Shrenuj & Company Ltd Auditor Reports

TO THE MEMBERS OF SHRENUJ & COMPANY LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Shrenuj & Company Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Profit and Loss Statement and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Managements Responsibility for the Standalone 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 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 prescribed 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 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 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 thereunder and the Order under section 143 (11) of the Act.

We conducted our audit of the standalone 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 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 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 standalone 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 Board of Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence obtained by us, read with the notes to the financial statements dealing with inventories and current assets, 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, and read with the Other Matters section of our Report, 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 March 31, 2016, and its loss and its cash flows for the year ended on that date.

Other Matters

We draw your attention to the following:

(a) Attention is invited to Point I of Significant Accounting Policies attached to financial statements regarding Inventories which continue to be as Valued, Verified and Certified by the Management. Since the same is technical in nature we have relied on the Managements certificate.

(b) Attention is invited to Note No. 8(b) and 16(b) of Notes to financial statements regarding balances of Receivables and Trade Payables which are subject to Confirmation and reconciliation and netting of receivables against payables to the same party in respect whereof the necessary approvals are pending.

(c) Attention is invited to Notes No. 3(b) of Notes to financial statements dealing with non-payment of amounts overdue on External Commercial Borrowing and 9(c) interest thereon; Note No. 9 on dividend declared and Dividend Distribution Tax being unpaid and Note No. 9(a) regarding Undisputed Statutory dues being outstanding beyond 6 months.

(d) Attention is invited to Notes No. 35 of Notes to financial statements dealing with receivable from Subsidiary Companies and amounts invested therein being stated at their carrying values. Audited / reviewed Financial Statements have not yet been received and hence, we are not able to verify the recoverability of these sums and have therefore relied upon the representation made by the management.

(e) The company has faced severe liquidity pressure resulting in various statutory and other payments being delayed or becoming overdue, including those stated above. However we have been informed that in the Managements opinion, the realisable value of inventories and other assets including overdue assets are expected to be adequate to repay all outstanding liabilities. Based on the said assertion by the Management, these financial statements are prepared on a going concern basis.

Our opinion is qualified / modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

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

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act, as applicable.

e) On the basis of the written representations received from the directors as on 31^st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".

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 as referred to in Note to the standalone financial statements.

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

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company..

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

For Rajendra & Co.

Chartered Accountants (Registration No.108355W)

A. R. Shah

Partner

Membership No.047166 Mumbai

Dated: 28^th May, 2016

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT ON THE STANDALONE FINANCIAL STATEMENTS OF SHRENUJ & COMPANY LIMITED

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and Regulatory Requirements 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 SHRENUJ & COMPANY LIMITED ("the Company") as of March 31, 2016 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. 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.

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 prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 judgement, 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 subject to the notes regarding inventories where we continue to rely only on the verification and valuation made by the management on account of technical issues related thereto. Further internal financial controls on seeking confirmations on Receivables need strengthening.

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.

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, established and put in place a system of internal financial controls over financial reporting. In our opinion such internal financial controls over financial reporting need to be significantly strengthened in order to operate more 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.

For Rajendra & Co.

Chartered Accountants (Registration No. 108355W)

A. R. Shah

Partner

Membership No.:47166 Mumbai

Date : 28^th May, 2016

ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT ON THE STANDALONE FINANCIAL STATEMENTS OF SHRENUJ & COMPANY LIMITED

(Referred to in paragraph 2, under the heading ‘Report on Other Legal and Regulatory Requirements of our Report of even date)

i. In respect of its fixed assets:

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

b) As explained to us, all the fixed assets have been physically verified by the management 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) As per the information and explanations provided to us, title deeds of immovable properties are generally in the name of the Company or in the name of the erstwhile companies which have since been amalgamated into the Company based on an Order of a Court in the past.

ii. As explained to us, inventories have been physically verified at reasonable intervals during the year by the Management and that no material discrepancies were noticed on such physical verification, as certified by the Management. The Industry in which the Company is operating and the nature of its inventories being technical in nature we have relied on the certificate of the Management for reporting under this clause as has been relied upon in earlier years.

iii. In respect of the loans, secured or unsecured, granted by the Company to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013:

a) According to the information given to us in respect of interest free loans granted to subsidiaries having regard to the long term involvement of the Company with its Subsidiaries, we are of the opinion that the other terms and conditions of the said loans are prima facie, not prejudicial to the interest of the Company. However some of the loanees have a negative net worth but the Management is hopeful of recovering the said sums. We have not independently verified the adequacy of the assets in the hands of the loanees to repay the sum and offer no opinion on the Managements assertion of recoverability.

b) The schedule of repayment of principal and payment of interest wherever applicable have been stipulated and repayments of principal amounts and /or receipts of interest have been regular as per stipulations except interest receivable for the year from one subsidiary amounting to Rs. 18.61 (in million).

