Auditor Report of Pratibha Industries Ltd.

Mar 31, 2018

Report on the Financial Statements

We have audited the accompanying standalone financial statements of PRATIBHA INDUSTRIES LIMITED, (“the Company”), which comprises the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, the 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

The Company’s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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.

Because of the matters described in the Basis for Disclaimer of Opinion paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

Basis for Disclaimer of Opinion

1. The company has accumulated losses and its net worth is fully eroded. It has incurred net loss during the current year as well as previous years and it’s current liabilities exceeded its current assets as at the balance sheet date. It is unable to repay its debts, statutory obligations and pay salaries apart from other obligations/commitments. Its scheme of Strategic Debt Restructuring has failed as the lenders have not accepted its proposal. All these indicate a material uncertainity that may cast significant doubt upon the Company’s ability to continue as a Going Concern. The Management is optimistic about finding resolution and believes it will be able to continue its business, accordingly the standalone financial results are prepared on a going concern basis.

2. Inventory of Work in Progress (WIP) includes certain contractual claim amounting to Rs. 36.91 Crores. These amounts have been ascertained by the management based on their estimates. No formal submission of these claims has been made to clients. WIP also includes certain claims amounting to Rs. 170.33 Crores which are though submitted but not yet approved by respective clients. The amounts of these claims are subject to change post submission/approval from clients. In absence of any communication from clients, we cannot confirm the amount of this WIP. The consequential impact, if any, on the standalone financial statements is therefore not ascertainable.

3. The management has not provided us with the Cost to Completion and consequent profitability/ and or losses on projects which are pending execution. In absence of these details, it is not possible for us to ascertain whether the WIP has been valued and stated correctly or not. The consequential impact, if any, on the standalone financial statements is therefore not ascertainable

4. The company has not provided for interest on various loans from Banks to the extent of Rs. 220.42 Crores. To that extent interest expense, interest liability and loss for the year ended March 31, 2018 are understated. The management is of the view that since the status of all loans has become NPA, interest will be waived off by the Banks and hence no provision is required.

5. Many clients of the company have en-cashed Bank Guarantee on account of various reasons. Balance of Rs. 353.67 Crores is shown as recoverable as asset in Balance sheet and no provision against the same has been made. To that extent loss and reserves are understated and Assets are overstated. Management is of the opinion that these amounts will be recovered in due course from respective parties and there is no need for any provision.

6. Many clients of the company have withheld around Rs. 142.88 Crores on account of various reasons. The amount is outstanding since long. This is shown as refundable from Clients and no provision against the same has been made. In absence of communication with client and proper documentations, we are unable to determine any possible impact thereof on the loss for the year. Management is of the opinion that these amounts will be recovered in due course from respective parties and there is no need for any provision.

7. Many loan accounts having aggregate balance of Rs. 271.78Crores are not confirmed due to non-availability of statement / confirmation from respective Banks. In the absence of sufficient appropriate audit evidence, we are unable to determine any possible impact thereof on the loss for the year and on the balance of cash and cash equivalent and Borrowed Funds.

8. The Company has not made provision against Investment of Rs. 1 Crore and Loans given of Rs. 94.73 Crores to its wholly owned subsidiary M/s. Prime Infrapark Private Limited. The networth of the subsidiary company has fully eroded and its Concession Agreement has been terminated by DMRC.

9. The Company has not made provision against Investment of Rs. 0.01 Crore and Loans given of Rs. 73.47 crores to its subsidiary M/s. Bhopal Sanchi Tollways Private Limited. Its Concession Agreement has been terminated by NHAI. The subsidiary company has lodged claim and the matter is under arbitration.

10. The company has not provided audited financial statements of its wholly owned subsidiary M/s. Pratibha Holdings (Singapore) Pte. Ltd and associate company M/s. Saudi Pratibha Industries LLC. In absence of these details, we can not comment on any requirement for provision for diminution in value of investments.

11. Balance confirmation of trade Receivables, Loans and Advances, deposits and trade payables are not received from third parties. These balances are subject to confirmations and consequent adjustments, if required. In absence of balance confirmations, financial impact on standalone financial statements is not ascertainable.

12. As per the requirements of Rule 4 of Companies (cost records and audit) Amendment Rules, 2016, the company has not conducted cost audit of its records.

13. During the year, Company unilaterally wrote back certain liabilities amounting to Rs. 76.44 Crores. The management is of the opinion that based on their analysis of balances and due to various reasons these balances were not payable and hence written back. In absence of proper documentation, financial impact on standalone financial statements is not ascertainable.

14. The company has not made provision for Expected Credit Loss on receivables and other financial assets as required under IND AS 109.

