stood suspended, since 1998, '' net losses / cash losses incurred by the Company for last several years including the current financial year, net worth of the Company having been totally eroded and substantial losses having been carried forward as at 31st March, 2014,

BIFR having held the Company as sick under the provisions of sec.3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 and ordered for winding up of the Company, which is upheld by the AAIFR in the absence of adequate data and information for its compilation on an alternative basis and consequently no adjustments having been made in the accounts relating to the recoverability of recordedasset amounts and in respect of recorded liabilities and contingent liabilities that might devolve on the company.

Note no.24(b): Regarding non provision of liabilities of Rs.6852.95 lacs Note no.24(k) :

Regarding certain balances being subject to confirmation the effect of which could not be quantified, 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 informatiort 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 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 ot Profit and Loss and Cash, Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations receivemfthe directors as on. 31st March, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f. Since the Central Government has not issued any not ification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.(3)

ANNEXURE TO THE AUDITOR''S REPORT REFERRED TO IN PAR AGRAPH ''2'' OF OUR AUDIT REPORT OF EVEN DATE ON ACCOUNTS OF PRASHANT INDIA LTD. FOR THE YEAR ENDED ON 31st MARCH, 2014.

In terms of the information and explanations given to us and the books and records examined by us in the normal course of our audit and to the best of our knowledge and belief, we state that in our opinion: 1

(a) The company has been maintaining proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) Fixed assets have been physically verified by the management at reasonable intervals and that no material discrepancies were noticed by the management on such verification.

(c) No substantial part of fixed assets has been disposed off during the year, which has affected the going concern assumption (Also refer Note 1(b) of our Audit Report).

2.

(a) Physical verification of inventory (except stocks lying with third parties, confirmation for which has been obtained and in stocks in transit) has been conducted at reasonable intervals during the year by the management.

(b) 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) The Company has been maintaining proper records of inventory and discrepancies noticed on physical verification as compared to book record s were not material and have been properly dealt with in the books of accounts.

3.

(a) The Company has not granted any loans, secured or unsecured, to Companies, Firms or other parties listed in the register maintained u/s. 301 of the Companies Act, .1956 (1 of 1956). The Company has taken secured loans from Companies, Firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956 (1 of 1956) and number of such party is one wherein the balance repayable as at the end of the year is Rs. 11,22,86,903/- plus interest payable on account of loan/debt assignments. ( Maximum balance during the year Rs. 11,32,86,903/- plus interest payable and number of party is two)

(b) Since there are no transactions of loans given by he company, clauses (b) to (d) of paragraph 3 of the order are not applicable.

(c) In our opinion, the rate of interest and other terms and conditions of secured loans taken by the company are prima facie not prejudicial to the company.

(d) In respect of loans taken by the company, payment of principal amount and interest is not regular, as stipulated

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

5. Based on Audit procedures applied by us and according to the information ana explanations given to us, we report that

(a) the particulars of contracts or arrangements referred to u/s 301 of the Companies Act, 1956 (1 of 1956) have been recorded in the register maintained for the purpose. '' (b) these transactions prima facie appear to have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. During the year, the company has not accepted deposits from the public.

7. Due to meager turnover and huge losses, the comparfy does not afford to have an internal audit system.

8. As informed to us, maintenance of cost records in accordance with the provisions sec. 209(1 )(d) of the Companies Act, 1956 is not applicable for job work activity and power generation activity undertaken by the Company

9.

(a) The provisions of the Provident Fund Act, Investor Education & Protection Fund and Employees'' State Insurance Act as applicable are duly complied with. There were no undisputed amount payable in respect of Income tax, Wealth tax, Sales tax, Service tax, Customs duty, Excise duty, Cess or any other statutory due which were outstanding as at 31-03-2014 for a period of more than six months from the date they became payable, except as mentioned below:

Nature of statute- Nature of dues Amount Remarks Authority Rs. lacs

Customs Act, 1962 & Custom duty 77.03 Nil Central Excise Act, 1944

Land Revenue ct Land rev. 4.87 Nil

(b) The disputed dues of Income tax, Wealth tax, Sales tax, Service tax, Customs duty, Excise duty or CesS as on 31/03/2014 are as follows :

Nature of statute- Nature of Amount Forum where dispute is Authority dues rs lacs pending

G.S.T. Act, 196 Sales tax 544.68 AC, Bhavnagar

I.T.Act, 1961 Income Tax- Not High Court, Gujarat A.Y. 1992-93 fixed

10. The Company has accumulated losses of Rs.4468.46 lacs as at the end of the financial year, which is in excess of 50% of its net worth. The com pany has Incurred cash losses in the current financial year but not in the immediately preceding financial year.

