Auditor Report of Ganesha Ecosphere Ltd.

Mar 31, 2018

Report on the Indian Accounting Standards (Ind AS) Financial Statements

We have audited the accompanying Ind AS financial statements of Ganesha Ecosphere Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as "Ind AS Financial Statements").

Management''s Responsibility for the Ind AS 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 of these Ind AS Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS prescribed under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

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 Ind AS 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 Ind AS Financial Statements based on our audit.

In conducting 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 thereunder.

We conducted our audit of the Ind AS Financial Statements 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 Ind AS Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 Ind AS Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion on these Ind AS Financial Statements.

Opinion

In our opinion, and to the best of our information, and according to the explanations given to us, the aforesaid Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Others Matters

The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Ind AS Financial Statements, are based on the previously issued statutory financial statements for the years ended March 31, 2017 and March 31, 2016, prepared in accordance with the Companies (Accounting Standards) Rules, 2006, audited by the predecessor auditor who expressed an unmodified opinion vide reports dated May 22, 2017 and May 22, 2016 respectively. The adjustments to those financial statements, for the differences in accounting principles adopted by the Company on transition to Ind AS, have been audited by us.

Our opinion is not qualified in respect of this matter.

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 in terms of Section 143(11) of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate, and according to the information and explanations given to us, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, based on our audit 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 (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid Ind AS Financial Statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

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, as amended, in our opinion, and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in the Ind AS Financial Statements - refer note 30.2.

ii. In our opinion, and as per the information and explanations given to us, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

iv. The reporting on disclosure relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.

(1) (i) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(ii) As explained to us, the fixed assets are physically verified by the management, according to a phased programme 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 assets. Pursuant to the programme, a portion of fixed assets has been physically verified by the management during the year and as informed to us, no material discrepancies were noticed on such physical verification.

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

(2) As explained to us, the physical verification of inventory has been conducted at reasonable intervals by the management during the year and discrepancies noticed on such physical verification between physical stock and book records were not material considering the operations of the Company and the same have been appropriately dealt with in the books of account.

(3) In our opinion, and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties as covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the provisions of Clause 3(iii) (a), (b) and (c) of the said Order are not applicable to the Company.

(4) In our opinion and according to the information and explanations given to us, the Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186 of the Companies Act, 2013. Accordingly, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.

(5) According to the information and explanations given to us, the Company has not accepted any deposits from the public, within the meaning of Sections 73, 74, 75 and 76 of the Companies Act, 2013 and the Rules framed there under to the extent notified.

(6) Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148 (1) of the Companies Act, 2013 in respect of its products. We have broadly reviewed the same and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

(7) (i) According to the information and explanations given to us, and the records of the Company examined by us, in our opinion, the Company has generally been regularly depositing with the appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, sales tax, service tax, duty of customs, duty of excise, value added tax, goods and services tax, cess and other material statutory dues applicable to it. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(ii) According to the records of the Company, and as per the information and explanations given to us, there are no dues of duty of customs, duty of excise, goods and services tax and cess which have not been deposited on account of any dispute. The particulars of dues of income-tax, sales tax, service tax, value added tax and entry tax as at March 31, 2018, which have not been deposited on account of a dispute, are as follows:

Name of the Statute	Nature of the Dues	Amount (Rs.)	Period to which the amount relates (financial year)	Forum where dispute is pending
U. P. Trade Tax Act, 1948	Entry Tax	1,393,924*	2003-04 to 2005-06	Supreme Court
West Bengal Tax on Entry of Goods in Local Area Act, 2012	Entry Tax	881,465	2013-14 to 2017-18	High Court, Kolkata
Uttarakhand Value Added Tax Act, 2005	Value Added Tax	212,493*	2010-11 to 2011-12	Joint Commissioner (Appeals) (First) Commercial Tax Haldwani, Uttarakhand

