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Auditor Report of Sadhana Nitro Chem Ltd.

Mar 31, 2023

INDEPENDENT AUDITORS'' REPORT

To the Members of Sadhana nitro chem Limited

Opinion

We have audited the stand-alone financial statements or Mis. Sad hone Nflro Cbcm I. Company"), which
comprise !ho balance shee! as at 31ManJi 2023. and die stejepnerM of Pnom and Loss (Including Olhcr Comprehensive
(ncomed, Statement of changes in Eouiiy and Statement of Cash flows for (he year teen ended, and notes to the financial
statements. including a sum m
3 ry of sig nifica ni accou n I .rg pc in ies and doer explanatory irfonmafinnh=rei lafter referred to
as ''the slandalone fmapf.ial statements.

In purdji-mpn anrt to the be-gt of our information and according 1n Ihu explanations given to uu, Ida aforesaid slanda-pne
financial sia(dineifl& give lha infom-iaton required by t"= Act Ip Uia manner so r&qtiired amt give a Litre and
view m
CoriVi n ity will
1IJ re accounting print:- pit;;; gsiiarailly acoa pled; ri I rid ia. of :f ia mate of affairs of ti 10 Company as at 31 March,
2023, it s pro fit, cha i igoe
and its east i (tows for the year e titled un tli at date

Basis for Opinion

We conducted our audil in accordance with the Standards on Audit mj (SAs) specified under 3eclion 143(10) of the
Coni pomes Act. 2013 Our res ponsibi'' ities under those Standards are funder descnf>sd in ide Auditor''s Responsihi1 ities for
the Audii of tlie Ftnariciol Statements section cf our repon We s re i ndependent of tee Com pan / in accord a nee wi Hi me C od
s
of Ethics ssued ny th e I r Stihtte pt Chartered Accouniants of I n-d n fog e 1hm wilh 1he eini cal regi lireme n1S that ere tsieve nt tp
our e.idd r,l the ftpencial statements under me provisions of Ine Comps n res Ac: 3013 am: lire R-.i''hs thereunder end we
have!
1. lJi iled nur otfier elhignl respon situ lili e s in ,h pcnm nr r.e wH h I neeR regi, Ire merlin a nd: I -e Code nf LI h ins. We bel, eve I h a I
the a udil avid&nca We have oiilei ned is Sul I it: a ri I end appropriate lo provide a ba Six
far pur Opinion

Key Audit Matters;

Kay a add ma tie rs a to those matters that. in our professional judgm 6 n I. wore of most s igoifican co in c ur audii of bio fin a ncial
statements of the current period These matters wore addressed in th e context of our audit of tee firartcia1 statements as a
whole, and m forming our opinion thereon, and we do not provide a separate opinion on these matters.

The Company''s management arc E3oard ot Directory are responsible for me other mforn-atior- The omer hbforTTialloii
comprises the information inr''uded in the Company''s annual report. out does nnr inc’Lid-e me standalone financial
statements ardour auditor'' report thereon

Our opinion np the etenha lone fingnns I sieremenfs rine& nnt nnysT the other intnrn''atipn a n rl ive dp r of epreS anyorm g1
essurahee rtinduninn Iherenn.

In ecifinauiiin with our a udi i of the standalone -irtancfal siafe.''nents. our iBsprjn''slbiJty is to 1 eac Liother informaSi in and. in
doing So, eadKidorwiiultior the other Inforn
is materially niCoilSisLunl with [ho stun tin ont Financial stall.-: munis or our
iuti^i^dge obtained in LIil- auditor ijttieriirise appears to ba matarisfly t ilestated. tf bsssd on [ha vrort we iiat*e purfomiud.
cludti that [herd
.s a maleria: misstatement of tills i.ilter Information, we are required ti report fact. We have
nothing to report i n tin s regard.

Res ponsib 11 Itios of Management a nd Those Cftrgod wtlb Go vornanco for the Sta nd a lone FI nano ia I Stalema nts

T he Company''s Board of Directors is respon siote for the matters seated i n section 134j5) of ine Compsn ies Act .2013 f‘1 ue
Act") wilh respect tome preparation of ihese standalone fiino^jfel statements that give s true and ig rviewof the financial
position, luancial performance changes innnily and QA-sh flows ot I ti e? Company in Accordance with the acCfliifitiilg
pnficipieS generally Accepted in Ini.a. including Ihe ancn.i.nfng Slur cards Specified under section 133 d the Act Tins
responsibility also includes maintenance of adequate accounting records in accordance wjlh fhe provisions of the Ac! for
safeguarding ol the Assets of the Company and f
ot preventing and defecting frauds end other irregularities; selection and
application of appropriate accounting poHcfes: making Hidgmenis and estimates that are reasonable and pnjdejfii and
design, implarrvsiitallofl and maintenance of adequate Interna) tlrtandal oonlfds, tfiat were ope-ating effectively fci
ensuring tho accuracy and camp''s Lon css of tho accouir ng iscores, relevant to the pro para tiun arc presentation of the
financial sfcStsmer its that g.vu a 1 rue and fjifYtew and a rufreoifrcini mater .a I misstatement, whether tluelo fraud or error.

In preparing ttieflnaiiclal statements, managen''pnr -s re sponsible for asses singthe Company''s -in IHy tacantir-Le as a going
concern disclosing. cs applicable natters reined to going concern and using tiie going concern basis of accounting unless
mans g=ment eiiher intend s fr iqi li''deiie the Company or io cense operSjBcms. or has no realislic a tiemaiive h lit to do. so

ThSoarrl of Director is also responsible rnrnverseeinq I he Company financial report ug process

Auditor''s Responsibilities for the Audit ol the Standalone Fina-nciul Statements

Our objectives are to obtain rea&otiaEte assurance At?Dul whothtir Ilia financial etaterowits as ,-j jifthole are free from
malei ¦ a I mis sta La me m, whetbe r duo to fraud or arror, and is issue an auditor''s re pa rt that Includes ou r opinion. Reasonabla
assurance is a high lov. iofaiSLirarict. tiut is not a cjuaranLc ¦ that an audit conducted in ¦accordance with SAswtil always
detecta materia:-misstatement when dexists. Misstatements can anse from fraud or error and are considered matierial if
i nd'' v''idually c r ¦ r rhs aggregate. mey could reaso naofy 0e oxpe cters to inflnence the econom ic decisjons of u sers taken on
the basis of these finanrtial slatemenfs

As part of an audit in accorffgnce with SAs we exccise piufessidnsl judgment and maintain professicna: skepticism
throughout the audit, We also1

identify end Fssfu;s the risks of mater h! hllSStatemert of I tie timnrml eteLenieiite, wiietfiei due to I mud Dr error resign
arid perform aud t prooeduree respor-sive to those risks and obtain audii avittenoe trial is sufficiuni and appropriate to
provide a basis forotif opinion
.'' bs risk of no) detactiny a matBrlal rriisslatuiriuiiL resulting fmm fraud is higher than tor
oriA resulliiig from error, as fraud may irwnlv coBusiori, frirgu-y, intontmual omlsilpris; rrhisropretLinlalions prflte
override of itrlerrial conlrot.

