PRABHA ENERGY PRIVATE LIMITED**********************************

D I R E C T O R S R E P O R T

2010-2011

TO,THE MEMBERSPRABHA ENERGY PRIVATE LIMITED

The Directors take pleasure in presenting the Annual Report together with the Audited Statements of Accounts of your Company for the Financial year ended the 31st March, 2011.

1. FINANCIAL RESULTS:

2010-11 2009-10PARTICULARS AMOUNT(RS.) AMOUNT(RS.)Profit / Loss before Taxation 6978 (4579)Provision for Taxation 0 0Profit / Loss After Tax 6978 (4579)Bal. brought from previous year -4579 0Balance carried to Balance Sheet 2399 (4579)

2. OPERATIONS:

During the period under review the Total income of the Company is Rs. 12416/- and the Company has incurred Total Expenditure of Rs. 5438/-. The Company expects to perform better in the Current year.

3. DIVIDEND:

In view of the loss incurred, the Directors recommend that no dividend to be declared this year.

4. AUDITORS:

M/s. Jayesh M. Shah & Co., Chartered Accountants, Ahmedabad, retire as the Auditors of the company at the conclusion of the ensuing general meeting and are eligible for reappointment. Members are requested to reappoint them as the Auditors of the company and authorize the Board to fix their remuneration.

The Company has received letters from them to the effect that their appointment/reappointment, if made, would he within the prescribed limits under

Section 224(1)(B) of the Companies Act, 1956 and that they are not disqualified for such appointment/reappointment within the meaning of Section 226 of the said Act.

5. AUDITORS REPORT: The Notes on Accounts referred to in the Auditors' Report are self-explanatory and

therefore do not call for any further comments.

6. PARTICULARS OF EMPLOYEES:

No employee is drawing remuneration more than the specified limit prescribed u/s.217(2A) of the Companies Act, 1956, (Particulars of Employees) Rules, 1975. Hence, the information required in terms of Section 217(2A) of the Companies Act, 1956 (Particulars of Employees) Rules, 1975 is not applicable to us.

7. COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF DIRECTORS) RULES,1988.

A. TECHNOLOGY ABSORPTION:

1. Research and Development (R & D) NIL2. Technology absorption and Innovation NIL

B. FOREIGN EXCHANGE EARNING & OUT GO:

1. Total Foreign Exchanged Used NIL2. Total Foreign Exchanged Earned NIL

8. DIRECTORS: In accordance with the provisions of Section 256 of the Companies Act, 1956 and the Articles of Association, Mr. Dharen Savla shall retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

9. DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SEC. 217(2AA) OF THE COMPANIES ACT,1956:

The Directors hereby confirm that:

1. That in the preparation of the annual accounts, the applicable accounting standards has been followed along with proper explanation relating to material departures.

2. Appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are responsible and prudent so as to give true and fair view of the state of affairs of the company at the end of the financial year 2010-11 and of the profit or loss of the company for the said period.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

4. The annual accounts have been prepared on a going concern basis.

10. PUBLIC DEPOSIT

During the year under review, the Company has not accepted any Deposit from the Public.

11. ACKNOWLEDGEMENT:

The Directors wish to place on record their sincere thanks and gratitude to: * all Bankers for extension of the financial facilities and continued support; * the members for the trust and confidence reposed by them in the Company. Our Directors also take this opportunity to convey their sincere appreciation and

gratitude for the hard work put in by the officers and employees of the Company, at all levels during the year under review.

BY ORDER OF THE BOARD OF DIRECTORS OF PRABHA ENERGY PVT. LTD.

Sd/-

Date : 02.06.2011 PARAS SAVLA Place: Ahmedabad DIRECTOR

JAYESH M. SHAH JAYESH M SHAH & CO. B.COM, F.C.A. CHARTERED ACCOUNTANTS

Flat No.-2 , Shital Appt, 11,Shilp Park Society Usmanpura ,Ahmdabad-13. PH. NO : (079) 27557047

A'LTDITORS' REPORT

To, The Members, -

Prabha Energy Private Limited.

1. We have audited the attached Balance Sheet of PRABHA ENERGY I'RIVATE LIMITED as at 3 lSt March, 201 1 and Profit and Loss Account and Cash Flow Statement for the year ended 'on that date annexed thereto. These financial statements are the responsibility of the Company'smanagement. 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 perfom the audit to obtain reasonable assurance about whether the financial statements are free of any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation .We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's report) Order, 2003 as amended by the 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 have to state that the necessary provisions are not applicable to the company. Hence the required Report on the provisions of the order has not been given herewith.

