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Auditor Report of Ahimsa Industries Ltd.

Mar 31, 2016

To the Members of Ahimsa Industries Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Ahimsa Industries Limited (''the Company''), which comprise the balance sheet as at 31 March 2016, 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 for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

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

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

(c) The balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;

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

(e) On the basis of the written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act; and

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

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

i. The details of pending Litigations on its financial position in its financial statements are mentioned in Note No. 5 and 16 of financial Statements.

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

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

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

(c) The balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;

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

(e) On the basis of the written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act; and

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

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

i. The details of pending Litigations on its financial position in its financial statements are mentioned in Note No. 5 and 16 of financial Statements.

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

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

“Annexure A” to the Independent Auditors'' Report

The Annexure referred to in our Independent Auditors'' Report to the members of the company on the financial statements for the year ended 31 March 2016, we report that:

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

(b) The Fixed Assets have been physically verified by the management in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the program, a portion of the fixed asset has been physically verified by the management during the year and no material discrepancies between the books records and the physical fixed assets have been noticed.

(c) The title deeds of immovable properties are held in the name of the company.

2. (a) The management has conducted the physical verification of inventory at reasonable intervals.

3. The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act except following:

-Company has granted Loan of Rs. 1,50,000.00 to Mr. Shrenikbhai M Khatwala who is CFO(KMP) of the company out of which Mr. Shrenikbhai M Khatwala has repaid Rs. 70,000.00 during the year and Rs. 80,000.00 is outstanding as on Balance Sheet Date. Company has not charged any Interest from Mr. Shrenikbhai M Khatwala.

4. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 In respect of loans, investments, guarantees, and security.

5. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

6. As informed to us, the maintenance of Cost Records has not been specified by the Central Government under sub-section (1) of Section 148 of the Act, in respect of the activities carried on by the company.

7. (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as on March 31, 2016 for a period of more than six months from the date on when they become payable, however there is undisputed Default of Rs. 66,158.50 with Income Tax Department in relation to TDS payment.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute.

8. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.

9. Based upon the audit procedures performed and the information and explanations given by the management, the company has raised moneys by way of Initial Public Offer amounting to Rs. 3,79,50,000.00 divided in to 15,18,000 equity shares of Rs. 25 per share including share premium of Rs. 15 per share dated October 16, 2015 for the purpose of Working Capital Requirement.

10. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

11. Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act. For details refer Note No. 18 of significant accounting policies.

12. In our opinion and the information and explanations given by the management, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.

13. In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Note No. 6 Financial Statements as required by the applicable accounting standards.

14. Based upon the audit procedures performed and the information and explanations given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company and hence not commented upon.

15. Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

16. In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.

“Annexure B” to the Independent Auditor''s Report of even date on the Financial Statements of Ahimsa Industries Limited Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Ahimsa Industries Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls Over Financial Reporting

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Mistry and Shah

Chartered Accountants

F.R.N: - 122702W

Krunal Shah

Partner Date: May 26, 2016

M.NO. 144596 Place: Ahmedabad


Mar 31, 2015

We have audited the accompanying standalone financial statements of Ahimsa Industries PVT. LTD. (lthe Conipany") the Company have been converted into a public limited company with effect from 25 May,2015) which comprise die Balance Sheet as at 3Tl March,. 2015, die Statement of Profit & Loss. The Cash Flow Statement, and a summary of the significant accounting policies and other explanatory information for die year then ended, ( in which are incorporated the Returns far the year ended on that date audited by us, of the Company's branch at Mumbai.

Management's Responsibility fur the Stanutalime Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act. 2U13('the Act7') with respect to the preparation of these slandalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with Ihc accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, Fead with Rule 7 of the Companies (Accounts) Rules, 20i4. This responsibility also includes maintenance of adequate accounting records in accordance with preparation of of (he Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent: and design, implementation and maintenance of adequate internal financial controls* tha( were operating effectively for ensuring die accuracy and completeness of (he accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from materia] misstatement, whedier due. to fraud or error.

Auditor'S' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based orr* our audit.

We have taken into account the provisions of the Act. the accounting and auditing standards and matters which are required to be included in Ihc audit report under the provisions of die Act and (he Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified uiider section 143(10) of the Act, Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free (rom material misstatement.

Aji audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on (he auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. En making those risk assessments, die auditor An audit Involves performing procedures to obtain audit evidence about the amounts and die disclosures in the financial statements. The procedures selected depend on die auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error, In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements thai give a true and Mr view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating die appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by die Company's Directors, as well as evaluating the overall presentation of me financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on die standalone financial statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to us. the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and lair view in conformity .with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March. 2015, and its profit/loss and its cash flows for the year ended on that date.

Report im Other Legal and Regulatory Requirements

As required by Section 143 (j) of the Aet, we report that:

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

(b) In our opinion, proper buoks of account as required by law have l>een kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from die brandies.

(t) The Balance Sheet, die Statement of Profit and Loss, and the Cash Flow Statement dealt with by dils Report are tn agreement with the books of account.

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

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

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to oiu separate Report in "Annexurc A". (1) With respect to the other matters to be Included in the Auditor's Report b accordance with Rule 11 of the Companies (Audit and Auditors) Rules. 2014. in our opinion and to the best of our information and according to the explanations given to us:

( i), The Company has disclosed the impact of pending J frictions on tli financial position in its financial statements - Refer TJotc 12(iv) to the financial statements.