11. According to the information and explanations given to us and based on our audit checks, we report that the company in the current financial year has not made repayment to any banks or financial institutions. The company has defaulted in repayment of dues to various banks and financial institutions. The company had been declared sick u/s 3(1 )(0) of the Sick Industrial Companies (Special Provisions) Act, 1985 by the BIFR vide order dt.20-09-2005 and has been held to be wound up u/s 20(1) of the said Act by the BIFR vide order dt. 14-09-2006. The entire outstanding of all financial institutions/banks is overdue since long. Please refer to Audit note no.5 & 7 also.

12. Since the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4(xii) of the Order is not applicable.

13. Since the company is not a chit fund or a nidhi/mutual benefit fund/society, paragraph 4(xiii) of the Order is not applicable.

14. Since the company is not dealing in or trading in shares, Securities, debentures and other investments, paragraph 4(xiv) of the Order is not applicable.

15. According to the information and explanations given to us,''the Company has not given guarantees for loans taken by others from banks and financial institutions.

16. On the overall examination of the Balance Sheet of the Company, we report that term loans have been applied for the purpose for which they were obtained.

17. On an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long- term investment.

18. Since the company has not made any preferential allotments of shares to any parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956, paragraph 4(xviii) of the Order is not applicable.

19. Since the company has not issued any debentures, paragraph 4(xix) of the Order is not applicable.

20. Since the company has not raised money by way of public issue during the year, paragraph 4(xx) of the Order is not applicable.

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

For DEVENDRA GHEEWALA & CO. CHARTERED ACCOUNTANTS

sd/- Place : Surat. D.M.GHEEWALA Date : 20-06-2014 PROPRIETOR M.No.: 049857 FRN. :115563W


Mar 31, 2012

We have audited the attached Balance Sheet of PRASHANT INDIA LTD. as at 31st March, 2012 and also the Profit & Loss Account and Cash Flow Statement 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003, ('CARO') as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government in terms of provisions of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records as we considered necessary and appropriate and according to the information and explanations, given to us during the course of the audit, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said order.

Further to our comments in the Annexure referred to 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 except cost records, 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 the report are in agreement with the books of accounts.

d. In our .opinion, the Balance Sheet, the Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in section 211 (3c) of the Companies Act, 1956 except AS15 as referred to in Audit Note no. 1(a)

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 of the company and also the information and explanations given to us, we report that none of the directors is, as at 31st March, 2012 prima facie disqualified 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, subject to the

Note no. 1(a) : Regarding non accounting for gratuity, leave encashment & bonus liability contrary to sec 209 of the Companies Act. 1956 and AS15 issued by the ICAI.

Note no. 1(b) : Regarding accounts of the company having been prepared on Going Concern Basis, despite

- operations of Agro division of the company having stood suspended,

- cash losses incurred by the company for last several years,

- net worth of the company having been totally eroded and substantial losses having been carried forward as at 31st March, 2012,

- BIFR having held, the company as sick under the provisions of sec.3(I)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 and ordered for winding up of the company, also upheld by the AAIFR

in the absence of adequate data and information for its compilation on an alternative basis and consequently no adjustments having been made in the accounts relating to the recoverability of recorded asset amounts and in respect of recorded liabilities and contingent liabilities that might devolve on the company.

Note no. 3 : Regarding non provision of liabilities of Rs. 5940.2 7 lacs

Note no. 9 : Regarding certain balances being subject to confirmation the effect of which could not be quantified,

the said accounts read together with other audit notes thereon, give the information as 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 so far as it relates to the Balance Sheet, of the state of affairs of the Company at the 3 1st March, 2012, -

(II) in so far as it relates to the Profit and Loss Account, of the loss of the Company for the year ended on that date and

(III) in so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date

ANNEXURE TO THE AUDITOR'S REPORT REFERRED TO IN PARAGRAPH '2' OF OUR AUDIT REPORT OF EVEN DATE ON ACCOUNTS OF PRASHANT INDIA LTD. FOR THE YEAR ENDED ON 31st MARCH, 2012

In terms of the information and .explanations given to us and the books and records examined by us in the normal course of our audit and to the best of our knowledge and belief, we state that in our opinion: 1

(a) The company has been maintaining proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) Fixed assets have been physically verified by the management at reasonable intervals and that no material discrepancies were noticed by the management on such verification.

(c) No substantial part of fixed assets has been disposed off during the year, which has affected the going concern assumption (Also refer Note 1(b) of our Audit Report).

