Confirmatory Order in the matter of Kavit Industries LimitedSAT Appeal No.126/2018]

WTM/MPB/ISD/143/2018 BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: MADHABI PURI BUCH, WHOLE TIME MEMBER ORDER Under Sections 11, 11(4), 11A and 11B of the Securities and Exchange Board of India Act, 1992 in the matter of M/s Kavit Industries Limited (PAN: AAACJ4907C):

1. Securities and Exchange Board of India (hereinafter referred to as “SEBI”), in the interest of investors, vide its letter dated August 7, 2017 took the pre-emptive interim measures under section 11(1) of SEBI Act, 1992, in respect of listed shell companies including M/s Kavit Industries Limited (hereinafter referred to as “KIL” / “Company”). SEBI placed trading restrictions, on the promoters/directors so that they do not exit the company at the cost of innocent shareholders. In view of the said objective, SEBI vide the said letter dated August 7, 2017 also placed the scrip in the trade to trade category with limitation on the frequency of trade and imposed a limitation on the buyer by way of 200% deposit on the trade value, so as to alert them trading in the scrip. The said measures were initiated by SEBI pending final determination after verification of credentials and fundamentals by the exchanges, including by way of audit and forensic audit if necessary. The measures also envisaged, on the final determination, delisting of companies from the stock exchange, if warranted. By virtue of these measure, trading in scrip was not suspended but allowed under strict monitoring so that investors could take informed investment decisions, till SEBI and Exchanges completed their detailed examination of such companies.

2. Aggrieved by the aforesaid letter dated August 7, 2017 issued by SEBI, KIL filed an appeal No. 176 of 2017 before the Hon’ble Securities Appellate Tribunal (hereinafter referred to as “SAT”). The Hon’ble SAT vide order dated August 11, 2017 had granted stay to KIL and directed stock exchanges to reverse their decision in respect of KIL as expeditiously as possible

Order in the matter of M/s Kavit Industries Limited and also directed SEBI to dispose of KIL representation in accordance of law. Hon’ble SAT also held that the said order shall not come in the way of SEBI as well as the stock exchanges to investigate the case of KIL and initiate proceedings if deemed fit.

3. Pursuant to the decision of Hon’ble SAT that the communication of SEBI dated August 7, 2017 is in the nature of quasi-judicial order, therefore, in the interest of natural justice, an opportunity of personal hearing was granted to KIL on August 14, 2017. The authorized representative of KIL had appeared for hearing.

4. Thereafter, SEBI vide Interim Order dated September 04, 2017 (hereinafter referred to as “Interim Order”), had modified, subject to para 30(iv) of the interim order, the actions envisaged in SEBI’s letter dated August 07, 2017 and the consequential actions taken by Stock Exchanges, against M/s Kavit Industries Limited as under:

(i) The trading in securities of KIL shall be reverted to XT group of BSE with applicable price band in trade to trade category. (ii) Exchange shall appoint an independent auditor to conduct forensic audit of KIL for verification, including the credentials/financials of KIL. (iii) The promoters and directors in KIL are permitted only to buy the securities of KIL. The shares held by the promoters and directors in KIL shall not be allowed to be transferred for sale, by depositories. (iv) The other actions envisaged in SEBI’s letter dated August 07, 2017 in para 1 (d) as may be applicable, and the consequential action taken by Stock Exchanges shall continue to have effect against M/s Kavit Industries Limited

5. The prima facie observations in the Interim Order are as under: “……….

Order in the matter of M/s Kavit Industries Limited

20. The details of bank statement (Corporation Bank with A/c No.510101000470189) provided by the company are as tabulated below: -

Date Particulars Debit Credit Balance

04/05/2017 Rtgs A Tejas 1,85,00,000 1,85,08586 04/05/2017 To CBCA 119 1,85,00,000 8,586 12/05/2017 RTGS Tejas 1,10,40,000 1,10,48,471 12/05/2017 RTGS Naolin Inf 50,00,000 1,60,48,471 15/05/2017 RTGS Naolin Inf 75,00,000 2,35,48,471 15/05/2017 To Content Infra 50,00,000 1,83,48,471 15/05/2017 To Content Infra 1,10,00,000 75,48,471 15/05/2017 To Content Infra 7,50,000 67,98,471 15/05/2017 To CBCA 119 Content 67,98,000 471.00 Infra 17/05/2017 NEFT Naolin 40,00,000 40,00,471 Infrastructure 18/05/2017 NEFT Naolin 25,00,000 65,00,471 Infrastructure 18/05/2017 ZUBER 8,00,000 57,00,471 18/05/2017 RTGS 32,00,000 25,00,413 18/05/2017 CBCA SUNAYANA 25,00,000 413