15. There are many statutory dues amounting to Rs.94.91 Crores, which are pending to be deposited with appropriate government authorities. The company has not made provision for interest on these dues on account of delay in depositing them. Since the management has not estimated overall liability on account of interest, financial impact on standalone financial statements is not ascertainable.

16. During the year, three independent directors have resigned from the Board. As a result composition of Board of Directors, Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee are not in compliance with the provisions of Section 149(4), Section 177 & Section 178 respectively.

Opinion

Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the standalone financial statements.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order, 2016 (“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” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by section 143(3) of the Act, we report that:

a. As described in the Basis for Disclaimer of Opinion paragraph, we sought but were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether 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 Company has not appointed a person other than Companies auditor for audit of accounts of branch offices under Section 143(8); hence clause (c) of sub-section (3) of section 143 is not applicable;

d. Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether 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;

e. Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the aforesaid financial statements comply with the Accounting Standards under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014;

f. the matters described under the Basis for Disclaimer of Opinion paragraph, read further with para i a, iv, v, vii a, and viii of our report in Annexure “A” and para 5 & 6 of Annexure “B” attached hereto, in our opinion, may have an adverse effect on the functioning of the Company;

g. On the basis of written representations received from the directors as on 31 March, 2018, taken on record by the Board of Directors, none of the directors are disqualified as on 31 March, 2018, from being appointed as a director in terms of Section 164(2) of the Act. As per their declaration, M/s Pratibha Industries Ltd., has defaulted in repayment of Deposit received from Public. Based on legal opinion taken by them, this doesn’t attract disqualification of directors.

h. the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Disclaimer of Opinion paragraph above.

i. with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give our separate Report in “Annexure B”.

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

a. As detailed in Note No. 36to the Standalone Financial Statements, the Company has disclosed the impact of pending litigations on its standalone financial position;

b. Due to the possible effects of the matter described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether 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;

c. There has been delay of 9 days in transferring the Unpaid Dividend amounting to Rs. 53,630 of FY 2010-11.

Annexure “A” to the Independent Auditor’s Report

The Annexure referred to in our report to the members of PRATIBHA INDUSTRIES LIMITED (‘The Company’) on the standalone financial statements for the year ended 31^st March, 2018. We report that:

i. In respect of its fixed assets:

a. The Company has maintained records showing particulars including quantitative details and situation of fixed assets. However, location of assets is not updated in records.

b. As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. We are informed that no material discrepancies were noticed on such physical verification.

c. According to the information and explanations given to us, the title deeds of immovable properties recorded as fixed assets in the books of account are held in the name of the company.

ii. In respect of inventories,

a. According to the information and explanation given to us, the physical verification of inventory has been conducted at reasonable intervals by the management during the year. However, we could not observe inventory verification in the absence of intimation from the management in this regard.

b. As per the information and explanation given to us, no material discrepancies between physical inventory and book records were noticed on physical verification. As regards inventory in the nature of Work in Progress, reference is invited to para 2 & 3 under Basis for Disclaimer of Opinion of our report.

iii. According to information and explanations given to us, the Company has granted unsecured loans to parties covered in the register maintained under Section 189 of the Companies Act, 2013. In respect of these loans;

a. In our opinion and as per information and explanation given to us, terms and conditions of grant of such loans are prejudicial to the company’s interest.

b. the terms of repayment of the principal amount and the payment of the interest have not been stipulated and hence we are unable to comment as to whether receipt of the principal amount and the interest are regular and

c. in the absence of stipulated terms and conditions, we are unable to comment as to whether there is any overdue amount for more than ninety days and whether reasonable steps have been taken by the Company for recovery of the principal amount and interest

iv. In our opinion and according to the information and explanations given to us, in respect of loans, investments, guarantees, and security, provisions of section 185 has been complied with. However, it has given interest free unsecured loans covered under section 186 of the Companies Act, 2013 which is in non-compliance of provisions of section 186(7).

v. The Company has accepted deposits from the public. As per our verification of records and information & explanations given to us, except the provisions of section 73(3) and 74(3),the company has complied with the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there-under, where applicable. As per information & explanations given to us, as per the requirements of section 73(3),the company has failed to repay the amount of deposits & interest thereon on maturity. Furtherthe order has been passed by Company Law Board under section 74 (2) of the Companies Act 2013. As per the requirement of the order and section 74 (3) of the Act, the company has failed to repay deposits amounting to Rs. 19,91,20,000 and interest thereon amounting to Rs. 9,31,73,942. Further, directives issued by the Reserve Bank of India are not applicable to the company.

vi. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government 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. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. In respect of statutory dues:

a. According to information and explanations given to us and on the basis of our examination on test check basis, undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of Customs, Duty of Excise, Value Added Tax, Goods & Service Tax, Cess and other material statutory dues have not been regularly deposited with the appropriate authorities and there have been significant delays in payment of statutory dues.

