Euro Ceramics Ltd Auditors Report.

TO THE MEMBERS OF EURO CERAMICS LIMITED

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

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

Managements Responsibility for the Standalone Ind AS Financial Statements

2. The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards ("Ind AS") specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act.

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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

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

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

5. 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 and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

6. 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 auditors 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 Companys 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 Companys Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

7. 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.

Basis of Qualified Opinion

Our audit opinion is qualified for the following matters:

(a) The Companys current liabilities exceeds its current assets and net worth of the Company has been fully eroded, these events indicate a material uncertainty that casts a significant doubt on the Companys ability to continue as a going concern and therefore it may be unable to realize its assets and discharge its liabilities in the normal course of business. The financial results do not disclose the fact that the fundamental accounting assumption of going concern has not been followed.

(b) We draw attention towards the fact that the Companys financial facilities/arrangements including Term Loans, Working Capital Facilities and Non Fund Based Credit Facilities have expired and the accounts with the Banks have turned into Non Performing Assets.

Some of the bank lenders have initiated legal proceedings against the Company for recovery of their respective debts at the Debt Recovery Tribunal and have taken symbolic possession of the securities u/s. 13(4) of the SARFAESI Act, 2002. However the Company has been able to renegotiate with the secured lenders and arrive at an amicable settlement of its debts. The Company has made the settlement of its total debt outstanding with the secured lenders. Accordingly some of the lenders have been settled completely on one time settlement basis and others have agreed for deferred payment along with some upfront payment based on their respective terms of settlement. In view of the above settlement, the Company has not provided the interest on the outstanding dues payable as per the settlement terms on the outstanding agreed amount of settlement amounting to Rs. 1,119 Lakhs for the year ended March 31, 2018 and the interest amount not provided cumulatively from the date of settlement upto March 31, 2018 was 2,172 Lakhs. Had the same been accounted for, the net loss (after tax) would have decreased and current liabilities for the year ended March 31, 2018 would have increased by that amount. In addition to this, the Company has been continuously incurring substantial losses since past few years and as on March 31, 2018, the Companys current liabilities exceed its current assets by 25,082.40 Lakhs. Further, the net-worth of the Company has fully eroded and the Company had also filed registration u/s. 15(1) of the erstwhile Sick Industrial Companies (Special Provisions) Act, 1985, before the erstwhile Honble Board for Industrial & Financial Reconstruction.

(c) We draw attention towards the fact that the Company has not provided for impairment or diminishing value of its assets/investment as per Ind AS 36 Impairment of Assets as notified under Section 133 of the Companies Act, 2013. The effect of such Impairment or diminishing value has not been quantified by the management and hence the same is not ascertainable.

(d) We draw attention to the fact that financial statements are subject to receipt of confirmation of balances from many of the debtors, loans & advances, investments, banks, sundry creditors and other liabilities. Pending receipt of confirmation of these balances and consequential reconciliations / adjustments, if any, the resultant impact on the financial statements is not ascertainable.

(e) We draw attention to Note No. 34(d) of the Standalone Ind AS financial statement which states that, the Company had imported various Capital Goods and Spares and Consumables for the Capital Goods under the Export Promotion Capital Goods Scheme (EPCG), of the Government of India, through various licenses, at concessional rates of Custom Duty on an undertaking to fulfil quantified exports within a period of eight years from the date of respective licenses.

The Custom Duties so saved amounted to Rs. 30,76,45,374/- and the corresponding Export obligation to be fulfilled amounted to 2,46,11,62,991/-, however as on March 31, 2018, the Export obligation yet to be fulfilled amounted to Rs. 169,19,04,058/-. The stipulated period of 8 years to fulfill Export obligation has already expired and the company is required to pay the said saved Custom Duty together with interest @ 15% p.a. but the same has not been provided in books of accounts by the Company and the final liability is presently unascertainable.

(f) We draw attention to the fact that, as required under Section 203 of the Act the Company is yet to appoint a Company Secretary and the Company is not in compliance with Regulation 6 of LODR which requires Company Secretary to be appointed as Compliance Officer.