From the above bank transactions, it is noted that some of the payments have been made by the Company which is in the manufacturing and trading business of oil to infrastructure companies, such as, Content Infra and Naolin Infrastructure. These appears to be accommodation entries as named entities are into infrastructure sector having no direct connection to the business of KIL………

Order in the matter of M/s Kavit Industries Limited

24. Based on the replies given by the company in response to SEBI’s queries, prima facie observations are as under:

(a) It is observed that company has not recovered any interest on the amount of loan given to M/s Yantra Natural resources limited (formerly known as M/s Shree Ganesh Spinners Limited) of Rs. 1.05 Crore even though outstanding for over 7 years and as per the reply of the company vide letter dated September 02, 2017, the loan was given at specific request and friendly guarantee given by some common business friend. The same has been classified under Loans and advances in balance sheet from the FY 2010-11. KIL vide its letter dated September 02, 2017, replied that the loan is still outstanding as on date. KIL has informed that it was a friendly loan given so no interest was charged. This is not in the interest of shareholders of the company. Therefore prima facie, directors & KMPs have failed to discharge their fiduciary responsibility. (b) From the analysis of bank statement (Corporation Bank with A/c No.510101000470189) provided by the company, it is observed that many transactions do not appear to be in the normal course of business and given the previous misuse of funds seriously raises a question on these entries warranting further enquiry in the matter. (c) It is observed that the company has disclosed that its revenue from operations have increased from Rs. 33.96 crore in F.Y. 2015-16 to Rs. 177.93 crore in F.Y. 2016- 17. i.e. increased by Rs. 144 crore (approx.). Further, there is substantial increase in the trade receivables from Rs. 22.05 crore as on March 31, 2016 to Rs. 139.71 crore as on March 31, 2017, i.e. increased by Rs. 117 crores. The sudden spurt in the revenue as well as the trade receivables prima facie raises doubt on the genuineness of these transactions.

Order in the matter of M/s Kavit Industries Limited

25. The Company vide its Annual Report for the period of FY- 2009-10 and 2010 -11, has represented that it has made investments in Prraneta Industries Ltd. to the extent of FY- 2009-10 (Rs. 98,84,402) and 2010 -11 (Rs. 40,62, 730). On a specific query raised vide SEBI letter dated August 16, 2017, the Company stated vide its letter dated August 21, 2017 that it had not made any transactions directly or indirectly with Prraneta Industries Ltd. Thus, it is observed that there is discrepancy in company’s Annual Report for the period of FY- 2009-10 and 2010 -11 (available in public domain) and company’s reply dated August 21, 2017 submitted to SEBI. Therefore, the company has either misrepresented its financials or made a misrepresentation before SEBI. ………..”

6. Vide said interim order, SEBI had advised KIL to file its reply/objections to the said interim order within 21 days from the date of receipt of the said interim order and also indicate in its reply whether it desires to avail an opportunity of personal hearing on a date and time to be fixed on a specific request made in that regard.

7. Vide email dated September 07, 2017 the copy of interim order was forwarded to KIL and the same was delivered. Vide letter dated September 07, 2017, the copy of interim order was also sent to KIL at ‘Kavit Industries Limited, Chairman & Managing Director, Tundav Anjesar Road, Village Tundav, Savli, Vadodara, Gujarat – 391775” through Speed Post and the same was delivered. KIL vide letter dated September 07, 2017 had acknowledge the receipt of interim order.

8. KIL vide letter dated September 26, 2017 has submitted its reply to the interim order which are inter alia as under: “……… (a) KIL had given the Loan to M/s Shree Ganesh Spinners Limited at specific request and friendly guarantee given by some common business friend before 7 years in Year 2009-