Name of the Statute	Nature of the Dues	Amount (H)	Period to which the amount relates (financial year)	Forum where dispute is pending
Central Excise Act, 1944	Service Tax & Penalty	285,007*	2009-10 and 2010-11	Commissioner (Appeal), Central Excise & Service Tax, Allahabad
Haryana Value Added Tax Act, 2003	Purchase Tax & Interest	2,204,383	2009-10 and 2010-11	Haryana Tax Tribunal, Chandigarh
U. P. Trade Tax Act, 1948	Value Added Tax	1,221,684	2014-15	Additional Commissioner (Appeals) Grade-II, Kanpur
Income-tax Act, 1961	TDS Demand	611,389	2010-11	Dy. Commissioner of Income-tax (TDS)

* net of amount deposited under protest.

(8) Based on our audit procedures, and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of loans or borrowings to financial institutions or banks or Government during the year. Further, the Company has not issued any debentures during the year.

(9) In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained. Further, as per the records, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year.

(10) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

(11) According to the information and explanations given to us, and based on our examination of the records of the Company, the Company has paid and provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

(12) In our opinion, and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provisions of Clause 3(xii) of the said Order are not applicable to the Company.

(13) The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Companies Act, 2013. The details of such related party transactions have been disclosed in the Ind AS Financial Statements as required under Ind AS 24, Related Party Disclosures, specified under Section 133 of the Companies Act, 2013.

(14) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Accordingly, the provisions of Clause 3(xiv) of the said Order are not applicable to the Company.

(15) According to the information and explanations given to us, and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with its Directors or persons connected with them covered under Section 192 of the Companies Act, 2013. Accordingly, the provisions of Clause 3(xv) of the said Order are not applicable to the Company.

(16) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the said Order are not applicable to the Company.

Report on the Internal Financial Controls Over Financial Reporting 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 Ganesha Ecosphere Limited ("the Company") as of March 31, 2018 in conjunction with our audit of the Ind AS 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 controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") 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 Act.

Auditor''s Responsibility

Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note issued by ICAI and the Standards on Auditing prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. 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 Ind AS 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 controls 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, to the best of our information, and according to the explanations given to us, 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, 2018, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Narendra Singhania & Co.

Chartered Accountants

Firm Reg. No. 009781N

Narendra Singhania

Place: Kanpur Partner

Date: 26 May 2018 Membership No. 087931

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Mar 31, 2015

We have audited the accompanying standalone financial statements of Ganesha Ecosphere Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone 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 of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting Standards specified under Section 133 of the Act, 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 of 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 standalone 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 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 fair 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 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, 2015 ('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 paragraphs 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 standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of 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 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 explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31st March 2015 on its financial position in its financial statements - Refer Note 38 to the financial statements.

ii. In our opinion and as per the information and explanations provided to us, the Company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31st March 2015.

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Ganesha Ecosphere Limited on the standalone financial statements as of and for the year ended 31st March 2015.

(1) (i) The Company is maintaining proper records showing full particulars including quantitative details & situation of fixed assets on the basis of available information.

(ii) As explained to us, the fixed assets are physically verified by the management, according to a phased programme 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 & nature of its assets. Pursuant to the programme, a portion of fixed assets has been physically verified by the management during the year and as informed to us, no material discrepancies were noticed on such physical verification.

(2) (i) As explained to us, inventory except for goods in transit has been physically verified by the management at reasonable intervals during the year.

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

(iii) On the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

(3) (i) According to the information and explanations given to us, the Company had granted unsecured loan to a Director covered in the register maintained under section 189 of the Companies Act, 2013 prior to his appointment as a director in the Company.

(ii) The principal amount as well as interest has, regularly, been repaid and there is no balance outstanding as on 31st March 2015.

(4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

(5) According to the information and explanations given to us, the Company has not accepted any deposit, in terms of the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under. Further, the deposits accepted by the Company before the commencement of the Companies Act, 2013, had been repaid during the Year.