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

(i) We have obtained all the information and explanations, which to the best our knowledge and belief were necessary for the purpose of our audit ;

(ii) 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 ;

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

(iv) In our opinion, the Balance sheet and Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 21 1 of the Companies Act, 1956;

(v) On the basis of written representation received firom the directors, as on 3 1" March 201 1 and taken on record by the Board of Directors of the Company and the information and explanations given to us, we report that none of the directors is disqualified as on 3 1'' March 201 1 firom being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to the effect of such adjustments, if any, as might have been required for and read together with the significant accounting policies and notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

i. In the case of the Balance Sheet, of the state of affairs of the Company as at 3 1" March, 20 1 1 ; and

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

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

Date : 02-06-2011

FOR AND ON BEHALF OF JAYESH M. SHAH & CO.

Chartered Accountants Firm Reg. no. 104173W

(JAYEsH M. SHAH) ., Proprietor

Mem. No. : 30638

PRABHA ENERGY PRIVATE LIMITED

BALANCE SHEET AS AT 31 ST MARCH 201 1

PARTICULARS SCHEDULE AMOUNT ASAT AMOUNT AS AT RUPEES 31-Mar-1 I RUPEES 31-Mar-I 0

RUPEES RUPEES SOURCES OF FUNDS :

(I) SHARE HOLDER'S FUND. (i) Share Capital (iii)Reserves & Surplus

(11) LOAN FUNDS ( i ) Secured Loan (ii) Unsecured Loan

I APPLICATION OF FUNDS :

(I) FIXED ASSETS

(11) 1NVESTMENTS

(Ill) CURRENT ASSETS, LOANS & ADVANCES (a) Inventories (b) Sundry Debtors (c) Cash & Bank Balances (d) Loans, Advances & Deposites

Less: CURRENT LIABILITIES & PROVISIONS (a) Current Liabilities (b) Provisions

Net Current Assets

(IV) MISC. EXPENSES (TO THE EXTENT NOT WRlTrEN OFF OR ADJUSTED)

(V) PROFIT & LOSS ACCOUNT BALANCE

' I Notes forming Part of Accounts

As per our report of even date attached

For & on Behalf of Jayesh M. Shah & Co. Chartered Accountants Firm Reg No. 1041 73W

,-

Jayesh M. Shah- Proprietor M.No. 30638 Place : Ahmedabad Date : 02-06-201 1

TOTAL : 352399 350000

- TOTAL : 352399 350000

I 0

For Prabha Energy F?rivate Limited

w> GzLJ- Paras Savla Rupesh Savla Director Director

Place : Ahmedabad Date : 02-06-201 1

P W H A ENERGY PRIVATE LIMITED

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH 2011

PARTICULARS SCHEDULE AS AT AS AT AMOUNT 31-Mar-1 1 AMOUNT 31-Mar-10 RUPEES RUPEES RUPEES RUPEES

(I) INCOME : Other Income

TOTAL : (11) EXPENSES :

Administrative & Other ~xpenses 9 ' . 3100 2670 Preliminary Expenses Written off 7 2338 2338

. TOTAL : 5438 5008 ProfitlLoss Before Taxation 6978 -4579 Less : Income Tax Provision Net ProfitlLoss after Taxation Addl(Less): Profit/(Loss) of previous year (Ill) Balance Available for Appropriation

(IV) APPROPRIATIONS Bal. of Pmft & Loss Account carried to Bal.Sheet

Basic E.P.S. of face value of Rs. 10 ( In Rupees) Diluted E.P.S. of face value of Rs. 10 ( In Rupees)

Notes forming Part of Accounts As per our report of even date attached

For & on Behalf of

Jayesh M. Shah Proprietor : M.No. 30638 ,Place : Ahrnedabad

' . , Date : 02-06-201 1 ,. '

For Prabha. Energy Private Limited

Paras Savla Rupesh Savla . '

Director ~iredtor

Place : Ahrnedabad Date : 02-06-201 1

PMBHA ENERGY PRIVATE LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED ON 3 1.03.1 1

PARTICULARS 2010-1 1 2009-10

CASH FLOWS FROM OPERATING ACTIVITIES : Net Profit before tax as per Profit & Loss Account 6978 (4579) Adjustment for : Depreciation Expenses Dividend Income (12116) (429) Other Income (300) 0

Prelimnary Expenses Written Off 2338 (10078) 2338 1909 Operating Profit before Working Capital Changes (31 00) (2670) Change in Working Capital

.Adjustment for Inventories

Sundry Debtors Loans & Advances

Trade Payable & Other Liabilities CASH FLOW FROM OPERATION

I I Cash Flow from Exceptional Claim lncome Tax & Cenvat Credit

NET CASH GENERATED BY OPERATING ACTIVITIES

CASH FROM INVESTING ACTIVITIES : Purchase of Fixed Assets & Changes in Work in Capltal Sale of Fixed Assets Purchase of Investments

