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Auditor Report of Khoday India Ltd.

Mar 31, 2017

To the Members of Khoday India Limited.

1. Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Khoday India Limited ("the Company”), which comprise the Balance Sheet as at 31st March, 2017, 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.

2. Management''s Responsibility for Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements, on a going concern basis, 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 provision of the Act for safeguarding of the assets of the Company and for preventing & detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design and implementation 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.

3. 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 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 true and fair view 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 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.

4. 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2017;

b) in the case of the Statement of Profit and Loss, of the loss 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.

5. Emphasis of Matter

We draw attention to Note no. 28 regarding Reduction of Capital under Section 100 of the Companies Act, 1956 confirmed by the Hon’ble High Court of Karnataka and appeal filed by SEBI.

Our opinion is not qualified in respect of this matter.

6. Report on Other Legal and Regulatory Requirements

I) 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, a statement on the matters specified in paragraphs 3 and 4 of the Order.

II) 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 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 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, 2017, and taken on record by the Board of Directors, none of the directors are disqualified as on 31st March, 2017, from being appointed as a director under Section 164(2) of the Act.

f) With respect to the adequacy of Internal Financial Control over Financial Reporting of the Company and operating effectiveness of such controls, refer to our separate report in "Annexure - B"

g) With respect to the other matters 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 Company has disclosed the impact of pending litigation on its financial position in its financial statements vide Note no. 27, Note No. 28 and Note no. 41 to the 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 that were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. The company had provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and the same were in accordance with the books of accounts maintained by the Company.

ANNEXURE - A TO THE AUDITOR''S REPORT (Referred to in Para 6 of our report of even date)

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

(b) We have been informed that the fixed assets of the Company are physically verified by the Management according to a phased program 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 the nature of its assets. Pursuant to the program, physical verification was carried out during the year and to the best of our knowledge no material discrepancies were noticed.

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

ii. As explained to us, Inventories have been physically verified by the management at reasonable intervals during the year and no material discrepancies were noticed.

iii. 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 Companies Act, 2013. As the Company has not granted any loans to Companies, firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013, reporting under Clauses (iii) (a), (iii) (b) and (iii) (c) of the Companies (Auditors Report) order, 2016 does not arise.

iv. There are no loans, guarantees or security extended by the Company under the provisions of Section 185 and 186 of the Companies Act, 2013. In respect of Investments made, the Company has complied with the provisions of Section 186 of the Companies Act, 2013.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 73 to 76 of the Companies Act, 2013 and the rules framed there under. Therefore, reporting under clause (v) of the Companies (Auditor''s Report) Order, 2016 does not arise.

vi. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 148(1) of the Companies Act, 2013

vii. (a) According to the information and explanations given to us and as per our verification of the records of the Company, in our opinion, the company is generally regular in depositing undisputed statutory dues including Income Tax, Service Tax, Employees Provident Fund, Employees State Insurance, Customs Duty, Excise Duty and other statutory dues applicable to it and there are no statutory dues outstanding for a period of more than six months from the date they become payable as on the last day of the financial year.

(b) According to the information and explanations given to us and as per records of the Company, the following are the particulars of dues on account of Employees Provident Fund, Income Tax and Entry Tax which have not been deposited/partially deposited under protest on account of dispute before the forum mentioned there against.

Name of the Statute

Nature of Dues & Related Period

Amount of Demand (Rs. In Thousands)

Amount Deposited under Dispute (Rs. In Thousands)

Forum where dispute is pending

Income Tax Act, 1961

Income Tax for the AY 2014-15

549

-

Commissioner of Income Tax (Appeals)

Employees Provident Fund

FY 2006-07 and 2007-08

10,716

8,100

EPF Tribunal, New Delhi

Employees Provident Fund Damages

FY 2001 to FY 2013

4,002

1,002

EPF Appellate Tribunal, Bangalore

viii. According to information and explanations given to us, the company has not defaulted in repayment of principal and interest dues to the bank or any financial institutions.

ix. The Company has not raised moneys by way of Initial Public Offer or Further Public Offer. In our opinion, and according to information and explanations given to us, term loans have been applied for the purposes for which they were raised.

x. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

xi. According to the information and explanations given to us, no managerial remuneration has been paid to the Directors. However, sitting fees has been paid to certain Directors in accordance with the requisite approvals mandated by the provisions of Section 197 [5] of Companies Act, 2013 read with the Rules made there under.

xii. In our opinion, the Company is not a Nidhi Company. Hence, reporting under Clause (xii) of the Companies (Auditor’s Report] Order, 2016 does not arise.

xiii. According to the information and explanations given to us and in our opinion, the transactions with related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 and the details have been disclosed in the Financial Statements etc., as required by the applicable Accounting Standard.

xiv. According to the information and explanation given to us, the Company has not made any preferential allotment or private placement of shares. Hence, reporting under Clause (xiv] of the Companies (Auditor''s Report) Order, 2016 does not arise.

XV. According to the information and explanations given to us, the Company has not entered into any non-cash transactions with the directors or persons connected with them. Hence, reporting under Clause (xv) of the Companies (Auditor''s Report] Order, 2016 does not arise.

xvi. According to the information and explanation given to us and in our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE - B TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF KHODAY INDIA LIMITED

Report on the Internal Financial Controls under Section 143 (3) (i) of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Khoday India Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the standalone 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 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. 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 alt 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.

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, 2017, 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 RANGARAJU AND ASSOCIATES

CHARTERED ACCOUNTANTS

(KRISHNAN RANGARAJU)

PARTNER

Membership No. 0184957

Firm No. 006912S

Place : Bangalore

Date: 07.06.2017


Mar 31, 2016

To the Members of Khoday India Limited. ’

1. Report on the Financial Statements

We have audited the accompanying financial statements of Khoday India Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, 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.

2. Management’s Responsibility for Financial Statements

The Company’s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements, on a going concern basis, 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 provision of the Act for safeguarding of the assets of the Company and for preventing & detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design and implementation 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.

3. 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 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 true and fair view 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 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.

4. 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 31st March, 2016;

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.

5. Emphasis of Matter

We draw attention to Note no. 28 regarding confirmation of Reduction of Capital under Section 100 of the Companies Act, 1956 by the Hon’ble High Court of Karnataka and subsequent applications filed by SEBI.

Our opinion is not qualified in respect of this matter.

6. Report on Other Legal and Regulatory Requirements

I) 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, a statement on the matters specified in paragraphs 3 and 4

of the Order.

II) 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 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 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 written representations received from the directors as on 31st March, 2016, and taken on record by the Board of Directors, none of the directors are disqualified as on 31st March, 2016, from being appointed as a director under Section 164(2) of the Act.

f) With respect to the adequacy of Internal Financial Control over Financial Reporting of the Company and operating effectiveness of such controls, refer to our separate report in "Annexure B”

g) With respect to the other matters 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 Company has disclosed the impact of pending litigation on its financial position in its financial statements vide Note no. 28 and Note no. 41 to the 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 that were required to be transferred to the Investor Education and Protection Fund by the Company.

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

(b) We have been informed that the fixed assets of the Company are physically verified by the Management according to a phased program 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 the nature of its assets. Pursuant to the program, physical verification was carried out during the year and to the best of our knowledge no material discrepancies were noticed.

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

ii. (a) As explained to us, Inventories have been physically verified by the management at reasonable intervals during the year and no material discrepancies were noticed.

iii. 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 Companies Act, 2013. As the Company has not granted any loans to Companies, firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013, reporting under Clauses (iii) (a), (iii) (b) and (iii) (c) of the Companies (Auditors Report) order, 2016 does not arise.

iv. There are no loans, guarantees or security extended by the Company under the provisions of Section 185 and 186 of the Companies Act, 2013. In respect of Investments made, the Company has complied with the provisions of Section 186 of the Companies Act, 2013.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 73 to 76 of the Companies Act, 2013 and the rules framed there under. Therefore, reporting under clause (v) of the Companies (Auditor''s Report) Order, 2016 does not arise.

vi. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under Section 148(1) of the Companies Act, 2013

vii. (a) According to the information and explanations given to us and as per our verification of the records of the Company, in our opinion, the company is generally regular in depositing undisputed statutory dues including Income Tax, Service Tax, Employees Provident Fund, Employees State Insurance, Wealth Tax, Customs Duty, Excise Duty and other statutory dues applicable to it and there are no statutory dues outstanding for a period of more than six months from the date they become payable as on the last day of the financial year except for Rs 1,458 thousands pertaining to VAT dues, which has been subsequently paid.