According to the information and explanations given to us, undisputed amounts payable in respect thereof, which were outstanding as at March 31, 2018 for a period of more than six months from the date of becoming payable are as follows:

Nature of Dues	Amount (Rs)	Period to which amount relates	Due Date
Property Tax	4,49,600	2015-16	31-12-2016
Provident Fund	2,14,82,252	2015-16	till 15/04/2016
Provident Fund	3,16,47,364	2016-17	till 15/04/2017
Provident Fund	82,31,464	April 17 to August 17	till 15/09/2017
Employee State insurance corporation	7,06,934	2015-16	till 21/04/2016
Employee State insurance corporation	69,51,197	2016-17	till 21/04/2017
Employee State insurance corporation	26,55,240	April 17 to August 17	till 21/09/2017
Profession Tax	30,05,280	2015-16	till 30/04/2016
Profession Tax	27,32,288	2016-17	till 30/04/2017
Profession Tax	3,24,548	April 17 to August 17	till 30/09/2017
Maharashtra Welfare Labour Fund	91,680	2015-16	till 31/01/2016
Maharashtra Welfare Labour Fund	1,14,979	2016-17	till 31/01/2017
Maharashtra Welfare Labour Fund	4,815	Jun-17	31-07-2017
Service Tax	5,50,23,053	2014-15	Till 31/03/2015
Service Tax	12,85,95,644	2015-16	Till 31/03/2016
Service Tax	14,80,76,466	2016-17	Till 31/03/2017
Service Tax	3,26,77,884	April 17 to August 17	Till 05/09/2017
Excise Duty	12,59,894	Nov-16	05-12-2016
Customs Duty	5,72,57,530	16-17	31-03-2017
Tax Deducted At Source	1,55,59,913	Upto Mar-16	Till 30/04/2016
Tax Deducted At Source	10,78,30,552	2016-17	Till 30/04/2017
Tax Deducted At Source	2,30,81,290	April 17 to August 17	Till 07/09/2017
Tax Collected At Source	48,843	2016-17	Till 30/04/2017
Tax Collected At Source	15,619	April 17 to August 17	Till 07/09/2017
Value Added Tax	5,10,44,136	Upto Mar-16	Till 21/04/2016
Value Added Tax	2,47,41,892	2016-17	Till 21/04/2017
Value Added Tax	41,57,347	Apr17-Jun17	Till 21/07/2016
CGST	49,83,886	Jul17-Aug17	Till 20/09/2017
SGST	49,83,885	Jul17-Aug17	Till 20/09/2017
IGST	1,90,267	Jul17-Aug17	Till 20/09/2017

b. According to the information and explanations given to us, dues that have not been deposited by the Company on account of disputes are as follows:

Nature of the dues	Amount (Rs.)	Period to which the amount relates	Forum where dispute is pending
Value Added Tax	10,77,90,909	2005-06 to 2009-10	Joint Commissioner (Appeal), Mumbai
Value Added Tax	1,95,26,625	2011-12	Asst Commercial Tax Officer, Goa
Value Added Tax	6,91,62,059	April 2012-March 2015	Asst Commissioner, Deptt of Trade & Taxes Delhi
Value Added Tax	3,91,47,672	2010-11	Joint Commissioner (Appeal) I, Mumbai
Value Added Tax	6,12,63,484	2011-12	Dy Commissioner (Appeal) I Mumbai
Value Added Tax	11,12,41,103	2012-13	Joint Commissioner of Sales Tax (Appeals)

Value Added Tax	24,06,185	2011-12	Add Commissioner Grade-II Appeal -I Meerut
Value Added Tax	4,61,39,603	2013-14	Add Commissioner Grade-II Appeal -I Meerut
Value Added Tax	6,53,90,998	2014-15	Special Commissioner I - Dept of Trade and Taxes, New Delhi
Value Added Tax	24,57,82,945	2015-16	Special Commissioner I - Dept of Trade and Taxes, New Delhi
Central Sales Tax	2,14,66,427	2010-11	Joint Commissioner (Appeal) I, Mumbai
Central Sales Tax	3,59,55,801	2011-12	Dy Commissioner (Appeal) I Mumbai
Central Sales Tax	2,37,99,475	2012-13	Joint Commissioner of Sales Tax (Appeals)
Service Tax	36,87,253	2007-10	CESTAT, Kolkata
Service Tax	99,65,877	2009-10	CESTAT, Dadar
Service Tax	5,03,62,887	2013-14	In the process of filing appeal to CESTAT, Mumbai
Service Tax	2,45,42,444	2016-17	Commissioner (Appeals) - Mysore
Excise Duty	24,26,682	2005-07	CESTAT, Kolkata
Custom Duty	66,89,106	2014-15	CIU, Mumbai
Income Tax	16,99,46,249	AY 2000-01 to AY 2008-09	Mumbai High Court
Income Tax	1,24,38,12,562	AY 2006-07 to AY 2013-14	ITAT, Mumbai

viii. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of following dues to the financial institutions and banks during the year, which were paid before the Balance Sheet date.