(6) In respect of business activities of the company, maintenance of cost records has not been specified by the Central Government under sub-section (1) of section 148 of the Companies Act.

(7) (i) According to the records of the Company, undisputed

statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Service Tax, duty of customs, duty of excise, Value Added Tax and other material statutory dues have been generally regularly deposited with the appropriate authorities .There are no outstanding Statutory dues as at the last day of the financial year under audit for a period of more than six months from the date they became payable.

(ii) According to the records of the Company and as per the information and explanations given to us, the disputed statutory dues as at 31st March 2015 that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of the Statute Nature of the Dues Amount (Rs.)

U. P. Trade Tax Act, 1948 Entry Tax 156030*

U. P. Trade Tax Act, 1948 Entry Tax 666061*

U. P. Trade Tax Act, 1948 Entry Tax 571833*

Central Excise Act,1944 Service tax 285007* & Penalty

Income Tax Act, 1961 Income Tax 2818417 Deducted at Source

Name of the Statute Forum where dispute is pending

U. P. Trade Tax Act, 1948 Supreme Court

U. P. Trade Tax Act, 1948 Supreme Court

U. P. Trade Tax Act, 1948 Supreme Court

Central Excise Act,1944 Commissioner (Appeals), Central Excise & Service Tax Allahabad

Income Tax Act, 1961 Commissioner of Income Tax (Appeals), Kanpur

* Net of amount deposited under dispute.

(iii) According to the information and explanation given to us, there is no amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made thereunder.

(8) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date and in the immediately preceding financial year.

(9) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, banks and debenture holders.

(10) In our opinion and according to the information & explanations given to us, the Company has not given any guarantee for loans taken by others from Bank or financial institutions. Therefore clause 3(x) of the Companies (Auditor's Report) Order 2015 is not applicable to the Company.

(11) In our opinion, and according to the information and explanations given to us by the management, the term loans have been applied for the purposes for which they were obtained.

(12) Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and according to the information and explanations given to us by the management, in our opinion, no fraud by the Company has been noticed or reported during the course of our audit but in respect of fraud on the Company we have been informed that the company imported Pet bottle Scrap (raw material) from an overseas supplier but later on during Inspection of sealed Containers jointly with custom authorities, Gravels were found instead of Pet Bottle Scrap in Containers. Due to this fraud, the company had suffered a loss to the tune of Rs.26,44,757/- on account of Cost of material paid to supplier, ocean freight & Custom Duty. The company had lodged Police Complaint and investigations are in progress.

FOR MEHROTRA RAKESH KUMAR & CO.,

Chartered Accountants (Registration No. 002978C)

(Deepak Seth) Place: Kanpur Partner Dated: 30th May, 2015 Membership No. 073081

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Mar 31, 2014

We have audited the accompanying financial statements of Ganesha Ecosphere Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation 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 Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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 and other applicable authoritative pronouncements 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 but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. 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, the accompanying 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, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the 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, 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 Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, 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 examination of those books;

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

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013; and

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, 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 INDEPENDENT AUDITORS'' REPORT (Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

(1) (i) The Company has maintained proper records showing

full particulars including quantitative details & situation of fixed assets on the basis of available information.

(ii) As explained to us, the fixed assets have been physically verified by the management during the year under regular program of verification, which in our opinion is reasonable, having regard to the size of the Company & nature of its assets. As informed to us, no material discrepancies were noticed on such physical verification.

(iii) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

(2) (i) As explained to us, inventory except for goods in transit has been physically verified by the management at reasonable intervals during the year.

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

(iii) On the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

(3) (i) According to the information and explanations given to us, the Company had granted unsecured loan to a Director covered in the register maintained under section 301 of the Companies Act, 1956 prior to his appointment as a director in the Company. In respect of said loan, the maximum amount outstanding at any time during the year after his appointment was H1,112,407/- and the balance outstanding as on 31st March 2014 is H877,550/-

(ii) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loan given by the Company are not prima facie prejudicial to the interest of the Company.

