Premier Industries (India) Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2013

We have audited the accompanying financial statements of PREMIER INDUSTRIES (INDIA) LIMITED which comprises of the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance 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.

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 except for the effects of the matter described in the other matter paragraph. The financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2013 and

(b) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date.

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

Other Matters:- Attention is invited to.:-

(a) Note no. 8(C) in respect of transfer of funds to Investor Education & Protection Fund.

(b) Note No. 10 (Fixed Assets Schedule) regarding non-provision of depreciation on certain machine and regarding non-provision in accounts for extra shift depreciation on the amount of revaluation of fixed assets.

(c) Note no. 32 (a), (b) & (c) in respect of Accounting for Employee benefits as per revised AS-15 to some extent only.

(d) Note no. 37 regarding contingent liabilities in respect of non provision of demand of Central Excise & Sales Tax of Rs. 3,73,16,825/-

(e) Note no. 40 regarding accounts of the company prepared on going concern basis.

(f) The company has not adjusted interest @ 12 % on loans taken from related parties as agreed on Rs. 20,88,45,557/-. The amount of interest on such loans is of Rs. 2,49,75,518/-. Refer Note. No.4(d)(ii) (iii) and 6 (b).

The impact of item (a), (c) ,(d) & (e) is not there but considering the impact of item (b) & (f) above if the interest & non Provision of Depreciation would have been charged the loss for the year would have been Rs. 7,56,86,821/- before tax and Rs 6,23,79,364/- after tax and accordingly the Reserves and Surplus would have been Rs. 43,06,88,951/

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 examina tion of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting standards referred to in subsection (3C) of section 211 of the 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.

ANNEXURE TO THE AUDITOR''S REPORT

Annexure Referred to in paragraph 1 of our Audit report of even date on the accounts for the year ended 31st March 2013 of PREMIER INDUSTRIES (INDIA) LIMITED

As required by the companies (Auditors report) order 2003 issued by the Company law Board in the terms of section 227(4A) of the Companies Act 1956, we have further to report that: -

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

(b) These Fixed Assets have been physically verified by the management, in accordance with the programme of verification adopted by the company. In our opinion.the frequency of verification is reasonable having regard to the size of the company and the nature of its assets.

(c) There was no substantial disposal of fixed assets during the year.

2. (a) The inventory of the Company has been physically verified by the management during the year and at the year end. In our opinion the frequency of verification is reasonable.

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

(c) On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory and discrepancies noticed on physical verification between the physical stocks and the book records were not material in relation to the operations of the Company.

3. (a) According to the information and explanations given to us, the company has not granted any loans secured or unsecured to Companies.firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.Accordingly the provision of Clause 4(iii)(a) to (d) of the Companies (Auditor''s Report )Order,2003(as amended) are not applicable to company and hence not commented upon. (b) According to the information and explanations given to us, the company has taken unsecured loan from Two parties covered in the register maintained under section 301 of the Companies Act, 1956. However interest for the year as per agreed rate 12% has not been adjusted during the year and were considered as Without Interest. The outstanding balance as on 31.03.2013 was Rs.20,88,45,557/- and the maximum balance outstanding was Rs.21,17,77,613/-.

4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements or transactions referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under Section 301 of the companies Act, 1956. (b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the companies Act, 1956 have been made at prices which are prima facie reasonable, having regard to prevailing market prices at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from public in contravention with the provisions of Section 58-A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of any deposits.

7. The Company has an Internal Audit System, which in our A opinion is adequate and commensurate with the size of th%^'' Company and nature of its business. ''

8. We have been informed that the prescribed cost records pursuant to the rule made by the Central Government under section 209 (1) (d) of the Companies Act, 1956 are being maintained for its Soya Division. However we have not '' carried out any detailed examination of such accounts and records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us, the Company is generally regular in depositing provident fund and employees state insurance with appropriate authorities during the year.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of income-tax, sales tax, wealth-tax, service-tax customs duty, excise duty, cess as on 31.3.2013 were outstanding for a period of more than six months from the date they became payable except for Sales Tax , Entry Tax & TDS aggregating to Rs. 14144671/- (Previous Year Rs. 13374150/-) for earlier years were due for payment for more than six months.

(c) As on 31st March 2013, According to the records of the company and the information and explanations given to us, the following are the particulars of dues on account of Income tax, Excise Duty, Cess, Sales Tax Service Tax Custom duty and wealth Tax matters that have not been deposited on account of disputes:-

10. (a) The Company has nt made cash profit during the financial year covered by our audit and also in the immediately preceding financial year and it has accumulated losses as on 31.03.2013 exceeding its net worth. (b) According to the information provided by the company, the company is a Sick Industrial Company within the meaning of section 3 (I) (xii) of the Sick Industrial Companies (Special Provision) Act,1985 and is duly registered with BIFR.