Name of Bank/ FI	No. of Instalments	Total Amount of Defaults	Range of Delay (in days)
BMW Financial Services	11	11,65,340	8 to 27
Daimler Financial Services	11	17,94,134	7 to 57
Kotak Mahindra Bank	9	23,63,739	12 to 91
Yes Bank	33	27,97,387	34 to 92

The Company has defaulted in repayment of following dues to the financial institutions and banks during the year, which were not paid as at the Balance Sheet date:

Name of Bank/ FI	No. of Instalment	Total Amount of Defaults	Range of Delay
Allahabad Bank	8	24,92,00,000	90-730
Bank of Baroda	1	5,00,00,000	424
Bank Of Maharashtra	8	1,00,00,00,000	59-700
Central Bank Of India	4	12,71,25,000	30-303
Export Import Bank Of India	5	1,21,00,00,000	364-729
Kotak Mahindra Bank	2	5,99,232	146-177
BMW Financial Services	1	1,11,855	30
Daimler Financial Services	2	3,47,572	29-57

Further, company has not issued debentures.

ix. According to the information and explanation given to us and on the basis of our examination on test check basis, we are of the opinion that the Company has used term loans for the purposes for which they were raised. During the year, the company has not raised money by way of initial public offer or further public office (including debt instrument).

x. According to the information and explanation given to us, no fraud by the company or on the Company by its officers or employees has been noticed or reported during the year.

xi. According to the information and explanation given to us and on the basis of an overall examination of books of accounts of the Company, no managerial remuneration has been paid or provided during the year.

xii. According to the information and explanation given to us, the company is not a Nidhi Company. Therefore, provisions of clause 3(xii) of the order are not applicable to the company.

xiii. According to the information and explanation given to us, transactions entered into by the company with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;

xiv. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

xv. According to the information and explanation given to us, the company has not entered into any non-cash transactions with directors or persons connected with him during the year.

xvi. According to the information and explanation given to us, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure “B” to the Independent Auditor’s Report

[Referred to under ‘Report on Other Legal and Regulatory Requirements’ in the Independent Auditor’s Report of even date to the members of PRATIBHA INDUSTRIES LIMITED on the standalone financial statements for the year ended 31^st March 2018]

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

1. We have audited the internal financial controls over financial reporting of Pratibha Industries Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

2. Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

3. Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our Adverse opinion on the Company’s internal financial controls system over financial reporting.

4. Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditure of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

5. Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

According to the information and explanations given to us and based on our audit, we have identified following material weaknesses that has not been identified as a material weakness in Management’s assessment:

a) The Company did not have an appropriate internal control system for preparing debtors ageing and making provision for bad debts. This could potentially result in non booking of bad debts.

b) The Company did not have an appropriate internal control system for obtaining external balance confirmation on periodic basis. This could potentially result in inaccurate assets & liabilities disclosed in the books of accounts.

c) The Company did not have an appropriate internal control system for reviewing computation of Work in Progress (WIP), Cost to Completion and estimated profitability of all projects regularly. This could potentially result in inaccurate disclosure of WIP and consequent profitability.

d) The company did not have an appropriate internal control system for reconciling balances of foreign vendors in INR and applicable foreign currency. This could potentially result in inaccurate translation of foreign currency balance in INR balance on Balance sheet date.

e) The company did not have an appropriate internal control system over updation of accounts on timely basis. Booking of many entries are delayed on account of delayed receipt of records. There is lack of coordination between different divisions of the company. These all could potentially result in misstatement of financial statements.

f) The company did not have an appropriate internal control system of maintaining Bank FD register, tracking maturity of FDs and accounting for interest on timely basis. This could potentially result in reporting FD and interest balance on Balance sheet date.

g) The company did not have an appropriate internal control system ofchecking the interest levied by Lenders. This could potentially lead to overcharging by Lenders and increase in Finance Cost of the company.

h) The company did not have an appropriate internal control system ofcalling Quotations from more than one Vendor while placing order. This could potentially lead to inefficient procurement and increased cost.

i) The company did not have mechanism to track booking of expenses against advances paid. This could potentially lead to unauthorised payment and non-adjustment of advance against corresponding liability.