(iii) In respect of aforesaid loan, receipt of principal amount and interest are regular.

(iv) In respect of said loan & interest thereon there are no overdue amounts.

(v) According to the information and explanations given to us, the Company has taken unsecured loans and fixed deposits from two Companies, four directors and nine other parties covered in the register maintained under section 301 of the Companies Act, 1956. During the year H41,290,000/- were taken as loan and the maximum amount involved during the year was H58,704,409/- and the balance outstanding as on 31st March 2014 is H50,690,000/-.

(vi) In our opinion and according to the information and explanations given to us, the rate of interest & other terms and conditions of such loans taken by the company, are not prima facie prejudicial to the interest of the Company.

(vii) In respect of unsecured loans taken by the Company, principal amount including interest is repayable on demand and there are no stipulations as to the payment of principal amount & interest thereon. In respect of fixed deposits taken by the Company, payment of principal amount & interest are regular.

(4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

(5) (i) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.

(ii) In our opinion and according to the information and explanations given to us, the Company has not entered into any transaction for the sale, purchase or supply of any goods, materials or services or for underwriting the subscription of any shares in, or debentures of the Company in pursuance of contracts or arrangements required to be entered in the register maintained under section 301 of the Companies Act, 1956.

(6) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or any Court or any other Tribunal.

(7) In our opinion, the Company has an internal audit system commensurate with the size & nature of its business.

(8) We have broadly reviewed the books of account maintained by the Company, pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government, under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of such records with a view to determine whether they are accurate or complete.

(9) (i) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues have been generally regularly deposited with the appropriate authorities.

(ii) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income tax, wealth tax, service tax, sales tax, value added tax, custom duty, excise duty and other material undisputed statutory dues were outstanding, as at 31st March, 2014 for a period of more than six months from the date they became payable.

(iii) According to the records of the Company and as per the information and explanations given to us, the disputed statutory dues as at 31st March 2014 that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of the Statute Nature of the Dues Amount (H) Forum where dispute is pending

U.P. Trade Tax Act, 1948 Entry Tax 156030* Supreme Court

U.P. Trade Tax Act, 1948 Entry Tax 666061* Supreme Court

U.P.Trade Tax Act, 1948 Entry Tax 571833* Supreme Court

Central Excise Act,1944 Excise Duty 1557031 CESTAT, New Delhi

* Net of amount deposited under dispute.

(10) The Company has no accumulated losses at the end of the financial year ended on 31st March, 2014 and it has not incurred any cash losses during the financial year ended on 31st March, 2014 and in the immediately preceding financial year ended on 31st March, 2013.

(11) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, banks and debenture holders.

(12) In our opinion and according to the information and explanations given to us the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the Company is not a Chit fund or nidhi / mutual benefit fund / society. Therefore clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

(14) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Therefore clause 4 (xiv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

(15) In our opinion and according to the information & explanations given to us, the Company has not given any guarantee for loans taken by others from Bank or financial institutions. Therefore clause 4(xv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

(16) In our opinion, and according to the information and explanations given to us by the management, the term loans have been applied for the purposes for which they were obtained.

(17) According to the information & explanations given to us and on an overall examination of the Balance Sheet of the Company at the end of the year, we report that, based on maturity profile of assets and liabilities, the Company has used short term funds to the extent of H205,776,690/- for long term investments.

(18) The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act 1956 during the year.

(19) The Company has not created any security or charge on the assets of the Company in respect of Unsecured Non Convertible Debentures issued.

(20) The Company has not raised any money by way of public issue during the year.

(21) Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and according to the information and explanations given to us by the management, in our opinion, no fraud on or by the Company has been noticed or reported during the course of our audit.