Sale of Investments

lnterest lncome Dividend lncome

Profit from Sale of Investments

CASH FLOW FROM FINANCING ACTIVITIES : lnterest Paid lnterest Expenses on late payment of TDS -

Proceeds from.-Issue of Share CapitalIConvettible Warrants

( Net of Expenses I Recovery of Expenses) Proceeds from Secured Loans Proceeds from Unsecured Loans

Dividend and Dividend Tax Paid , 0 0 0 326620 NET INCREASEI(DECREASE) IN CASH AND CASH EQUIVALENTS (2901 00) 301450

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 301 450 0 CASH AND CASH EQUIVALENTS AT THE CLOSE OF M E YEAR 11350 : 301450

As per our report of even date attached For & on Behalf of

Jayesh M. Shah & Co. For Prabha Energy Private ~imited Chartered Accountants Firm Reg No. 1041 73W

V-L P-upesh Savla

Proprietor Director Director M. No. 30638 Place : Ahmedabad Place : Ahmedabad Date : 02-06-201 1 ate : 02-06-201 1

1 PRABHA ENERGY PRIVATE LIMITED

SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE 1 TO 7 ANNEXED TO AND FORMING PART OF BALANCE SHEET AS AT 31ST MARCH 201 1

PARTICULARS 31-Mar-I I 31-Mar-10 RUPEES RUPEES

SCHEDULE - I A. SHARE CAPITAL :

Authorised Share Capital : 50000 Equity Shares of Rupees 101- each (Previous Year 50000 Equity Shares of.Rs. 101- each)

Issued & Paid up Share Capital : 35000 Equity Shares of Rupees 101- each fully paid up (Previous Year 35000 Equity Shares of Rs. 101- each) (25000 Equity Shares of Rs 101- each held by Holding Company - Deep Industries Ltd)

SCHEDULE - 2 RESERVES & SLIRPLUS : Profit & Loss Account Balance

TOTAL :

SCHEDULE - 3 INVESTMENTS : AT COST CURRENT INVESTMENT Unquoted Investments HDFC Cash Management Fund (Market Value as on 31.03.201 1 is Rs.2248451- and Previous Year Market Value Rs.254291-) (Units as on 31.3.201 1 : 22421.50 ) (Units as on 31.3.201 0 : 2536.20 )

TOTAL : 224845 25429

SCHEDULE - 4

CASH & BANK BALANCES $ 1

(I) Cash on Hand 0 0 (11) Bank Balances :

Balance in current account with scheduled bank '1 1350 301450

TOTAL : 1 1350 301450

SCHEDULE - 5 LOANS & ADVANCES

(Advances recoverable in cash or in kind or for the value to be received) Advances for Tender Application

SCHEDULE - 6

CURRENT LIABILITIES AND PROVISIONS : k Current Liabilities

Creditor for Expenses

100000 0 TOTAL : I00000 0

PRABHA ENERGY PRIVATE LIMITED

SCHEDULE FORMING PART OF THE. PROFIT AND LOSS ACCOUNT

SCHEDULE 7 TO 9 FORMING PART OF PROFIT AND LOSS ACCOUNT FOR'6HE YEAR ENDED ON 31 ST MARCH 201 1

SCHEDULE - 7

MISCELLANEOUS EXPENDITLIRE : Preliminary Expenses Less : Written off during the year

TOTAL : 16366 , 21042

SCHEDULE - 8

OTHER INCOME : Dividend

TOTAL : 12416 429

ADMINISTRATIVE & OTHER EXPENSES : ROC Expense 600 0 Auditor's remuneration 2500 2560 PAN/TAN Application Fees 0 170

TOTAL : 31 00 2670

PRABHA ENERGY PRIVATE LIMITED SCHEDULE - 10

Notes forming part of the accounts of PRABBA' ENERGY PRIVATE L M T E D for the year ended 31St March, 2011.

A. Significant Accounting Policies:

1. Basis of Preparation of Financial Statements

The financial statements have been prepared in compliance with all material aspects of the mandatory Accounting Standards issued by the ICAI and the relevant provisions of the Companies Act, 1956.

Financial Statements are based on historical cost and are prepared on accrual basis. \

2. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting year. Difference between the actual results and .estimates are recognized in the year in which the results are known1 materialized.

3. Fixed Assets

There is no Fixed Assets held by the company.

4. Investments

Current unquoted Investments are stated at book value.

1 5. Basis of Accounts

1 Revenue/Income and costs/expenditures are generally accounted on accrual as-they I are earned or incurred. I

6. Tax on Income

Current Tax is determined on the basis of the amount of tax payable in respect of taxable income for the year.

There is no amount of transaction for which Deferred tax AssetLiability is to be determined and so Company has not made provision for that..

'I. Other Income

$. Contingent Liabilities

Provision is made for all known liabilities and contingent liabilities if any, are disclosed in the account by way of note.