11. The Company has defaulted in the repayment of dues to Financial Institutions. Bank and debenture holders and the period, amount of default and the explanations furnished by the Company affe as follows:

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the other provisions of clause 4 (xii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

13. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

14. In our opinion, according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

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

16. According to the information and explanation given to us, the company has not taken any term loans during the year.

17. According to the information and explanations given to us and an overall examination of the Balance Sheet of the company, we report that funds raised on short-term basis, have been used for short term purpose only.

18. The Company has not made preferential allotment of share to parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956 during the year covered by our audit.

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

20. The company has not raised any money by public issues during the year under review.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For :M/SM.MEHTA&CO.

Chartered Accountants

(Firm Reg. No. 000957C)

DATE : 31.08.2013 CA : P.R.Bandi

PLACE : INDORE Partner

(M.No. 16402)

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Mar 31, 2012

1) We have audited the attached Balance sheet of PREMIER INDUSTRIES (INDIA) LIMITED,DEWAS as at 31st March,2012 and the relative Profit & Loss Account and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the management of the Company. 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 mis-state- ment. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principals used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

3) We have obtained all the information and explana- tions which, to the best of our knowledge and belief, were necessary for the purpose of our audit.

4) 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.

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

6) In our opinion the Balance Sheet and the Profit & Loss Account and the Cash Flow Statement dealt by this report are in compliance with the Accounting Standards referred to in Section 211 (3c) of the Companies Act, 1956.

7) On the basis of written representation received from ail the Directors of the Company as on 31st March, 2012 and the information and explanation as made available, we report that none of the Directors of the Company prima facie have any disqualification as referred to in Clause (g) of Sub-Section (1) of the Section 274 of the Companies Act, 1956.

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

i. Note No. 8(c) in respect of non-transfer of funds to Investors Education and Protection Funds.

ii. Note No. 10 (Fixed Assets Schedule) regarding non-provision of depreciation on certain machine and regarding non-provision in accounts for extra shift depreciation on the amount of revaluation of fixed assets.

iii. Note No. 33 in respect of adopting of revised AS-15 to some extent only.

iv. Note No. 38 regarding contingant liabilities in respect of non-provision of demand of Central Excise & Sales Tax.

v. Note No. 41 regarding accounts of the Company prepared on going concern basis.

We further report that without considering item mentioned at (i), (iii), (iv), (v) above the effect of which is not there, had the observations made by us in paragraphs (ii) above been considered, the Loss for the year would have been Rs. 2,53,87,679 (as against the reported Loss of Rs. 2,33,39,799), debit balance of Profit & Loss Accounts would have been Rs. 44,02,18,824 (as against the reported figures of Rs. 43,81,70,944), and read together with other notes there on give the information required by the Com- pany Act, 1956 in the manner so required and give a true and fair view, in confirmaty with the accounting principles generally accepted in India.

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

(b) In the case of Profit & Loss Account of the Loss of the Company for the year ended on that date. and

(c) In the case of Cash Flow statement of the Cash Flows for the year ended on that date.

As required by the Companies (Auditors'Report) order, 2003 issued by Central Government Of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we further report that:

i. a) The nature of the Companie's business/activities during the year was such that clause (xii),(xiii) and (xiv) of the paragraph 4 of the Companies (Auditors Report) Order 2003 are not applicable to the Com- pany

ii. a) The Company has maintained proper records show- ing full particulars, including quantitative details and unit wise situation of fixed assets.

b) Physical verification of fixed assets was carried out during the year in accordance with the Company's policy. In our opinion the frequency of verification is at reasonable intervals having regard to the size of the company and nature of assets. According to the infor- mation and explaination given to us no materials dis- crepancies were noticed on such verification.

c) During the year, in our opinion, a substantial part of fixed assets has not been disposed off by the Com- pany.

iii. a) The inventory of the Company has been physically verified by the management during the year and at the year end. In our opinion the frequency of verifica- tion is resonable.

b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the Company and nature of its business,

c) On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory and discrepancies noticed on physical verification between the physical stock and the book records were not material in relation to the operation of the Company.

iv. a) In our opinion and according to the information and explanations given to us, the Company has taken loans during the year from two parties listed in the Register maintained under section 301 of the Compa- nies Act, 1956, .The outstanding balance as on 31.03.12 was Rs.22,06,31,004/- and the maximum balance outstanding was Rs. 22,57,03,354/-.

b) The terms & condition of such loan was not preju- dicial to the interest of the Company.

c)In our opinion and according to the explanation given to us the company is regular in paying the principal and interest wherever applicable.