6. Opinion

In our opinion, because of the effects/possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has not maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were not operating effectively as of March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2018 standalone financial statements of the Company, and our aforesaid report and opinion on Internal Financial Control over Financial Reporting should be read in conjunction with our report of even date issued on the standalone financial statements of the Company.

For Ramanand & Associates

Chartered Accountants

ICAI Firm Registration Number: 117776W

Sd/-

Ramanand Gupta

Partner

Membership Number: 103975

Place: Mumbai

Date: 11^th September 2018

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Mar 31, 2015

We have audited the accompanying financial statements of PRATIBHA INDUSTRIES LIMITED, ("the Company"), which comprises 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 significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position and financial performance 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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 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 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 true and fair view 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 Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

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

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

Emphasis Of Matters

We draw attention to the following matters in the Notes to the financial statements:

a) Refer Note No. 1 (E) which states that the management has taken estimated useful life of assets belonging to Construction Equipment category, which is different from the useful life indicated in Schedule II to the Companies Act, 2013, based on technical advice and after taking into account the nature of the assets, their estimated usage, their operating conditions, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support.

b) Refer Note No. 44 which states that the Company's investment in its wholly owned subsidiary M/s. Prime Infrapark Private Limited, whose net worth is fully eroded, is carried at cost at Rs.1,00,00,000/-in the Balance Sheet. The Management is of the opinion that the losses shall be recovered in the coming years and hence there is no requirement for making provision for permanent diminution in the value of the investment.

c) Refer Note No. 45 which states that balances of Trade Receivables, Trade Payables and Loan & Advances are subject to confirmation and consequent adjustments, if required.

Our opinion is not modified in respect of these matters.

Report on other legal and Regulatory Requirements

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.

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 appears from our examination of those books.

c. The Company has not appointed a person other than Companies auditor for audit of accounts of branch offices under Section 143(8); hence clause (c) of sub-section (3) of section 143 is not applicable.

d. 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.

e. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

g. With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us :

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note No 30 to the financial statements.

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

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

The Annexure referred to in our report to the members of Pratibha Industries Limited. ('The Company') for the year ended 31st March, 2015. We report that:

i. In respect of its fixed assets:

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

b. As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

ii. In respect of inventories:

a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories 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 maintained proper records of inventories. As per the information and explanation given to us, no material discrepancies were noticed on physical verification.

iii. According to information and explanations given to us, the Company has granted interest free unsecured loans aggregating of Rs.10,447.52 lakhs to nine parties covered in the register maintained under Section 189 of the Companies Act, 2013. In respect of these loans;

a. As per information and explanation given to us, there is no schedule for repayment of these loans.

b. In absence of repayment schedule, we cannot comment whether there is any overdue amount. However, as per the information and explanation given by the management, there is no overdue payment from these parties.

i v. 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 for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls.

v. The Company has accepted deposits from the public. As per our verification of records and information & explanations given to us, the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there-under, where applicable, have been complied with. As per information & explanations given to us, No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government 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. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. In respect of statutory dues:

a. According to information and explanations given to us and on the basis of our examination of test check basis, amounts of undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues have been generally regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were in arrears as at March 31, 2015 for a period of more than six months from the date of becoming payable.

b. According to the information and explanations given to us, dues that have not been deposited by the Company on account of disputes are given below:

Nature of Dues Amount Period to which the amount relates Forum where dispute is pending (Rs. in lakhs)

Income Tax 1,498.22 F.Y. 2001-02 to 2008-09 Hon. Bombay HC

Income Tax 887.53 F.Y. 2005-06 to 2007-08 ITAT

Income Tax 7,174.99 F.Y. 2008-09 to 2012-13 CIT(Appeal)

Excise Duty 24.27 F.Y. 2005-06 to 2006-07 CESTAT, Kolkata

Service Tax 36.87 F.Y. 2007-08 to 2009-10 Appellate Tribunal, Kolkata

Service Tax 99.66 F.Y. 2009-10 Appellate in Dadar Corrigendum

Sales tax 652.65 F.Y. 2005-06, 2007-08 and 2008-09 Jt. Comm of Sales tax

Sales tax 195.27 F.Y. 2011-12 Asst. Commercial Tax Officer

Sales tax 37.63 F.Y. 2012-13 Asst. Commissioner

c. The Company has been generally regular in transferring amounts to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder within time.

viii. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year and in the immediately preceding financial year.

ix. In our opinion and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or banks. Further, Company has not issued debentures.

x. According to the information and explanations given to us, the Company has given guarantees for loans taken by others from banks and financial institutions. We are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

xi. According to the information and explanation given to us, we are of the opinion that the Company has used term loans for the purposes for which they were raised.

xii. The management has represented that during internal investigations by the Company, an instance of malafde conduct by certain employees were observed at site. The total quantum of amount attributable to malafde conduct is approx. 6.5 Cr which is under further investigation. The Management does not expect any material impact on the financials as all possible losses attributable to the matter have already been provided. Apart from the same, we have not observed any cases of fraud by or on the Company.