FOR MEHROTRA RAKESH KUMAR & CO.,

Chartered Accountants,

(Registration No. 002978C)

(Deepak Seth)

Place: Kanpur Partner

Dated: 30th May, 2014 Membership No. 073081

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Ganesha Ecosphere Limited ("the Company"), which comprise 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 for the Financial Statements

Management is responsible for the preparation 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 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, 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;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the 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, 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 examination of those books;

c. The Balance Sheet, Statement of Profit and Loss, and 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 Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; and

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.

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

(ii) As explained to us, the fixed assets have been physically verified by the management during the year under regular program of verification, which in our opinion is reasonable, having regard to the size of the Company & nature of its assets. As informed to us, no material discrepancies were noticed on such physical verification.

(iii) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

(2) (i) As explained to us, inventory has been physically verified by the management at reasonable intervals during the year.

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

(iii) On the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

(3) (i) 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, paragraphs 4 (iii) (a), (b), (c) and (d) of the Order, are not applicable to the Company.

(ii) According to the information and explanations given to us, the Company has taken unsecured loans and fixed deposits from a Company, four directors and six other parties covered in the register maintained under section 301 of the Companies Act, 1956. During the year Rs.65,350,000/- were taken as loan and the maximum amount involved during the year was Rs.52,282,861/- and the balance outstanding as on 31st March, 2013 is Rs.22,297,409/-.

(iii) In our opinion and according to the information and explanations given to us, the rate of interest & other terms and conditions of such loans taken by the company, are not prima facie prejudicial to the interest of the Company.

(iv) In respect of unsecured loans taken by the Company, principal amount including interest is repayable on demand and there are no stipulations as to the payment of principal amount & interest thereon. In respect of fixed deposits taken by the Company, payment of principal amount & interest are regular.

(4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control systems during the course of the audit.

(5) (i) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.

(ii) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5,00,000 in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(6) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or any Court or any other Tribunal.

(7) In our opinion, the Company has an internal audit system commensurate with the size & nature of its business.

(8) We have broadly reviewed the books of account maintained by the Company, pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government, under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of such records with a view to determine whether they are accurate or complete.

(9) (i) According to the information & explanations given to us and the records of the Company examined by us, in our opinion, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues have been regularly deposited with the appropriate authorities though there have been a slight delay in a few cases.

(ii) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income tax, wealth tax, service tax, sales tax, value added tax, custom duty, excise duty and other material undisputed statutory dues were outstanding, as at 31st March, 2013 for a period of more than six months from the date they became payable.

(iii) According to the records of the Company and as per the information and explanations given to us, the disputed statutory dues as at 31st March, 2013 that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of the Statute Nature of the Dues Amount (Rs.) Forum where dispute is pending

U. P. Trade Tax Act, 1948 Entry Tax 156030* Supreme Court

U. P. Trade Tax Act, 1948 Entry Tax 666061* Supreme Court

U. P. Trade Tax Act, 1948 Entry Tax 571833* Supreme Court

Central Excise Act,1944 Excise Duty 1557031 CESTAT, New Delhi * Net of amount deposited under dispute.

(10) The Company has no accumulated losses at the end of the financial year ended on 31st March, 2013 and it has not incurred any cash losses during the financial year ended on 31st March, 2013 and in the immediately preceding financial year ended on 31st March, 2012.

(11) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, banks and debenture holders.

(12) In our opinion and according to the information and explanations given to us the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the Company is not a Chit fund or nidhi / mutual benefit fund / society. Therefore clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

(14) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Therefore clause 4 (xiv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

(15) In our opinion and according to the information & explanations given to us, the Company has not given any guarantee for loans taken by others from Bank or financial institutions. Therefore clause 4(xv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

(16) Based on information and explanations given to us by the management, the term loans were applied for the purpose for which the loans were obtained.

(17) According to the information & explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on short- term basis have been used for long-term investments.

(18) The Company has not made any preferential allotment of shares to parties covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

(19) The Company has not created any security or charge on the assets of the Company in respect of Unsecured Non Convertible Debentures issued.