- OPinion understanding of eternal control relevant to the audit In order to design aud.t procedures that are
appropriate n the circumstances Under section me Companies Act. 2013. we are also responsible for

express-ng our opinion on whether the company has adequate interne! finance'' controls system in p:ace and fee
nperaltng eifef:EivEr.EH.5 of such coJilrnls.

* Ey;h unto the 8pprop«rieteniB&£ or accounting policies used and ftte reasoopblpn-eps of accr-unl re eStiflij^e''S aid
related disc Q6Ure$ made by mantis err''" in.

¦ Conclude on j£ie approprlateness.-of mm my orient''s usej ol the going contufri basis ol acoouiih

audit ov. J q nee ohla ''nod, whether a mate n a i nndartainty exists re- atod to events o ¦'' conditions ilia L may cast sig-lificanl
doubt on the Company''s abihty toconbnua as agoing concern It we conclude''that ?¦maional uncertainty exists we
are required to craw attenlioi nour auditors report
10 the related disclosures m irie financial slatome-i''ts or. if such
disclosures are inadequate to modify our option Our cc-nclusons nre based on ihe audit evidence obtained up lo
the date of our auditor''s resort. However, future ev e n
15 or cond ifions may cause the Company lo ce a se to continue as

a going concern

Eva-ill a te tha overall presenlnlipn. structure Bfid cpnlsnl n1 1fie financial etalpmenls. ino-li irting the disclosures and
whnLhe-'' 1.ne ImFincm elgtamenls neprespr.l ihe underlying transaction:-! nnrf eu-enls in a nianm:r ln.il artiieve^. fair
presentation

MaLenahiy Is Ihn magritajda crt standalone finarv: ul Etdterlftn!s ttidl, Individual y ci in aggregate,

1 decisions of a 1 oasonab ;l ki iuwladgeaue user of lbs standalone filane. slalamei its
may bo influenced. Wo consider LruaiiULalive materiality
& qualitative factors in (i) planning iho scope of our audit and in
oval u ating the resu Its of ou r work: and (ii) to eual uate the effect of an y idefibfied misstatements i n the standalone financial
statements

We communicate wife those charged with governance regarding, among other martens, the p’armed scope and liming of
(he audit and significant audit findings, including any significant deficiencies in internal control thal we identify during our
audit.

We alsoprqvicfe Ihcme charged will 1 gnvEmanoR wi111 g slaLemenl him We have oc-n1; 1 ied with relevant alhioel FPEjulrenterilS
1 H-gurcing i ndepander.tte. ai d to Com n 1 u ntoftte with tlteta
3ll retttidnshi p> fi S nd chief 11: a I la rs dial may reasonably be Ihriu g hi
to be nr pnOUt indepEiiUuiiOE, end where applicable, related safeguards.

from ti c mallci.''s cofrimunicjitod wilh 1nosa chaigod with govemancu, wo dc-tcrmino Ihoso matters lhal wore of most
s. p ii if ica ncc- in the audit of itio sta nda: on-e f ntanciai statemen ts of the currant period ana are lhorefcro tho key a ud it matte ra..
Wc describe- these matters Incur auditor eport unless :aw or regulation precludes public d sefosuro about the matter or
when, in extremely rare circumstances, we rtetenmino that a manor should no- be communicated n dur repent because the
adverse consequences of doing so would reasonably tie: expected so outweigh the public interest benefits of such

communication

Report on Other Legal and Regulatory Requirements

As required ny I Me Companies (Auditor''s Re p-rutl Order, ?0?n fl he Order'') issued ny I he Centra; Government of Indie
and 4 o1 tl 1(3 Oftfe’, to ttm axle lit applitablo

2. As roqu irad Py Section 14 3(3) of the Act, we report, that

a We have sought and obtai ned a H the information a up explanati ems which to the bes! of our knowledge a nd be lief
were necessary fecthe purposes ofou r aud it

b In our opinion. proper nooks of accoum as required by law nave been * ept by the Com bony in so far as ft a ppears
From our exs miration of ihose books;

c The Balance Sheet. Mm Statement ol Profit and Loss ncftitiing Other Comprehensive Income, me Cash Ftow
Sfaiernahtend Ststamenl of Change''S
11 Eguiitydarall with hy (his ijbport are fiiegrEement with thareleventltaclts
of account

d. In nu.'' ophiion, the aforesaid slandatcmis linantiu ftataenents comply wiih the Indian Accqunling Standayds
prescribed unde ¦ sacUon 133 of the Act rood with relevant rules -ssuod thereundor

e On tne basis of the written representations received front ine directors as on 31 '' March. 2023 and taken on record
by tha Board of Directors, none of the cirectorsisd squal find os on 31” March, 2023 from being appointed as a
director .n terms of Section ’ 64(2}of iho Act;

F With respect to the adequacy of the internal financial contras over financial reporting of the Company a-nd me
oper.svng effertiveresB 0= StJCll conl''ols, refer to oytseparfite Report in "Annnyurs
''

g WLI respect ta the -matter le be included in Lhfl Auditor''s Report under section 1E)7( 16) -of (he Act

opinion and lathe best at our information and according La the explanation gfysipi lo us. the rartiunttreilori

pant by Lire Company to its diractu i s daring the year|s lii accordance witlt pruvis-ofts of Section 197 read with
Sdiadule y rd the Act. The nemunpralrtfi paid Id any director is net m excess of the In iris I a down pndar Siiution
"¦97 toad w:Lh Schedule V of Ure Act.

h With respect to the ether matters to be ncljdod in the Auditor''s Report n accordance witti Role tl of the
Con1 pan es (Audit and Aud-tors) R-.ies. 2014.-as amended. in our opinion-and to rhe best otour information and
seconding to the explanations given ta us

(i) The Company has disci osec ihe impact nt per fling liiirjations on its financial position m itb siandgloina
t‘na ncial si a Ir=men
1s. Refer note 3 11d the Slaoh alone finanna ¦ staterr e hts

iir) 1 he Company did not nave any Inng-term ciMitiecfs- including derivative coni rads ''or which there wa-e any
malarial (bra aeea trie lossa s

(li i: i here ha s not iwu nary occasiot ¦ in casa of 11 m Comp; 11 ly dor ing the year under repot 1 iu t: ti isfar any Earns
to
Ltio Invoslor Education and Protection Fund. Thus, the question of da lay In transferring such sums does
notarise