Order in the matter of M/s Kavit Industries Limited

10 as Advance for Investment purpose which is shown as Loans and advance in KIL Books of Account. Loan Amount was not recovered though many reminders and telephonic calls made. We have taken legal action against M/s Shree Ganesh Spinners Limited and sent Legal Notice to recover the amount Rs. 1.05 Crore with interest @ 18%. Due to fear of Legal Action M/s Shree Ganesh Spinners Limited has started to repay amount in instalment. we have recovered Rs 82.50 lacs (Rs.10,00,000 on 14.09.2017, Rs.12,50,000 on 15.09.2017, Rs. 20,00,000 on 16.09.2017, Rs. 17,50,000 on 20.09.2017, Rs. 15,00,000 on 21.09.2017 and Rs. 7,50,000 on 25.09.2017) from Shree Ganesh Spinner Limited and they have given promise to repay the whole amount within end of September 2017 with interest @ 6% p.a instead of Interest @ 18% P.a But our demand for interest @ 18% p.a continue against M/s Shree Ganesh Spinners Limited. Ledger & Confirmation for Financial Year (FY) 2009-10, FY 2010-11, FY 2012-13. Copy of Same is attached.

(b) We would like to inform you that KIL have many diversified Line of Business which included Edible Oils, Garments, Lubricating Oil, Solar Project Division, Information Technology Application Development, Share Trading, Agriculture Allied Product Trading etc. In Years 2015-16 and 2016-17, we have trading on Solar Photovotic Module. Even KIL has mentioned the same in reply to SEBI dated 2nd September 2017, In which KIL have mentioned that “we are in the business of edible oil, Solar Energy, Lubricating Oil etc.” Which clearly shows that we have trading business of Solar Energy (Infrastructure Sector)?

Apart From this, KIL have a Subsidiary Company Named “Kavit Green Energy P Ltd” which Produced 5 MW Solar Energy and sale to Karnataka Government. KIL had mentioned in Annual Report 2015-16, 2014-15 in General Information Note Regarding “Solar Energy Power Project In Kavit Green energy P Ltd.( Solar Infrastructure)”. KIL had submitted many Tenders of Government for solar Energy Project i.e Tender of Punjab Energy Development Agency (PEDA) for Led based SPV street Lighting Systems submitted on February 2016 (copy attached), & Second Tender of PEDA for 1000 Solar

Order in the matter of M/s Kavit Industries Limited

Power Packs on March 2016(copy attached), 300 MW Power from Grid Connected Solar Energy Geration Tender of MADHYAPRADESH POWER MANAGEMENT COMPANY LIMITED ON JULY, 2015. Copy of the same is attached. As company has received good business opportunity so in FY 2015-16 KIL had sold Solar Photovoltaic Module to Naoline Infrastructure P Ltd. Therefore Sale of Solar Photovotic Module is part of object of Kavit Industries Limited and receipt from Naoline Infrastructure P Ltd AND paid same to Content infrastructure P Limited Company due to Business Strategy on interest @ 10% P.a amount was given as short term Loans and Advances receivable on demand. Confirmation and Board Resolution for the same is attached. So as per the above fact it is not accommodation entry as observed by you based on entry you have analysed in Corporation Bank but it was part of Trading Sales Receipt. Copy of Sales Bills of Naoline infrastructure is attached.

(c) As discussed in Point No (b) Regarding Companies Diversified Line of Business. In year 2015-16 KIL was in business of Garment, Welding Machine and Trading in Solar Module but we were not succeeded as per expectation. In Year 2015-16, we have also filled and submitted tender of Power Project of Government but we could not succeeded. From JUNE 2016, KIL has started Edible oil Business which has market in the world. Due to following Factor, we have started Edible Business: The consumption of vegetable oils and fats has increased substantially in last three decades mainly due to the following reasons: (i) There is sharp increase in population and hence the demand for edible oil had increased substantially. (ii) There is increase in per-capita income both in rural and urban area due to increased industrial activities. (iii)There is change in living standards of people and hence with increase in per-capita income, the per-capita consumption of oils and fats has increased substantially.

Order in the matter of M/s Kavit Industries Limited (iv) There is also increase in oil based products manufacturing such as ready to eat snack food, vanaspati, soap, cosmetics. Our country has passed through an era of chronic shortage of vegetable oils and fats resulting in huge imports of vegetable oils to meet domestic demand and supply gap. Such imports have drained valuable foreign exchange for more than two decades. Due to chronic shortage of vegetable oils in our country and increasing demand year after year, government of India had realized the importance of this industry and hence gave it the highest priority for its development. In fact than government included oilseeds development in 20 point economic program and it has established National Oilseeds Development Board. Our Turnover increase rapidly in FY 2016-17 because, we have business of edible oil in different cities of Gujarat like Vadodara, Ahmedabad, Surat, Panchmahal, Bharuch, Anand, Nadiad, Gondal, Katch etc. We had also import as High seas Purchase and high-seas sales from different state in the same year. Due to demonetization, we are unable to receive amount from our sundry debtors and also pending for payment to our creditors. This was just because of business relation, we have allow credit period for the same. So Trade receivable as well as Trade payable increased in F Y 2016-17 compare to F Y 2015- 16. So we are succeed in Edible oil to cover mostly Gujarat state. And we will expect to cover other cities of Gujarat and also other state which will increase our turnover rapidly. So this is just beginning of our rapidly increase of Sales.