For Jayesh Sanghrajka & Co LLP.

Chartered Accountants

Firm Regn. No.: 104184W/W100075

Ashish Sheth

Place: Mumbai Designated Partner

Date: 29th May, 2015 Membership No.: 107162

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Mar 31, 2014

We have audited the accompanying financial statements of PRATIBHA INDUSTRIES LIMITED ("the Company"), which comprises 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 notified under 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. 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 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 of 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") 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 have been kept by the Company, so far as appears from our examination of those books;

bb. Company not has appointed a person other than Companies auditor for audit of accounts of branch offices under section 228; hence clause (c) of sub- section (3) of section 228 is not applicable.

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; and with the returns received from branches not visited us.

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956, 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 Companies Act, 1956.

f. Since the Central Government has not issued any notification 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.

Annexure to Independent Auditors'' Report Referred to in Paragraph 1 under the heading of "Report on other Legal & Regulatory requirements" of our report of even date

1. In respect of its fixed assets:

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

b. As explained to us, all the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of the loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in register maintained under Section 301 of the Companies Act, 1956:

a. The Company has given interest free unsecured loans to nine parties aggregating of Rs. 7,228.41 lakh.

b. In our opinion and according to the information and explanations given to us, terms and conditions of the loans given by the Company are not prima facie prejudicial to the interest of the Company.

c. As informed to us, there is no schedule for repayment of these loans.

d. As informed to us, there is no overdue payment from these parties.

e. The Company has not taken any loan during the year from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies, Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered into in the register maintained under Section 301 of the Companies Act, 1956, have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions aggregating during the year to Rs.5,00,000/- or more in respect of each party, have been made at prices which appear reasonable as per information available with the Company.

6. The Company has accepted deposits from the public. As per our verification of records and information & explanations given to us, the directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there-under, where applicable, have been complied with. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government for the maintenance of the cost records under section 209(1)(d) of the Companies Act 1956, and are of the opinion that prima facie the prescribed accounts and

prescribed records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

a. As per the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2014, for a period of more than six months from the date of becoming payable.

b. The disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities are as under:

Nature of Amount Period to Forum Where dispute is Dues In Lakh which the Pending Amount relates

Income Tax 10.27 F.Y 2001 -2002 Hon. Bombay HC

Income Tax 27.73 F.Y 2002 -2003 Hon. Bombay HC

Income Tax 21.11 F.Y 2003 -2004 Hon. Bombay HC

Income Tax 81.96 F.Y 2004 -2005 Hon. CIT(Appeal)

Income Tax 251.65 F.Y 2005-2006 Hon. CIT(Appeal)

Income Tax 425.17 F.Y 2006-2007 Hon. CIT(Appeal)

Income Tax 215.64 F.Y 2008-2009 Hon. CIT(Appeal)

Income Tax 3,009.56 F.Y 2009-2010 Hon. CIT(Appeal)

Excise Duty 24.27 F.Y 2005-06 to CESTAT, Kolkata F.Y 2006-07

Service Tax 36.87 F.Y 2007-08 to Appellate F.Y 2009-10 Tribunal, Kolkata

Service Tax 99.66 For 2009-10 Appellate in Dadar Corrigendum

Sales tax 94.11 For 2005-06 Jt Comm of Sales and 2007-08 tax

Sales tax 41.41 For 2006-07 Dy Comm of Sales tax

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or banks. The Company has not issued Debentures.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund / nidhi /mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. During the year, the Company has not entered into any transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments. All existing investments have been held by the Company in the name of the Company.

15. The Company has given guarantees for loans taken by others from banks or financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima-facie prejudicial to the interests of the Company.

16. In our opinion and according to the information and explanation given to us, the Company has used term loans for the purposes for which they were raised.

17. According to the information and explanation given to us and on the basis of an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on a short- term basis, which have been used for long term investment.

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

19. The Company has not issued any debentures. Therefore, the provisions of Clause (xix) of paragraph 4 of the Order are not applicable to the Company.

20. During the year, the Company has not raised money by public issue. Therefore, the provisions of Clause (xx) of paragraph 4 of the Order are not applicable to the Company.

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

For Jayesh Sanghrajka & Co Chartered Accountants Firm''s Regn. No.: 104184W

Hemant Agrawal Place: Mumbai (Partner) Date: 27th May, 2014 M. No.: 403143

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of PRATIBHA INDUSTRIES LIMITED ("the Company”), which comprises 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.