: Ivj (a) The Managemen t has represen ted that. to the best of f as disclosed in th c hoie
no. 45 to he standalone financial statements. no Funds have been advanced or Foanetf or invested (either
from borrowed Funds or securities prem t; m or any ot he: sou nces or kfnti of funds) h / ihe Connpar.y to or in
any other person entities}, Iticlutling foreign entities {''Intyrmerftaries''), with th= understanding.
Whether rHoondad in Wiling or oLtievWise that I he Intern ledimy spall directly or indirectly tend nr u vest in
ether persons nr entities identified li nny niannfl'' wlialsnever nynr on behalf nf I fie Compary ¦ "Jltimele
be neiktiarieii''
\ af prav l! e any guar Antea, s-ticn oly nr the liite Ofl bahftll nf I ha Ulti mate Beneficiaries

(b) t he Managament has rspnsMfitud, ifiat. re ina bast of it''s Knowtedg* and belief as diset&sad in the
rale no. 45 to the standalone tin a ncinl statement s. i so f u nd s have boon ractilv ud sy fbu Company trom any
aarson(s>or cntilyfi*s(. inefudhig foreign entities Funding Parties"), with the understanding, whether

licordod ¦ n writing or olkiBrtwse, Liia I the Compary shall, di reefiy or indirod :y. le: id or invest ih uthc-rpersons
o: entities identify d in any manner whatsoever sy or on behalf of the Tun ping Party edit''male
Bo net diaries > or p nov d c any guaran te e, security or Ihg Hke on behalf of i he Ultimate Beneficiaries

(c) Rased on she aud i rvocedures lh^r hsve been considered reasonable and appropriate m the
circumstances, nothing nas come to our nnrice that has CB used us to ce ieve that the representations ur-rer
(iyj As stalmd In note ho 50 tedne stand,sluna finahciill statements

(a) i Nt final d vidarid jjtiopxssafl m (he previoue yea/, riuularcd a paid by (ha Gatnpany rturtna tin: year is lr
accorda.hoa wilh Secbcu 123 of theAct, as applicable.

(b J The Board of Directors or the Company have proposed final dividend for the ye a r which is subject to the
approval
of the membere al the ensuing Annual General Mooting The in:, urt of dividend proposod ''S in
accord ance wit n Section 123 of th e Ac: as applicable

For Jayesh Updia & Associates LLP
Chartered A ncounlanfs
Firm Reg istrali cm Ho. 12 M 42W
IW1091 22

Jayesh Dadia
Partner

Membership No, 033973

Piacc of S i gita tu ro: Mumbai

24 '' May, 2023

LI DIM: 23033973BCVRBT2649


Mar 31, 2018

Report on the Standalone IND AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Sadhana Nitro Chem Limited (the Company), which comprise the Balance Sheet as at 31"March, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information, (hereinafter referred to as “Standalone IND AS Financial Statements”)

Management''s Responsibility forthe Standalone Financial Statements

The Company''s Board of Directors is responsible forthe matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of thesestandalonelndASfinancialstatementsthatgiveatrueandfairviewofthe state of affairs(financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone 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 there under.

We 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. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 including the Ind AS, of the state of affairs(financial position) of the Company as at 31s'' March, 2018, and its profit(financial performance including other comprehensive income), its cash flows and the changes in equity forthe year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended 31 “ March 2017 and the transition date opening balance sheet as at 1st April 2016 included in these standalone financial statements , are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31- March 2017 and 31“ March 2016 dated 26"1 April 2017 and 27- May 2016 respectively expressed unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order-) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

c) The Balance Sheet, the Statement of Profit and Loss, 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 Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules issued thereunder.

e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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”; 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 standalone Ind AS financial statements - Refer Note 32 to the standalone I nd 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 delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

The Annexure referred to in independent auditors report to the members of the Company on the standalone IND AS financial statements of Sadhana Nitro Chem Limited for the year ended 31st March 2018.We report that:

i) a) The company has generally maintained proper records, showing full particulars including quantitative details and situation of property, plant and equipment.

b) property, plant and equipment have been physically verified by the Management during the year based on a phased programme of verifying all the assets over three years, which in our opinion is reasonable having regard to the size of the company and the nature of its property, plant and equipment. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

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) The Management has conducted physical verification of inventory at reasonable intervals and no material discrepancies were noticed on physical verification.

Iii) The Company has granted loan to a Company covered in the register maintained under section 189 of the Companies Act, 2013("the Act").

a) In our opinion , the rate of interest and other terms and condition on which the loan had been granted to the company listed in the register maintained under Section 189 of the Act was not , prima facie , prejudicial to the interest of the Company.

b) The schedule of repayment of principal and payment of interest is not stipulated and in absence of such a schedule , we are unable to comment on the regularity of the repayments or receipts of principal amounts and interest.

c) There are no overdue amounts in respect of the loan granted to a company covered in the register maintained under Section 189 of the Act.

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. The Company has not provided any guarantees / security.

v) The Company has not accepted any deposits from the public.

vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prlma facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii) According to the information and explanations given to us, in respect of statutory dues:

a) There were delays by the Company in depositing undisputed statutory dues, including Provident Fund, Employees ‘State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues In arrears as at March 31,2018 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, there are no dues of income tax, sales-tax, service tax, customs duty and cess which have not been deposited on account of any dispute except as given below:

Name of Statue

Nature of Dues

Forum where dispute is pending

Period to which the amount relates

Amount involved (Rs)

Amount Pending (Rs)

Maharashtra Value Added Tax Ad

Maharashtra Value Added Tax Act

Maharashtra Value Added Tax Tribunal

A.Y :2012-13

12,48,439/-

6,98,439/-

Income Tax Act

Income Tax

Commissioner of Income Tax -Appeals, Mumbai

A.Y : 2014-15

55,180/-

55,180/-

viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks or government. The Company did not have any borrowings during the year by way of debentures.

ix) According to the information and explanations given to us , the Company has not raised any money by way of public issue or further public offer (including debt instruments) during the year. The term loans raised by the company have been applied for the purpose for which they were raised.

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 provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

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 standalone Ind AS 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 except of issue of sweat equity shares to a Director in accordance with the Issue of Sweat Equity Regulations, 2002 issued by Securities and Exchange Board of India.

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 them. Accordingly, paragraph 3(xv)of the Order is not applicable.

xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

Referred to in paragraph 2(f) of our report of even date

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

1. We have audited the internal financial controls over financial reporting of Sadhana Nitro Chem Limitedfthe Company") as of March 31,2018 in conjunction with our audit of the standalone IND AS financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

2. 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 (Guidance Note) issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

3. 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.

4. 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.

5. 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

6. 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

7. 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

8. 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 31st March, 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 Chandrashekar Iyer & Co

Chartered Accountants

Firm Registration No: 114260W

Chandrashekhar Iyer

Place: Mumbai Partner

Date: April 30, 2018 Membership No.47723


Mar 31, 2017

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Sadhana Nitro Chem Limited (“the Company”), which comprises the Balance Sheet as at 31 “ March 2017, the Statement of Profit and Loss, 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 Standalone Financial Statements

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

Auditor’s Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 $’ March, 2017, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

2. Further to our comments in Annexure 1, as required by Section 143(3) of the Act, we report that:

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

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 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 2’, 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 does not have any pending litigation which would Impact its financial position.