(g) We draw attention towards the fact that, in respect of deposits accepted by the Company before the commencement of this Act, within the meaning of section 74 & 75 of the Act and the Rules framed there under, the principal amount of such deposits and interest due thereon remained unpaid even after expiry of one year from such commencement and the Company has not filed a statement within a period of three months from such commencement or from the date on which such payments, are due, with the Registrar details as prescribed u/s.74(1)(a).

(h) We draw attention towards overdue receivables aggregating to Rs. 170 Lakhs as on March 31, 2018, towards purchase of goods included under "Trade Receivables" owed to the Company by its Foreign Customers due for more than 6 months as on March 31, 2018. These balances have not been settled till March 31, 2018. The Company is yet to make an application to the authorized dealer or Reserve Bank of India (RBI) for overdue receivable balances beyond the prescribed time limits in accordance with Foreign Exchange Management Act (FEMA). Any penalties that may be levied by RBI are presently not known and not given effect to in the IND AS financial statements.

(i) The Company has interest free borrowings, classified under Non-Current Financial Liabilities and Current Financial Liabilities which are borrowed from various related parties and other lenders, the repayment terms of which have not been agreed between the Company and the lenders. The Company has considered the amount borrowed to be the fair value and disclosed the same in the financial statements. However in the absence of any repayment terms and interest rate, the amount disclosed may not be the fair value, in accordance with the provisions of Ind AS 109 Financial Instrument and Ind AS 113 Fair Value Measurement. The effect of such treatment has not been quantified by the management and hence the same is not ascertainable.

(j) We draw attention to the facts that the non-ascertainment of complete particulars of dues to Micro, Small and Medium enterprises, if any under MSMED Act, 2006, and provisions towards interest, if any, is not ascertained at this stage which is not in conformity with Ind AS 37-Provision, Contingent Liabilities and Contingent Assets.

(k) We draw attention to Note No. 52 of the Standalone Ind AS financial statement which states that, the Companys non-current investments as at March 31, 2018 include investments aggregating Rs. 143 Lakhs in two of its subsidiaries (of which Rs. 142.50 Lakhs has been provided); and loans as at that date include dues from such subsidiaries aggregating 7,608.46 Lakhs (of which Rs. 3,410 Lakhs has been provided), net amount being considered good and recoverable by the management considering the factors stated in the aforesaid note. Also, attention is drawn toward Note 34(b), which states that the Company has given guarantee for loans taken by Subsidiary Company from bank and the terms and conditions of the same are not prejudicial to the interest of the Company, as per the management. However, these subsidiaries either have accumulated losses and their consolidated net worth is fully eroded or have no transactions. Further, these subsidiaries are facing liquidity constraints due to which they may not be able to realize projections made as per their respective business plans. In the absence of sufficient appropriate evidence, we are unable to comment upon the carrying value of these non-current investments and recoverability of the aforesaid dues and the consequential impact, if any, on the accompanying standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, except for the matters illustrated and described in the Basis of Qualified Opinion 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 of the Company as at March 31, 2018, and its total comprehensive income (comprising of loss and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matter

9. The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2017 and March 31, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by the predecessor auditor who expressed a modified opinion vide reports dated May 30, 2017 and May 30, 2016 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditors Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act ("the Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

(a) We have sought and except for the possible effect of the matter described in the Basis of Qualified Opinion paragraph above, 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) Except for the possible effect of the matter described in the Basis of Qualified Opinion paragraph above, 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, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) Except for the possible effect of the matter described in the Basis of Qualified Opinion paragraph above, in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under section 133 of the Act read with Rules issued thereunder;

(e) The matters described in the Basis of Qualified Opinion paragraph above, in our opinion may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;

(g) 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

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

i. The Company has disclosed the impact, of pending litigations as at March 31, 2018 on its financial position in its standalone Ind AS financial statements Refer Note 34;

ii. The Company did not have any long-term contracts including derivative contracts as at March 31, 2018; and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018; and

iv. The disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from November 8, 2016 to December 30, 2016 which is not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.