(d) In the Books of accounts, KIL has shown in investment head that it invested in equity share of Prraneta Industries Ltd in the Financial year 2009-10.The share were bought through SEBI registered Broker and in Open Market Purchases (NAT). Hence as per understanding and genuine belief there was no direct or indirect dealing. The company Prraneta Industries Ltd shown continuously as Investment in Books of account KIL in Year 2010-11 and 2011-12. The open market Purchase of shares cannot and do not amount to having made misrepresentation directly or indirectly with Prraneta Industries Ltd. There is therefore no discrepancy in company's annual report for the period from FY

Order in the matter of M/s Kavit Industries Limited

2009-10 and 2010-11. We reiterate that we had no business dealing with Prraneta industries Limited. Copy of Ledger is attached for F Y 2009-10 with Scripts of Arihant capital Market Limited for your reference purpose. ………”

9. Vide interim order, KIL was advised to indicate in its reply whether it desires to avail an opportunity of personal hearing, if any. From the reply of KIL dated September 26, 2017, it is noted that Company has not specified that whether it desires to avail an opportunity of personal hearing. SEBI vide email dated January 16, 2018 had advised KIL to confirm whether it desire to avail an opportunity of personal hearing or reply filed vide letter dated September 26, 2017 may be taken as final submission to proceed further in the matter. KIL vide email dated January 17, 2018 confirmed that submission made by the Company via letter dated September 26, 2017 may be considered as final submission by the Company. I am, therefore, proceeding with the matter based on KIL replies & other material available on record and the issue for consideration before me is whether the directions in the Interim Order need to be continued, revoked or modified in any manner.

10. Based on the replies given by the company in response to Interim order, the observations are as under: (a) In response to the observation made at para 24(a) of Interim Order, KIL stated that it had given the loan to M/s Shree Ganesh Spinners Limited (SGPL) at specific request and friendly guarantee given by some common business friend before 7 years in Year 2009- 10 as advance for investment purpose which is shown as Loans and advance in KIL Books of Account. Loan Amount was not recovered though many reminders and telephonic calls made. KIL have taken legal action against SGPL and sent Legal Notice to recover the amount Rs. 1.05 Crore with interest @ 18%. Due to fear of legal action, SGPL has started to repay amount in instalment. KIL has recovered Rs 82.50 lacs (Rs.10,00,000 on 14.09.2017, Rs.12,50,000 on 15.09.2017, Rs. 20,00,000 on 16.09.2017, Rs. 17,50,000 on 20.09.2017, Rs. 15,00,000 on 21.09.2017 and Rs. 7,50,000 on Order in the matter of M/s Kavit Industries Limited

25.09.2017) from SGPL and SGPL has promised to repay the whole amount within end of September 2017 with interest @ 6% p.a instead of Interest @ 18% p.a., however, KIL continue to demand for interest @ 18% p.a from SGPL. KIL submitted the copy of Ledger & Confirmation for Financial Year (FY) 2009-10, FY 2010-11, FY 2012-13.

It is noted from the reply of KIL dated September 26, 2017 that KIL had initiated recovery proceedings against SGPL and had recovered Rs. 82.50 lakhs out of Rs. 1.05 crores from SGPL. I find that that the first installment of Rs. 10,00,000/- was received on September 14, 2017 i.e. subsequent to the issuance of interim order dated September 04, 2017. It is also noted that KIL had only submitted ledger statement and had not provided any bank statements in support of the receipt of amount to substantiate its claims. Therefore, there is no proof of such repayment as stated by KIL. I note that the interim order was issued on the basis of prima facie findings and KIL had submitted the explanation, however KIL had failed to submit sufficient documentary evidence to contradict the same. In the absence of documentary evidence, I do not find any merit in the said submission of KIL. Therefore, I find that there is no evidence on this point to contradict the prima facie findings. Further, the initial conduct of the directors in letting the company to enter into loan transaction without any interest is detrimental to public shareholders. The fact that there has been subsequent recovery (although not substantiated by documentary evidence) does not take away the nature of director’s conduct in letting the company lend its money in breach of trust and interest of public shareholders.