(b) According to the information and explanations given to us and as per records of the Company, the following are the particulars of dues on account of Employees Provident Fund and Income Tax which have not been deposited on account of dispute before the forum mentioned there against.

Name of the Statute

Nature of Dues & Related Period

Amount (Rs. In Thousands)

Forum where dispute is pending

Employees Provident Fund Act, 1952

EPF for the F.Y 2006-07 and 2007-08

10,716

Employees Provident Fund Tribunal, New Delhi.

Income Tax Act, 1961

Income Tax for the AY 2012-13

7,752

Commissioner of Income Tax (Appeals)

viii. According to information and explanations given to us, the company has not defaulted in repayment of principal and interest dues to the bank or any financial institutions.

ix. The Company has not raised moneys by way of Initial Public Offer or Further Public Offer. In our opinion, and according to information and explanations given to us, term loans have been applied for the purposes for which they were raised.

x. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

xi. According to the information and explanations given to us, no managerial remuneration has been paid to the Directors. However, sitting fees has been paid to certain Directors in accordance with the requisite approvals mandated by the provisions of Section 197 (5] of Companies Act, 2013 read with the Rules made thereunder.

xii. In our opinion, the Company is not a Nidhi Company. Hence, reporting under Clause (xii) of the Companies (Auditor’s Report) Order, 2016 does not arise.

xiii. According to the information and explanations given to us and in our opinion, the transactions with related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 and the details have been disclosed in the Financial Statements etc., as required by the applicable Accounting Standard.

xiv. According to the information and explanation given to us, the Company has not made any preferential allotment or private placement of shares. Hence, reporting under Clause (xiv) of the Companies (Auditor''s Report) Order, 2016 does not arise.

xv. According to the information and explanations given to us, the Company has not entered into any non-cash transactions with the directors or persons connected with them. Hence, reporting under Clause (xv) of the Companies (Auditor''s Report) Order, 2016 does not arise.

xvi. According to the information and explanation given to us and in our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE - B TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF KHODAY INDIA LIMITED

Report on the Internal Financial Controls under Section 143 (3) (i) of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Khoday India Limited ("the Company’’) as of March 31, 2016 in conjunction with our audit of the standalone 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 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. 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 Rangaraju& Associates

Chartered Accountants

(Firm Regn No.6912S)

Krishnan Rangarajan

Partner

(Membership No. 18457)

Place: Bangalore

Date : 28.05.2016


Mar 31, 2015

To the members of khoday Indian limetad

Report on the financial the statement

We have audifed the accompanying financial ratement of khoday india limted (the company) which comprise the balance sheet as at 31th march and 2015 the statement of profit and loss and cash flow statement for the year then ended and a summary of significant accunting policies and other explanatory information .

Management `s responsibillty for Financixl Stutement

Toe Company''s bored of directors is responsible for the matters in section 134(5) of the compaies act.2013 [“the act”] with repwct to the preparation of these financial statements on a going concern basis that give a true and fari view of the financial poalition finanacial generally accepted in india including the accunting standarts specified under section 133 of the Act for read with rule 7 of the company (accunting) ruies 2014 this responability also inclupes manintenance of adequate assete of the company and the internal financial contros that and desing and implementation of adequate intaenal and completeness of the accounting of the accunting re cords relevant to the prepararion and presentation of the financial statement that give a true and fair viewand are free from materinal misstatement whether due to fraud error.

Auditor’s Respansibility

Our respansibitty is to express an opition on there standaione financial statement

We have taken into account the provisions of the act the accounting and auditing and duting matters wituch are required to be included in the audit under the provisions of the act and the rules made there under

We conducted out audit in accordance with the standarcts on audining specified under section 143(10) of the those standards requrids require that we comply withs requirement and plan An dudit involves- performing performing to obtain audit Evdence about on the amount and disdnsiires in the financial statement of the procedures seleted depend on the ituditors udgment induding the assesiment of the riske of material missinents the auatar conslders internal costrol relevant to the company ‘s preparation of the appropriate in the circrstances are appropriate in the circumstance ari audit also includrs evaluating the appropriateness of accouting policies as evaluating the over all presentation of the financial statement.