(d) In our opinion and according to the information and explanations given to us, the Company has not granted any loans to parties listed in the Register maintained under section 301 of the Companies Act, 1956, except has maintained a Current A/c with one of its Group Company, hence sub clause (iii) (b), (c) and (d) of the Order are not applicable in respect of loans granted.

v. According to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the Company and na- ture of its business, for purchase of raw materials, stores, components, plant & machinery, equipment and other assets.

vi. a) Based on the Audit procedure applied by us and as per the information and explainations given to us the particulars of Contracts or arrangements referred to in Section 301 of the Act are entered in the register require to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the Company has pur- chased/sold stores, raw materials, finished goods and components from / to and also paid rent, processing charges, interest to Company in which Directors are interested as listed in the register maintained under section 301 of the Companies Act, 1956, at prices which are reasonable having regards to prevailing market prices of such goods, materials or services or the prices at which transaction for similar goods, ma- terials or services have been made with other parties.

vii. The Company has not accepted any deposit from public as defined in section 58-A of the Companies Act, 1956 and the rules framed thereunder except Inter Corpo- rate deposit from body corporates. No order has been passed by Company Law Board ,National Company Law Tribunal or any Court during the year.

viii. In our opinion, the internal audit system is reasonably commensurate with the size and nature of the busi- ness of the Company.

ix. We have been informed that the prescribed cost records pursuant to the rule made by the Central Government under section 209 (1) (d) of the Companies Act, 1956 are being maintained for its Soya Division. However we have not carried out any detailed examination of such accounts and records with a view to determine whether they are accurate or complete.

x. a) The Company has been regular in depositing during the year provident fund and employees state insurance dues with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Custom Duty,Excise Duty and Service Tax as on 31.03.12 were outstanding for a period of more than six months (except deferement of Sales Tax and Entry Tax for the year) from the date they became payable except the Entry Tax of Rs 1727109 /-due for earlier years and Vat Tax of Rs. 11647041/ - due up to 30.09.2011.

c) As on 31.03.12, according to records of the Company and the information and explanations given to us, the following are the particulars of dues on account of Income Tax, Excise Duty,Cess, Sales Tax, Service Tax,Custom Duty and Wealth tax matters that have not been deposited on account of any dispute:

Sr. No. Name of the Statute Nature of the dues Amount (Rs.In lacs) Forum where pending

1 Commercial Tax Levies Sales Tax & Entry Tax 24694662/- Commissioner of Demand including Sales Tax interest & penalty

2 Central Excise Act, 1944 Excise Duty 1118153/- Commissioner of Central Excise (Appeal)

xi. a) In our opinion the company's accumulated losses as on 31.03.12 exceeds its net worth and it has incurred cash loss during the financial year ended on that date and had also incurred cash loss in the immediate preceding financial.

b) According to the information provided by the Company, the Company is a Sick Industrial Company within the meaning of section 3(1)(XII) of the Sick Industrial Companies (Special Provision) Act, 1985 and is duly registered with BIFR.

xii. The Company has defaulted in the repayment of dues to Financial Institutions. Bank and debenture holders and the period, amount of default and the explanations furnished by the Company are as follows:

S. No. Name of Financial Total Default till 31.03.12 including Period of Default Institutions /Bank/Others principal amount & Interest (as per revival package duly approved by AAIFR) (In Rs.)

1 DEBENTURE HOLDERS 9901954 F. Y. 1999-2000 To 2011-12

xiii. According to the information and explanations given to us, the Company has given guarantee to Banks, the terms and conditions whereof, are not prejudicial to the interest of the Company.

xiv. In our opinion and according to the information and explanations given to us, the Company has not taken any term loan during the year.

xv. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on shortterm basis have prima facie been used for shortterm purpose only.

xvi. During the year the Company has not made preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

xvii. In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year.

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

xix. According to the information and explanations given to us, during the year, no fraud on or by the Company has been noticed or reported.

FOR M/S M. MEHTA & CO.

CHARTERED ACCOUNTANTS

Firm Reg. No. 000957C

CA: (P. R.BANDI)

PLACE: INDORE PARTNER

DATE:31.05.2012 (M.N0.16402)

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Mar 31, 2010

1. We have audited the attached Balance sheet of PREMIER INDUSTRIES (INDIA)LIMITED,DEWAS as at 31st March,2010 and the relative Profit & Loss Account and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report.

These financial statements are the responsibility of the management of the Company. 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 mis-statement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principals used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

3) 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.

4) In our opinion, proper books of account, as required bylaw, have been kept by the company, so far as appears from our examination of those books.

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

6) In our opinion the Balance Sheet and the Profit & Loss Account and the Cash Flow Statement dealt by this report are in compliance with the Accounting Standards referred to in Section 211 (3c) of the Companies Act, 1956.