(ii) "The Company did not have any lung-term contracts including derivative contracts for which mere were any material foreseeable losses.

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

Annexure to Auditors'Report

(i) In respect of fixed assets:

a. The company has maintained proper record showing full particulars including quantitative details and situation of fixed assets on die basis of available information,

b. As explained to us, the management during the year in a phased periodical manner, which in our opinion is reasonable, liavlng regard ro die size of the company and nature of its assets. No material discrepant; ies were noticed on such physical verification. In our Opinion, the Company has not disposed of substantial part of fixed assets during the year and going concern status of The company is nol affected,

(ii) In. respect of Inventories :

a. As explained to us, trade and PET goods have been physically verified by the management ai the end of the year.

b. In our opinion and according to the information and explanations given to us. die procedures of physical verification of ttading goods and PUT goods followed by the management are reasonable and adequate in relation to the size of lite company and the nature of its business.

t. As informed by the director. The Company is eagaged in export trading and Manufacturing Goods. The company for Trading Goods places orders after receipt of confirm order from overseas buyer as per their orders. On receipt of die delivery from supplier the same goods are being dispatched. Hence the company not maintaining a separate regisler for quantity details for such trading goods. As explained lo us there were no material discrepancies noticed on physical verification of inventory' as compared to the book records.

(iii) Tn respect of loans, secured nr unsecured, granted or taken by the Company to/from companies* firms or other parties covered in the register maintained under Section 185* of Companies Act, 2013,

a. The company lias not granted secured loans. The Company has taken a EPC Limit from Corporation Bank. The maximum amount outstanding during the year was Rs. L 39. 68JO0/- & the year end balance of E.P.C. (Corporation Bank) was tts. 1, 39, 6OQ0/-. The Company has a C.C. Limit from Corporation Bank. The maximum amount involved during the year was Rs.4, 6"!,54,312A & the year end balance of was Rs. 3. 99, 52,j83/-, The Company has facility from Corporation Bank (Buyer Credit), The maximum amount involved during the year was Rs.5,43.64.816/' & the year end balance was NIL The Company has taken a Term Loan having no.06580401150006 from Corporation Bank (TLS). The maximum amount involved during the year was Rsr4, 10, 98,600/- & theyear end balance was Rs.2, 25, 91,027/-. The Company has taken second term loan having no.065S05-01 L3000I iron Corporation Bank (TLS). The maximum amount involved during Lite year was Rs.3B5, j3hS10/- & the ycarend balance wag Rs.2£S, 44T323/-, Tile Company has taken thhd term loan having no.065S0540! 140004 from Corporation Bank (TLS), The maximum amount involved during the year was R$.13S,J7.6"58/-& the ycarend balance was Rs.!2E, 49,024/-, The Company has taken overdraft facility having no.[)65&t)05(M 150001 from Corporation Bank . The maximum amount involved during the vear was Rs. 162,69.341:'- &. the ycarend balance was Rs.Lol. 50.0QO/-

b, Jn our opinion and according to the information and cxplanahons given to us, [interest is paid on loans from Banks. Therefore., not prima facie prejudicial to the Interest of the company.

c. In respect of loan taken by the Company, the principle amount payment is regular. There is not overdue amount in respect ofloan taken by the Company.

{iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for (he purpose of inventories, fixed assets and also for the saEe of goods. During the course of our audit, we have tint observed any major weaknesses in internal Controls.

(v) The Company has uul laken deposit from public. Loans taken from Banks & Financial institution has not considered as deposit.

(vi) The Central Government has not prescribed maintenance of cost records tinder Section MS(1) of the Companies Act. 2013 for any of the products of the company,

(vil) In respect uf statutory dues :

h, As informed by the management the provisions of the Employees1 State

Insurance, Provident Fund, income lax, sales A'at tax/ CSTT custom duty, excise duty, Service tax, cess, and other material statutory dues have been generally and regularly deposited with the appropriate authority.

b. As explained to us there was no amount outstanding at the year end in respect of Undisputed Income Taxr Sales Tax which are due for more than six monlhs from die date they become payable.

c (Transfer of Amount to investor education and protection fund En accordance with the relevant provisions of the Companies Act, 1957 and rules made there under has been transferred to such fund within time.

tviii) The .Company has no accumulated losses and has not Incurred any cash losses during (he financial year covered by audit or in the immediately preceding financial year.

(3x) Based on otu audit procedures and according to the fnfbrmation and explanations given to us, we are of the opinion that the Company has not defaulting in repayment of dues to financial institutions, banks or debentures.

[x] hi our opinion and according to the information and explanations given to us. the company has not given any guarantee for loans and advances !akcn by oihcrs from bank or financiai institutions, the terms and conditions whereof at prejudicial to the interest of the company,

(xi) The Company has raised term loan during the year. According w the information and explanation provided to us and record examine by us wc arc of opinion that (he term loan outstanding ai the beginning of the year and raised during the year have been applied by the company For (he purpose for which they were obtain.

(xii) In our opinion and according to the informal [on and explanations given to us, no fraud on or the company has been noticed or reported during the year.

Place; Ahmcdabad. For, Kr 11. Trivedi & Co.,

Date: 15th July Chartered Accountants

Firm Reg. No.; 111054W

Kirit H. Trivedi

Proprietor

Membership No.: 03639Q

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