Tarini International Ltd Auditors Report.

The Members of TAR1N1 INTERNATIONAL LIMITED Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of TARINI INTERNATIONAL LIMITED ("the Company"), which comprise the Balance sheet as at March 31, 2018. the Statement of profit and loss, cash flow statement for the year then ended, and a summary of 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 and presentation 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 accoidance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with relevant Rules issued thereunder. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fail 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 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 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 financial statements.

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

Basis for qualified opinion

(a) The company has made certain advances amounting to Rs. 100 Lakhs during the financial year 2014-15 for which documents related to such advances given by the company were not made available as the documents were impounded by the income tax authorities as mentioned in note no 25 of the financial statements. Further, confirmation from the parties including mentioned hereinabove as at end of the year was not found on records. In view of non-availability of related documents and other alternate audit evidence to corroborate the managements assessment of recoverability of these advances, we are unable to comment on the extent to which these balances are recoverable.

(b) We draw attention to note 30 to Financial Statement regarding the investment amounting Rs.68,00,000 in a subsidiary, which has suffered recurring losses and has a net capital deficiency. The financial statements of that subsidiary have been prepared assuming that the Company will continue as a going concern. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts that might result that the subsidiary be unable to continue as a going concern.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of matter described in Basis for qualified opinion paragraph, the 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2018;

(b) in tire case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date, and

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

Emphasis of Matters

1. We draw attention to the note 20 of the standalone financial statements, in respect of trade receivables and trade payables external confirmations of the balances were not obtained by the Company. Management does not expect any material adjustment in respect of these balances. Due to non-availability of confirmation of balances, we are unable to quantify the impact, if any, arising from the confirmation of balances.

2. We draw attention to the note 29 of the standalone financial statements regarding the advance made of Rs. 59.16 Lakhs (equivalent Euro - 80,000/-) as share application money during the year 2015-16, towards acquisition of 51% shares of HPWE GmbH. Against such payment, share has not been allotted as the company could not make full payment.

3. The company has given the collateral guarantee for the loan taken by its associate company / directors & loans / advances granted amounting to Rs. 1873.13 Lakhs (as on 31/03/2018) to group companies / associated companies in which directors are interested; the company is yet to comply within the provisions of section 186 of the Companies Act, 2013.

Our Opinion is not qualified in respect of these matters.

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 sub-section (I I) of section 143 of the Act, we give in the Annexure - A, a statement on the matters specified in the paragraph 3 and 4 of the Order.

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

a. we have sought and except for the matters described in the Basis for qualified opinion paragraph, 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 effects of the matter described in the Basis for Qualified Opinion paragraph, 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 and proper returns adequate for the purpose of our audit.

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

d. except for the possible effect of the matters described in the Basis for qualified opinion paragraph, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. on the basis of the written representations received from the directors as on 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;

f. with respect to the adequacy of 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. in our opinion and to the best of our information and according to the explanation given to us, we report as under 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:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. Refer Note 27 & 28 to the Financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the investor Education and Protection Fund by the Company.

For V C G & CO.

Chartered Accountants

Finn Registration No.021837N •

V1SHAL CH ANDWA GUPTA

Partner

MernbersmjTNo. 093908

Place: New Delhi Dale: May 30, 2018

ANNEXURE - "A" REFERRED IN INDEPENDENT AUDITORS REPORT OF EVEN DATE

The Annexure referred to paragraph (1) in our Independent Auditors Report to the

members of the Company on the financial statements 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 fixed assets.

b. A major portion of the fixed assets has been physically verified by the management during the year pursuant to a programme for physical verification of fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanations provided to us, no material discrepancies were noticed on such verification.

c. According to the information and explanations provided to us, title deeds of

immovable properties are held in the name of the company.

ii. As per the information and explanations provided to us, the company does not have any inventory; therefore, the clause 3 (ii) (a), (b) & (c) of the Companies (Auditors Report) Order, 2016 is not applicable to the company.

iii. According to the information and explanations provided to us, the Company has granted interest bearing unsecured loan, to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. In respect of such loans;

a) In our opinion, the terms and conditions of the loans granted by the company to 6 group companies aggregating to Rs. 1198.69 Lakhs as at March 31, 2018 are not prejudicial to the interest of the company.

b) The schedule of repayment of principal and payment of interest has not been stipulated, hence, we are unable to comment as to whether the repayment of principal and payment of interest is regular.

c) As the schedule of repayment of principal and payment of interest has not been stipulated, we are unable to comment whether any amount is overdue and whether reasonable steps have been taken by the company for recovery of principal and interest thereupon.

