Nilkamal Ltd.

Report on the Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of NilkamalLimited ("the Company") which comprise the Balance Sheet as at 31st March 2018the Statement of Profit and Loss the Statement of Changes in Equity and the Statement ofCash Flows for the year then ended and summary of the significant accounting policies andother explanatory in formation (herein after referred to as "standalone Ind ASfinancial statements").

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134 (5) of the Companies Act 2013 ("the Act") with respect to the preparationof these standalone Ind AS financial statements that give a true and fair view of thestate of affairs profit (including other comprehensive income) changes in equity andcashflows of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards (Ind AS) prescribed under section 133of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safe guarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalone Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany’s ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone Ind AS financial statements in accordance with the Standardson Auditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the standalone Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor’s judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company’s preparation of the standalone Ind AS financial statementsthat give a true and fair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompany’s Directors as well as evaluating the overall presentation of the standaloneInd AS financial statements.

We are also responsible to conclude on the appropriateness of management’s use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor’sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor’s report. However future events or conditionsmay cause an entity to cease to continue as a going concern.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2018 its profit (including other comprehensive income) changesin equity and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure A" a statement on the matters specified in paragraphs 3 and 4of 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 bestof our knowledgeand 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss Statement of Changes in Equityand the Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms of Section164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company andthe operating effectiveness of such controls referto our separate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us: i. theCompany has disclosed the impact of pending litigations on its financial position in itsstandalone Ind AS financial statements- Refer note 33a to the Standalone Ind AS FinancialStatements; ii. the Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses; iii. there has been nodelay in transferring amounts required to be transferred to the Investor Education andProtection Fund by the Company during the year ended 31st March 2018; and iv. thedisclosures in the financial statements regarding holdings as well as dealings inspecified bank notes during the period from 8 November 2016 to 30 December 2016 have notbeen made since they do not pertain to the financial year ended 31st March 2018. Howeveramounts as appearing in the audited Standalone Ind AS financial statements for the yearended 31st March 2017 have been disclosed.

Annexure A to the Independent Auditors’ Report – 31st March 2018

(Referred to in our report of even date)

With reference to the Annexure A referred to in the Independent Auditors’ Reportto the members of the Company on the standalone Ind AS financial statements for the yearended 31st March 2018 we report the following: (i) (a) The Company has maintained properrecords showing full particulars including quantitative details and situation of fixedassets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich the fixed assets are verified by the management according to a phased programmedesigned to cover all the items over a period of three years. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. In accordance with the programme the Company hasphysically verified certain fixed assets during the year and we are informed that nomaterial discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in Note 1 to the standalone Ind AS financial statements are held in the name ofthe Company other than those disclosed in the table below:

(ii) The inventory except for goods in transit and stocks lying with third partieshas been physically verified by the management at reasonable intervals during the year. Inour opinion the frequency of such verification is reasonable. In respect of stocks lyingwith third parties at the year-end written confirmations have been obtained. Thediscrepancies noticed on verification between the physical stocks and the book recordswere not material and have been adequately dealt with in books of account.

(iii) According to the information and explanations given to us the Company has notgranted any loans to companies firms limited liability partnerships or other partiescovered in the register maintained under Section 189 of the Companies Act 2013 (‘theAct’). Accordingly paragraphs 3 (iii) (a) and (b) of the Order are not applicable tothe Company.

(iv) In our opinion and according to the information and explanation given to us theCompany has not granted any loans during the year or provided any guarantees or securityto the parties covered under Section 185 of the Act. The Company has complied with theprovisions of Section 186 of the Act in respect of the investments made by the Company.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from public in accordance with the provisions ofSections 73 to 76 or any other relevant provisions of the Act and the rules framedthereunder. Accordingly paragraph 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148 (1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees’State Insurance Income-tax Sales-tax Goods and Service tax Service tax Duty ofCustoms Duty of Excise Value added tax cess and other material statutory dues have beengenerally regularly deposited during the year by the Company with the appropriateauthorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees’ State Insurance Income-taxSales-tax Goods and Service tax Service tax Duty of Customs Duty of Excise Valueadded tax cess and other material statutory dues were in arrears as at 31st March 2018for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome-tax Sales tax Service tax Duty of Customs Duty of Excise and Value added tax asat 31st March 2018 which have not been deposited with the appropriate authorities onaccount of any dispute except as stated below:

* Amount is net of payments made under dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to banks. The Companydoes not have any loans or borrowings from financial institutions or government or dues todebenture holders during the year.

(ix) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments) and has notobtained any term loans during the year. Accordingly paragraph 3(ix) of the Order is notapplicable to the Company.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

(xi) In our opinion and according to the information and explanations given to us themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to usthe Company has entered into transactions with related parties in compliance with theprovisions of Sections 177 and 188 of the Act where applicable and the details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired by Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedunder Section 133 of the Act read with relevant rules.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable to the Company.

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

Annexure B to the Independent Auditor’s Report – 31st March 2018 onStandalone Ind AS Financial Statements Report on the Internal Financial Controls underClause (i) of sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financial reporting of NilkamalLimited ("the Company") as of 31st March 2018 in conjunction with our audit ofthe standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the "Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India". Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining anunderstanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and thatreceiptsand expenditures of the company are being made only in accordance withauthorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’s 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.