Auditor Report of Primo Chemicals Ltd.

Mar 31, 2023

Primo Chemicals Ltd (Formerly Known as Punjab Alkalies & Chemicals Limited)

Report on the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS financial statements of Primo Chemicals Ltd (Formerly Known as Punjab Alkalies & Chemicals Limited) (“the Company”), which comprise the Standalone Balance Sheet as at March 31,2023, the Standalone Statement of Profit and Loss (including the Standalone statement of Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Cash Flow Statement for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the Standalone Ind As financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We have conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the Standalone Ind AS financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.

Management''s Responsibility for the Standalone Financial Statements

1. 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 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards)

Rules, 2015, as amended. 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 the 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 Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the company''s financial reporting process.

Auditor''s Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone financial statements.

2. An audit also includes evaluating the appropriateness of 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 Standalone Ind AS financial statements.

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

Report on Other Legal and Regulatory Requirements

4. As required by the Companies (Auditor''s report) Order, 2020 (“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.

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 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 it appears from our examination of those books;

c) The Balance Sheet, Profit and Loss statement including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, Companies (Indian Accounting Standards) Rules, 2015, as amended;

e) On the basis of written representations received from the directors as on March 31,2023, and taken on record by the Board of Directors, none of the directors of the company is disqualified as on March 31, 2023, 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” to this report;

g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of Section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.

h) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.

i) 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 litigation on its financial position in its Standalone Ind AS 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 has been no amount which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31^st March 2023.

iv) (a) The Management has represented that, to the best of its knowledge and belief, no funds

(which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

For S Tandon & Associates

Chartered Accountants

ICAI Firm Registration Number 006388N

ICAI UDIN: 23518893BGXMLV6076

Sd/-

(Nipun Rastogi)

Partner

Membership No. 518893

Place of Signature: Chandigarh

Date: May 26, 2023

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Mar 31, 2021

To the Shareholders of Punjab Alkalies & Chemicals Limited

Report on the Ind AS Financial Statements

Opinion

We have audited the accompanying Ind AS financial statements of Punjab Alkalies & Chemicals Limited (“the Company”), which comprise the Balance Sheet as at March 31,2021, the Statement of Profit and Loss (including the statement of Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the Ind As financial statements”)

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 Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2021, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We have conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Ind AS Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the Ind AS financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Management’s Responsibility for the Financial Statements

1. 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the company’s financial reporting process Auditor’s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

2. An audit also includes evaluating the appropriateness of 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.

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

Report on Other Legal and Regulatory Requirements

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

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 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 it appears from our examination of those books;

c) The Balance Sheet, Profit and Loss statement including the Statement of Other Comprehensive Income, the Cash Flow Statement and 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 Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, Companies (Indian Accounting Standards) Rules, 2015, as amended;

e) On the basis of written representations received from the directors as on March 31, 2021, and taken on record by the Board of Directors, none of the directors of the company is disqualified as on March 31,2021, 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” to this report;

g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of Section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.

h) 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 litigation on its financial position in its Ind AS 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 has been no amount which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31st March 2021.

For Hari S. & Associates

Chartered Accountants

ICAI Firm Registration Number 007709N

ICAI UDIN 21523735AAAAKA4541

Sd/-

Kapil Vohra

Partner

Membership No.: 523735

Place of Signature: Chandigarh Date: May 21,2021

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Mar 31, 2018

Report on the Ind AS Financial Statements:

1. We have audited the accompanying Ind AS financial statements of Punjab Alkalies & Chemicals Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements:

2. 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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.

Auditors’ Responsibility:

3. Our responsibility is to express an opinion on these Ind AS 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 thereunder. We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 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.

4. An audit also includes evaluating the appropriateness of 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.

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

Opinion:

6. In our opinion and to the best of our information and according to the explanations given to us, the 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, its loss including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

7. 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, to the extent applicable.

8. 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 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 statement including the Statement of Other Comprehensive Income, the Cash Flow Statement and 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 Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors of the company 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” to this report;

(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 its Ind AS financial statements - Refer Note 24, 34 and 36 to the Ind AS financial statements;

ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii) There has been no amount required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2018.

Other Matter

9. 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 prepared in accordance with Ind AS, included in these Ind AS financial statements, have been audited by the predecessor auditor who had audited the financial statements for the relevant periods. The report of the predecessor auditor on the comparative financial information and the opening balance sheet dated May 24, 2017 expressed an unmodified opinion.

ANNEXURE “A” TO THE INDEPENDENT AUDITORS’ REPORT

Annexures referred to in Paragraph 7 of The Auditor’s Report of even date to the Shareholders of PUNJAB ALKALI ES & CHEMICALS LIMITED on the Accounts for the year ended 31st March, 2018.

(i) a) The Company has maintained proper records showing full particulars, including the quantitative details and situation of Fixed Assets.

b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

c) 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.

(ii) a) The stock of finished goods, stores, spare parts and raw material lying in the factory have been physically verified by the management during /at the year-end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of the physical verification of stock 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 is maintaining proper records of its inventories and no material discrepancies were noticed on such verification.

d) Discrepancies noticed on physical verification of inventory were not material and have been adequately dealt with in the books of account.

(iii) The Company has not granted any loans, secured or unsecured to Companies, Firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

(v) The Company has not accepted any deposits from the public during the year within the meaning of Section 73 to 76 of the Act and the rules framed there-under.

(vi) We have broadly reviewed the books of account as required to be maintained by the Company under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained.