We belive that the audit evidence we have obtained is sufficientsand appropriate to provide a basis for our andit opinion on the financial statement

Opinion

In our opinian and to the best ofour infornamation and accorcting to the explanations given to us the financial statnment give the information required by the manner so requiend and fair conformation with the accciting principles generally accepted in india

a) In the case of the balance sheet of the of affaires of the company as at 31th march 2015

b) In the of the statement of profit and loss of the year ended onthat date and

c) In the case of the cash fiow statement of the flows for the year ended on thet date.

Emphasis of Matter

We draw attention to note no 28 reganding comformation of capital under section 100 of the companies act 1955 by the hon”bie high courr of karatake and subsequent our opition is not

is not quition in rrspect of the matter

Name of the Statute

Nature of Dues Related Period

Amouut

Rs. in Thousand)

Forum where disputs is pending

Employees Provident

Fund Act, 1956

EPF for the F.Y.2006-07 AND 2007-08

10.716

Employees provident fund Tribunal new Delhi

Income Tax Act, 1961

Income tax for the

AY 2012-13

20.836

Commissioner of Income Tax (Appeals)

According to the information and explanation given to as and as per the records of the company the company has acculated lasses at the of the financial year which exceed fifty percent of its net worth purther the company has incurred cash loss during the financial year but not incurred cash in the immediately preceding financial year.

According to the information and explanation given to the company has not defaulted in repayment of princinal and interest dose to the bank or any financial institution.

According to the information and explanation given to as the company has not given any guarantee for the puposes for which they were raised

In our opinion and according to information and explanation given to as the company has been noticed or reported during the course of out audit

FOR RANGARAJU AND ASSOCIATES

CHARTERED ACCOUNTANTS

KRISHAN RANGARAJU PARTNER

Membersihp no:018457

Firm Regn No:069125

Place: Bangalore

Date: 29 .05.2015

is not quition in rrspect of the matter

Name of the Statute

Nature of Dues Related Period

Amouut

Rs. in Thousand)

Forum where disputs is pending

Employees Provident

Fund Act, 1956

EPF for the F.Y.2006-07 AND 2007-08

10.716

Employees provident fund Tribunal new Delhi

Income Tax Act, 1961

Income tax for the

AY 2012-13

20.836

Commissioner of Income Tax (Appeals)


Mar 31, 2014

To the Members of

Khoday India Limited.

Report on the Financial Statements

We have audited the accompanying financial statements of Khoday India Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2014, and 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.

Management’s Responsibility for 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, 2014;

b) in the case of the Statement of Profit and Loss, of the loss 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 subsection (3C) of section 211 of the Companies Act, 1956;

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.

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

(b) We have been informed that the fixed assets of the Company are physically verified by the Management according to a phased program 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 the nature of its assets. Pursuant to the program, physical verification was carried out during the year and to the best of our knowledge no material discrepancies were noticed.

(c) In our opinion, the Company has not disposed off any Fixed Assets during the year.

ii. (a) As explained to us, Inventories have been physically verified by the management at reasonable intervals during the year. The stocks in possession of the third parties have been confirmed by them.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventories and we have been informed that no material discrepancies were noticed on physical verification.

iii. (a) 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. As the Company has not granted any loans, Clauses (iii) (b), (iii) (c) and (iii) (d) of paragraph 4 of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

(b) The Company has not taken loans, secured or unsecured, from companies and firms which have been listed in the register maintained under section 301 of the Companies Act, 1956

However, the Company has taken unsecured Interest free loan from four Directors'' of the Company and the maximum amount outstanding at any time during the year is Rs.73.338 thousands and the yearend balance of such loan is Rs. 74,790 thousands.

(c) In our opinion, according to the information and explanations given to us, the loan taken from the Directors are interest free, and the terms and conditions are not, prima facie, prejudicial to the interest of the Company.