Auditor''s Responsibility

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

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

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, the state of affairs of the Company as at March 31, 2013;

b. in the case of the of 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”) 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 and proper returns adequate for the purposes of audit have been received from branches not visited by us;

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 and with the returns received from branches not visited us;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the Directors as on 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 Companies Act, 1956;

f. Since the Central Government has not issued any notification 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.

Referred to in Paragraph 1 under the heading of "Report on other Legal & Regulatory requirements” of our report of even date

1. In respect of its fixed assets:

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

b. As explained to us, all the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of the loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in register maintained under Section 301 of the Companies Act, 1956:

a. The Company has given interest free unsecured loans to ten parties aggregating of ` 4515.10 lakh.

b. In our opinion and according to the information and explanations given to us, terms and conditions of the loans given by the Company are not prima facie prejudicial to the interest of the Company.

c. As informed to us, there is no schedule for repayment of these loans.

d. As informed to us, there is no overdue payment from these parties.

e. The Company has not taken any loan during the year from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies, Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered into in the register maintained under Section 301 of the Companies Act, 1956, have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions aggregating during the year to ` 5,00,000/- or more in respect of each party, have been made at prices which appear reasonable as per information available with the Company.

6. The Company has accepted deposits from the public. As per our verification of records and information & explanations given to us, the directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there-under, where applicable, have been complied with. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government for the maintenance of the cost records under section 209(1)(d) of the Companies Act 1956 and are of the opinion that prima facie the prescribed accounts and prescribed records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

a. As per the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been, generally, regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2013 for a period of more than six months from the date of becoming payable.

b. The disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities are as under:

Nature of Amount Period to which Forum where Dues (` in the amount dispute is Lakh) relates pending

Income Tax 192.42 F.Y. 2004-2005 CIT(Appeal), Mumbai

Income Tax 309.87 F.Y. 2005-2006 CIT(Appeal), Mumbai

Income Tax 385.60 F.Y. 2006-2007 CIT(Appeal), Mumbai

Income Tax 77.74 F.Y. 2008-2009 CIT(Appeal), Mumbai

Income Tax 3,072.69 F.Y. 2009-2010 CIT(Appeal), Mumbai

Excise Duty 24.27 F.Y. 2005-06 to CESTAT, F.Y. 2006-07 Kolkata

Service Tax 36.87 F.Y. 2007-08 to Appellate F.Y. 2009-0 Tribunal, Kolkata

Service Tax 99.66 For 2009-10 Appellate in Dadar Corrigendum

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or banks. The Company has not issued Debentures.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. In our opinion, the Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All these investments have been held by the Company in the name of the Company.

15. The Company has given guarantees for loans taken by others from banks or financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima-facie prejudicial to the interests of the Company.

16. The Company has used term loans for the purposes for which they were raised.

17. According to the information and explanation given to us and on the basis of an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on a short- term basis, which have been used for long term investment.

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

19. The Company has not issued any debentures. Therefore, the provisions of Clause (xix) of paragraph 4 of the Order are not applicable to the Company.

20. During the year, the Company has not raised money by public issue. Therefore, the provisions of Clause (xx) of paragraph 4 of the Order are not applicable to the Company.

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

For Jayesh Sanghrajka & Co.

Chartered Accountants

Firm Regn. No. 104184W

Hemant Agrawal

Partner

Membership No. 403143

Place : Mumbai

Date : 24th May, 2013

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Pratibha Industries Limited as at 31st March 2012, the Statement of Profit and Loss for the year ended on that date and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management and have been prepared by the Management on the basis of separate financial statements and other financial information regarding components. 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 disclosures in 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 by Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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 mandatory Accounting Standards referred in sub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable:

e) On the basis of written representations received from the Directors as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes thereon give the information required by the Companies Act, 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

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

(iii) In the case of the Cash Flows Statement, of the cash flows for the year ended on that date.

Annexure to Auditors' Report

Referred to in Paragraph 3 of our report of even date

1. In respect of its fixed assets:

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

b. As explained to us, all the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of the loans, secured or unsecured, granted or taken by the company to / from companies, firms or other parties covered in register maintained under Section 301 of the Companies Act, 1956:

a. The Company has given interest free unsecured loans to eleven parties aggregating of Rs 5,693.97 lakhs.

b. In our opinion and according to the information and explanations given to us, terms and conditions of the loans given by the Company are not prima facie prejudicial to the interest of the Company.