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 delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the financial statements as to holding as well as dealing in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management—(Refer Note No. 16.1 of Financial Statements)

ANNEXURE 1 TO TI-IE INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SADHANA NITRO CHEM LIMITED ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2017

Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and in our opinion, we report that:

I a. The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The Company has a policy of physically verifying its fixed assets in a phased manner to cover all the assets of the Company in a block of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its business.

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

II a. The inventory has been physically verified by the Management at reasonable intervals during the year

b. The procedures of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business. No material discrepancies were noticed on such physical verification.

c. The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

III The Company has not granted any loans secured or unsecured during the period to the parties covered in the Register maintained under section 189 of the Companies Act, 2013.

IV The Company has not granted any loans, investments, or any guarantees or securities accordingly provision of Section 185 and 186 does not apply.

V The Company has not accepted any deposits from public. Accordingly, this clause is not applicable.

VI The Central Government has not prescribed maintenance of cost records under section 148(1) of the Act.

VII a) The company has been irregular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities during the year. No undisputed amount in respect of the aforesaid statutory dues were in arrears, as at 31st March 2017, for a period of more than six months from the date they become payable except in the following cases :-

Name of the Statute

Nature of Dues

Amount (Rs.)

Period to Which it relates

Income Tax Act. 1961

Tax Deducted at Source

67,17,849

April 2015 to September 2016

Provident Fund Act, 1952

R F. Contribution

57,84,537

June 2015 to September 2016

Service Tax

Reverse Mechanism

20,57,631

April 2014 to September 2016

Total

1,45,60,017

b) There are no dues of Income Tax, Sales tax, Service Tax, Customs duty, Wealth Tax, Excise Duty, Excise Duty and Cess which have not been deposited on account of a dispute.

VIII The Company has not defaulted in repayment of dues to any financial institutions or banks.

IX The Company did not raise any money by way of initial public offer (including debts instruments) or further public offer and terms loans during the year. Accordingly, this clause is not applicable.

X No material 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 The company has paid / provided for managerial remuneration in accordance with the requisite approvals as mandated by the provisions of section 197 read with Schedule V of the Act.

XII The Company is not a Nidhi Company. Accordingly, this clause is not applicable.

XIII All Transaction with related parties are in compliance with Section 177 and section 188 of the Companies Act,2013 where applicable, and details of such transactions have been disclosed in the financial statements as required by the applicable Accounting standards.

XIV The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, this clause is not applicable.

XV The Company has not entered into any non cash transactions with directors or persons connected with them.

XVI The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

For V. Sankar Aiyar & Co

Chartered Accountants

Firm Reg No: 109208W

Arvind Mohan

Place: Mumbai Partner

Date: April 26th, 2017 Membership No. 124082


Mar 31, 2016

AUDITOR’S REPORT

Independent Auditor’s Report

To the Members of Sadhana Nitro Chem Limited.

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Sadhana Nitro Chem Limited (“the Company”), which comprises the Balance Sheet as at 31st March 2016, the Statement of Profit and Loss, 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 Standalone Financial Statements

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

Auditor’s Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

Emphasis of Matter

We draw attention to Note No. 30 in financial statements regarding going concern. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

2. Further to our comments in Annexure 1, as required by Section 143(3) of the Act, we report that :

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

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st 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 2'', 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 does not have any pending litigation which would impact its financial position.

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 delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE1

TO THE INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF SADHANA NITRO CHEM LIMITED ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and in our opinion, we report that :

I. a. The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The Company has a policy of physically verifying its fixed assets in a phased manner to cover all the assets of the Company in a block of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its business.

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

II. a. The inventory has been physically verified by the Management at reasonable intervals during the year.

b. In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business. No material discrepancies were noticed on such physical verification.

c. The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

III. The Company has not granted any loans secured or unsecured during the period to the parties covered in the Register maintained under section 189 of the Companies Act, 2013.

IV. The Company has not granted any loans, investments, or any guarantees or securities accordingly provision of Section 185 and 186 does not apply.

V. The Company has not accepted any deposits from public. Accordingly, this clause is not applicable.

VI. The Central Government has not prescribed maintenance of cost records under section 148(1) of the Act.

VII. a. The company is generally irregular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amount in respect of the aforesaid statutory dues were in arrears, as at 31st March 2016, for a period of more than six months from the date they become payable except in the following cases :-

Name of the Statute

Nature of Dues

Amount ''

Period to which it relates

Income Tax Act, 1961

Tax Deducted at Source

24,07,383

April to September 2015

Provident Fund Act, 1952

P. F. Contribution

26,61,814

April to September 2015

Service Tax

Reverse Mechanism

12,82,097

April to September 2015

Total

63,51,294

b. According to the information and explanations given to us based on the records of the company examined by us, there are no dues of Income Tax, Sales tax, Service Tax, Customs duty, Wealth Tax, Excise Duty, Excise Duty and Cess which have not been deposited on account of a dispute.

VIII. The Company has not defaulted in repayment of dues to any financial institutions or banks.

IX. The Company did not raise any money by way of initial public offer (including debts instruments) or further public offer and terms loans during the year. Accordingly, this clause is not applicable.

X No material 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. The company has paid / provided for managerial remuneration in accordance with the requisite approvals as mandated by the provisions of section 197 read with Schedule V of the Act.

XII. The Company is not a Nidhi Company. Accordingly, this clause is not applicable.

XIII. All Transaction with related parties are in compliance with Section 177 and section 188 of the Companies Act,2013 where applicable, and details of such transactions have been disclosed in the financial statements as required by the applicable Accounting standards.

XIV. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, this clause is not applicable.

XV The Company has not entered into any non - cash transactions with directors or persons connected with them.

XVI. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. ANNEXURE2

TO THE INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SADHANA NITRO CHEM LIMITED ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016.

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 Sadhana Nitro Chem Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

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

Auditors’ Responsibility

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s Judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company ;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

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

For V. Sankar Aiyar & Co.

Chartered Accountants

Firm Regn No. 109208W

Arvind Mohan

Place : Mumbai Partner

Dated : 27th May, 2016 Membership No. 124082


Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

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

Auditor's Responsibility

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

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. I n 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our aud it opi n ion on the standalone financial statements.