(d) Since there is no stipulation as to the repayment of principal and interest, we are of the opinion that there is no irregularity in the repayment of these loans.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v (a) 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 that need to be entered into the register maintained under that section have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of each party have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, where the market price is available.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act 1956 and the rules framed there under.

vii. In our opinion, the Company has an internal Audit system commensurate with its size and nature of business.

viii. We have broadly reviewed the books of accounts relating maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government for the maintenance of cost records 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.

ix. (a) (i) According to the information and explanations given to us and as per our verification of the records of the Company, in our opinion, the company is generally regular in depositing undisputed statutory dues including Income Tax, Service Tax, Value Added Tax/Sales Tax, Wealth Tax, Customs Duty, Excise Duty and Cess, except certain amounts towards Professional Tax, Employees State Insurance, Provident Fund and Sales Tax.

(ii) According to the information and explanations given to us, excepting for Rs.16,290/- towards Professional Tax, Rs.39,272/- towards Employees State Insurance, Rs.79,553/- towards Provident Fund and Rs. 6,69,695 /- towards VAT and Central Sales Tax, there are no other undisputed amounts payable in respect of statutory dues which have remained outstanding as at 31st March 2013 for a period of more than six months from the date they became payable. However, the entire dues have been paid subsequently.

(b) According to the information and explanations given to us and as per records of the Company, the following are the particulars of dues on account of Sales Tax, and Employees Provident Fund which have not been deposited on account of dispute before the forum mentioned there against.

Name of the Statute

Nature of Dues & Related Period

Amount (Rs. in Thousands)

Forum where dispute is pending

Employees Provident Fund Act, 1952

EPF for the F.Y. 2006-07 and 2007-08

10,716

Employees Provident Fund Tribunal, New Delhi

x The company has accumulated losses at the end of the financial year. However the same does not exceed fifty percent of its net worth. The company has incurred cash loss during the financial year but has not incurred cash loss in the immediately preceding financial year.

Xi According to information and explanation given to us the company has not defaulted in repayment of principal and interest dues to the bank or any financial institutions.

xii. According to the information and explanations given to us, the Company has not granted any loans and advances secured by pledge of shares, debentures and other securities.

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

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

xv According to the information and explanations given to us, the Company has not given any guarantee for the loans taken by others from banks or financial institutions.

xvi. In our opinion, and according to information and explanations given to us, term loans have been applied for the purposes for which they were raised.

xvii. Based on the information and explanations given to us and overall examination of the Balance sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment.

xviii. According to the information and explanations given to us, 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.

xix. According to the information and explanations given to us, the Company has not issued any debentures during the year.

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

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Rangaraju & Associates

Chartered Accountants

(Firm Regn No.6912S)

Krishnan Rangaraju

Place : Bangalore Partner

Date : 29.05.2013 Membership No. 18457


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Khoday India Limited ("the Company"), which comprise the Balance Sheet as at March 31s1, 2013, and 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.

Management''s Responsibility for 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 31st, 2013;

b) in the case of the Statement of Profit and Loss, of the loss 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 Letjal 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''Uy section 227(3) of the Act, we report that:

a) we haVfe 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 subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31st, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31st, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITOR''S REPORT

(Referred to in Para 1 of our report of even date)

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

(b) We have been informed that the fixed assets of the Company are physically verified by the Management according to a phased program 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 the nature of its assets. Pursuant to the program, physical verification was carried out during the year and to the best of our knowledge no material discrepancies were noticed.

(c) In our opinion, the Company has not disposed off any Fixed Assets during the year.

ii. (a) As explained to us, Inventories have been physically verified by the management at reasonable intervals during the year. The stocks in possession of the third parties have been confirmed by them.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventories and we have been informed that no material discrepancies were noticed on physical verification.

iii. (a) 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. As the Company has not granted any loans, Clauses (iii) (b), (iii) (c) and (iii) (d) of paragraph 4 of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

(b) The Company has not taken loans, secured or unsecured, from companies and firms which have been listed in the register maintained under section 301 of the Companies Act, 1956.