(b) In response to the observation made at para 20 & 24(b) of Interim Order, KIL stated that it have many diversified line of business which included Edible Oils, Garments, Lubricating Oil, Solar Project Division, Information Technology Application Development, Share Trading, Agriculture Allied Product Trading etc. In Years 2015-16 and 2016-17, KIL had trading on Solar Photovotic Module. KIL have a subsidiary company named “Kavit Green Energy P Ltd” which Produced 5 MW Solar Energy and Order in the matter of M/s Kavit Industries Limited sale to Karnataka Government. KIL had mentioned in Annual Report 2015-16, 2014-15 in General Information Note regarding “Solar Energy Power Project in Kavit Green Energy P Ltd. (Solar Infrastructure)”. KIL had submitted various Tenders of Government for solar energy project. As KIL has received good business opportunity so in FY 2015- 16 it had sold Solar Photovoltaic Module to Naoline Infrastructure Private Limited (NIPL), therefore sale of Solar Photovotic Module is part of object of KIL and receipt from NIPL and paid same to Content Infrastructure Private Limited (CIPL) due to business strategy an interest @ 10% P.A amount was given as short term Loans and Advances receivable on demand.

Confirmation and Board Resolution for the same was submitted. Therefore, KIL claims that as per the above fact it is not accommodation entry as observed in the interim order based on the entry analysed in Corporation Bank but it was part of trading sales receipt. KIL had submitted the copy of invoices issued by KIL to NIPL. Upon analysis of sale’s invoices, it is noticed that in all the submitted sale’s invoices, there is no entry relating to the field of Delivery Note, Dispatch Document Number, Delivery Note Date, Dispatched through, Terms of Delivery. All these fields are kept blank. In other words the sale’s invoice does not evidence the fact of physical delivery of the said Solar Photovotic Modules. The fact that the company has not submitted the customer acknowledged copy of the sale’s bill further corroborates the fact that the company has not adduced any evidence to show that there was actual physical delivery of the Solar Photovotic Modules to NIPL. Thus, this raises doubt about the genuineness of the sale’s invoices. From para 20 of the interim order it is noted that KIL had received an amount of approximately Rs. 2.85 crores from Tejas and 1.90 crores from Naolin Infra and on same day or on next working day KIL had transferred Rs. 4.20 crores to Content Infra, Rs. 8 lakh to Zuber, Rs. 32 lakh via RTGS, Rs. 25 lakh to Sunayana.

From the reply of KIL, it is noted that KIL had submitted explanation only with respect to the amount received from Naolin Infra as sale proceeds for solar module sold in the month of March 2017 and the amount to Content Infra as Unsecured Loan given by KIL. It is also noted that KIL had submitted the Board resolution dated May 02, 2017 signed by only one director (i.e. Jayesh Thakkar), wherein it was decided for “making of unsecured loan not exceeding to Order in the matter of M/s Kavit Industries Limited

Rs. 4.25 crore to M/s Content Infrastructure Private Limited”. However, I find that KIL had failed to submit any loan agreement executed between KIL and CIPL. Also, it is noted that KIL had not submitted any explanation/documentary evidence of the funds received with respect to approximately Rs. 2.85 crores from Tejas and amount transferred to other entities apart from Content Infrastructure. I am of the view that the receipt and payment in the bank account on same day or next working day that too exactly the same amount raises suspicion on the nature of such transactions. In the interim order, only sample instances were highlighted in terms of preliminary examination. I note that the interim order was issued on the basis of prima facie findings and no plausible explanation (apart from amount received from NIPL and amount transferred to CIPL) or documentary evidence to contradict the same has been submitted by KIL. In the absence of any plausible explanation / documentary evidence, I do not find any merit in the said submission of KIL. Therefore, I find that there is no evidence on this point to contradict the prima facie findings.