B. In the opinion of the board, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of business. The provision for all known liabilities are adequate and not in excess of the amount reasonably necessary.

C. Other Information pursuant to paragraphs 3,4,4A, 4B and 4D of Para-I1 of the Schedule VI is given as under so far as applicable to the Company.

(a) The Company has . not employed any person drawing remuneration of Rs.2,00,000/- per month or more or Rs.24,00,000/- per annum.

(b) As the Company has not started any business activity during the year, information in~espect of installed capacity, production capacity, raw material consumption, opening and closing stock of goods produced and consumption of indigenous and imported raw materials and spares thereof and turnover of goods produced is not I

given. There is no foreign exchange earning and expenditure during the year.

(c) Payment to Statutory Auditors

I

i D. Capital Commitment Expenses to the extent not provided for during the year are Rs.

I NIL.

I

Particulars

~ E. Figures are rounded off to the nearest rupee. I

F. Previous year figures have been rearranged and regrouped where ever applicable.

Taxation Matters Others Total

1 G Segment Reporting

Since there is no operational revenue, there are no separate reportable segmeks as per Accounting Standard 17 - "Segment Reporting" issued by the Council of the Institute of Chartered Accountants of India.

- -

Rs. 2,500

- -

Rs. 2,500

H. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date, if there is any - indication of impairment based on internallexternal factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the assets' net selling price and value in use. In assessing the value in use the estimated future cash flows are discounted to the present value at the weighted average cost of capital. During the year there are no impairment losses on assets of the Company.

I. As per Accounting Standard - 18, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

(i) List of related parties where control exists and related parties, with whom transactions have 9 Holding Company I Deep Industries Limited

[i) Transactions during the financial year 2010-1 1 with the related parties are s h o h below:

I

J. Earnings per share

Nature of transaction

Unsecured Loan Received Repaid

Outstanding Balance at year end

The earnings considered in ascertaining the Company's EPS represent profit for the year after tax. Basic EPS is computed and disclosed using the weighted average number of equity shares outstanding during the year.

Calculation of EPS

KMP

- - -

I Particulars 1 31.03.2011 ( 31.03.2010 1

RKMP

- - -

I considered as outstanding in computation ( I I 9 Weighted Average Number of shares

Enterprises significantly influenced

(4,359

I each (in Rs) I

Holding Company

- - -

of Basic EPS and Diluted EPS Basic EPS, Shares of face value of Rs 10

Other Associate Companies

- - -

35000

Diluted EPS, Shares of face value of Rs 10 each (in Rs)

35000

0.2 (0.13)

K Information pursuant to the provision of part IV of SCHEDULE W to the Companies Act, 1956. Balance sheet abstract and Company's general business profile.

I. REGISTRATION DETAILS : Registration No. 57716 State Code : 04 Balance Sheet Date 3 1/03/2011

11. CAPITAL RAISED DURING THE YEAR ( RS. IN THOUSANDS) : Public Issue NIL Right Issue NIL

Bonus Issue NIL Private Placement Convertible NIL Warrants

111. POSITION OF MOBILITION AND DEPLOYMENT OF FUNDS (RS IN THOUSANDS) :

Total Liabilities 352.399 Total Assets 352.399 Sources of Funds : Application of Funds Paid up Capital . . 350.00 Net Fixed Assets 0.00

Investments 224.845 ~eserves & Surplus 2.399 Net Current Assets ,108.850 Secured Loans 0.000 Misc. Expenditure 18.704

IV. PERFORMANCE OF COMPANY( RS. IN THOUSANDS) :

Turnover & Other Income 12.4 16 Total Expenditure 5.438

Profit Before Tax 6.978 Profit After Tax 6.978

Earnings per share Rs. 0.20 Dividend Rate 0% (After Tax)

V. GENETIC NAME OF THREE PRINCIPAL PRODUCT OF ,COMPANY

NOT APPLICABLE BEING NO OPERATIONAL TRANSACTION IN COMPANY.

SIGNATURE TO SCHEDULE '1' TO '10'

FOR AND ON BEHALF OF FOR PRABHA ENERGY PRIVATE LIMITED JAYESH M. SHAH & CO.

CHARTERED ACCOUNTANTS Firm Reg. No. 104173W

(JAYESH M. SHAH)

(Paras Savla) Director

Proprietor (Mem. No. 30638)

PLACE : AHMEDAB PLACE : AHMEDABAD DATE : 02-06-201 1 DATE : 02-06-201 1

J .4YE$N M. SHAH & CO. Ci-IARTERED ACCOUNTANTS

'rat Nc,?, S h i t a l ~ ~ ~ a r t r n e n t , :'!iip Psrk Society, Usmanpura,

' !111?edabad-.780 013.

(Rupesh Savla) (Director)