7) On the basis of written representation received from all the Directors of the Company and the information and explanation as made available, Directors of the Company do not prima facie have any disqualification as referred to in Clause (g) of Sub-Section (1) of the Section 274 of the Act, 1956.

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

i. Note No. 1 regarding contingant liabilities in respect of non-provision of demand of Central Excise & Sales Tax.

ii. Note No.7 (a) regarding non-provision of depreciation on certain machine and No. 7

(b) regarding non-provision in accounts for extra shift depreciation on the amount of revaluation of fixed assets.

iii. Note No.11 for non-provision of part of sundry debtors and loans and advances considered doubtful.

iv. Note No.16 (a) regarding accounts of the Company prepared on going concern basis.

v. Note No. 18 in respect of non-transfer of funds to investors education and protection funds.

vi. Note No. 19 in respect of adopting of revised AS-15 to some extent only.

We further report that without considering item mentioned at (i), (iv), (v), (vi), above the effect of which is not there, had the observations made by us in paragraphs (ii), and (iii) above been considered, the Loss for the year would have been Rs.140.31 lacs (as against the reported Loss of Rs. 77.65 lacs), debit balance of Profit & Loss Accounts would have been Rs. 3595.09 lacs (as against the reported figures of Rs. 3532.43 lacs), and read together with other notes there on give the information required by the Company Act, 1956 in the manner so required and give a true and fair view, in confirmaty with the accounting principles generally accepted in India.

(a) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March,2010.

(b) In the case of Profit & Loss Account of the Loss of the Company for the year ended on that date. and

(c) In the case of Cash Flow statement of the Cash Flows for the year ended on that date.

As required by the Companies (AuditorsReport) order, 2003 issued by Central Government Of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we further report that :

i The nature of the Companies business/activities during the year was such that clause (xii).(xiii) and (xiv) of the paragraph 4 of the

Companies (Auditors Report) Order 2003 are not applicable to the Company ii. a) The Company has maintained proper records showing full particulars, including quantitative details and unit wise situation of fixed assets.

b) Physical verification of fixed assets was carried out during the year in accordance with the Companys policy. In our opinion the frequency of verification is at reasonable intervals having regard to the size of the company and nature of assets. According to the information and explaination given to us no materials discrepancies were noticed on such verification.

c) During the year, in our opinion, a substantial part of fixed assets has not been disposed off by the Company.

iii. a) The inventory of the Company has been physically verified by the management during the year and at the year end. In our opinion the frequency of verification is resonable.

b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the Company and nature of its business.

c) On the basis of our exmanination of records of inventory, in our opinion, the Company has maintained proper records of inventory and discrepancies noticed on physical verification between the physical stock and the book records were not material in relation to the operation of the Company.

iv. a) In our opinion and according to the information and explanations given to us, the Company has taken loans during the year from three parties listed in the Register maintained under section 301 of the Companies Act, 1956, .The outstanding balance as on 31.03.10 was Rs. 16,51,45,597/- and the maximum balance outstanding was Rs.17,29,04,357/-.

b) The terms & condition of such loan was not prejudicial to the interest of the Company.

c) In our opinion and according to the explanation given to us the company is regular in paying the principal and interest is stipulated.

(d) In our opinion and according to the information and explanations given to us, the Company has not granted any loans to parties listed in the Register maintained under section 301 of the Companies Act, 1956, except has maintained a Current A/c with one of its Group Company, hence sub clause (iii) (b), (c) and (d) of the Order are not applicable in respect of loans granted.

v. According to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the Company and nature of its business, for purchase of raw materials, stores, components, plant & machinery, equipment and other assets

vi. a) Based on the Audit procedure applied by us and as per the information and explainations given to us the particulars of Contacts, or arrangements referred to in Section 301 of the Act are entered in the register require to be maintained under that section. b)ln our opinion and according to the information and explanations given to us, the Company has purchased/sold stores, raw materials, finished goods and components from / to and also paid rent, processing charges , interest to Company in which Directors are interested as listed in the register maintained under section 301 of the Companies Act, 1956, at prices which are reasonable having regards to prevailing market prices of such goods, materials or services or the prices at which transaction for similar goods, materials or services have been made with other parties.

vii. The Company has not accepted any deposit from public as defined in section 58-A of the Companies Act, 1956 and the rules framed thereunder except Inter Corporate deposit from body corporates. No order has been passed by Company Law Board .National Company Law Tribunal or any Court during the year.

viii. In our opinion, the internal audit system is reasonably commensurate with the size and nature of the business of the Company.

ix. We have been informed that the prescribed cost records pursuant to the rule made by the Central Government under section 209 (1) (d) of the Companies Act, 1956 are being maintained for its Soya Division. However we have not carried out any detailed examination of such accounts and records with a view to determine whether they are accurate or complete.