iv. According to the information and explanations provided to us, the company has granted the loans, made investment, provided guarantees which outstanding as on March 31,2018. The company has not complied with the provisions of section 186 of the Companies Act, 2013.

v. According to the information and explanations provided to us, the Company has not accepted any deposit as per the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under. No order against the Company has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal. Therefore, the clause 3(v) of Companies (Auditors Report) Order, 2016 is not applicable.

vi. According to the information and explanations given to us, the Company does not covered under specified category for the maintenance of cost records under Sub Section (1) of Section 148 of the Companies Act, 2013 as prescribed by the Central Government, therefore, clause 3 (vi) of the Companies (Auditors Report) Order, 2016 is not applicable to the company.

vii. a. According to the records of the company and Information & explanation provided to

us, the Company, during the year, is generally regular in depositing undisputed statutory dues including provident fund, income tax, service tax and other statutory dues, as applicable with the appropriate authorities except Rs. 11.59 Lakhs towards Service tax,Rs.39.90 lakhs towards Income Tax & Rs 0.14 Lakhs towards Goods & Service tax and which was outstanding as on March 31, 2018 for more than six months.

b. According to the information and explanation given to us, there were no disputed amounts payable in respect of income tax, sales tax, service tax, duty of customs, value added tax or cess as at March 31,2018 except for the following:

s.

No

Name of the Statute Nature of Dues Amount

(Rs.)

Period to which amount relates Forum where dispute is pending
1 Income tax Act Income

tax

16,80,077 A.Y. 2013-14 CIT - Appeals
2 Income tax Act Income

tax

12,26,350 A.Y. 2012-13 CIT - Appeals
3 Income tax Act Income

tax

34,89,680 A.Y.2011-12 CIT - Appeals

viii. In our opinion and according to the information and explanations provided to us, the Company has not defaulted in repayment of dues to any financial institution or bank or Government. The Company has not issued any debentures.

ix. According to the information and explanations provided to us, the company has not raised moneys by way of initial public offer or further public offer (including debt instruments). The Company has taken term loan during the year for business purpose as per the terms of sanction letter dated January 18, 2018 and the amount of such term loan is utilized for the purpose for which it is obtained.

x. According to the information and explanations provided to us, no fraud by the Company or on the Company by its officers or employees have been noticed or reported during the year.

xi. According to the information and explanations provided to us and based on the audit procedures conducted by us, Remuneration has been paid or provided to a director in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act, 2013.

xii. In our opinion and according to the information and explanations provided to us, the Company is not a Nidhi Company, therefore, clause 3 (xii) of the Companies (Auditors Report) Order, 2016 is not applicable to the company.

xiii. In our opinion and according to the information and explanations provided to us, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013, where applicable and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

xiv. According to the information and explanations provided to us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year, therefore, clause 3 (xiv) of the Companies (Auditors Report) Order, 2016 is not applicable to the company.

xv. According to the information and explanations provided to us, the company has not entered into any non-cash transactions with directors or persons connected with them, therefore, clause 3 (xv) of the Companies (Auditors Report) Order, 2016 is not applicable to the company.

xvi. In our opinion and according to the 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 V C G & CO.

Chartered Accountants Finn Registration No.021837N

VISHAL CjMNDRX GUPTA

Partner

MembershipNo. 093908

Place: New Delhi Date: May 30, 2018

ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF TARINI INTERNATIONAL LIMITED

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 Tarini International Limited ("the Company") as of March 31, 2018 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. 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 on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, 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 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 for Qualified Opinion

In our opinion and according to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31,2018:

The Company did not have appropriate internal financial controls over (a) Assessment of impairment in value of long term equity investment and assessment of impairment in value of loans and advances to various parties, (b) Control over reconciliation of Creditors balances or other advances, (c) Control over the statutory compliances, (d) Assessment of expected cash requirement for the timely payment of statutory dues such as Income tax, Service tax, GST, and PF etc.

The inadequate supervisory and review control over Companys process in respect of aforesaid assessment in accordance with the accounting principles generally accepted in India could potentially result in a material misstatement in preparation and presentation of financial statement including the profit/Ioss after tax.

A ‘material weakness is a deficiency, or a combination of deficiencies, in internal financial control 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.

Qualified opinion

In our opinion, except for the possible effects of material weaknesses described in "basis of qualified opinion" paragraph above, 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 on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses 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 for the year ended on March 31, 2018, and these material weaknesses have affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements

For VCG & CO.

Chartered Accountants

Firm Registration No.J021837N ,

VISHAL CRANDRA GUPTA

Partner

MembershipNo. 093908

Place: New Delhi

Date: May 30, 2018