(vii) a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, customs duty, excise duty, value added tax, Goods & Services Tax, cess and other statutory dues have generally been regularly deposited with appropriate authorities though there has been a slight delay in a few cases.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, customs duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they become payable.

c) Following dues are not deposited on account of disputes pending at various forums:

Name of the Statue	Nature of Dues	Amount in Lakhs	Period to which amount relates	Forum where dispute is pending
Central Excise Act,1944	Excise Duty & Penalty	76.93	July,14 to Feb’15, March’15 to Dec’15, Jan’14 to June’14	Commissioner (Appeals), Chandigarh
Central Excise Act,1944	Excise Duty & Penalty	60.17	2004-2008	CESTAT
Central Excise Act,1944	Excise Duty & Penalty	5.49	April’08 to June’08	CESTAT
Finance Act, 1994	Service Tax Penalty	4.66	April’11 to D ec’ 11	CESTAT
Finance, Act, 1994	Service Tax Penalty	116.09	Feb’07 to March’11	CESTAT
Central Excise Act,1944	Excise Duty & Penalty	3.11	Jan’12 to Nov’12	CESTAT
Central Excise Act,1944	Excise Duty & Penalty	5.32	July’11 to Dec’11	CESTAT
Finance Act, 1994	Service Tax Penalty	25. 79	Jan’12 to Nov’12	CESTAT
Finance Act, 1994	Service Tax Penalty	35.85	J u ly’13 to Dec’13, Dec’12 to June’13	CESTAT
Central Excise Act,1944	Excise Duty	19.78	01 Jan’16 to 31st March’17	Commissioner (Appeals)
Central Excise Act,1944	Excise Duty	5.26	April’17 to June’17	Supdt,CGST Range,Nangal
Pb. Value Added Tax,2005	Entry Tax	2.35	2009-10	VAT Tribunal, Chandigarh
Pb. Value Added Tax,2005	Entry Tax	23.73	2012-13	Dy. Excise & Taxation Commissioner (Appeal), Rupnagar

(viii) According to the information and explanations given to us, the company has not defaulted in repayment of dues to the banks during the year.

(ix) According to the information and explanations given to us, No Term Loan has been received by the company during the year.

(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not paid/provided for managerial remuneration, Accordingly, paragraph 3 (xi) of the order is not applicable.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares and partly convertible debentures but has issued on private placement 2769200 fully convertible debentures having face value Rs 100/- each, on the terms and conditions as detailed in Note no. 18 to the financial statements.

Further the company has complied with the requirements of Section 42 of the Companies Act, 2013.

xv) 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 directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi) 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 AUDITORS’ REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Punjab Alkalies & Chemicals Limited (“the Company”) as of 31st March 2018 in conjunction with our audit 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 (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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, 2018, 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 HARI S. & ASSOCIATES

Chartered Accountants

ICAI Firm Registration No. 007709N

Sd/-

Place of Signature : Chandigarh (KAPIL VOHRA)

Date : May 28, 2018 Partner

Membership No. 523735

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Mar 31, 2016

To the Shareholders of

PUNJAB ALKALIES & CHEMICALS LIMITED

Report on the Financial Statements:

1. We have audited the accompanying financial statements of Punjab Alkalies & Chemicals Limited, which comprise the Balance Sheet as at 31^st March, 2016, and the Profit and Loss Statement 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:

2. 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 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) Rule 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the Assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgment 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.

Auditors’ Responsibility:

3. Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. 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 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 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.

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

Opinion:

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(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 Profit and Loss Statement, 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.

Emphasis of Matter

7. We draw attention to the following Note in the financial statements:

“Note No. 1(a): The financial statements are prepared under the historical cost convention and on the basis of going concern. Accumulated losses have resulted in erosion of net worth of the Company. The financial statements have been prepared on a going concern basis on the strength of continued support of the promoters, financial institutions and banks. The Company has filed a reference before the Board for Industrial and Financial Reconstruction (BIFR). BIFR has registered the company''s reference as Sick Industrial Company as Case No. 152/2015. At the request of Company CDR Empowered Group has sanctioned conversion of outstanding loan amount of Rs.4286 lacs into 6605246 Equity Shares as per SEBI Formula i.e. @ Rs.22.95 (Face Value Rs.10/- per share) and Fully Convertible Debentures (fCd) amounting to Rs.2770 lacs. It was further provided that the Company will issue Non-Convertible Debentures (NCD) to CDR Lenders to the extent of Mark to Market Loss in respect of fresh Equity issued by PACL. These FCDs and NCDs shall bear coupon rate equivalent to IDBI base rate as on 30th June, 2015 i.e. 10% p.a. CDR EG further approved waiver of interest on outstanding O.T.S. amount during period April to June, 2015. The Company has received sanctions from IDBI Bank Limited, IFCI Limited and LIC of India Limited. The Company has been given time up to 31st October, 2016 for the said conversion. The individual sanction from Punjab National Bank and Punjab & Sind Bank is awaited. The Company is optimistic of a favourable decision in the matter. The Board of Directors, considering the future plan for operations and support of the promoters, lenders, business associates and workmen is hopeful of improved profitability leading to improvement in its financial position. All expenses and incomes to the extent considered payable and receivable respectively, unless stated otherwise, have been accounted for on mercantile basis.”

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements:

8. 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, to the extent applicable.