x. a) The Company has been regular in depositing during the year provident fund and employees state insurance dues with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Custom Duty .Excise Duty and Service Tax as on 31.03.10 were outstanding for a period of more than six months (except deferement of Sales Tax and Entry Tax for the year) from the date they became payable except the Entry Tax of Rs 4,14,557 /- due for earlier years. And Vat Tax of Rs. 56,50,975 /- due up to 30.09.2010.

c) As on 31.03.10, according to records of the Company and the information and explanations given to us, the following are the particulars of dues on account of Income Tax, Excise Duty.Cess, Sales Tax, Service Tax .Custom Duty and Wealth tax matters that have not been deposited on account of any dispute:

S. Name of Nature of Amount Forum where No the Statute the dues (Rs.ln lacs) pending

1 Commercial Tax Sales Tax & Entry Tax Demand 88.20 Commissioner of Sales Tax Levies including interest & penalty

2 Central Excise Act, 1944 Excise Duty 20.18 Commissioner of Central Excise (Appeal)

xi. a) In our opinion the companys accumulated losses as on 31.03.10 exceeds its net worth and it has incurred cash loss during the financial year ended on that date and earned cash profit in the immediate preceding financial year.

b) According to the information provided by the Company, the company is a sick industrial company within the meaning of section 3(1) (XII) of the Sick Industrial Companies (Special Provision) Act, 1985 and is duly registered with BIFR. xii. The Company has defaulted in the repayment of dues to financial institutions. Bank and debenture holders and the period, amount of default

and the explanations furnished by the Company are as follows:

(Rs.in lacs)

S. No.Name of Financial Institutions/Bank Total Default till 31.03.10 including Period of Default /Others principle amount & Interest (as per revival package duly approved by AAIFR)

CANARA BANK 306.00 FY 1999-2000 TO 2009-10

2. DEBENTURE HOLDERS 99.02 -DO-

xiii According to the information and explanations given to us, the Company has given guarantees to bank, the terms and conditions wereof , are not prejudicial to the interest of the Company.

xiv. In our opinion and according to the information and explanations given to us, the Company has not taken any term loan during the year.

xv. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have prima facie been used for short term purpose only.

xvi. During the year the Company has not made preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

xvii. In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year.

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

xix. According to the information and explanations given to us, during the year, no fraud on or by the Company has been noticed or reported.

For : M/S M.MEHTA & CO.

Chartered Accountants DATE : 31.08.2010 (P.R.Bandi) PLACE : INDORE Partner

(M.No. 16402) (Firm Reg. No. 000957C)

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Mar 31, 2009

1. We have audited the attached Balance sheet of PREMIER INDUSTRIES (INDIA)LIMITED,DEWAS as at 31st March,2009 and the relative Profit & Loss Account and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the management of the Company. 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 mis-statement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

3. 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.

4. 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.

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

6. In our opinion the Balance Sheet and the Profit & Loss Account and the Cash Flow Statement dealt by this report are in compliance with the Accounting Standards referred to in Section 211 (3c) of the Companies Act, 1956.

7. On the basis of written representation received from all the Directors of the Company and the information and explanation.as made available, Directors of the Company do not prima facie have any disqualification as referred to in Clause (g) of Sub-Section (1) of the Section 274 of the Act, 1956.

8. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with and subject to :-

i. Note No. 1 regarding contingant liabilities in respect of non-provision of demand of Central Excise & Sales Tax.

ii. Note No.6 (a) regarding non-provision of depreciation on certain machine and No. 6 (b) regarding non-provision in accounts for extra shift depreciation on the amount of revaluation of fixed assets.

iii. Note No.10 for non-provision of part of sundry debtors and loans and advances considered doubtful.

iv. Note No.12 (b) in respect of leased assets.

v. Note No.13 in respect of Sales TaxA/AT liabilities. .

vi. Note No.15 (a) regarding accounts of the Company prepared on going concern basis.

vii. Note No. 17 in respect of non-transfer of funds to investors education and protection funds.

viii. Note No. 18 in respect of adopting of revised AS-15 to some extent only.

ix. Note No. 19 in respect of written off of unsecured loans / lease rentals .

x. Note No. 20 in respect of directly crediting NON COMPETE FEES as an extra ordinary item in Profit and Loss Account.

We further report that without considering item mentioned at (i), (iv), (v), (vi), (vii), (viii), (ix) and (x) above the effect of which is not there, had the observations made by us in paragraphs (ii), and (iii) above been considered, the Profit for the year would have been Rs.144.53 lacs (as against the reported Profit of Rs. 242.42 lacs), debit balance of Profit & Loss Accounts would have been Rs.3162.42 lacs (as against the reported figures of Rs. 3064.53 lacs), and read together with other notes there on give the information required by the Company Act, 1956 in the manner so required and give a true and fair view, in confirmaty with the accounting principles generally accepted in India.