(c) In response to the observation made at para 24(c) of Interim Order, KIL stated that in year 2015-16 it was in business of Garment, Welding Machine and Trading in Solar Module but were not succeeded as per their expectation. In year 2015-16 KIL had also filled and submitted tender of Power Project of Government but could not succeeded. From June 2016, KIL has started Edible Oil business which has market in the world. KIL Turnover increase rapidly in FY 2016-17 because it had business of edible oil in different cities of Gujarat like Vadodara, Ahmedabad, Surat, Panchmahal, Bharuch, Anand, Nadiad, Gondal, Katch etc. KIL had also import as high seas purchase and high-seas sales from different state in the same year. Due to demonetization, KIL was unable to receive amount from its sundry debtors and also pending for payment to its creditors and because of business relation, KIL had allow credit period for the same. Therefore, trade receivable as well as trade payable increased in FY 2016-17 as compare to FY 2015-16.

Order in the matter of M/s Kavit Industries Limited

It is noted that KIL in its reply had submitted that it started edible oil business from June 2016. However, on analysis of Annual report 2016-17, it is observed that KIL had revenue from edible oil even in the FY 2015-16 as mentioned at note 22 (revenue from operations) at page 70 of Annual Report 2016-17. Further, it is also noted that KIL in its reply stated that due to demonetization, they were unable to receive amount from sundry debtors and also pending for payment to their creditors. However, I note that the KIL had not submitted any documentary evidence i.e. agreement copies, name of debtors and creditors including ageing analysis, any correspondence with respect to increase in credit period and also did not submit any documentary evidence with respect to high seas purchases and high seas sales. Therefore, in the absence of any documentary evidence, I do not find any merit in the said submission of KIL. In view of this, I find that there is no evidence on this point to contradict the prima facie findings.

(d) In response to the observation made at para 25 of Interim Order, KIL stated that in the Books of accounts, KIL has shown in investment head that it invested in equity share of Prraneta Industries Ltd in the Financial year 2009-10.The share were bought through SEBI registered Broker and in Open Market Purchases (NAT). Hence as per understanding and genuine belief there was no direct or indirect dealing. The company Prraneta Industries Ltd shown continuously as investment in Books of account KIL in Year 2010-11 and 2011-12, the open market purchase of shares cannot and do not amount to having made misrepresentation directly or indirectly with Prraneta Industries Ltd. There is therefore no discrepancy in KIL's annual report for the period from FY 2009-10 and 2010-11. KIL reiterate that it had no business dealing with Prraneta industries Limited. In this regard, it is noted that vide SEBI’s letter dated August 16, 2017, KIL was asked for the declaration that whether there were any other transactions wherein Mr. Shirish Chandrakant Shah or any of the 16 companies including Prraneta Industries Ltd (Aadhar Ventures Limited) was directly or indirectly involved during the period April 01, 2009 to March 31, 2013. KIL vide its reply dated August 21, 2017 submitted that they had

Order in the matter of M/s Kavit Industries Limited transactions during the period April 1, 2009 to March 31, 2013 only with Shree Ganesh Spinner and Prabhav Industries Ltd and it had not made any transactions directly or indirectly with Prraneta Industries Limited. Further, KIL vide its reply dated September 26, 2017 had only reiterated that it had no business dealing with Prraneta industries Limited and had not denied that it had purchase the shares of Prraneta Industries Ltd.

Thus, I find that KIL's annual report for the period from FY 2009-10 and 2010-11, KIL reply dated August 21, 2017 and KIL reply dated September 26, 2017 to interim order are inconsistent. Therefore, I do not find any merit in the said submission of KIL. In view of this, I find that there is no evidence on this point to contradict the prima facie findings.

11. I note that KIL, at this stage, has failed to submit any third party/banks documentary evidence in support of its claims other than ledgers & invoices of the company itself and has also failed to give a plausible reason/explanation alongwith suitable documentary evidences for the allegations / prima facie findings as described in the interim order. I also note that further enquiry/audit in the matter is pending.

12. In view of the above, I find that the facts and circumstances of the case as brought out in the Interim Order have not changed, justifying the dis-continuation/modification/revocation of the directions passed in the Interim Order.

13. Thus, I, in exercise of the power conferred upon me under sections 11, 11(4), 11A and 11B read with section 19 of the Securities and Exchange Board of India Act, 1992 hereby confirm the directions contained in the Interim Order dated September 04, 2017.

14. Copy of this Order shall be forwarded to the recognized stock exchanges for information and necessary action.

Order in the matter of M/s Kavit Industries Limited

15. A copy of this Order shall also be forwarded to the Ministry of Corporate Affairs and Serious Fraud Investigation Office for their information.

-Sd- DATE: FEBRUARY 28, 2018 MADHABI PURI BUCH PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

Order in the matter of M/s Kavit Industries Limited