9. 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 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 it appears from our examination of these books;

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

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

(e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors of the Company is disqualified as on 31^st March, 2016 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; and

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

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements wherever applicable-Refer Note Nos. 20, 30 and 32 to the financial statements.

ii) The Company is not required to make provisions as at 31^st March, 2016 under the applicable law or accounting standards for material foreseeable losses, on long term contracts including derivative contracts.

iii) There has been no amount required to be transferred to the Investors Education and Protection Fund by the company during the year ended 31^st March, 2016.

Annexure referred to in Paragraph (8) of The Auditor''s Report of even date to the Shareholders of PUNJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended 31st March, 2016.

(i) a) The Company has maintained proper records showing full particulars, including the quantitative details and situation of Fixed Assets.

b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

c) 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.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory has been physically verified by the management during /at the year-end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of the physical verification of stock 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 is maintaining proper records of its inventories and no material discrepancies were noticed on such verification.

d) Discrepancies noticed on physical verification of inventory were not material and have been adequately dealt with in the books of account.

(iii) The Company has not granted any loans, secured or unsecured to Companies, Firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

(v) The Company has not accepted any deposits from the public during the year within the meaning of Section 73 to 76 of the Act and the Rules framed there-under.

(vi) We have broadly reviewed the books of account as required to be maintained by the Company under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained.

(vii) a) According to the information and explanation to us and on the basis of our examination of the

records of the company, amount deducted/ accrued in the books of account in respect of undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess and other material statutory dues have been regularly deposited with the appropriate authorities during the year by the company. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payable at the end of the Financial year.

b) Following dues are not deposited on account of disputes pending at various forums:

Name of the Statue	Nature of Dues	Amount (Rs. in Lacs)	Period to which amount relates	Forum where dispute is pending
Central Excise Act, 1944	Excise duty and Penalty	13.58	July’14 to Feb’15	Additional Commissioner Central Excise Chandigarh
Central Excise Act, 1944	Excise duty and Penalty	16.43	July’14 to Feb’15	Additional Commissioner Central Excise Chandigarh

Central Excise Act, 1944	Excise duty and Penalty	60.17	2004-2008	CESTAT
Central Excise Act, 1944	Excise duty and Penalty	5.49	2004-05 to 2008 and April, 2008 to June 2008	CESTAT
Finance Act,1994	Service Tax and Penalty	4.66	Apr’11 to Dec’11	CESTAT
Finance Act,1994	Service Tax and Penalty	116.09	Feb’07 to Mar’11	CESTAT
Central Excise Act, 1944	Excise Duty and Penalty	3.11	January 2012 to November 2012	CESTAT
Central Excise Act, 1944	Excise Duty and Penalty	2.66	July 2011 to December 2011	CESTAT
Finance Act,1994	Service Tax & Penalty	25.79	January 2012 to November 2012	CESTAT
Central Excise Act, 1944	Excise Duty and Penalty	0.28	July 2013 to December 2013	Superintendent, Central Excise, Naya Nangal
Finance Act,1994	Service Tax & Penalty	11.72	July 2013 to December 2013	CESTAT
Finance Act,1994	Service Tax & Penalty	9.98	December 2012 to June 2013	CESTAT
Finance Act,1994	Service Tax & Penalty	19.9	January 2014 to June 2014	CESTAT
Central Excise Act, 1944	Excise Duty and Penalty	5.47	January 2012 to November 2012	Asstt. Commissioner, Central Excise, Ropar
Central Excise Act, 1944	Excise Duty and Penalty	6.37	1996-97	Asstt. Commissioner, Central Excise, Ropar
Central Excise Act, 1944	Excise Duty and Penalty	7.08	1994-95	Asstt. Commissioner, Central Excise, Ropar
Central Excise Act, 1944	Excise Duty and Penalty	3.82	1995-96	Asstt. Commissioner, Central Excise, Ropar
	Total	312.60

(viii) According to the information and explanations given to us, the company has not defaulted in repayment of dues to the banks during the year.

(ix) According to the information and explanations given to us, no term loan has been received by the company during previous year.

(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not paid/ provided any managerial remuneration. Accordingly, paragraph 3 (xi) of the Order is not applicable.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv) 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 directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi) The company is not required to be registered under Section 45-IAofthe Reserve Bank of India Act, 1934.

ANNEXURE-B TO THE INDEPENDENT AUDITORS’ REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“theAct”)

We have audited the internal financial controls over financial reporting of Punjab Alkalies and Chemicals Ltd. as of 31 March 2016 in conjunction with our audit 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 (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 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 A.K. SOOD & ASSOCIATES For S.TANDON & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration No. 000072N Firm Registration No. 006388N

Sd/- Sd/-

(GAURAV SOOD) (H.S. KHURANA)

Place: Chandigarh Partner Partner

Date : May 26, 2016 Membership No. 507583 Membership No. 86331

---

Mar 31, 2015

1. We have audited the accompanying financial statements of PUNJAB ALKALIES & CHEMICALS LIMITED, which comprise the Balance Sheet as at 31s' March, 2015, and the Profit and Loss Statement 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:

2. 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 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) Rule 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the Assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate and accounting policies; making judgment 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 viewand are free from material misstatement, whether due to fraud or error.

Auditors 'Responsibility:

3. Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. 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 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 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.