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

b) In the case of Profit & Loss Account of the Profit of the Company for the year ended on that date.

and

c) In the case of Cash Flow statement of the Cash Flows for the year ended on that date.

As required by the Companies (AuditorsReport) order, 2003 issued by Central Government Of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we further report that :

i. a) The nature of the Companies business/activities during the year was such that clause (xii).(xiii) and (xiv) of the paragraph 4 of the Companies (Auditors Report) Order 2003 are not applicable to the Company

ii. a)The Company has maintained proper records showing full particulars, including quantitative details and unit wise situation of fixed assets. b) Physical verification of fixed assets was carried out during the year in accordance with the Companys policy. In our opinion the frequency of verification is at reasonable intervals having regard to the size of the company and nature of assets. According to the information and explanation given to us no materials discrepancies were noticed on such verification.

c)During the year, in our opinion, a substantial part of fixed assets has not been disposed off by the Company.

iii. a) The inventory of the Company has been physically verified by the management during the year and at the year end. In our opinion the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the Companyand nature of its business.

c) On the basis of our exmanination of records of inventory, in our opinion, the Company has maintained proper records of inventory and discrepancies noticed on physical verification between the physical stock and the book records were not material in relation to the operation of the Company. •

iv. a) In our opinion and according to the information and explanations given to us, the Company has taken loans during the year from three parties listed in the Register maintained under section 301 of the Companies Act, 1956, .The outstanding balance as on 31.03.09 was Rs.10,35,99,383/- and the maximum balance outstanding was Rs.13,90,92,105/-. b) The terms & condition of such loan was not prejudicial to the interest of the Company.

c)ln our opinion and according to the explanation given to us the company is regular in paying the principle and interest is stipulated. : d) In our opinion and according to the information and explanations given to us, the Company has not granted any loans to parties listed in the Register maintained under section 301 of the Companies Act, 1956, except has maintained a Current A/c with one of its Group Company, hence sub clause (iii) (b), (c) and (d) of the Order are not applicable in respect of loans granted.

iv. According to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the Company and nature of its business, for purchase of raw materials, stores, components, plant & machinery, equipment and other assets. ,

v. a) Based on the Audit procedure applied by us and as per the information and explainations given to us the particulars of Contract or ; arrangements referred to in Section 301 of the Act are entered in the register require to be maintained under that section. b)|n our opinion and according to the information and explanations given to us, the Company has purchased/sold stores, raw materials, finished goods and components from / to and also paid rent, processing charges , interest to Company in which Directors are interested as listed in the register maintained under section 301 of the Companies Act, 1956, at prices which are reasonable having regards to prevailing market prices of such goods, materials or services or the prices at which transaction for similar goods, materials or services have been made with other parties.

vi. The Company has not accepted any deposit from public as defined in section 58-A of the Companies Act, 1956 and the rules framed thereunder except Inter Corporate deposit from body corporates. No order has been passed by Company Law Board .National Company Law , Tribunal or any Court during the year. ;

vii. In our opinion, the internal audit system is reasonably commensurate with the size and nature of the business of the Company.

viii. We have been informed that the prescribed cost records pursuant to the rule made by the Central Government under section 209 (1) (d) of the Companies Act, 1956 are being maintained for its Soya Division. However we have not carried out any detailed examination of such accounts and records with a view to determine whether they are accurate or complete.

ix. a) The Company has been regular in depositing during the year provident fund and employees state insurance dues with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Custom Duty .Excise Duty and Service Tax as on 31.03.09 were outstanding for a period of more than six months (except deferement of Sales Tax and Entry Tax for the year) from the date they became payable except the Entry Tax of Rs 359S8 /- due for earlier years. And VAT Tax Of Rs. 4201992 /- due up to 30.09.2008.

c) As on 31.03.09, according to records of the Company and the information and explanations given to us, the following are the particulars of dues on account of Income Tax, Excise Duty.Cess, Sales Tax, Service Tax .Custom Duty and Wealth tax matters that have not been deposited on account deposited on account of any dispute:

S. Name of Nature of Amount Forum where No. the Statute the dues (Rs.In lacs) pending

1 Commercial Tax Sales Tax & Entry Tax Demand 318.31 Commissioner of Sates Tax Levies including interest & penalty

2 Central Excise Act, 1944 Excise Duty 20.18 Commissioner of Central Excise (Appeal)

X. a) In our opinion the companys accumulated losses as on 31.03.09 exceeds its net worth and it has incurred cash loss during the financial year ended on that date and earned cash profit in the immediate preceding financial year without considering extra ordinary items.

b) According to the information provided by the Company, the company is a sick industrial company within the meaning of section 3(1)(XII) of the Sick Industrial Companies (Special Provision) Act, 1985 and is duly registered with BIFR.