(20) The Company has not raised any money by way of public issue during the year.

(21) Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and according to the information and explanations given to us by the management, in our opinion, no fraud on or by the Company has been noticed or reported during the course of our audit.

FOR MEHROTRA RAKESH KUMAR & CO.,

Chartered Accountants,

(Registration No. 002978C)

(Deepak Seth)

Place: Kanpur Partner

Dated:25th May, 2013 Membership No. 073081

---

Mar 31, 2012

We have audited the attached Balance Sheet of GANESHA ECOSPHERE LIMITED as at 31st March, 2012, the Statement of Profit Et Loss for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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 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.

01. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

02. Further to our comments in the Annexure referred to in paragraph 1 above, we report that:

(a) We have obtained all the information Et 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 appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit Et Loss and 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 Cash Flow Statement dealt with by this report, comply with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956, to the extent applicable;

(e) On the basis of written representations received from the Directors of the Company, as on 31st March , 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Companies Act, 1956, 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 31st March, 2012;

(ii) in the case of the Statement of Profit Et Loss, of the Profit for the Year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the Cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF GANESHA ECOSPHERE LIMITED ON THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31ST MARCH 2012.

1) i) The Company has maintained proper records showing full

particulars including quantitative details Et situation, of fixed assets.

ii) As explained to us, the fixed assets have been physically verified by the management during the year under regular program of verification, which in our opinion is reasonable, having regard to the size of the Company Et nature of its assets. As informed to us, no material discrepancies were noticed on such physical verification.

iii) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2) i) As explained to us, inventory has been physically verified by the management at reasonable intervals during the year.

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

iii) On the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3) i) 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, paragraphs 4 (iii) (a), (b), (c) and (d) of the Order, are not applicable to the Company.

ii) According to the information and explanations given to us, the Company has taken unsecured loans and fixed deposits from a Company, four directors and seven other parties covered in the register maintained under section 301 of the Companies Act, 1956. During the year Rs. 6,89,57,955 were taken as loan and the maximum amount involved during the year was Rs. 5,03,47,500 and the balance outstanding as on 31st March 2012 isRs. 1,12,26,410.

iii) In our opinion and according to the information and explanations given to us, the rate of interest Et other terms and conditions of such loans taken by the company, are not prima facie prejudicial to the interest of the Company.

iv) In respect of unsecured loans taken by the Company, principal amount including interest is repayable on demand and there are no stipulations as to the payment of principal amount Et interest thereon. In respect of fixed deposits taken by the Company, payment of principal amount Et interest are regular.

4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control systems during the course of the audit.

5) i) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.

ii) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5,00,000 in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or any Court or any other Tribunal.

7) In our opinion, the Company has an internal audit system commensurate with the size Et nature of its business.

8) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of such records with a view to determine whether they are accurate or complete.

9) i) According to the information Et explanations given to us and the records of the Company examined by us, in our opinion, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues have been regularly deposited with the appropriate authorities though there have been a slight delay in a few cases.

ii) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income tax, wealth tax, service tax, sales tax, value added tax, custom duty, excise duty and other undisputed statutory dues were outstanding, as at 31st March, 2012 for a period of more than six months from the date they became payable.

iii) According to the records of the Company and as per the information and explanations given to us, the disputed statutory dues as at 31st March 2012 that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of the state nature of the dues amount forum where dispute is pending U. P. Trade Tax Act, 1948 EntryTax 234045* Supreme Court

U. P. Trade Tax Act, 1948 EntryTax 1198910* Supreme Court

U. P. Trade Tax Act, 1948 EntryTax 914932* Supreme Court

Central Excise Act, 1944 Cenvat Duty 2421248s CESTAT, New Delhi

Central Excise Act, 1944 Cenvat Duty 6469879s The Commissioner (Appeals) Central Excise, Kanpur

Income Tax Act,1961 Penalty 125000* The Commissioner (Appeals) Kanpur

* Net of amount deposited under dispute.