Opinion

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

Emphasis of Matters

We draw attention to Note 31 in the financial statements regarding going concern. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor's Report) Order, 2015 ('the Order"), as amended, issued by the Central Government of India intermsofsub-sedion 11 of section 143oftheAct, wegiveintheAnnexure a statement on the matters specified i n parag raphs 3 and 4 of the Order

2) As required by Section 143(3)oftheAct,wereportthat:

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

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

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

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

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

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

i. The Company does not have any pending litigations which would impact its financial position;

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 delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph (a) under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Sadhana NitroChem Ltd forthe period ended 31st March, 2015) Annexure referred in Independent Auditors Report of even date

1. a. The company has maintained records showing particulars including quantitative details and situation offixed assets on the basis of available information, b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner of over two years, which in ouropinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification.

2. a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. No material discrepancies were noticed on such physical verification.

c. The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. The company has not granted any loans, secured or unsecured during the period to parties covered in register maintained under section 189oftheAct.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that purchase of certain items of inventory and fixed assets are for the Company's specialized requirements and similarly, certain goods sold are forthe specialized requirements of the buyers and suitable alternate source are not available to obtain comparable quotations there is generally adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory & fixed assets and for the sale of goods & services. In our opinion ands according to the information and explanations given to us, we have not observed any major weakness during the course of Audit.

5. The company has not accepted any deposits during the year.

6. The Central Government has prescribed maintenance of cost records under sub section (1) of section 148 of the Companies Act 2013 in respect of one of the products, manufactured by the company. We have broadly reviewed the accounts and records of the company and are of the opinion that prima- facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

7. In respect of statutory dues:

a. There have generally been delays by the company in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, Sales Tax, Wealth tax, Customs duty, Excise duty, cess, Service tax and other statutory dues with the appropriate authorities. There are undisputed amounts payable in respect of the aforesaid dues as at 31st March, 2015 for a period of more than six months from the date of becoming payable, details are as under:

Name of Nature of dues Amount (Rs.) Period to which it relates statute

Income Tax Act, 1961 Tax Deducted 20,31,593 April to September 2014 at Source

Provident Fund Act,1952 P.F. Contribution 8,42,405 April to September 2014

Service Tax Reverse Mechanism 3,97,176 April to September 2014

Total 32,71,174

b. According to the records of the company, there are no disputed statutory dues on account of Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and cess remaining unpaid as on 31st March, 2015.

c. Amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of Companies Act, 1956 has been transferred to such fund within time.

6. The company has accumulated losses is more than fifty percent of its net worth. The company has not incurred any cash loss during the year and in the immediately preceding financial year.

7. Based on our audit procedures and according to the information and explanation given to us, there have been no delays in repayment of dues to banks and financial institutions during the year.

8. The company has not given any guarantee for loans taken by others from Bank or Financial Institutions.

9. The company has not obtained any term loans during the year.

10. In our opinion and according to the information and explanation given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

For V. Sankar Alyar & Co. Chartered Accountants (Firm's Registration No. 10S208W) Arvind Mohan Place: Mumbai Partner Date: 16th April 2015 (Membership No. 124082)


Mar 31, 2014

We have audited the accompanying financial statements of Sadhana Nitro Chem Limited. ("the Company") which comprise the Balance sheet as at 31st March, 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the period then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the financial statements

Management is responsible for preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014 ;

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

(c) In the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

Emphasis of Matter

We draw your attention to Note 33 regarding going concern. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit ;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 ;

e. On the basis of written representations received from the directors as on 31st March, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITOR''S REPORT

(Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Sadhana Nitro Chem Ltd for the period ended 31st March, 2014)

Annexure referred in Independent Auditors Report of even date

1. In respect of its fixed assets :

a. The company has maintained records showing particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the period in a phased periodical manner of over two years, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. During the period, the company has disposed of some of its non core business assets which does not form substantial part of fixed assets. Accordingly, going concern status of the company is not affected.

2. In respect of its inventories :

a. As explained to us, inventories have been physically verified by the management at regular intervals during the period.

b. In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. No material discrepancies were noticed on such physical verification.

c. The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to/ from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, we report that : a. The company has not granted any loans, secured or unsecured during the period.

b. During the period company had taken interest free loan from one company amounting to Rs. 22,50,000/- This along with other loans covered in register maintained under section 301 have been repaid during the period and maximum balance during the period was Rs. 20,28,242/-.

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

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that purchase of certain items of inventory and fixed assets are for the Company''s specialized requirements and similarly, certain goods sold are for the specialized requirements of the buyers and suitable alternate source are not available to obtain comparable quotations there is generally adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory & fixed assets and for the sale of goods & services. In our opinion ands according to the information and explanations given to us, we have not observed any major weakness during the course of Audit.

5. In respect of transactions covered under section 301 of the companies act, 1956 :

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under section 301 of the companies act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the companies act, 1956 exceeding value of Rs. 5,00,000/- in respect of any party during the period have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The company has repaid all existing deposits accepted from public and has not accepted new deposits. Accordingly, clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

7. On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the internal audit functions carried out by a firm of chartered accountants appointed by the management is commensurate with the size of the company and the nature of its business.

8. The Central Government has prescribed maintenance of cost records under section 209(1) (d) of the Companies act, 1956 in respect of one of the products, manufactured by the company. We have broadly reviewed the accounts and records of the company and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9. In respect of statutory dues :

a. There have generally been delays by the company in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, Sales Tax, Wealth tax, Customs duty, Excise duty, cess, Service tax and other statutory dues with the appropriate authorities. There are undisputed amounts payable in respect of the aforesaid dues as at 31st March, 2014 for a period of more than six months from the date of becoming payable, details are as under :

Name of statute Nature of dues Amount (Rs.) Period to which it relates

Income Tax Act, 1961 Tax Deducted at Source 14,08,125 July to September 2013

Provident Fund Act, 1952 P.F. Contribution 8,15,612 August - September 2013

Service Tax Reverse Mechanism 5,16,258 April - September 2013

Total Unpaid Statutory Dues for more than 27,39,995 six months

b. According to the records of the company, there are no disputed statutory dues on account of Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and cess remaining unpaid as on 31st March, 2014.

10. The company has accumulated losses of Rs. 22,71,06,251/- at the end of the financial period, which is more than fifty percent of its net worth. The company has not incurred any cash loss during the period and in the immediately preceding financial period.

11. Based on our audit procedures and according to the information and explanation given to us, there have been delays in repayment of dues to banks and financial institutions during the period. There were, however, no delayed dues to banks existing at the balance sheet date.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

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

14. The company has not traded in securities, debentures and other investments. All the investments are held in the name of the company. Accordingly, clause 4(xiv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

15. The company has not given any guarantee for loans taken by others from Bank or Financial Institutions. Accordingly, clause 4(xv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

16. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company as on 31st March, 2014, in our opinion, there are no funds raised on a short term basis which have been used for long term investment

18. During the period, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. In our opinion and according to the information and explanation given to us, the company has not issued any secured debentures during the period covered by our report.

20. The Company has not raised any money by public issue during the period. Accordingly clause 4(xx) of Companies (Auditor''s Report) Order 2003 is not applicable to the company.

