Jainex Aamcol Ltd Auditors Report.

TO THE MEMBERS OF JAINEX AAMCOL LIMITED

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of JAINEX AAMCOL LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and the 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 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 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 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.

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 thereunder.

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 materials 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 control relevant to the companys preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companys 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.

OPINION

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors Report) Order 2016 ("the Order") issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(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 aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with relevant Rules issued there under.

e) On the basis of written representations received from the Directors as on 31st March, 2017 and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2017 from being appointed as a director in terms of section 164(2) of the Act.

f) With regard 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 Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us ;

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note No. 25(8) to the financial statements,

ii. the Company does 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. there has been no occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.

iv. The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016. Based on audit procedures and relying on the management representation, we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management – Refer Note No. 25(14) to the financial statements.

for R. A. SINGH & ASSOCIATES

CHARTERED ACCOUNTANTS

FRN 110271W

R. A. SINGH

(PROPRIETOR)

M. No. 014098

Place : Mumbai

Dated : 30th May, 2017

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

(Referred to in Paragraph 1 under Report on Other Legal and Regulatory Requirements, of our report of even date)

Report on Companys (Auditors Report) Order, 2016 (the Order) issued by the Central government in terms of Section 143 (11) of the Companies Act, 2013 (the Act) of JAINEX AAMCOL LIMITED (the Company)

======================================================= 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) In respect of the Companys Fixed Assets

(a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets other than furniture & fixtures and office equipments.

(b) All the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. According to information and explanation given to us, no material discrepancies were noticed on such verification.

(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) In respect of the Companys Inventories

As explained to us, the inventories except goods in transit were physically verified during the year by the management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) In respect of the Companys Loans granted

The company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnership or other parties covered in the register maintained under section 189 of the the Act. Accordingly, clause (iii) of the Order is not applicable to the Company.

(iv) In respect of the Companys Loans, Investments, Guarantees and Securities

The company has not granted any loans, made investments, provided guarantees and securities as per the provisions of sections 185 and 186 of the Act. Accordingly, the clause (iv) of the Order is not applicable to the company.

(v) In respect of Loans/Deposits taken

The Company has not accepted any deposits during the year and does not have any unclaimed deposits as at March 31, 2017 and therefore, the provisions of the clause 3(v) of the order are not applicable to the Company. However, the Company has taken loans from related parties viz. a body corporate share holder and a firm in which directors are interested.

(vi) In respect of Cost Audit

The Central government has not prescribed the maintenance of cost records under section 148(1) of the Act for any of the products/services dealt by the company. Accordingly, the clause (vi) of the Order is not applicable to the company.

(vii) In respect of Statutory Dues

According to the information and explanation given to us

(a) The company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, service tax, customs duty, excise duty, value added tax(VAT), cess and any other material statutory dues applicable to it with 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(VAT), cess and any other material statutory dues in arrears as at 31st March, 2017 for a period of six months from the date they became payable.

(c) Details of dues set out herein below in respect of customs duty which has not been deposited as at 31st March, 2017 by the company with the appropriate authorities on account of disputes.

Name of Statute Nature of Dues Amount in Rs. lacs Amount in Rs. lacs paid under protest Period to which the amount relates Forum were disputes is pending
Customs Custom Duty 7.14 2.00 2008-2009 Commissioner of
Customs – (Appeals)

There were no dues of income tax, sales tax (VAT), Service Tax, Excise duty and Cess which have not been deposited as at 31st March, 2017 on account of dispute.

(viii) In respect of default in repayment of loans or borrowings from banks/financial institutions/debenture holders and government In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of term/corporate loans installments of Bank of India as mentioned below.

(Rs. In lacs)
Sr. No. Financial year Period/Type Due Date Loan Type Amount of default Delay – till date of this report
1. 2017 For the whole year Term Loan 15 43.22 Monthly installments w.e.f. 30/04/16 to 31/03/17 resulting in delay from 1 month to 13 months as the case may be respectively as per sanction but not recovered by bank.
--do-- Interest on Tl15 18.91- -do--
Total (1) 62.13
2. 2017 31.01.2017 Term Loan 14 6.00 Quarterly installment -
Less than four months
Total (2) 6.00
3. 2017 31.03.2017 Corporate Loan 5.00 Less than one month
31.03.2017 Interest on Less than one month
corporate loan 2.42
Total (3) 7.42
Total 1 to 3) 75.55

(ix) In respect of money raised

The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans. Accordingly, the clause (ix) of the Order is not applicable to the company.

(x) In respect of Fraud

To the best of our knowledge and according to the explanations given to us, no fraud by the company and no fraud on the company by its officers or employees has been noticed or reported during the year.

(xi) In respect of Managerial Remuneration

In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In respect of Nidhi Companies

The Company is not a Nidhi Company. Accordingly, the clause (xii) of the Order is not applicable to the company.

(xiii) In respect of transactions with related parties

In our opinion and according to the information and explanations given to us, the Company is in compliance with section 177 and 188 of the Act, wherever applicable for all the transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) In respect of preferential allotments, private placement of shares and convertible debentures

During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. Accordingly, the clause (xiv) of the Order is not applicable to the company.

(xv) In respect of non cash transactions under section 192

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. Accordingly, the clause (xv) of the Order is not applicable to the company.

(xvi) In respect of registration as NBFC under section 45-IA of RBI Act, 1934

The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the clause (xvi) of the Order is not applicable to the company.

For R.A. SINGH & ASSOCIATES

CHARTERED ACCOUNTANTS

FRN 110271W

R A SINGH

(PROPRIETOR)

M. No. 014098

Place : Mumbai

Dated: 30th May, 2017

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT

(Referred to in Paragraph 2(f) under (Report on Other Legal and Regulatory Requirements sections, of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting 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 JAINEX AAMCOL LIMITED (the Company) as of March 31, 2017 in conjunction with our audit of the 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 issued by the Institute of Chartered Accountants of India (the Guidance Note). 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 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 Standards on Auditing prescribed under Section 143(10) of the Act and the Guidance Note, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with the 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 controls 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, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.

For R.A. SINGH & ASSOCIATES

CHARTERED ACCOUNTANTS

FRN 110271W

R A SINGH

(PROPRIETOR)

M. No. 014098

Place : Mumbai

Dated :30th May, 2017