For Rasesh Shah & Associates
Chartered Accountants
Firm Registration Number: 108671W
CA Mehul Shah
Partner
Membership Number: 137148
Place : Mumbai
Date : May 29, 2018

"Annexure A" to the Independent Auditors Report

The Annexure A referred to in our Independent Auditors Report to the members of the Company on the standalone Ind AS financial statements of Euro Ceramics Limited for the year ended March 31, 2018, we report that:

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

(b) The property, plant and equipment covering significant value were physically verified during the year by the management at such intervals which in our opinion, provides for the physical verification of all the property, plant and equipment at reasonable intervals having regard to the size of the Company and nature of its business. According to the information and explanations given to us, no material discrepancies were noticed on such verification;

(c) According to the information and explanations given to us, the title deeds of immovable properties, as disclosed in Note 3 to the standalone Ind AS financial statements, are held in the name of the Company, except for the following:

Sr. No. Particulars Gross Block as at March 31, 2018 Net Block as at March 31, 2018 Remark
(Amount in Rs.) (Amount in Rs.)
(1) 2.17 Acres 0.95 Lakhs 0.95 Lakhs Registration with Government Authorities pending
(2) 48.24 Acres 34.89 Lakhs 34.89 Lakhs Yet to be converted into Non- Agricultural from Agricultural purpose or there are discrepancies in respect of measurement as compared to Government Records

ii. In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.

iii. According to the information and explanation given to us, the Company has granted unsecured loans to party covered in the register maintained under Section 189 of the Companies Act.

(a) In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loan have not been specifically defined and hence we are unable to comment as to whether the same are prejudicial to the interest of the Company or not.

(b) In our opinion and according to the information and explanations given to us, there are no stipulations made regarding repayment of principal amount and interest in respect of loans granted by the Company to parties covered in the register maintained under Section 189 of the Companies Act, 2013. Hence we are unable to comment as to regularity of repayments of principal and interest amount. In absence of specific stipulations for repayment of principal and interest we are unable to comment on the overdue amounts in respect thereof and steps taken for their recovery.

iv. In our opinion and according to the information and explanations given to us, the Company has generally complied with the provisions of Section 185 and 186 of Companies Act, 2013 with respect to the loans, investments, guarantees and security.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits during the year from the public within the meaning of Section 73 & Section 76 of the Companies Act, 2013 and the Rules framed there under to the extent notified. Further in respect of deposits accepted by the company before the commencement of this Act, within the meaning of Section 74 & Section 75 of the Companies Act, 2013 and the Rules framed there under to the extent notified, the principal amount of such deposits and interest due thereon remained unpaid even till date. The Company had filed an application within the meaning of Section 74(2) with the National Company Law Tribunal requesting to allow further time for compliance, however the National Company Law Tribunal has dismissed the extension request.

vi. The Central Government has not specified maintenance of cost records under sub-Section (1) of Section 148 of the Act, in respect of Companys products. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

vii. (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion the Company has been facing liquidity stress since past few years due to which there were delays in depositing various undisputed statutory dues with appropriate authorities including provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable and there are no arrears of outstanding statutory dues as at the year-end for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us and the records of the Company examined by us, there are no dues of income tax, sales tax, service tax, duty of excise, value added tax, as at March 31, 2018, which have not been deposited on account of any dispute. However there are dues of duty of customs which have not been deposited on account of a dispute which are as under:

Name of the Statute Nature of Dues Amount Period to which the amount relates Forum where the dispute is pending
Customs Act, 1962 Custom Duty 1185.11 F.Y. 2005- 2013 High Court of Mumbai
Customs Act, 1962 Custom Duty 1782.77 F.Y. 2006- 2014 High Court of Mumbai
Customs Act, 1962 Custom Duty 28.65 CESTAT, Ahmedabad
Central Excise Act, 1961 Excise Duty 171.88 High Court of Gujarat
The Gujarat Value Added Tax Act, 2003 Sales Tax / VAT 13.96 F.Y. 2012- 2013 Joint Commissioner Of Sales Tax (Appeal)( Rajkot)
The Gujarat Value Added Tax Act, 2003 Sales Tax / VAT F.Y. 2013- 2014 Joint Commissioner Of Sales Tax (Appeal)( Rajkot)