21. In our opinion and according to the information and explanation given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

For V. Sankar Aiyar & Co.

Chartered Accountants

Firm Regn. No. 109208W

Arvind Mohan

Place: Mumbai Partner

Dated: 27th May, 2014 Membership No. 124082


Jun 30, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Sadhana Nitro Chem Limited ("the Company"), which comprise the Balance Sheet as at June 30, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the period then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at June 30, 2013;

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

c) in the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

Emphasis of Matter

We draw your attention to Note 33 regarding going concern and deferred tax assets. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"),as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

ANNEXURE TO THE AUDITOR''S REPORT

Annexure Referred in Independent Auditors Report of even date

1. In respect of its fixed assets:

a. The company has maintained records showing particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the period in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. During the period, the company has disposed of some of its non core business assets which does not form substantial part of fixed assets. Accordingly, going concern status of the company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the period.

b. In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. No material discrepancies were noticed on such physical verification.

c. The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to/ from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, we report that:-

a. The company has not granted any loans, secured or unsecured during the period.

b. During the period company had taken interest free and interest bearing loan from one company amounting to Rs. 6,10,54,474/-. This loan had maximum balance ofRs. 12,12,27,610/- and has been repaid during the period.

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

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that purchase''of certain items of inventory and fixed assets are for the Company''s specialized requirements, and similarly, certain goods sold are for the specialized requirements of the buyers and suitable alternate source are not available to obtain comparable quotations, there is generally adequate interna! control system commensurate with the size of the Company and the nature of its business for purchase of inventory and fixed assets and for the sale of goods and services. In our opinion, and according to the information and explanations given to us, we have not observed any major weakness during the course of audit.

5. In respect of transactions covered under Section 301 of the Company Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

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

6. The company has repaid all existing deposits accepted from public and has not accepted new deposits. Accordingly, clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

7. On the basis of the internal audit reports broadly reviewed by us. we are of the opinion that, the internal audit functions carried out by a firm of chartered accountants appointed by the management is commensurate with the size of the company and the nature of its business.

8. The Central Government has prescribed maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of products, manufactured by the company. We have broadly reviewed the accounts and records of the company and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9. In respect of statutory dues:

a. There have generally been delays by the company in depositing undisputed statutory dues including provident fund, investor education and protection fund employees'' state insurance income-tax, Sales Tax, Wealth tax, Customs duty, Excise duty, cess, Service tax and other statutory dues with the appropriate authorities. There are no undisputed amounts payable in respect of the aforesaid dues as at 30th June, 2013 for a period of more than six months from the date of becoming payable;

b. According to the records of the company, there are no disputed statutory dues on account of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and cess remaining unpaid as on 30lh June, 2013.

10. The company has accumulated losses of Rs. 22,14,88,874/- at the end of the financial period, which is more than fifty percent of its net worth. The company has not incurred any cash loss during the period and in the Immediately preceding financial period.

11. Based on our audit procedures and according to the information and explanation given to us, there have been delays in repayment of dues to banks and financial institutions. Details of default in repayment of dues to banks existing at the balance sheet date are as under;

Name of Bank Amount due Due date Date of payment

State Bank of Patiala Rs. 56,25,000 June 30, 2013 Not yet paid

(USD 1,03,500)

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

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

14. The Company has not traded in securities, debentures and other investments. All the investments are held in the name of the company. Accordingly, clause 4(xiv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

15. The company has not given any guarantee for loans taken by others from bank or financial institutions. Accordingly, clause 4(xv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

16. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company as on 30th June, 2013, in our opinion, there are no funds raised on a short term basis which have been used for long term investment

18. During the period, the company has made preferential allotment of Preference Shares to its Holding Company. In our opinion and according to information and explanations given to us, the price at which these Preference Shares have been issued is not prejudicial to the interest of the company.

19. In our opinion and according to the information and explanation given to us, the company has not issued any secured debentures during the period covered by our report.

20. The Company has not raised any money by public issue during the period. Accordingly, clause 4(xx) of Companies (Auditor''s Report) Order 2003 is not applicable to the company.

21. In our opinion and according to the information and explanation given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

For V. SankarAiyar&Co.

Chartered Accountants

Firm Regn No. 109208W

Arvind Mohan

Place Mumbai Partner

Dated : 28th August, 2013 Membership No. 124082


Mar 31, 2012

1. We have audited the attached Balance Sheet of Sadhana Nitro Chem Limited as at 31st March, 2012 and also the annexed Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on the 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 the audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred to in paragraph 3 above.

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

b. In our opinion proper Books of Account as required by Law have been kept by the Company so far as it appears from our examination of such books.

c. The Balance Sheet, Profit & Loss Account and cash flows statement referred to in this report are in agreement with the Books of Account.

d. In our opinion Balance Sheet and Profit & Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to sub-sections 3(C) of Section 211 of the Companies Act, 1956.

e. Based on the representations made by the Directors and taken on record by the Board of Directors of the Company and the information and explanations given to us, none of the Directors is, as at 31E| March, 2012, prima-facie disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f. Without qualifying attention is invited to note 11 of financial statements regarding non provision in respect of guarantees and diminution in value of investment provided to one of its subsidiaries.

g. Without qualifying attention is invited to note 32 of financial statements regarding accumulated losses and consequential effect on going concern.

h. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read along with notes on Accounts and the Accounting Policies give the information required by the Companies Act, 1956, in the manner so required and read in conjunction with all other notes thereon give a truo and fair view.

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

ii) in the case of the Profit & Loss Account, of the profit for the year ended on that date.

and

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

Referred to in Paragraph 3 of our report of even date.

1. In respect of its fixed assets:

a. The company has maintained records showing particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification. .

c. In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories :

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

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

c. The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to/ from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, we report that:-

a. The company has not granted any loans, secured or unsecured during the year.

b. During the year company had taken interest free and interest bearing loan from two companies amounting to Rs 3,62,95,000/- and interest free loan from one party amounting to Rs 35,50,000/- respectively. This along with other loans covered in register maintained under section 301 have an outstanding year end balance of Rs 6,58,06,987/- and maximum balance during the year was Rs 7,38,04,928/-.

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

d. The company is regular in repaying principal and interest as stipulated.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods & services. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under section 301 of the Company Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

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

6. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 58Aofthe companies act and the rules framed thereunder, and also the directives of Reserve Bank of India with regard to acceptance of deposits. The company has not accepted any deposits from small depositors as defined under section 58AA of the companies act. Since the company has not defaulted in repayments of deposits, obtaining any order from the national company law tribunal does not arise.

7. On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the internal audit functions carried out by a firm of chartered accountants appointed by the management is commensurate with the size of the company and the nature of its business.