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

Opinion:

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2015;

(b) In the case of the Profit and Loss Statement, of the loss forthe 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. Emphasis of Matter

7. We draw attention to the Note No. 1 (a) on the aforesaid financial statements, which, inter-alia, reads as under:

The financial statements are prepared under the historical cost convention and on the basis of going concern. Accumulated losses have resulted in erosion of net worth of the Company. The financial statements have been prepared on a going concern basis on the strength of continued support of the promoters, financial institutions and banks. The final installment of OTS amount under the OTS scheme had fallen due on 1st April, 2015. The Company informed the IDBI Bank Limited, the lead bank, that the Board of Directors of PSIDC, the promoters had approved the conversion of entire balance debt of Rs.4286 lacs into equity shares at a share price as per SEBI formula applicable on the date of freezing/accepting the proposal on certain terms and conditions. The matter was discussed in the Joint Lenders Meeting held on 13th April, 2015. The Lenders agreed to take up the proposal with their respective sanctioning authorities. The Company is optimistic of a favorable decision in the matter. The Board of Directors, considering the future plan for operations and support of the promoters, lenders, business associates and workmen is hopeful of improved profitability leading to improvement in its financial position.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements:

8. 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.

9. 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 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 it appears from our examination of these books;

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

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

(e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors of the Company is disqualified as on 31s' March, 2015 from being appointed as a Director in terms of Section 164(2) of the Act; and

(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 the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements wherever applicable-Refer Note Nos. 20, 30 and 32 to the financial

ii) InfcTrntany is not required to make provisions as at 31 - March, 2015 under the applicable law or accounting standards for material foreseeable losses, on long term contracts including derivative contracts.

iii) There has been no amount required to be transferred to the Investors Education and Protection Fund by the company during the year ended 31st March, 2015.

Annexure referred to in Paragraph (8) of The Auditor's Report of even date to the Members of PU NJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended 31stMarch, 2015.

(i) a) The Company has maintained proper records to showing full particulars, including quantitative details and situation of Fixed Assets.

b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory has been physically verified by the management during /at the year- end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of the physical verification of stock 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 is maintaining proper records of its inventories and no material discrepancies were noticed on such verification.

(iii) The Company has not granted any loans, secured or unsecured to Companies, Firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(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 purchases of Inventories, 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.

(v) The Company has not accepted any deposits from the public during the year within the meaning of Section 73 and 74 of the Act and the Rules framed there-under.

(vi) We have broadly reviewed the books of account as required to be maintained by the Company under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained. However, we are not required to and have not carried out detailed examination of such accounts and records with a view to determining whether they are accurate or complete.

(vii) a) According to the information and explanation to us and on the basis of our examination of the records of the company, amount deducted/ accrued in the books of account in respect of undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess and other material statutory dues have been regularly deposited with the appropriate authorities during the year by the company. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payable at the end of the Financial year.

b) Following dues are not deposited on account of disputes pending at various forums:

Name of Nature of Amount Period to Forum Where the Statue Dues (Rs. In lacs) which amount dispute is pending relates

Central Excise Duty 60.17 2004-2008 CESTAT Excise and Penalty Act,1944

Central Excise Duty 5.36 April, 2007 CESTAT Excise and Penalty to November, 2011 Act, 1944

Finance Service Tax 8.03 December, Commissioner Act, 1994 2012 to June, 2013 (Appeals), Central Excise, Chandigarh

Central Excise Duty 5.49 2004-05 to CESTAT Excise and Penalty March, 2008 Act, 1944 and for April, 2008 toJune,2008

Central Excise Duty 0.57 April, 2008 CESTAT Excise and Penalty to December, 2011 Act, 1944

Central Excise Duty 3.11 January, 2012 CESTAT Excise and Penalty to November, 2012 Act, 1944

Central Excise Duty 2.66 July, 2011 to CESTAT Excise December, 2011 Act, 1944

Central Penalty 0.99 April, 2009 to CESTAT Excise March, 2010 Act, 1944

Central Excise Duty 5.47 January, 2012 to Assistant Excise and Penalty November, 2012 Commissioner, Act, 1944 Central Excise, Ropar

Finance Service Tax 4.66 April, 2011 to CESTAT Act, 1994 and Penalty December,2011

Finance Service Tax 116.09 February, 2007 CESTAT Act, 1994 and Penalty to March,2011

Finance Service Tax 25.79 January, 2012 CESTAT Act, 1994 and Penalty to November,2012

Finance Service Tax 19.90 January, 2014 to CESTAT Act, 1994 and Penalty June,2014

Finance Service Tax 19.62 July, 2013 to Commissioner Act, 1994 and Penalty December, 2013 (Appeals), Central Excise, Chandigarh

Central Excise Duty 0.28 March, 2014 Superinten- dent, Naya Excise and Penalty Nangal Act, 1944

Central Excise Duty 2.57 January, 2014 Deputy Excise and Penalty to June, 2014 Commissioner, Act, 1944 Central Excise, Ropar

Finance Service Tax 1.88 January, 2014 to Superinten dent, Naya Act, 1994 and Penalty June, 2014 Nangal

Central Excise Duty 7.08 1994-95 Assistant Excise Commissioner, Act, 1944 Central Excise, Ropar

Central Excise Duty 3.82 1995-96 Assistant Excise Commissioner, Act, 1944 Central Excise, Ropar

Central Excise Duty 6.37 1996-97 Assistant Excise Commissioner, Act, 1944 Central Excise, Ropar

c) There has been no amount required to be transferred to the Investors Education and Protection Fund by the company during the year ended 31s' March, 2015.