$ Net of amount deposited under dispute and Cenvat available against disputed dues.

10) The Company has no accumulated losses at the end of the financial year ended on 31st March, 2012 and it has not incurred any cash losses during the financial year ended on 31st March, 2012 and in the immediately preceding financial year ended on 31st March, 2011.

11) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, banks and debenture holders.

12) In our opinion and according to the information and explanations given to us the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the Company is not a Chit fund or nidhi / mutual benefit fund / society. Therefore clause 4(xiii) of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.

14) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Therefore clause 4 (xiv) of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.

15) In our opinion and according to the information Et explanations given to us, the Company has not given any guarantee for loans taken by others from Bank or financial institutions. Therefore clause 4(xv) of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.

16) Based on information and explanations given to us by the management, the term loans were applied for the purpose for which the loans were obtained.

17) According to the information Et explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on short-term basis have been used for long-term investments.

18) During the year, the Company has made preferential allotment of equity shares to the four directors and one other party covered in the register maintained under section 301 of the Companies Act 1956. In our opinion, the price at which, equity shares have been issued, is not prejudicial to the interest of the Company.

19) The Company has not created any security or charge on the assets of the Company in respect of Unsecured Zero Coupon Optionally Convertible Debentures issued.

20) The Company has not raised any money by way of public issue during the year.

21) Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and according to the information and explanations given to us by the management, in our opinion, no fraud on or by the Company has been noticed or reported during the course of our audit.

FOR MEHROTRA RAKESH KUMAR ft CO., Chartered Accoun tan ts, (Registration No. 002978C)

(Deepak Seth)

Place: Kanpur Partner

Dated: 26th May, 2012 Membership No. 073081

---

Mar 31, 2010

We have audited the attached Balance Sheet of GANESH POLYTEX LIMITED as at 31st March, 2010 and the Profit & Loss Account for the year ended on that date annexed thereto and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 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.

01 As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

02 Further to our comments in the Annexure referred to in paragraph 1 above, we report that:-

(a) We have obtained all the information & 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 appears from our examination of those books;

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

(d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report, comply with the Accounting Standards referred to in sub- section (3 C) of section 211 of the Companies Act , 1956, to the extent applicable;

(e) On the basis of written representations received from the Directors of the Company, as on 31st March , 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of subsection (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts read together with 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 31st March, 2010 ;

(ii) in the case of the Profit & Loss Account, of the Profit for the Year ended on that date and

(iii) in the case of the Cash Flow Statement, of the Cash flows of the Company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF GANESH POLYTEX LIMITED ON THE ACCOUNTS AS AT AND FOR THE YEAR ENDED 3 1st MARCH, 2010.

(1) (i) The Company has maintained proper records showing full particulars including quantitative details & situation of fixed assets.

(ii) As explained to us, the fixed assets have been physically verified by the management during the year under regular program of verification, which in our opinion, is reasonable having regard to the size of the Company & nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

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

(2) (i) As explained to us, inventory has been physically verified by the management at reasonable intervals during the year.

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

(iii) On the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

(3) (i) 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, paragraphs 4 (iii) (a), (b), (c) and (d) of the Order, are not applicable to the Company.

(ii) According to the information and explanations given to us, the Company has taken Unsecured loans and fixed deposits from two Companies, four directors and ten other parties covered in the register maintained under section 301 of the Companies Act, 1956. During the year Rs. 385.11 lakhs were taken as loan and the maximum amount involved during the year was Rs. 420.12 lakhs and the balance outstanding as on 31st March, 2010 is Rs. 211.27 Lakhs.

(iii) In our opinion and according to the information and explanations given to us, the rate of interest & other terms and conditions of such loans taken by the company, are not prima facie prejudicial to the interest of the Company.