8. The Central Government has prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of products manufactured by the company. We have broadly reviewed the accounts and records of the company and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9. In respect of statutory dues:

a. There have generally been delays by the company in depositing undisputed statutory dues including provident fund, employees' state insurance income-tax, Sales Tax, Wealth tax, Customs duty, Excise duty, cess, Service tax and other statutory dues with the appropriate authorities. There are no undisputed amounts payable in respect of the aforesaid dues as at 31st March, 2012 for a period of more than six months from the date of becoming payable;

b. According to the records of the company, there are no disputed statutory dues on account of Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and cess remaining unpaid as on 31st March 2012.

10. The company has accumulated losses of Rs 20,35,82,519/- at the end of the financial year, which is more than fifty percent of its net worth. The company has not incurred any cash loss during the year and has incurred cash loss Rs 1,82,87,622/- during the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, there have been delays in repayment of dues to banks and financial institutions. Details of default in repayment of dues to banks existing at the balance sheet date are as under;

Name of Bank Amount due Due date Date of payment

State Bank of Patiala Rs 36,00,000 March 31, 2012 June 18, 2012 (USD 70,768) State Bank of Patiala Rs 42,00,000 March 31, 2012 Not yet paid

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the company is not a chit fund or nidhi/mutual benefit fund/ society. Therefore, clause 4
14. The company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the company in its own name.

15. The company has given corporate guarantee against borrowings of one of its subsidiaries. According to information explanations given to us, and the representations made by the management, the terms and conditions of guarantee are not prejudicial to the interest of the company.

16. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company as on March 31, 2012, in our opinion, there are no funds raised on a shortterm basis which have been used for long term investment

18. During the year, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. In our opinion and according to the information and explanation given to us, the company has not issued any secured debentures during the period covered by our report.

20. The Company has not raised any money by public issue during the year. Accordingly clause 4(xx) of Companies (Auditor's Report) Order 2003 is not applicable to the company.

21. In our opinion and according to the information and explanation given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

For V. Sankar Aiyar & Co.

Chartered Accountants

Firm Regn No. 109208W

Arvind Mohan

Place : Mumbai Partner

Dated : 18th June, 2012 Membership No. 124082


Mar 31, 2011

1. We have audited the attached Balance Sheet of Sadhana Nitro Chem Limited as at 31st March, 2011 and also the annexed Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on the 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 the audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred to in paragraph 3 above.

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

b. In our opinion proper Books of Account as required by Law have been kept by the Company so far as it appears from our examination of such books.

c. The Balance Sheet, Profit & Loss Account and cash flows statement referred to in this report are in agreement with the Books of Account.

d. In our opinion Balance Sheet and Profit & Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to sub-sections 3(C) of Section 211 of the Companies Act, 1956.

e. Based on the representations made by the Directors and taken on record by the Board of Directors of the Company and the information and explanations given to us, none of the Directors is, as at 31st March, 2011, prima-facie disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f. Without qualifying attention is invited to note B-(3) of Schedule J regarding non provision in respect of guarantees and diminution in value of investment provided to one of its subsidiaries.

g. Without qualifying attention is invited to note B-(2) of schedule (J) regarding accumulated losses and consequential effect on going concern.

h. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read along with notes on Accounts and the Accounting Policies give the information required by the Companies Act, 1956, in the manner so required and read in conjunction with ail other notes thereon give a true and fair view.

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.

ii) in the case of the Profit & Loss Account, of the loss for the year ended on that date.

and

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

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

1. In respect of its fixed assets:

a. The company has maintained records showing particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories :

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

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

c. The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to/ from companies, firms or other parties covered in the register maintained under section 301 of the companies act, 1956, we report that:-

a. The company has not granted any loans, secured or unsecured during the year.

b. During the year company had taken interest free loan from two parties amounting to Rs. 32,00,000/- and interest free and interest bearing loan from one company amounting to Rs. 4,14,60,000/- and Rs. 30,00,000/- respectively. This along with other loans covered in register maintained under section 301 have an outstanding year end balance of Rs. 2,58,07,638/- and maximum balance during the year was Rs. 6,93,37,393/-.

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

d. The company is regular in repaying principal and interest as stipulated.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods & services. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under section 301 of the company act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under section 301 of the companies act, 1956 have been so entered.

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

6. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 58A of the companies act and the rules framed thereunder, and also the directives of Reserve Bank of India with regard to acceptance of deposits. The company has not accepted any deposits from small depositors as defined under section 58AA of the companies act. Since the company has not defaulted in repayments of deposits, obtaining any order from the national company law tribunal does not arise.

7. On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the internal audit functions carried out by a firm of chartered accountants appointed by the management is commensurate with the size of the company and the nature of its business.

8. The Central Government has prescribed maintenance of cost records under section 209(1) (d) of the Companies act, 1956 in respect of one of the products, manufactured by the company. We have broadly reviewed the accounts and records of the company and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9. In respect of statutory dues:

a. There has generally been delays by the company in depositing undisputed statutory dues including provident fund, employees' state insurance income-tax, Sales Tax, Wealth tax, Customs duty, Excise duty, cess, Service tax and other statutory dues with the appropriate authorities. However except as reported below there are no other undisputed amounts payable in respect of the aforesaid dues as at 31st March, 2011 for a period of more than six months from the date of becoming payable;

Nature of Nature of Total Period it statutory Dues relates to

Income Tax Tax Deducted 2,36,163 July& Act 1961 at source August 2010

Nature of Due date Date of statutory payment

Income Tax 7th August and June 14, 2011. Act 1961 7th September respectively

b. According to the records of the company, there are no disputed statutory dues on account of Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and cess remaining unpaid as on 31st March 2011. In case of disputed dues of Income tax, details are as under;

Name of Nature of Amount Period to which statute dues (Rs.) related to

Income tax Act, Income tax 46,81,787 Assessment 1961 year 1998-99

Income tax Act, Income tax 44,83,294 Assessment 1961 year 1999-2000

Income tax Act, Income tax 36,00,028 Assessment 1961 year 2001-02

Income tax Act, Income tax 10,58,012 Assessment 1961 year 2003-04

Income tax Act, Income tax 27,80,897 Assessment 1961 year 2004-05

Income tax Act, Income tax 14,44,494 Assessment 1961 year 2007- 08

1,80,48,512

Name of Forum where it dispute statute is pending

Income tax Act, Hon'ble High Court of 1961 Bombay

Income tax Act, Hon'ble High Court of 1961 Bombay

Income tax Act, Hon'ble Supreme Court 1961 of India / CIT(A)

Income tax Act, Hon'ble Supreme Court 1961 of India

Income tax Act, Hon'ble Supreme Court 1961 of India

Income tax Act, Commissioner Of Income 1961 Tax (Appeals)

Attention is also drawn to note B(5) in Schedule J.