c. The company has not taken any loan during the year from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies, Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions aggregating during the year amounting to Rs 5,00,000/- or more in respect of each party, have been made at prices which appear reasonable as per information available with the company.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8. We have broadly reviewed the books of accounts maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government for the maintenance of the cost records under section 209(1)(d) of the Companies Act 1956 in respect of Steel Pipes and are of the opinion that prima facie the prescribed accounts and prescribed records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

a. As per the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been generally, regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2012 for a period of more than six months from the date of becoming payable.

b. The disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of Dues Amount Period to which Forum where (Rs in lakh) the amount relates dispute is pending

Income Tax 526.63 From 2000-01 to 2005-06 ITAT, Mumbai

Income Tax 1,821.55 From 2006-07 to 2008-09 CIT (Appeal), Mumbai

Service Tax 51.19 From 2005-06 to 2006-07 CESTAT, Mumbai

Excise Duty 24.27 2005-06 CESTAT, Kolkata

Excise Duty 36.87 From 2004-05 to 2006-07 CESTAT, Kolkata

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or banks. The Company has not issued Debentures.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund / nidhi /mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. In our opinion, the company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All these investments have been held by the company in the name of the company.

15. The Company has given guarantees for loans taken by others from banks or financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima-facie prejudicial to the interests of the Company.

16. The Company has used term loans for the purposes for which they were raised.

17. According to the information and explanation given to us and on the basis of an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on a short-term basis, which have been used for long term investment.

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

19. The Company has not issued any debentures. Therefore, the provisions of Clause (xix) of paragraph 4 of the Order are not applicable to the Company.

20. During the year, the company has not raised money by public issue. Therefore, the provisions of Clause (xx) of paragraph 4 of the Order are not applicable to the Company.

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



For Jayesh Sanghrajka & Co.

Chartered Accountants

Firm Regn. No. 104184W

Hemant Agrawal

Partner

Membership No. 403143

Place: Mumbai

Date: 25th May 2012

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Mar 31, 2011

1. We have audited the attached Balance Sheet of Pratibha Industries Limited as at 31st March 2011, the Profit and Loss Account for the year ended on that date and the Cash Flow Statement for the year ended on that date. 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 disclosures in 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 by Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified m paragraphs 4 and 5 of the said Order.

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

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

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

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 mandatory Accounting Standards referred in sub-section (3C) of section 211 of the Companies Act, 1956, to the extent applicable:

e) On the basis of written representations received from the Directors as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 from being appointed as directors in terms of clause (g) of sub section (1) of section 274 of the Companies Act 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes thereon give the information required by the Companies Act, 1956, in the manner so required, and present 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 2011;

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

(iii) In the case of the Cash Flows Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT Referred to in Paragraph 3 of our report of even date

1. In respect of its fixed assets:

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

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. According to the information and explanation given to us, the Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures 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. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, Transactions aggregating during the year to Rs. 5,00,000/- or more in respect of each party, have been made at prices which appear reasonable as per information available with the company.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8. We have broadly reviewed, without carrying out a detailed examination, the books of accounts maintained by the company pursuant to the Order made by the Central Government for the maintenance of the cost records under section 209(l)(d) of the Companies Act 1956, in respect of Steel Pipes and are of the opinion that prima facie the prescribed accounts and prescribed records have been maintained.

9. In respect of statutory dues:

a. As per the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2011 for a period of more than six • months from the date of becoming payable.

b. The disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities are as under:

Nature of Dues Amount Period to which Forum where in Rs. the amount relates dispute is pending

Income Tax 42,622,153 From 2001-02 to 2005-06 ITAT, Mumbai

Income Tax 155,648,020 From 2006-07 to 2008-09 CIT (Appeal), Mumbai

Service Tax 5,118,565 From 2005-06 to 2006-07 CESTAT, Mumbai

Excise Duty 2,426,682 2005-06 CESTAT, Kolkata

Excise Duty 3,687,253 From 2004-05 to 2006-07 CESTAT, Kolkata

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or banks. The Company has not issued Debentures.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund / nidhi /mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. In our opinion, the company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All these investments have been held by the company in the name of the company.

15. The Company has given guarantees for loans taken by others from banks or financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima-facie prejudicial to the interests of the Company.

16. The Company has used term loans for the purposes for which they were raised.

17. According to the information and explanation given to us and on the basis of an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on a short-term basis, which have been used for long term investment.

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

19. The Company has not issued any debentures. Therefore, the provisions of Clause (xix) of paragraph 4 of the Order are not applicable to the Company.

20. During the year, the company has not raised money by public issue. Therefore, the provisions of Clause (xx) of paragraph 4 of the Order are not applicable to the Company.

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

For Jayesh Sanghrajka & Co.

Chartered Accountants

Hemant Agrawal

Partner

Membership No. 403143

Firm Regn. No. 104184W

Mumbai, 19th May, 2011