Wanbury Ltd Auditors Report.

TO,

THE MEMBERS OF,

WANBURY LIMITED

Report on Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of WANBURY LIMITED ("the Company"), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss including Other Comprehensive Income (Loss), the Cash Flow Statement 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

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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income (loss), 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) prescribed 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 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

Our responsibility is to express an opinion on these standalone Ind AS 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 of the standalone Ind AS 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 Ind AS financial statements are free from material misstatement.

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.

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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2018, and its Loss, other comprehensive income (loss), its cash flows and changes in equity and for the year ended on that date.

Material Uncertainty Related to Going Concern

In spite of negative net worth of the Company, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in Note no.64 of the financial statements.

Our opinion is not modified in respect of the same.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a) The Company has given guarantee in respect of Exim Banks investments of USD 60 Lakhs (Rs. 3,902.64 Lakhs) in Wanbury Holding B.V., a subsidiary of the Company which has been invoked. The said dues being part of the CDR Scheme will be accounted upon arriving at mutually agreed terms of settlement as stated in Note 43(a) of the financial statements.

b) Note No. 46 of the financial statements regarding the status of merger of erstwhile PPIL with the Company.

Our opinion is not modified in respect of these matters.

Other Matters

The comparative financial information for the year ended 31 March 2017 and the transition date opening balance sheet as at 1 April 2016, prepared in accordance with Ind AS included in these standalone financial statements, are based on the previously issued statutory financial statements for the year ended 31 March 2017 and 31 March 2016, respectively prepared in accordance with Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) which were audited by the predecessor auditor, whose reports dated 30 May 2017 and 18 May 2016, respectively, expressed unmodified opinion on those standalone financial statements, and have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have been audited by us.

Our opinion is not modified in respect of this matter.

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 Section 143(11) 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 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 Statement of Profit and Loss including other comprehensive income (loss), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act read with relevant rules issued thereunder;

e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 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 with reference to financial statements 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, if any, of pending litigations as at 31 March 2018, on its financial position in its standalone Ind AS financial statements - Refer Note 42 to the standalone Ind AS financial statements;

ii. The Company has not entered into any long-term contracts including derivative contracts requiring provision under the applicable law or Ind AS, for material foreseeable losses;

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

iv. The disclosures in the financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made since they do not pertain to the financial year ended 31 March 2018. However, amounts as appearing in the audited standalone financial statements for the year ended 31 March 2017 have been disclosed - Refer note 68 to the standalone Ind AS financial statements.

For V. Parekh & Associates
Chartered Accountants
ICAI FRN 107488W
Rasesh V. Parekh
Partner
Mumbai, 10th August, 2018 M. No. 38615

ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT

(The Annexure referred to in para 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the Members of WANBURY LIMITED on the standalone Ind AS financial statements for the year ended 31 March 2018.)

1) In respect of its fixed assets:

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

b) As informed to us by the management, the Company has a policy of physically verifying fixed assets in a phased manner over a period which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informed that there were no material discrepancies noticed on such verification and the same has been properly dealt with in the books of account.

c) According to the information and explanations given to us and the title deeds/lease deeds and other records examined by us, we report that the title deeds/lease deeds in respect of all the immovable properties of land which are freehold, immovable properties of land that have been taken on lease and buildings, as disclosed in Note 8 - fixed assets in the standalone Ind AS financial statements, are held in the name of the Company or in the erstwhile name of the Company or in the name of the transferor companies which have merged into the Company, as at the balance sheet date.

2) According to the information and explanation given to us, the inventories have been physically verified by the management at reasonable intervals during the year except for stocks with third parties for which most of the confirmation certificates have been obtained by the Company. The discrepancies noticed on such physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account.

3) According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured, to companies, firms, Limited Liability Partnership or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, paragraph 3(iii) of the Order is not applicable to the Company.

4) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013.

5) According to the information and explanations given to us, the Company has not accepted any deposits as per the directives issued by the Reserve Bank of India under the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.

6) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Companies Act, 2013 in relation to products manufactured, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, made a detailed examination of the records with a view to determine whether they are accurate and complete.

7) According to the information and explanations given to us:

a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues with the appropriate authorities during the year. There are no undisputed amounts payable in respect of aforesaid material statutory dues as at 31 March 2018, which were in arrears for a period of more than six months from the date they became payable except statutory dues of erstwhile PPIL referred to in note 46 of the financial statements.

b) On the basis of our examination of the documents and records of the Company, there are no dues of Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Customs Duty, Excise Duty, Value Added Tax, and Cess as at 31 March 2018 which have not been deposited on account of a dispute, except as enumerated herein below which are pending before respective authorities as mentioned there against:

Name of the Statute Nature of the Dues Amount Rs. In Lakhs* Period to which amounts relate Forum where dispute is Pending
The Income Tax Income Tax/TDS/ 46.20 AY 1997-98 Bombay High Court
Act, 1961 Interest /Penalty 503.71 AY 2010-11 Deputy Commissioner of Income tax, Mumbai
The Central Sales Tax Act, 1956 Sales Tax/Interest/Penalty 42.95 FY 1997-98 to FY 2004-05 Andhra Pradesh High Court
2,972.28 FY 1992-93 FY 1994-95 FY 1996-97 FY 1997-98 & FY 2000-01 to FY 2004-05 Bombay High Court
Service Tax under Finance Act, 1994 Service Tax/ Interest/ Penalty 282.37 FY 2005-06 to FY 2010-11 Central, Excise and Service Tax Appellate Tribunal, Mumbai
31.43 FY 2011-12 The Commissioner of Central Excise (Appeals), Mumbai
The Central Excise Act, 1944 Excise Duty/ Penalty 26.10 Mar 2013 to Dec 2013 The Custom, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad
41.94 Jan 2014 to Oct 2014 The Custom, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad
20.03 Nov 2014 to Aug 2015 The Commissioner of Central Excise (Appeals), Guntur, Andhra Pradesh

*Net of amounts paid under protest or otherwise. Amount as per demand order including interest and penalty wherever quantified.

8) Based on our audit procedures, information and explanations given to us, there is no delay in respect of repayment of loans or borrowings to financial institutions, banks, Government and dues to debenture holders, except for the following defaults.

Particulars Amount of default as at the balance sheet date (Rs. in Lakhs) Period of default (in days) and Remarks
Andhra bank
- Principal 515.27 1 to 366 days
- Interest 166.31 1 to 366 days
Axis Bank
- Principal 133.63 1 day
- Interest 2.14 1 day
EXIM Bank
- Principal 244.04 1 to 91 days
- Interest 39.36 1 to 731 days
IDBI Bank
- Principal 11.52 1 to 91 days
- Interest 1.20 1 day
Edelweiss Asset Reconstruction Company Limited ("EARCL")
- Principal 1086.94 1 to 640 days
- Interest 199.69 366 to 640 days
Foreign Currency Convertible Bond Holders
- Principal 397.04 1 to 2,168 days
- Interest 115.70 1 to 2,467 days
Non Convertible Debentures 55.67 Unpaid from 1 May 2009
97.00 Unpaid from 1 May 2010 Refer Note 28.1 and 46 of the financial statements
Optionally Fully Convertible Debentures 290.99 Unpaid from 30 April 2010
291.00 Unpaid from 30 April 2011
Refer Note 28.2 and 46 of the financial statements
Term Loans taken by erstwhile 68.02 Unpaid from respective due dates.
PPIL from banks/financial institutions Refer Note 28.4, 28.5 and 46 of the financial statements

9) According to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and has not taken any term loan during the year.

10) 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.

11) According to the information and explanation given to us:

During the year ended 31 March 2018, 31 March 2017 and 31 March 2016 the Company has paid Rs. 45.77 Lakhs, Rs. 41.77 Lakhs and Rs. 49.77 Lakhs respectively in excess of the remuneration payable as per the provisions of section 197 read with Schedule V to the Companies Act, 2013, which is recoverable from whole time director. The Company has applied to the Central Government for the approval of the excess remuneration paid for F.Y. 2015-16. Amount recoverable from whole time director aggregating to Rs. 137.31 Lakhs is shown under "Other Current Assets - Non Financial". In case of non approval from Central Government, the Board of Directors at its meeting held on 10 August 2018 has decided to recover the said dues on or before 9 August 2019. (Refer Note 57).

12) In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

13) The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Companies Act, 2013. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable Ind AS.

14) According to the information and explanation given to us, as per the terms of its debt settlement, the Company has, during the year, made preferential allotment of Equity Shares to the lender on conversion of Compulsory Convertible Debentures (CCDs) issued/allotted in part settlement of dues to lenders in the earlier year. The requirements of section 42 of the Companies Act, 2013 have been complied with to the extent applicable.

15) In our opinion and according to the information and explanation given to us, the Company has not entered into any non-cash transactions with directors or persons connected with directors. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

16) In our opinion and according to the information and explanation given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

For V. Parekh & Associates
Chartered Accountants
ICAI FRN 107488W
Rasesh V. Parekh
Partner
Mumbai, 10th August, 2018 M. No. 38615

ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT

(The Annexure referred to in para 2 (f) under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the Members of WANBURY LIMITED on the Standalone Ind AS financial statements for the year ended 31 March 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 with reference to financial statements of WANBURY LIMITED ("the Company") as of 31 March 2018 in conjunction with our audit of the standalone Ind AS 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 with reference to financial statements 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 ("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 and presentation 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 with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI 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. Those Standards and the above mentioned 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 with reference to financial statements 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 with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, 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 with reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A companys internal financial control with reference to financial statements 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 with reference to financial statements 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 with reference to Financial Statements

Because of the inherent limitations of internal financial controls with reference to financial statements, 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 with reference to financial statements to future periods are subject to the risk that the internal financial control with reference to financial statements 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, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31 March 2018 based on the internal control with reference to financial statements 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 ICAI.

For V. Parekh & Associates
Chartered Accountants
Firm Regn. No. 107488W
Rasesh V. Parekh
Partner
Mumbai,10 August, 2018 M. No. 38615