c) There is an overdue interest amount of Rs 72.55 (in million) receivable from subsidiaries as at the year-end.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities to the extent applicable as the provisions are not applicable in respect of wholly owned subsidiary companies. However the Company has not complied with the provisions of Section 186 of the Companies Act, 2013 as the aggregate amount of investments, loans and guarantees given to the wholly owned subsidiary companies exceed the limits specified in the said section.

v. The company has not accepted any deposit from public during the year. In respect of advances received from the customers against which sales could not be completed within one year continue to be shown as Current Liabilities under the head "Advance Received from the Customers" as in the past.

vi. The provisions of the clause 3 (vi) of the CARO 2016 are not applicable to the Company as the Company is not covered by the Companies (Cost Records and Audit) Rules, 2014.

vii. In respect of statutory dues:

a) According to the records of the Company, 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 have not been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2016 for a period of more than six months from the date of becoming payable are as under:

Sr. No	Name of the Statute	Nature of Dues	Amount (Rs. in million)	Period to which amount relates (Rs. in million)
1	Income Tax Act, 1961	Tax Deducted at Sources	11.27 12.12	FY 2014-15 Upto September, 2015
2	Income Tax Act, 1961	Dividend Distribution Tax	7.85	FY 2014-15
3	Income Tax Act, 1961	Self Assessment Tax	114.73	FY 2014-15
4	Maharashtra Value Added Tax Act, 2002	Sales Tax/VAT	2.16	Upto September, 2015
5	The Municipal Corporation of Greater Mumbai	Property Tax	1.26 3.19	FY 2014-15 FY 2015-16
	TOTAL		236.25

b) Details of dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Value Added Tax which have not been deposited as on March 31, 2016 on account of disputes are given below:

Sr. No	Name of the Statute	Nature of Dues	Amount (Rs. in million)	Period to which the amount relates	Forum where dispute is pending
1.	Income Tax Act, 1961	Income Tax	0.21	FY 2000-01	Commissionner of
			5.37	FY 2001-02	Income Tax (Appeals)
			0.92	FY 2002-03
			2.35	FY 2005-06
			40.17	FY 2009-10
			77.56	FY 2010-11
			0.39	FY 1989-90	Income Tax Appellate
			0.35	FY 1999-00	Tribunal
			40.40	FY 2007-08
			69.44	FY 2008-09
2.	Maharashtra Value Added	Sales Tax/VAT and	0.34	FY 1994-95	Commissioner (Appeals)
	Tax Act, 2002	Entry Tax
	TOTAL		237.50

viii. In our opinion and according to the information and explanations given to us, the Company has defaulted in the repayment of loans or borrowings to financial institutions and banks as under.

Name of the Lenders	Total Amount in default (Rs.in Millions)	Date of default started
Banks:
ICICI Bank- New York (ECB)	46.38	15-Jan-2016
ICICI Bank- New York (ECB)	21.76	ECB Loan delayed payment - Due on 15/07/2015, paid on 27/08/2015
Allahabad Bank	85.74	Various Dates
Andhra Bank	48.16	Various Dates
Bank of Baroda	205.09	Various Dates
Name of the Lenders	Total Amount in default (Rs.in Millions)	Date of default started
Bank of India	517.73	Various Dates
Corporation Bank	59.74	Various Dates
ICICI Bank	639.01	Various Dates
IDBI Bank	87.98	Various Dates
Karnataka Bank	254.78	Various Dates
State Bank of Hyderabad	112.44	Various Dates
State Bank of Patiala	30.77	Various Dates
Standard Chartered Bank	54.32	Various Dates
Syndicate Bank	103.73	Various Dates
Union Bank of India	721.94	Various Dates
Punjab National Bank	325.65	Various Dates
Financial Institution
Housing Development Finance Corporation Limited	40.00	Default in repayment of loan Rs. 40 million. The said loan has been rescheduled on 15/01/2016
Total	3,355.23

The Company does not have any outstanding due from Government and dues to debenture holders.

ix. In our opinion and according to the information and explanations given to us, there are no monies raised by way of debt instruments or term loans during the year.

x. Based on the audit procedures performed and according to the information and explanations given to us by the Management, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year nor have been informed of any such case by the Management. We report that we have not come across any instance of fraud by the Company.

xi. In our opinion and according to the information and explanations given to us, 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 Companies Act, 2013.

xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of Paragraph 3 of the Order is not applicable.

xiii. In our opinion and according to the information and explanations given to us the Companys transactions with its related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013, where applicable, and details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

xiv. During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of Paragraph 3 of the Order is 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 with its directors as covered under section 192 of the Companies Act, 2013and hence reporting under clause (xv) of Paragraph 3 of the Order is not applicable to the Company

xvi. In our opinion and according to information and explanations provided to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For Rajendra & Co.

Chartered Accountants

(Registration No.108355W)

A. R. Shah

Partner

Membership No. 47166

Mumbai

Dated: 28^th May, 2016