Prashant India Ltd Auditors Report.

The Members of PRASHANT INDIA LTD.

Report on the Standalone Financial Statements Opinion

We have audited the standalone financial statements of Prashant India Limited, which comprise the balance sheet as at 31st March 2018, and the statement of Profit and Loss, and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and profit/loss, and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Managements Responsibility for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimatesthat are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Other matters

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

Note no.2(a): Regarding non accounting for gratuity, leave encashment & bonus liability contrary to sec.128 of the Companies Act, 2013 and AS-15 issued by the ICAI.

Note no.2(b): Regarding accounts of the company having been prepared on ‘Going Concern Basis, despite

• operations of Agro Division of the Company having stood suspended, since the year 1998 and having finalized the deal to saleplant & machineries of the division as scrap after the balance sheet date,

• net losses / cash losses having been incurred by the Company over the past several years including the current financial year,

• net worth of the Company having been totally eroded and substantial losses having been carried forward as at 31stMarch, 2018

• current liabilities exceeded Companys current assets as at the balance sheet date,

• BIFR restoring companys reference in conformity with the order passed by the Honble High Court of Gujarat for fresh hearing under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985

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

These condition, indicate the existence of a material uncertainty that may cast significant doubt about the Companys ability to continue as a going concern.

Note no. 24(b) : Regarding non provision of liabilities of Rs. 7882.23lacs

Note no.24(k): Regarding certain balances being subject to confirmation the effect of which could not be quantified,

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors 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) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

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

d) Except for the matters described in the other matters paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) The going concern matter described in sub-paragraph (b) under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 23 to the financial statements;

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

iii. There were no amounts which were required to be tra nsferred to the Investor Education and Protection Fund by the Company.

Annexure ‘A to the Independent Auditors Report -

The Annexure referred to in our Independent Auditors Report to the members of Prashant

India Ltd. on the standalone financial statements for the year ended on 31stMarch, 2018,

Statement on matters specified in paragraphs 3 & 4 of the Companies (Auditors Report)

Order 2016:

1. In respect of Fixed Assets :

(a) The company maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the company.

(c) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the company and the nature of its assets. The discrepancies noticed on such verification were not material and the same have been properly dealt with in the books of account.

2. In respect of Inventories :

Physical verification of inventory (except stocks lying with third parties, confirmation for which has been obtained and in stocks in transit) has been conducted at reasonable intervals by the management. The discrepancies noticed on such verification were not material and the same have been properly dealt with in the books of account.

3. In respect of loans granted by the company:

(a) The Company has not granted any loans, secured or unsecured, to companies, firms, LLPs or other parties listed in Register maintained u/s 189 read with clause 76 of section 2 of the Companies Act, 2013.

(b) Since there are no transactions of loans given by the company, clauses (a), (b) & (c) of paragraph 3(iii) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us, in respect of loans, investment and guarantees, provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.

5. According to the information and explanations given to us, the company has not accepted deposits from the public. The directives issued by the RBI and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under, where applicable, have been complied with. No order has been passed by CLB or National Company Law Tribunal or RBI or any court or any other tribunal for any contraventions.

6. As informed to us, maintenance of cost records has not been specified by the Central Government under sub-section (1) of secton 148 of the Companies Act, 2013 for job work activity and power generation activity undertaken by the Company.

7. In respect of statutory dues :

(a) According to the information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax and any other statutory dues with the appropriate authorities except that following statutory dues which on account of disputes are outstanding as at the last day of the financial year for a period of more than six months from the date they became payable :

Nature of statute- Authority Nature of dues Amount Rs. lacs Period Authority
Customs Act, 1962 & Central Excise Act, 1944 Custom duty 77.03 Prior to year 2000 Central Excise & Customs Authority
Land Revenue Act Land rev. 23.64 Up to FY 2017-18 Local Authority of Palsana and Bhavnagar

(b) The disputed dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax not having been deposited on account of dispute, then the amounts involved and the forum where dispute is pending are as follows:

Nature of statute- Authority Nature of dues Amount Rs. lacs Period Forum where dispute is pending
G.S.T. Act, 1969 Sales tax 121.05 FY 1989-90 &FY 1993-94 to FY 1998-99 AC, Bhavnagar
I.T.Act, 1961 Income Tax- A.Y. 1992-93 Not fixed FY1991-92 High Court, Gujarat

8. The financial institutions and banks have, from time to time, either settled their entire dues or assigned their entire dues in favor of strategic investors. Accordingly, as on 31st March, 2018 there is no outstanding of any dues of any financial institution or a bank. However, the Company has defaulted in repayment of loans and borrowings to the Strategic Investors. Please refer to Audit note no.5, 7 & 24(b) also.

9. The Company has not raised fresh moneys either by way of public issue/ follow on offer (including debt instruments) or term loans during the year.

10. The managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act.

11. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or any fraud on the Company by its officers / employees has been noticed or reported during the course of our audit, for the year under Audit

12. In our opinion, the Company is not a Nidhi Company. Hence, paragraph 3(xii) of the Order is not applicable.

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

14. According to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements, etc. as required by the applicable accounting standards and provisions of the Companies Act, 2013.

15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not enteredinto any non cash transactions with directors or persons connected with him. Hence, paragraph 3(xv) of the Order is not applicable.

16. The Company is not required to be Registered u/s 45IA of the Reserve Bank of India Act, 1934 and hence, provisions of paragraph 3(xvi) of the Order is not applicable.

Annexure ‘B to the Independent Auditors Report -

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

We have audited the internal financial controls over financial reporting of PRASHANT INDIA LIMITED as of 31 March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys 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 (‘ICAI). 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 companys 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.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys 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, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, 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 auditors judgment, 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 audit opinion on the Companys internal financial controls system over financial reporting.

For GHEEWALA & CO.
CHARTERED ACCOUNTANTS
Sd/-
Place : Surat. K.R.GHEEWALA
Date : 29-05-2018 PARTNER
M.No. : 034405
FRN. : 115746W