xi. The Company has defaulted in the repayment of dues to financial institutions. Bank and debenture holders and the period, amount of default and the explanations furnished by the Company are as follows:

(Rs.in lacs)

S. No. Name of Financial Institutions/Bank Total Default till 31.03.09 including Period of Default

/Others principle amount & Interest (as per revival package duly approved by AAIFR)

1. CANARABANK 470.00 F.Y. 1999-2000 TO 2008-09

2. DEBENTURE HOLDERS 99.03 --DO--

xii According to the information and explanations given to us, the Company has given guarantees for loans taken by others from Bank & Financial Institutions, the terms and conditions wereof , are not prejudicial to the interest of the Company.

xiii. In our opinion and according to the information and explanations given to us, the Company has not taken any term loan during the year.

xiv. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have prima facie been used for short term purpose only.

xv. During the year the Company has not made preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

xvi. In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year

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

xviii. According to the information and explanations given to us, during the year, no fraud on or by the Company has been noticed or reported.

For : M/S M.MEHTA & CO.

Chartered Accountants DATE : 30.07.2009 (P.R.Bandi)

PLACE : INDORE Partner

(M.No. 16402)

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Mar 31, 2008

1. We have audited the attached Balance sheet of PREMIER INDUSTRIES (INDIA) LMITED. DEWAS at at 31st March.2008 and the relative Profit & Loss Account and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the management of the Company. 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 resonable assurance about whether the financial statements are free of material mis-statement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principals used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a resonable basis for our opinion.

3. 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.

4. 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.

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

6. In our opinion the Balance Sheet and the Profit & Loss Account and the Cash Flow Statement dealt by this report are in compliance with the Accounting Standards referred to in Section 211 (3c) of the Companies Act, 19S6.

7. On the basis of written representation received from all the Directors of the Company and the information and explanation as made available Directors of the Company do not prima facie have any disqualification as referred to in Clause (g) of Sub-Section (1) of the Section 274 of the Act, 1956.

8. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with and subject to :-

i. Note No. 1 regarding contingant liabilities in respect of non-provision of demand of Central Excise & Sales Tax.

ii. Note No.6

(a) regarding non-provision of depreciation on certain machine and No. 6

(b) regarding non-provision in accounts for extra shill depreciation on the amount of revaluation of raced assets.

iii. Note No.10 for non-provision of part of sundry debtors and loans and advances considered doubtful. iv. Note No.12 (b) in respect of leased assets. v. Note No.13 in respect of Sales Tax/VAT liabilities.

vi. Note No.15

(a) regarding accounts of the Company prepared on going concern basis.

vii. Note No. 17 in respect of non-provision of interest of Rs. 11.16 lacs on unsecured loans taken from some parties.

viii. Note No. 18 in respect of non-transfer of funds to investors education and protection funds.

ix. Note No. 19 in respect of write back of interest payable to Canara Bank

x. Note No. 20 in respect of adopting of revised AS-15 to some extent only.

We further report that without considering item mentioned at (i), (iv), (v), (vi) and (viii) above the effect of which is not there, had the observations made by us in paragraphs (ii), (iii)and(vii) above been considered, the Profit for the year would have been Rs.108.21 lacs (as against the reported loss of Rs. 179.80 lacs), debit balance of Profit & Loss Accounts would have been Rs.3199.43 lacs (as against the reported figures of Rs. 3307.64 lacs), and read together with other notes there on give the information required by the Company Act, 1956 in the manner so required and give a true and fair view, in confirmaty with the accounting principles generally accepted in India.

a) In the case of Balance Sheet, of the state of affairs of the Company us at 31st March,2008.

b) In the case of Profit & Loss Account of the Profit of the Company or the year ended on that date. and

c) In the case of Cash Flow statement of the Cash Flows for the year ended on that date.

As required by the Companies (Auditors Report) order. 2003 issued by Central Government Of India in terms of Sub-Section (4A) of Section 227 of the Companies Act. 1956, we further report that :

i. a) The nature of the Companies business/activities during the year was such that clause (xii).(xiii) and (xiv) of the paragraph 4 of the Companies (Auditors Report) Order 2003 are not applicable to the Company

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

b) Physical verification of fixed assets was carried out during the year in accordance with the Companys policy. In our opinion the (requency of verification is at resonable intervals having regard to the size of the company and nature of assets. According to the information and explaination given to us no materials discrepancies were noticed on such verfication.

c) During the year, in our opinion, a substantial part of fixed assets has not been disposed off by the Company.

iii. a) The inventory of the Company has been physically verified by the management during the year and at the year end. In our opinion the frequency of verification is resonable.

b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management were found resonable and adequate in relation to the size of the Company and nature of its business.