However, the Company has taken unsecured Interest free loan from four Directors'' of the Company and the maximum amount outstanding at any time during the year is Rs.75,651 thousands and the year end balance of such loan is Rs. 74,558 thousands.

(c) In our opinion, according to the information and explanations given to us, the loan taken from the Directors are interest free, and the terms and conditions are not, prima facie, prejudicial to the interest of the Company.

(d) Since there is no stipulation as to the repayment of principal and interest, we are of the opinion that there is no irregularity in the repayment of these loans.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. (a) 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 that need to be entered into the register maintained under that section have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of each party have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, where the market price is available.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act 1956 and the rules framed there under.

vii. In our opinion, the Company has an internal Audit system commensurate with its size and nature of business.

viii. We have broadly reviewed the books of accounts relating maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government for the maintenance of cost records 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.

ix. (a) (i) According to the information and explanations given to us and as per our verification of the records of the Company, in our opinion, the company is generally regular in depositing undisputed statutory dues including Income Tax, Service Tax, Value Added Tax/Sales Tax, Wealth Tax, Customs Duty, Excise Duty and Cess, except certain amounts towards Professional Tax, Employees State Insurance, Provident Fund and Sales Tax.

(ii) According to the information and explanations given to us, excepting for Rs. 16,290/- towards Professional Tax, Rs.39,272/- towards Employees State Insurance, Rs.79,553/- towards Provident Fund and Rs. 6,69,695/- towards VAT and Central Sales Tax, there are no other undisputed amounts payable in respect of statutory dues which have remained outstanding as at 31s'' March 2013 for a period of more than six months from the date they became payable. However, the entire dues have been paid subsequently.

x The company has accumulated losses at the end of the financial year. However the same does not exceed fifty percent of its net worth. The company has incurred cash loss during the financial year but has not incurred cash loss in the immediately preceding financial year.

xi. The Company has defaulted in repayment of principal dues to a bank. The details of which are given below;

xii. According to the information and explanations given to us, the Company has not granted any loans and advances secured by pledge of shares, debentures and other securities.

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

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

xv. According to the information and explanations given to us, the Company has not given any guarantee for the loans taken by others from banks or financial institutions.

xvi. In our opinion, and according to information and explanations given to us, term loans have been applied for the purposes for which they were raised.

xvii. Based on the information and explanations given to us and overall examination of the Balance sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment.

xviii. According to the information and explanations given to us, 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.

xix. According to the information and explanations given to us, the Company has not issued any debentures during the year.

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

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Rangaraju & Associates

Chartered Accountants

(Firm Regn No.6912S)

Krishnan Rangaraju

Place : Bangalore Partner

Date : 29.05.2013 Membership No. 18457


Mar 31, 2011

1. We have audited the attached Balance Sheet of Khoday India limited as at 31st March 2011, the Profit and Loss account and also 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.

2. We have 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.

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

4. Further to our comments in the Annexure referred to above, 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, Profit and 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 applicable Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

e. In our opinion, on the basis of the information and explanations given to us and written representa- tion received from the directors, as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March, 2011 from being appointed as a Director in terms of clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

5. In our opinion, and to the best of our information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account read together with the notes thereon and Accountinn Policies 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;

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011,

b. In the case of the Profit and Loss Account, of the Loss 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.

ANNEXURE TO THE AUDITOR'S REPORT. (Referred to in Para 3 of our report of even date)

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

(b) We have been informed that the fixed assets of the Company are physically verified by the Management according to a phased program 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 the nature of its assets. Pursuant to the program, physical verification was carried out during the year and to the best of our knowledge no material discrepancies were noticed.

(c) The fixed assets disposed off during the year were not substantial so as to affect the going concern status of the Company.

ii. (a) As explained to us, Inventories have been physically verified by the management at reasonable intervals during the year. The stocks in possession of the third parties have been confirmed by them.

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

(c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of inventories and we have been informed that no material discrepancies were noticed on physical verification.

iii. (a) 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. As the Company has not granted any loans, Clauses (iii) (b), (iii) (c) and (iii) (d) of paragraph 4 of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

(b) The Company has not taken loans, secured or unsecured, from companies and firms which have been listed in the register maintained under section 301 of the Companies Act, 1956 Further, the company has taken unsecured Interest free loan from four Directors' of the company and the maximum amount outstanding at any time during the year is ' 84,390 Thousands and the year end balance of such loan is ' 76,584 Thousands.