(viii) The Company has accumulated losses of Rs. 5950.59 lacs at the end of the financial year. Consequently the Net Worth of the company is fully eroded. The Company has incurred cash losses of Rs.519.22 lacs in the current financial year. However, the Company had not incurred cash losses during the preceding financial year.

(ix) The Company has not defaulted in repayment of dues to banks during the year.

(x) According to the information and explanations given to us the Company has not given any guarantee for loans taken from Banks and Financial Institutions by any other Company.

(xi) The Company has not taken any Term Loans during the year.

(xii) As per information and explanation given to us, no fraud on or by the Company has been noticed during the year.

For A.K. SOOD & ASSOCIATES For STAN DON & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration No. 000072N Firm Registration No. 006388N

Sd/- Sd/-

(GAURAVSOOD) (H.S. KHURANA)

Place: Chandigarh Partner Partner

Date : May 26, 2015 Membership No. 507583 Membership No. 86331

---

Mar 31, 2014

1. We have audited the accompanying financial statements of PUNJAB ALKALIES & CHEMICALS LIMITED, which comprise the Balance Sheet as at 31st March, 2014, and the Profit and Loss Statement 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:

2. 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 referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with General Circular No. 8/2014 dated 4th April, 2014 issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal controls 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.

Auditors'' Responsibility:

3. 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.

4. 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.

5. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion:

6. 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, 2014;

(b) In the case of the Profit and Loss Statement, of the loss of the Company for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

7 As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the 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.

8. As required by section 227(3) ofthe Act, we reportthat:

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

(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 these books;

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

(d) In our opinion, the Balance Sheet, the Profit and Loss Statement and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act read with General Circular No. 8/2014 dated 4th April, 2014 issued by the Ministry of Corporate Affairs;

(e) Onthe basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors of the Company is disqualified as on 31st March, 2014 from being appointed as a Director in terms of clause(g)of sub-section (1) of Section 274 (1) (g)ofthe Act;

(f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT Statement referred to in Paragraph (7) of our Report of even date to the Shareholders of PUNJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended 31st March, 2014.

We report that

(i) a) The Company is maintaining proper records to show full particulars including the quantitative details of Fixed Assets.

b) As explained to us, the management has physically verified the major fixed assets of the Company in a phased manner, designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification.

c) As per the information and explanations given to us no substantial part of the fixed assets have been disposed off during the year, which affect the ability of the Company to continue as a going concern.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory has been

physically verified by the management during /at the year- end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of the physical verification of stock 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 is maintaining proper records of its inventories.

(iii) The Company has not taken or granted any loans, secured or unsecured from Companies, Firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of Inventories, Fixed Assets and for the Sale of goods.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any transactions, which are required to be entered in the register maintained in pursuance of Section 301 ofthe Companies Act, 1956.

(vi) As per the information and explanations given to us, the Company has not accepted the public deposits within the meaning of Section 58A and accordingly the directives issued by the Reserve Bank of India and provisions of Section 58AA of the Companies Act, 1956 and the rules framed thereunder are not applicable.

(vii) In our opinion, the Company has an adequate Internal Audit System, commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account as required to be maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained. However, we are not required to and have not carried out detailed examination of such accounts and records with a view to determining whether they are accurate or complete.

(ix) a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund,

Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess with the appropriate authorities during the year. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payable at the end ofthe Financial year.

b) Disputed Excise Duty/Service Tax amounting to Rs.264.48 Lacs has not been deposited, out of which Rs.708 Lacs, Rs.3.82 Lacs, Rs.6.37 Lacs and Rs.247.21 lacs pertains to years 1994-95, 1995-96, 1996-97 and 2004-05 to 2013-14 respectively, since the matters are pending with the Excise Appellate Authorities.

(x) The Company has accumulated losses of Rs. 4639.62 Lacs as on 31st March, 2014 and has not incurred cash losses during the currentand preceding financial year.

(xi) In view of the approval by the CDR Empowered Group of the Company''s Proposal for One Time Settlement (Refer to Note No. 4.3 on the Financial Statements) and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks.

(xii) The Company has not granted any loans and advances on the basis ofthe security by way of pledge of Shares, Debentures and other Securities.

(xv) According to the information and explanations given to us the Company has not given any guarantee for loans taken from Banks and Financial Institutions by any other Company.

(xvi) The Company has not received any Term Loans and has not issued any Debentures during the year.

(xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on shortterm basis have, prima-facie, not been used during the year for long term investment and vice-versa, other than temporary deployment pending application.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

(xxii) In our opinion and according to the information and explanations given to us, the nature of the Company''s business/activities during the year are such that clauses xiii, xiv, xviii, xix and xx of CARO are not applicable to the Company.

For A.K. SOOD & ASSOCIATES For S.TANDON & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration No. 000072N Firm Registration No. 006388N

Sd/- Sd/- (GAURAV SOOD) (H.S. KHURANA) Partner Partner Membership No. 507583 Membership No. 86331

Place: Chandigarh

Date : May 29, 2014

---

Mar 31, 2013

Report on the Financial Statements:

1. We have audited the accompanying financial statements of PUNJAB ALKALIES & CHEMICALS LIMITED, which comprise the Balance Sheet as at 31st March, 2013, and the Profit and Loss Account 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 FinancialStatements:

2. 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 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 controls 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.