2. (a) Physical verification of inventory (except stocks lying with third parties, confirmation for which has been obtained and in stocks in transit) has been -conducted at reasonable intervals during the year by the management.

(b) 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) The Company has been maintaining proper records of inventory and discrepancies noticed on physical verification as compared to book records were not material and have been properly dealt with in the books of accounts.

3. (a) The Company has not granted any loans, secured or unsecured, to Companies, Firms or other parties listed in the register maintained u/s. 301 of the Companies Act, 1956 (1 of 1956). The Company has taken secured loans from Companies, Firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956 (1 of 1956) and number of such party is one wherein the balance repayable as at the end of the year is Rs. 2,95,00,000/- on account of debt assignments. (Maximum balance during the year Rs. 2,95,00,000/-)

(b) Since there are no transactions of loans given by the company, clauses (b) to (d) of paragraph 3 of the order are not applicable.

(c) In our opinion, the rate of interest and other terms and conditions of secured loans taken by the company are prima facie not prejudicial to the company.

(d) In respect of loans taken by the company, payment of principal amount and interest is not regular, as stipulated.

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

5. Based on Audit procedures applied by us and according to the information and explanations given to us, we report that

(a) the particulars of contracts or arrangements referred to u/s 301 of the Companies Act, 1956 (1 of 1956) have been recorded in the register maintained for the purpose.

(b) these transactions prima facie appear to have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. During the year, the company has not accepted deposits from the public.

7. Due to recessionary trend and huge losses, the company does not afford to have an internal audit system.

8. The company has made and maintained cost records in accordance with the provisions sec. 209( 1 )(d) of the Companies Act, 1956.

9. (a) The provisions of the Provident Fund Act, Investor Education & Protection Fund and Employees' State Insurance Act as applicable are duly complied with. There were no undisputed amount payable in respect of Income tax, Wealth tax, Sales tax, Service tax, Customs duty, Excise duty, Cess or any other statutory due which were outstanding as at 31-03-2012 for a period of more than six months from the date they became payable except as mentioned below:

Nature of statute- Nature of dues Amount Remarks Authority Rs. lacs

Customs Act, 1962 & Custom duty 77.03 Nil

Central Excise Act, 1944

Land Revenue Act Land rev. 20.01 Nil

(b) The disputed dues of Income tax, Wealth tax, Sales tax. Service tax. Customs duty. Excise duty or Cess as on 31/03/2012 are as follows:

Nature of statute- Nature of Amount Forum where dispute is Authority dues Rs. Lacs pending

G.S.T. Act, 1969 Sales tax 544.68 AC, Bhavnagar

G.S.T. Act, 1969 Sales tax 10.24 GVAT Tribunal, A bad

10. The Company has accumulated losses of Rs. 4319.79 lacs as at the end of the financial year, which is in excess of 50% of its net worth. The company has not incurred cash losses in the current financial year but has incurred cash losses in the immediately preceding financial year.

11. According to the information and explanations given to us and based on our audit checks, we report that the company in the current financial year has not made repayment to any banks or financial institutions. The company has defaulted in repayment of dues to various banks and financial institutions. The company had been declared sick u/s 3(1 )(0) of the Sick Industrial Companies (Special Provisions) Act, 1985 by the B1FR vide order dt.20-09-2005 and has been held to be wound up u/s 20(1) of the said Act by the BIFR vide order dt. 14-09-2006. The entire outstanding of all financial institutions/banks is overdue since long. Please refer to Audit note no.2 & 3 also.

12. Since the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4(xii) of the Order is not applicable.

13. Since the company is not a chit fund or a nidhi/mutual benefit fund/society, paragraph 4(xiii) of the Order is not applicable.

14. Since the company is not dealing in or trading in shares, securities, debentures and other investments, paragraph 4(xiv) of the Order is not applicable.

15. According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks and financial institutions.

16. On the overall examination of the Balance Sheet of the Company, we report that term loans have been applied for the purpose for which they were obtained.

17. On an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

18. Since the company has not made any preferential allotments of shares to any parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956, paragraph 4(xviii) of the Order is not applicable.

19. Since the company has not issued any debentures, paragraph 4(xix) of the Order is not applicable.

20. Since the company has not raised-money by way of public issue during the year, paragraph 4(xx) of the Order is not applicable.

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



For DEVENDRA GHEEWALA & CO. CHARTERED ACCOUNTANTS

Sd/ D.M.GHEEVVALA PROPRIETOR

M.No. : 049857 FRN. : 115563W

Place : Surat. Date : 20-07-2012

 
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