Hiran Orgochem Ltd Auditor Reports

To the Members of

Hiran Orgochem Limited

Report on the Financial Statements

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

Managements Responsibility for the Financial Statements

The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the act) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014. This responsibility 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; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. 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. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the financial statements, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companys management and Board of Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

1. During the year, all the fixed assets of the company (except Motor Car) are sold by asset management company appointed by State bank of India, including the land & factory building due to companys inability to repay the loan. However, no documentary evidence so as to confirm the sale value was available with the company. Also, there are various legal cases pending against the company and its directors under SARFASEI Act, 2002 and Negotiable Instruments Act, 1881. So we are unable to comment on whether company can operate as going concern.

2. Company has exceeded the limit specified in Section 186 of Companies Act, 2013 as regards to lending money.

3. Company has not accounted for Foreign exchange gain / loss as required by Account Standard 11 relating to "Foreign Exchange Transactions".

4. Sales recognized by the company were not in conformity with the sales tax returns filed by the company. Sales as per books of accounts were 42.22 lakhs however sales as per returns filed by the company was Nil.

5. During the year Management has provided for doubtful loans and advances for Rs. 96.50 lacs. Company has also written off Short term loans and advances aggregating to Rs. 202.07 lakhs (net of loans and advances written back). We were not provided with any documentary evidence or basis on which management has relied and classified these loans as doubtful or writing it off.

6. Company has not appointed Chief Financial Officer and a whole time Company Secretary as on 31 March, 2015 as required by Section 203 of Companies Act, 2013.

7. We have been informed that there are huge outstanding demands, disputed as well as undisputed, against the company with regards to Sales Tax, Income Tax, Excise Duty, Wealth Tax, etc. However, the necessary documentary evidences / information were not made available by the management. Hence we are unable to quantify the same. Loss of the Company is understated to that extent.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and Fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March 2015, its Loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order.

As required by section 143(3) of the Act, we further report that:

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

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

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

d) In our opinion, the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014 except for Accounting Standard 11 relating to "Foreign Exchange Transactions";

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

f) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:

i. The Company has not disclosed the full impact of pending litigations on account of Excise Duty, Income Tax, Sales Tax & other matters on its financial position in its financial statements.

ii. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise

iii. The Company is yet to transfer unclaimed dividends outstanding for a period more than seven years aggregating to Rs. 4.22 lakhs to the Investor Education and Protection Fund.

For MVK Associates

Chartered Accountants

Firm Reg. No: 120222W

Sd/-

CA. Kapil Gupta

Partner

Membership No. : 047911

Place : Mumbai

th

Date : 30 May, 2015

ANNEXURE TO THE AUDITORS REPORT

Annexure referred to in our Report of even date to the members of Instant Holding Limited on the accounts of the company for the year ended 31st March, 2015

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

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

(b) As explained to us, all the fixed assets at factory were in possession of the asset reconstruction company (ARC) during the whole year and hence could not be physically verified. These assets were subsequently sold by the ARC. Other fixed assets have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification;

ii. (a) The Physical verification of inventories have been conducted at reasonable intervals by the management;

(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 reasonable and adequate in relation to size of the company and the nature of its business.

(c) Company is maintaining proper records of Inventory and no material discrepancies found during the year.

iii. (a) The company has granted unsecured interest free loan to one company covered in the register maintained under section 189 of the Companies Act.

(b) In the case of loan granted to the party listed in the register maintained under section 189 of the Act, the loan is interest free and principal amounts , are being repaid regularly in accordance with the agreed contractual terms.

(c) There are no overdue amount of more than Rupees one lakh in respect of loans granted to the party listed in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, there is no adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services.

v. The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013

vi. As informed to us, the Central Government has not prescribed maintenance of cost records under subsection (1) of Section 148 of the Act

vii. (a) According to the information and explanations given to us and based on the records of the company examined by us, the company is irregular in depositing the undisputed statutory dues, including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, with the appropriate authorities in India;

According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears, as at March 31, 2015 for a period of more than six months from the date they became payable.

Name of Liability	Amount due for more than 6 months as on 31.03.2015
Service Tax	2,29,503
Central Sales Tax	31,315
Professional Tax	9,575
Provident fund	16,774
Maharashtra VAT	1,38,87,577
Income Tax	46,44,378
Wealth Tax	7,554
Investor Education	4,22,543
and Protection Fund

(b) We have been informed that there are huge outstanding disputed demands, against the company with regards to Sales Tax, Income Tax, Excise Duty, Wealth Tax, etc. However, the necessary documentary evidences / information were not made available. Hence we are unable to quantify the same. Loss of the Company is understated to that extent.

(c) The Company is yet to transfer unclaimed dividends outstanding for a period more than seven years aggregating to Rs. 4.22 lakhs to the Investor Education and Protection Fund.

viii. The company does have accumulated losses at the end of the financial year and has incurred cash losses in the financial year and in the immediately preceding financial year.

ix. The company examined by us and as per the information and explanations given to us, the company has defaulted in repayment of its dues to the banks and financial institutions and overdue position to financial institutions and banks are as under.

Name of Bank/ Institution	Amount Overdue	Period of Default
State Bank of India*	Rs. 45,36,42,082	Loan has been recalled on 23.12.2011
State Bank of Patiala	Rs. 15,42,88,358	Loan has been recalled on 28.01.2012
SICOM Ltd.	Rs. 2,83,90,199	Loan has been recalled on 23.01.2012

 

* Total outstanding	5,601.42 lakhs
Less: Amount recovered from selling off all factory assets of the Company by the ARC	(1,065.00 lakhs)
Net outstanding	4,536.42 lakhs

x. The Company has given corporate guarantee of

Rs. 2700 Lacs in the earlier period and is continuing for the loans taken by Actgen Pharma Private Limited from Bank of India. The account of Actgen Pharma Private Limited with the bank has been classified as NPA w.e.f. 30.06.2013. Also, networth of Actgen Pharma Private Limited is completely eroded. However, company is of the view that assets of Actgen Pharma Private Limited are sufficient to meet the liabilities of the bank and management does not foresee any development of their liability on the company.

xi. In our opinion, and according to the information and explanations given to us, the company has not raised any term loans during the year.

xii. We are unable to comment on occurrence of any material fraud on or by the Company due to lack of documentary evidence provided for our verification as envisaged above.

For MVK Associates

Chartered Accountants

Firm Reg. No: 120222W

Sd/-

CA. Kapil Gupta

Partner

Membership No. : 047911

Place : Mumbai

Date : 30 May, 2015