(iv) In respect of unsecured loans taken by the Company, principal amount including interest is repayable on demand and there are no stipulations as to the payment of principal amount & interest thereon. In respect of fixed deposits taken by the Company, payment of principal amount & interest are regular.

(4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(5) (i) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered in to the register maintained under section 301 have been so entered.

(ii) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(6) In our opinion and according to the information and explanations given to us, the Company has generally complied with the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or any Court or any other Tribunal.

(7) In our opinion, the Company has an internal audit system commensurate with the size & nature of its business.

(8) The Central Government has prescribed maintenance of Cost Records under section 209(1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made & maintained. We have not, however made a detailed examination of the same.

(9) (i) According to the information & explanations given to us and the records of the Company

examined by us, in our opinion, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues have been regularly deposited with the appropriate authorities though there have been a slight delay in a few cases.

(ii) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income tax, wealth tax, service tax, sales tax, value added tax, custom duty, excise duty, cess and other undisputed statutory dues were outstanding, as at 31st March, 2010 for a period of more than six months from the date they became payable.

(iii) According to the records of the Company and as per the information and explanations given to us, the disputed statutory dues as at 31st March 2010 that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of the Statute Nature of Amount Forum where dispute is the Dues (Rs. in pending Lakhs) *

U. P. Trade Tax Act, 1948 U. P. Trade Tax 0.58 Trade Tax Tribunal, Kanpur

U. P. Trade Tax Act, 1948 U. P. Trade Tax 0.72 Trade Tax Tribunal, Kanpur

U. P. Trade Tax Act, 1948 U. P. Trade Tax 0.19 Trade Tax Tribunal, Kanpur

U. P. Trade Tax Act, 1948 U. P. Trade Tax 4.41 Trade Tax Tribunal, Kanpur

U. P. Trade Tax Act, 1948 Entry Tax 2.34 Appeal- Joint Commissioner, Kanpur.

U. P. Trade Tax Act, 1948 Entry Tax 11.99 Appeal - Joint Commissioner, Kanpur.

U. P. Trade Tax Act, 1948 Entry Tax 10.29 Appeal - Joint Commissioner,Kanpur.

Custom Act,1962 Custom Duty 5.79 C ESTAT, New Delhi & Penalty

* Net of amount deposited under dispute.

(10) The Company has no accumulated losses at the end of the financial year ended on 31st March, 2010 and it has not incurred any cash losses during the financial year ended on 31st March, 2010 and in the immediately preceding financial year ended on 31st March, 2009.

(11) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, banks or debenture holders.

(12) In our opinion and according to the information and explanations given to us the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the Company is not a Chit fund or nidhi / mutual benefit fund / society. Therefore clause 4(xiii) of the Companies (Auditors Report) Order 2003 is not applicable to the Company.

(14) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Therefore clause 4 (xiv) of the Companies (Auditors Report) Order 2003 is not applicable to the Company.

(15) In our opinion and according to the information & explanations given to us, the Company has not given any guarantee for loans taken by others from Bank or financial institutions. Therefore clause 4(xv) of the Companies (Auditors Report) Order 2003 is not applicable to the Company.

(16) Based on information and explanations given to us by the management, the term loans were applied for the purpose for which the loans were obtained.

(17) According to the information & explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on short-term basis have been used for long-term investment.

(18) During the year, the Company has made preferential allotment of equity shares to the three directors and four other parties covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion, prices at which, equity shares have been issued, are not prejudicial to the interest of the Company.

(19) The Company has not issued any debentures during the year.

(20) The Company has not raised any money by way of public issue during the year.

(21) Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and according to the information and explanations given to us by the management, in our opinion, no fraud on or by the Company has been noticed or reported during the course of our audit.



FOR MEHROTRA RAKESH KUMAR & CO. Chartered Accountants Registration No. 002978C

Place : Kanpur DEEPAK SETH Date : 28th May, 2010 Partner Membership No. 073081