Auditors''Responsibility:

3. 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.

4. 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.

5. Webelieve that the audit evidencewe have obtainedissufficient and appropriate to providea basis for our audit opinion.

Opinion:

6. 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) Inthe caseof the Balance Sheet,ofthestateof affairsof the Company as at31st March, 2013;

(b) Inthe caseofthe Profit and Loss Account,ofthe Profitofthe Company for the year ended onthat date; and

(c) Inthe caseof the Cash Flow Statement,ofthe Cash Flowsofthe Company for the year endedon that date.

ReportonOther Legal and Regulatory Requirements:

7. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the 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 specifiedin paragraphs 4and5of the Order.

8. As required by section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations, which tothe bestof our knowledge and belief were necessary for the purposeof our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company, sofar as appears from our examinationofthese books;

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

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

(e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors of the Company is disqualified as on 31st March, 2013 from being appointedasa Director interms ofclause(g)of sub-section (1)ofSection 274 of the Act;

(f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURETOTHEINDEPENDENTAUDITORS''REPORT

Statement referred to in Paragraph (7) of our Report of even date to the Shareholders of PUNJAB ALKALIES & CHEMICALSLIMITEDon the accounts for the year ended 31st March, 2013.

We report that

(i) a) The Company is maintaining proper records to show full particulars including the quantitative details of Fixed Assets.

b) As explained to us, the management has physically verified the major fixed assets of the Company in a phased manner, designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification.

c) As per the information and explanations given to us no substantial part of the fixed assets have been disposed off during the year, which affect the abilityof the Company to continue as a going concern.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory has been physically verified by the management during /at the year- end. In our opinion and according to information and explanations given to usthe frequencyofphysical verificationisreasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of the physical verification of stock followed by the management are reasonable and adequate in relation to the size ofthe Company and the natureofits business.

c) In our opinion and according to the information and explanations given to us the company is maintaining proper recordsof its inventories.

(iii) The Company has not taken or granted any loans, secured or unsecured from Companies, Firms or other parties listed inthe register maintained under Section 301of the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases ofInventories, Fixed Assets and for the Sale of goods.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any transactions, which are required to be entered in the register maintainedin pursuanceofSection 301of the Companies Act, 1956.

(vi) As per the information and explanations given to us, the Company has not accepted the public deposits within the meaning of Section 58A and accordingly the directives issued by the Reserve Bank of India and provisions of Section 58AA of the Companies Act, 1956 and the rules framed thereunder are not applicable.

(vii) In our opinion, the Company has an adequate Internal Audit System, commensurate with its size and Nature of its business.

(viii) We have broadly reviewed the books of account as required to be maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained. However,weare not requiredto and have not carried out detailed examinationofsuch accounts and records withaview to determining whether they are accurateor complete.

(ix) a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess with the appropriate authorities during the year. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payableat the end of the Financial year.

b) Disputed Excise Duty/Service Tax amounting to Rs. 173.82 Lacs has not been deposited, outof which Rs.7.08 Lacs, Rs.3.82 Lacs, Rs.6.37 Lacs and Rs.156.55 Lacs pertains to years 1994-95, 1995-96, 1996-97 and 2004-05 to 2012-13, respectively, since the matters are pending with the Excise Appellate Authorities.

(x) The Company has accumulated losses of Rs. 3682.05 Lacs as on 31st March, 2013 and has not incurred cash losses during the current and preceding financial year.

(xi) In view of the approval by the CDR Empowered Group of the Company''s Proposal for One Time Settlement (Refer to Note No. 4.3 on the Financial Statements) and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks.

(xii) The Company has not granted any loans and advances on the basis of the security by way of pledge of Shares, Debentures and other Securities.

(xv) According to the information and explanations given to us the Company has not given any guarantee for loans taken from Banks and Financial Institutions byany other Company.

(xvi) The Company has not received any Term Loans and has not issued any Debentures during the year.

(xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment and vice-versa, other than temporary deployment pending application.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud onorby the Company was noticedorreported during the year.

(xxii) In our opinion and according to the information and explanations given to us, the nature of the Company''s business/activities during the year are such that clauses xiii, xiv, xviii, xix and xx of CARO are not applicabletothe Company.

For A.K. SOOD & ASSOCIATES For S.TANDON & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration No. 000072N Firm Registration No. 006388N

Sd/- Sd/-

(H.S. KHURANA) (GAURAV SOOD)

Partner

Place: Chandigarh Partner

Date : May 28, 2013

Membership No. 507583 Membership No. 86331

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of PUNJAB ALKALIES & CHEMICALS LIMITED as at 31st March, 2012, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These Financiat 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 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 misstatements. 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 the management, as well as evaluating the overall Financial Statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto 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 in Paragraph 3 above, we report that: (i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary lor the purpose of our audit;

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

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

(iv) 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 (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the Directors 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.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the 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:

(a) In the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2012;

(b) In the case of the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Statement referred to in paragraph (3) of our Report of even date to the Shareholders of PUNJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended 31st March, 2012.

(i) a) The Company is maintaining proper records to show full particulars including the quantitative details of Fixed Assets.

b) As explained to us, the management has physically verified the major fixed assets of the Company in a phased manner, designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification.

c) As per the information and explanations given to us no substantial part of the fixed assets have been disposed off during the year, which affect the ability of the Company to continue as a going concern.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory have been physically verified by the management during /at the year-end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of the physical verification of stock 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 is maintaining proper records of its inventories.