(c) There were no amounts required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.

viii. In our opinion and according to the information and explanations given to us the Company had defaulted in repayment of loans and interests dues to the banks. Some of the bank lenders have initiated legal proceedings against the Company for recovery of their respective debts at the Debt Recovery Tribunal and have taken symbolic possession of the securities u/s. 13(4) of the SARFAESI Act, 2002. However the Company has been able to renegotiate with the secured lenders and arrive at an amicable settlement of its debts. The Company has made the settlement of its total debt outstanding with the secured lenders. Accordingly some of the lenders have been settled completely on one time settlement basis and others have agreed for deferred payment along with some up-front payment based on their respective terms of settlement. In view of the above settlement, the Company has not provided the interest on the outstanding dues payable as per the settlement terms on the outstanding agreed amount of settlement amounting to Rs. 1,119 Lakhs for the year ended March 31, 2018 as given under:

Name of the Bank Principal Outstanding as on the date of turning NPA Agreed Settlement Amount Amount Paid upto March 31, 2018 as per settlement terms Interest Outstanding as per agreed terms of settlement as on March 31, 2018
(In Lakhs) (In Lakhs) (In Lakhs) (In Lakhs)
State Bank of India 25,598.96 14,500.00 6,405.10 1,557.95
The Cosmos Co-Op Bank Ltd 5,805.03 4,000.00 1,482.00 613.25
Total 31,403.99 18,500.00 7,887.10 2,171.20

ix. In our opinion, the Company has applied the term loans for the purposes for which these were raised. The Company did not raised money by way of initial public offer/ further public offer (including debt instruments) during the year.

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

xi. The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

xiii. In our opinion and according to the information and explanations given to us the Company is incompliance with Section 177 and 188 of the Act, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable Ind AS.

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

xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to its Directors and hence provisions of Section 192 of the Act are not applicable.

xvi. The company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934 and hence reporting under clause 3 (xvi) of the Order are not applicable to the Company.

For Rasesh Shah & Associates
Chartered Accountants
Firm Registration Number: 108671W
CA Mehul Shah
Partner
Membership Number: 137148
Place : Mumbai
Date : May 29, 2018

"Annexure B" to the Independent Auditors Report

Referred to in paragraph 11 (g) of the Independent Auditors Report of even date to the Members of Euro Ceramics Limited on standalone financial statement for the year ended March 31, 2018.

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 Euro Ceramics Limited ("the Company") as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys 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 ("the Guidance Note) issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys 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 ("the Act").

Auditors Responsibility

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors 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 Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companys 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 companys 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 companys 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.

Basis of Qualified Opinion

In our opinion, according to the information and explanations given to us and based on our audit procedure performed, the following material weakness has been identified in the operating effectiveness of the Companys internal financial controls over financial reporting as at March 31, 2018:

The Companys internal financial controls in respect of supervisory and review controls over process of determining of (a) carrying value of the Companys non-current investments in its subsidiaries; and (b) recoverability of loans, due from such subsidiaries were not operating effectively. Absence of aforesaid assessment in accordance with the accounting principles generally accepted in India could potentially result in a material misstatement in the carrying value of investments in such subsidiaries and the aforesaid dues from such subsidiaries and consequently, could also impact the profit (financial performance including other comprehensive income) after tax.

A material weakness is a deficiency, or a combination of deficiencies, in internal financial controls over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.

Opinion

In our opinion, except for the possible effects of the material weakness described above in the Basis for Qualified Opinion paragraph, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company as at and for the year ended March 31, 2018, and the material weakness has affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

For Rasesh Shah & Associates
Chartered Accountants
Firm Registration Number: 108671W
CA Mehul Shah
Partner
Membership Number: 137148
Place : Mumbai
Date : May 29, 2018