(c) In our opinion, according to the information and explanation given to us, the loan taken from the Directors are interest free, and the terms and conditions are not, prima facie, prejudicial to the interest of the Company.

(d) Since there is no stipulation as to the repayment of principal and interest, we are of the opinion that there is no irregularity in the repayment of these loans.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. (a) 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 that need to be entered into the register maintained under that section have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of each party have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, where the market price is available.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act and the rules framed there under.

vii. In our opinion, the Company has an internal Audit system commensurate with its size and nature of business.

viii. We have broadly reviewed the books of accounts maintained by the Company in respect of Industrial Alcohol and paper products pursuant to the Rules made by Central Government for the maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956, and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained by the company.

ix. (a) According to the information and explanations given to us and as per our verification of the records of the company, in our opinion, the company is generally regular in depositing undisputed statutory dues including Wealth Tax, Service Tax, Income Tax, Tax collected at source, Custom Duty, Value Added Tax / Sales tax, Excise Duty, Cess and other material statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us and as per records of the Company, the following are the particulars of dues on account of Sales Tax and Income Tax which have not been deposited on account of dispute before the forum mentioned there against.

Name of the Nature of Dues & Rupees in Forum where dispute Statute related Period Thousands is pending.

Kamataka Sales Tax Sales tax, Entry Tax and 2,096 Joint Commissioner of Act, 1957 penalty for F.Y. 2002-03 Commercial Taxes (Appeal) Bangalore.

Kamataka Sales Tax Sales tax, Entry Tax and 12 Joint Commissioner of Act, 1957 penalty for F.Y. 2005-06 Commercial Taxes (Appeal) Bangalore.

Income Tax Act, 1961 Income tax for the 19,655 Commissioner of AY-2007-08 Income Tax (Appeals)

Income Tax Act, 1961 Income tax for the 1,170 Commissioner of AY-2008-09 Income Tax (Appeals)

x The Company has accumulated losses at the end of the financial year. However, the same does not exceed 50% of its net worth. The Company has incurred cash losses during the financial year and also in the immediately preceding financial year.

xi. According to information and explanations given to us, the Company has not defaulted in repayment of principal and interest dues to the bank or any financial institutions.

xii. According to the information and explanations given to us, the Company has not granted any loans and advances secured by pledge of shares, debentures and other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi or a mutual fund society. Therefore the provision of clause 4 (xiii) of the companies (Auditor's Report) Order, 2003 are not applicable to the Company.

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

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

xvi. In our opinion, and according to information and explanations given to us, term loans have been applied for the purposes for which they were raised.

xvii. Based on the information and explanations given to us and overall examination of the Balance sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment.

xviii. According to the information and explanation given to us, 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.

xix. According to the information and explanations given to us, the Company has not issued any debentures during the year.

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

xxi. During the course of 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 report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

Place : Bangalore For Rangaraju & Associates

Date : 23-09-2011 Chartered Accountants

(Firm Regn No.6912S)

Krishnan Rangaraju

Partner

Membership No. 18457


Mar 31, 2010

1. We have audited the attached Balance Sheet of Khoday India limited as at 31st March 2010, the Profit and Loss account and also the 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.

2. We have 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.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, We enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order

4. Further to our comments in the Annexure referred to above, 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, Profit and 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 applicable Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

e. In our opinion, on the basis of the information and explanations given to us and written representation received from the directors, as on 31st March 2010 and taken on record by the Board of Directors, We report that none of the Directors are disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

5. In our opinion, and to the best of our information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account read together with the notes thereon and Accounting Policies 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:

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

b. In the case of the Profit and Loss Account, of the Loss 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.

ANNEXURE TO THE AUDITORS REPORT. (Referred to in Para 3 of our report of even date)

i. (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) We have been informed that the fixed assets of the Company are physically verified by the Management according to a phased program 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 the nature of its assets. Pursuant to the program, physical verification was carried out during the year and to the best of our knowledge no material discrepancies were noticed.