(iii) The Company has not taken or granted any loans, secured or unsecured from Companies, Firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of Inventories, Fixed Assets and for the Sale of goods.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any transactions, which are required to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vi) As per the information and explanations given to us, the Company has not accepted the public deposits within the meaning of Section 58A and accordingly the directives issued by the Reserve Bank of India and provisions of Section 58AA of the Companies Act, 1956 and the rules framed there under are not applicable.

(vii) In our opinion, the Company has an adequate Internal Audit System, commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account as required to be maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained, However, we are not required to and have not carried out detailed examination of such accounts and records with a view to determining whether they are accurate or complete.

(ix) a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess with the appropriate authorities during the year. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payable at the end of the Financial year.

b) Disputed Excise Duty/Service Tax amounting to Rs. 108.80 Lacs has not been deposited, out of which Rs.7.08 Lacs, Rs.3.82 Lacs, Rs.6.37 Lacs and Rs.91.53 Lacs pertains to years 1994-95, 1995-96, 1996-97 and 2004-05 to 2011-12, respectively, since the matters are pending with the Excise Appellate Authorities. As explained to us there were no disputed amounts in respect of Income Tax, Sales Tax, Custom Duty and Wealth Tax during the year.

(x) The Company had accumulated losses amounting to Rs.4402.20 Lacs as on 31.03.2011.

During the year the Company has earned profit after tax of Rs.438.73 Lacs and accordingly the accumulated losses are reduced to that extent at the end of the year. The Company has not incurred cash losses during the current financial year as against cash loss of Rs,1178,77 Lacs during the preceding financial year.

(xi) In view of the Modified Rework Proposal of the Revised Restructuring Package approved by the CDR Empowered Group (refer to Note No.4.4 on the Financial Statements) and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks.

(xii) The Company has not granted any loans and advances on the basis of the security by way of pledge of Shares, Debentures and other Securities.

(xv) According to the information and explanations given to us the Company has not given any guarantee for loans taken from Banks and Financial Institutions by any other Company.

(xvi) The Company has not received any Term Loans and has not issued any Debentures during the year,

(xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment and vice- versa, other than temporary deployment pending application.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

(xxii) In our opinion and according to the information and explanations given to us, the nature of the Company's business/activities during the year are such that clauses xiii, xiv, xviii, xix and xx of CARO are not applicable to the Company.

For A.K, SOOD & ASSOCIATES For S. TANDON & ASSOCIATES

Chartered Accountants Chartered Accountants

Sd/- Sd/-

(GAURAV SOOD) (H.S. KHURANA)

Partner Partner

Membership No. 507583 Membership No. 86331

Place : Chandigarh

Date : May 21, 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of PUNJAB ALKALIES & CHEMICALS LIMITED as at 31" March, 2011, and also the Profit and Loss Account 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.

2. 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 misstatements. 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 the management, as well as evaluating the overall Financial Statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto 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 in Paragraph 3 above, we report that:

(i) 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;

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

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

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Row 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;

(v) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is 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.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon in Schedule O, 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 the affairs of the Company as at 31st March, 2011;

(b) In the case of the Profit and Loss Account, of the Loss of the Company for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Statement referred to in paragraph (3) of our Report of even date to the Shareholders of PUNJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended 31st March, 2011.

(i) a) The Company is maintaining proper records to show full particulars including the quantitative details of Fixed Assets.

b) As explained to us, the management has physically verified the major fixed assets of the Company in a phased manner, designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification.

c) As per the information and explanations given to us no substantial part of the fixed assets have been disposed off during the year, which affect the ability of the Company to continue as a going concern.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory have been physically verified by the management during /at the year-end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of the physical verification of stock 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 is maintaining proper records of its inventories.

(iii) The Company has not taken or granted any loans, secured or unsecured from Companies, Firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of Inventories, Fixed Assets and for the Sale of goods.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any transactions, which are required to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vi) As per the information and explanations given to us, the Company has not accepted the public deposits within the meaning of Section 58A and accordingly the directives issued by the Reserve Bank of India and provisions of Section 58AA of the Companies Act, 1956 and the rules framed there under are not applicable.

(vii) In our opinion, the Company has an adequate Internal Audit System, commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account as required to be maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained. However, we are not required to and have not carried out detailed examination of such accounts and records with a view to determining whether they are accurate or complete.

(ix) a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess with the appropriate authorities during the year. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payable at the end of the Financial year.

b) Disputed Excise Duty/Service Tax amounting to Rs.126.61 Lacs has not been deposited, out of which Rs.7.08 Lacs, Rs.3.82 Lacs, Rs.6.37 Lacs and Rs. 109.34 Lacs pertains to years 1994-95, 1995-96, 1996-97 and 2004-05 to 2010-11 respectively, since the matters are pending with the Excise Appellate Authorities. In case of Sales Tax, the Company has received demands of Rs.2430-66 Lacs and the Company has filed Civil Writ Petitions in the Punjab & Haryana High Court challenging the Assessment Order. The High Court has admitted the same and stayed the recovery of the said amount. As explained to us there were no disputed amounts in respect of Income Tax, Custom Duty and Wealth Tax during the year.

(x) The Company has accumulated losses of Rs. 1974.17 Lacs as on 31.03.2010. The Company has incurred Cash Loss of Rs.1178.77 Lacs as against Cash Loss of Rs. 1303.86 Lacs during the preceding financial year.