10. The company has accumulated losses of Rs. 21,44,26,293/- at the end of the financial year, which is more than fifty percent of its net worth. The company has incurred cash loss Rs. 1,57,87,622/- for the financial year and Rs. 5,52,55,265/- during the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, the company has defaulted in repayment of dues to financial institutions and banks during the year as under. During the year banks have rescheduled its loan to the company in the form of deferring its installments.

Name of Bank & Amount due Due date Date of Facility payment

State Bank of Patiala Rs. 1000015 30th Sept. 24th (USD 22090) 2010 Dec.2010

State Bank of Patiala Rs. 4166675 31st Mar. 12th May (USD 92490) 2011 2011

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

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

14. The company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the company in its own name.

15. The company has given corporate guarantee against borrowings of one of its subsidiaries. According to information explanations given to us, and the representations made by the management, the terms and conditions of guarantee are not prejudicial to the interest of the company.

16. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company as on March 31, 2011, in our opinion, there are no funds raised on a short term basis which have been used for long term investment

18. During the year, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. In our opinion and according to the information and explanation given to us, the company has not issued any secured debentures during the period covered by our report.

20. The Company has not raised any money by public issue during the year. Accordingly clause 4(xx) of Companies (Auditor's Report) Order 2003 is not applicable to the company.

21. In our opinion and according to the information and explanation given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

For V. SankarAiyar & Co. Chartered Accountants Firm Regn. No. 109208W Arvind Mohan Partner Membership No. 124082

Place Mumbai Dated 17thJune, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of SADHANA NITRO CHEM LIMITED as at 31st March, 2010 and alsc the annexed Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on the 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 the audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred to in paragraph 3 above.

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

b. In our opinion proper Books of Account as required by Law have been kept by the Company so far as it appears from our examination of such books.

c. The Balance Sheet, Profit & Loss Account referred to in this report are in agreement with the Books of Account.

d. In our opinion Balance Sheet and Profit & Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to sub-sections 3(C) of Section 211 of the Companies Act, 1956.

e. Based on the representations; made by the Directors and taken on record by the Board of Directors of the Company and the information and explanations given to us, none of the Directors is, as at 31st March, 2010, prima-facie disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f. Without qualifying we draw attention to note B(1) regarding accumulated losses and Note B(2) of Schedule (J) regarding non provision in respect of diminution in value of investment, loans and guarantee provided to one of its subsidiaries.

g. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read along with notes on Accounts and the Accounting Policies give the information required by the Companies Act, 1956, in the manner so required and read in conjunction with all other notes thereon give a true and fair view.

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010.

ii) in the case of the Profit & Loss Account, of the loss for the year ended on that date. and

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



ANNEXURE TO THE AUDITORS REPORT

Referred to in Paragraph 3 of our report of even date.

1. In respect of its fixed assets :

a. The company has maintained records showing particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories :

a. As explained to us, inventories have been physically verified by the management a. regular intervals during the year.

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

c. The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to/ from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, we report that :-

a. During the year company has not granted any loans to parties concerned in registered maintained u/s 301 of Companies Act, 1956. In respect of existing loans given, the maximum amount outstanding at any time during the year is Rs. 5,44,34,699/- and the year end balance is Rs. 2,26,95,476/-.

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

c. Principal on the said loan is repayable on demand. During the year Rs. 3,72,99,379/- has been received. With regard to interest the same is under negotiation with the party.

d. According to information and explanations provided to us, we are of the opinion that reasonable steps are being taken by the company in recovering the interest due for the year.

e. The company has taken loans from one Director, three companies and one party aggregating to Rs. 2,51,70,396/-. These loans have maximum balance of Rs. 2,54,51,652/- having an outstanding year end balance of Rs. 1,84,63,476/-.

f. In our opinion and according to the information and explanations given to us, the rate of interest, wherever applicable and other terms and conditions on which the loans are given are not prima- facie prejudicial to the interest of the company.

g. The company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods & services. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Company Act, 1956 :

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

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

6. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Section 58A of the Companies Act and the rules framed thereunder, and also the directives of Reserve Bank of India with regard to acceptance of deposits. The company has not accepted any deposits from small depositors as defined under Section 58AA of the Companies Act. Since the company has not defaulted in repayments of deposits, obtaining any order from the national company law tribunal does not arise.

7. On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that, the internal audit functions carried out by a firm of chartered accountant appointed by the management is commensurate with the size of the company and the nature of its business.

8. The Central Government has prescribed maintenance of cost records under section 209(1) (d) of the Companies act, 1956 in respect of one of the products, manufactured by the company. We have broadly reviewed the accounts and records of the company and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9. In respect of statutory dues :

a. According to the records, there has been no dalay in depositing dues to Investor Education and Protection Fund and Wealth Tax. There has generally been delays by the company in depositing undisputed statutory dues including provident fund, employees state insurance income-tax, Sales Tax, Customs duty, Excise duty, cess, Service tax and other statutory dues with the appropriate authorities. There are no other undisputed amounts payable in respect of the aforesaid dues as at 31st March, 2010 for a period of more than six months from the date of becoming payable.

Nature of Nature of Total(Rs.) Period it Due date Date of statutory Dues relates to payment

Income Tax Tax Deducted 9,63,216 April To 7th day of the 3rd May,

Act 1961 at source September following month 2010

2009 from the month of deduc- tion

b. According to the records of the company, there are no disputed statutory dues on account of Income Tax, Sales Tax, Service Tax, Excise Duty, and cess remaining unpaid as on 31st March, 2010.

10. The company has accumulated losses at the end of the financial year, which is more than fifty percent of its net worth. The company has incurred Rs. 5,52,55,265/- as cash loss for the financial year and Rs. 6,97,90,311/- during the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, the company has defaulted in repayment of dues to financial institutions and banks during the year as under. During the year banks have rescheduled its loan to the company in the form of deferring its installments.

Name of Bank & Facility Amount due Due date Date of payment

Exim Bank Term Loan Rs. 26,12,567 15th March, 2010 27th April, 2010 (USD 61,294.66)

Axis Bank Term Loan Rs. 65,62,500 5th January, 2010 18th February, 2010

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

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

14. The company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the company in its own name.

15. The company has given corporate guarantee against borrowings of one of its subsidiaries. According to information explanations given to us, and the representations made by the management, the terms and conditions of guarantee are not prejudicial to the interest of the company.

16. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company as on 31st March, 2010, in our opinion, there are no funds raised on a short term basis which have been used for long term investment

18. During the year, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. In our opinion and according to the information and explanation given to us, the company has not issued any secured debentures during the period covered by our report.

20. The Company has not raised any money by public issue during the year. Accordingly clause 4(xx) of Companies (Auditors Report) Order 2003 is not applicable to the company.

21. In our opinion and according to the information and explanation given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

For V. Sankar Aiyar & Co.

Chartered Accountants

Firm Regn. No. 109208W

Arvind Mohan

Place : Mumbai Partner

Dated : 29th July, 2010 Membership No. 124082

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