c) On the basis of our exmanination of records of inventory, in. our opinion, the Company has maintained proper records of inventory and discrepancies noticed on physical verification between the physical stock and the book records were not material in relation to the operation of the Company.

iv. a) In our opinion and according to the information and explanations given to us, the Company has taken loans during the year from three parties listed in the Register maintained under section 301 of the Companies Act, .1956, .The outstanding balance as on 31.03.08 was Rs.7,13,30.833/- and the maximum balance outstanding was Rs.11.97.56,159/-.-

b)The terms A condition of such loan was not prejudicial to the Interest of the Company.

c) In our opinion and according to the explanation given to us the company Is regular in paying the principal and interest is stipulated.

d) In our opinion and according to the information and explanations given to us, the Company has not granted any loans to parlies listed in the Register maintained under section 301 of the Companies Act, 1956, except has maintained a Currant Ate with one of its Group Company. hence sub clause (ill) (b), (c) and (d) of the Order are not applicable in respect of loans granted.

iv. According to the Information and explanations given to us. there is an adequate Internal control procedure commensurate with the size of the Company and nature of its business, for purchase of raw materials, stores, components, plant & machinery, equipment and other assets.

v. a) Based on the Audit procedure applied by us and as per the information and explanations given to us the particulars of Contacts or arrangements referred to in Section 301 of the Act are entered in the register require to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the Company has purchased/sold stores, raw materials. finished goods and components from / to and also paid rent, processing charges , interest to Company in which Directors are interested as listed in the register maintained under section 301 of the Companies Act, 19S6, at prices which are reasonable having regards to prevailing market prices of such goods. materials or services or the prices at which transaction for similar goods, materials or services have been made with other parties.

vi. The Company has not accepted any deposit from public as defined in section 58-A of the Companies Act. 19S6 and the rules framed thereunder except Inter Corporate deposit from body corporales. No order has been passed by Company Law Board .National Company Law Tribunal or any Court during the year.

vii. In our opinion, the internal audit system is reasonably commensurate with the size and nature of the business of the Company.

viii. We have been informed that the prescribed cost records puersuant to the rule made by the Central Government under section 209 (1)
ix. a) The Company has been regular in depositing during the year provident fund and employees state insurance dues with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amount payable In respect of Income Tax, Sales Tax, Custom Duty .Excise Duty and Service Tax as on 31.03.08 were outstanding for a period of more than sac months (except deferement of Sales Tax and Entry Tax for the year) from the date they became payable except the Entry Tax of Rs 2,87.181/- due for earlier years. And Vat Tax of Rs. 18,72,014/- due up to 30.09.2007.

c) As on 31.03.08, according to records of the Company and the Information and explanations given to us, the following are the particulars of dues on account of Income Tax, Excise Duty. Cess, Sales Tax, Service Tax .Custom Duty and Wealth tax matters that have not been deposited on account of any dispute:

S Name of Nature of Amount Form where No. the Statute the dues (Rs. ln lacs) Pending

1 Commercial Tax Sales Tax & Entry Tax Demand 318.31 Commissioner of Sales Tax Levies including interest & penalty

2 Central Excise Act. 1944 Excise Duty 44.98 Commissioner of Central Excise (Appeel)

x. a) In our opinion the companys accumulated losses as on 31.03.08 exceeds its net worth and it has earned cash profit during the financial year ended on that dale and Incurred cash loss in the immediate preceding financial year.

b) According to the information provided by the Company, the company is a sick Industrial company within the meaning of section 3(1)(XD) of the Sick Industrial Companies (Special Provision) Act, 1985 and is duly registered with BIFR.

xi. The Company has defaulted in the repayment of dues to financial institutions. Bank and debenture holder* and the period, amount of default and the explanations furnished by the Company are as follows::

(Rs in lacs) S No Name of Financial Institutions/Bank Total Default til 31.03.08 including Period of default /Others principal amount & lnterest (as per revival package duly approved by AAIFR)

1 CANARA BANK 650.00 F.Y 1999-2000 TO 2007-06

2 DEBENTURE HOLDERS 99.17 --DO--

xii According to the information and explanations given to us, the Company has given guarantees for loans taken by others from Bank & Financial Institutions, the terms and conditions were of, are not prejudicial to the interest of the Company.

xiii. In our opinion and according to the information and explanations given to us, the Company has not taken any term loan during the year.

xiv. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, the funds raised on short term basis have prima facie been used for short term purpose only.

xv. During the year the Company has not made preferential allotment of shares to parlies and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

xvi. In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year

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

xviii. According to the information and explanations given to us, during the year, no fraud on or by the Company has been noticed or reported.

For : M/S M. MEHTA & CO.

Chartered Accountants

DATE : 31.07.2008 (P. R. Bandi)

PLACE : INDORE Partner.