(xi) In view of the Modified Rework Proposal of the Revised Restructuring Package approved by the CDR Empowered Group (refer to Note No. 5 in Schedule O to the accounts) and according to the information and explanations given to us, the Company has not paid over due interest of Rs. 12.07 Lacs to Financial Institutions and Banks.

(xii) The Company has not granted any loans and advances on the basis of the security by way of pledge of Shares, Debentures and other Securities.

(xv) According to the information and explanations given to us the Company has not given any guarantee for loans taken from Banks and Financial Institutions by any other Company.

(xvi) The Company has not received any Term Loans and has not issued any Debentures during the year.

(xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment and vice- versa, other than temporary deployment pending application.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

(xxii) In our opinion and according to the information and explanations given to us, the nature of the Company's business/activities during the year are such that clauses xiii, xiv, xviii, xix and xx of CARO are not applicable to the Company.

For A.K. SOOD & ASSOCIATES For S. TANDON & ASSOCIATES Chartered Accountants Chartered Accountants

Sd/- Sd/- (SUBHASH BINDLISH) (H.S. KHURANA) Partner Partner Membership No. 81521 Membership No. 86331

Place Chandigarh Date May 26, 2011

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Mar 31, 2010

1. We have audited the attached Balance Sheet of PUNJAB ALKALIES & CHEMICALS LIMITED as at 31st March, 2010, and also the Profit and Loss Account and 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 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 misstatements. 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 the management, as well as evaluating the overall Financial Statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto 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 in Paragraph 3 above, we report that:

(i) 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;

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

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

(iv) 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 (3C) of Section 211- of the Companies Act, 1956;

(v) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as op 31" 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.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon in Schedule O, 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 the affairs of the Company as at 31s1 March, 2010;

(b) In the case of the Profit and Loss Account, of the Loss of the Company for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Statement referred to in paragraph (3) of our Report of even date to the Shareholders of PUNJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended 31" March, 2010.

(i) a) The Company is maintaining proper records to show full particulars including the quantitative details of Fixed Assets.

b) As explained to us, the management has physically verified the major fixed assets of the Company in a phased manner, designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification.

c) As per the information and explanations given to us no substantial part of the fixed assets have been disposed off during the year, which affect the ability of the Company to continue • as a going concern.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory have been physically verified by the management during /at the year-end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of the physical verification of stock 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 is maintaining proper records of its inventories.

(iii) The Company has not taken or granted any loans, secured or unsecured from Companies, Firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of Inventories, Fixed Assets and for the Sale of goods.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any transactions, which are required to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vi) As per the information and explanations given to us, the Company has not accepted the public deposits within the meaning of Section 58A and accordingly the directives issued by the Reserve Bank of India and provisions of Section 58AA of the Companies Act, 1956 and the rules framed there under are not applicable.

(vii) In our opinion, the Company has an adequate Internal Audit System, commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account as required to be maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained. However, we are not required to and have not carried out detailed examination of such accounts and records with a view to determining whether they are accurate or complete.

(ix) a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess with the appropriate authorities during the year. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payable at the end of the Financial year.

b) Disputed Excise Duty/Service Tax amounting to Rs.78.05 Lacs has not been deposited, out of which Rs.7.08 Lacs, Rs.3.82 Lacs, Rs.6.37 Lacs, Rs.32.83 Lacs and Rs.27.44 Lacs pertains to years 1994-95, 1995-96, 1996-97, 2009-10 and 2004-05 to 2008-09 respectively, since the matters are pending with the Excise Appellate Authorities. In case of Sales Tax, the Company has received a demands of Rs.2430.66 Lacs and the Company has filed Civil Writ Petitions in the Punjab & Haryana High Court challenging the Assessment Order. The High Court has admitted the same and stayed the recovery of the said amount. As explained to us there were no disputed amounts in respect of Income Tax, Custom Duty and Wealth Tax during the year.

(x) The Company does not have any accumulated losses as on 31.03.2009. The Company has incurred Cash Loss of Rs. 1303.86 Lacs but has incurred no cash toss during the proceeding , financial year.

(xi) In view of the Revised Restructuring Package approved by the CDR Empowered Group (refer to Note No. 5 in Schedule O to the accounts) and according to the information and explanations given to us, the Company has not paid over due interest of Rs.44.13 Lacs to Financial Institutions and Banks.

(xii) The Company has not granted any loans and advances on the basis of the security by way of pledge of Shares, Debentures and other Securities.

(xv) According to the information and explanations given to us the Company has not given any guarantee for teens taken from Banks and Financial Institutions by any other Company.

(xvi) The Company has not received any Tern Loans and has not issued any Debentures during the year.

(xvii) According to the Cash Flow Statement end ether records examined by us and the ktfdfmatkm end explanations given to us, on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment and vice-versa, other than temporary deployment pending application.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

(xxii) In our opinion and according to the information and explanations given to us, the nature of the Companys business/activities during the year are such that clauses xiii, xiv, xviii, xix and xx of CARO are not applicable to the Company.

For A.K. SOOD & ASSOCIATES

sd/-

(GAURAV SOOD) Partner Membership No. 507583

For S. TANDON & ASSOCIATES Charterd Aeaeuntant

Sd/- (H.S. KHURANA) Partner Membership No. 86331

Place : Chandigarh Date : June 29, 2010