(c) The fixed assets disposed off during the year were not substantial so as to affect the going concern status of the Company.

ii. (a) As explained to us, Inventories have been physically verified by the management at reasonable intervals during the year. The stocks in possession of the third parties have been confirmed by them.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of inventories and we have been informed that no material discrepancies were noticed on physical verification.

iii. (a) 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. As the Company has not granted any loans, Clauses (iii) (b), (iii) (c) and (iii) (d) of paragraph 4 of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

(e) The Company has not taken loans, secured or unsecured, from companies and firms which have been listed in the register maintained under section 301 of the Companies Act, 1956

Further, the company has taken unsecured Interest free loan from four Directors of the company and the maximum amounts outstanding at any time during the year are Rs 972.96 Lakhs and the year end balance of such loan is Rs.843.90 Lakhs.

(f) In our opinion, according to the information and explanation given to us, the loan taken from the Directors are interest free, and the terms and conditions are not, prima facie, prejudicial to the interest of the Company.

(g) Since there is no stipulation as to the repayment of principal and interest, we are of the opinion that there is no irregularity in the repayment of these loans.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v (a) 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 that need to be entered into the register maintained under that section have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the companies Act, 1956 and exceeding the value of Rs 5 lakhs in respect of each party have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, where the market price is available.

vi. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act and the rules framed there under.

vii. In our opinion, the company has an internal Audit system commensurate with its size and nature of business.

viii. We have broadly reviewed the books of accounts maintained by the company in respect of Industrial Alcohol and paper products pursuant to the Rules made by Central Government for the maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956, and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained by the company.

ix. (a) According to the information and explanations given to us and as per our verification of the records of the company, in our opinion, the company is generally regular in depositing undisputed statutory dues including Wealth Tax, Service Tax, Income Tax, Tax collected at source, Custom Duty, Value Added Tax / Sales tax, Excise Duty, Cess and other material statutory dues with the appropriate authorities except certain amount towards Tax deducted at source where it is not regular.

(b) According to information and explanation given to us, excepting for Rs. 0.16 Lakhs towards TDS, there are no other undisputed amounts payable in respect of statutory dues which have remained outstanding as at 31st March 2010 for a period of more than six month from the date they became payable. However, the entire dues have been paid subsequently.

(c)According to the information and explanations given to us and as per records of the company, the following are the particulars of dues on account of sales Tax which have not been deposited on account of dispute before the forum mentioned there against.

Name of the Nature of Dues & Rupees in Forum where dispute

Statute related Period Lacs is pending.

Karnataka Sales Tax Sales tax, Entry Tax and 20.96 Joint Commissioner of

Act, 1957 penalty for F.Y. 2002-03 Commercial Taxes (Appeal) Bangalore.

i. The company does not have any accumulated losses at the end of the financial year. The company has incurred cash losses during the financial year but not in the immediately preceding financial year.

ii. According to information and explanations given to us, the company has not defaulted in repayment of principal and interest dues to the bank or any financial institutions.

iii. According to the information and explanations given to us, the company has not granted any loans and advances secured by pledge of shares, debentures and other securities.

iv. In our opinion, the company is not a chit fund or a nidhi or a mutual fund society. Therefore the provision of clause 4 (xiii) of the companies (Auditors Report) Order, 2003 are not applicable to the company.

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

vi. According to the information and explanation given to us, the company has not given any guarantee for the loans taken by others from banks or financial institutions.

vii. In our opinion, and according to information and explanations given to us, term loans have been applied for the purposes for which they were raised.

viii. Based on the information and explanations given to us and overall examination of the Balance sheet of the company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment.

ix. According to the information and explanation given to us, 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.

x According to the information and explanations given to us, the company has not issued any debentures during the year.

xi. The company has not raised any money by way of public issue during the year.

During the course of 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 report that no case of fraud on or by the company has been noticed or reported during the year under audit.



Place : Bangalore For Rangaraju & Associates

Date : 06-09-2010 Chartered Accountants

(Firm Regn No.6912S)

Krishnan Rangaraju

Partner

Membership No. 18457

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