1. Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of BANSWARA SYNTEX LIMITED ("the Company") which comprise the Balance Sheet as at 31^st March, 2018, the Statement of Profit & Loss (including Other Comprehensive Income), the Cash Flow statement & the statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information

2. Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's 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 Ind AS financial statements that give a true and fair view of the State of affairs (financial position), profit or loss (financial performance including other comprehensive income), 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.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

In conducting 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 auditor's 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 Company's 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 Company's Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence obtained by us & other auditors in terms of their reports referred to in others matter paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

4. 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 accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at 31^st March, 2018, and its Profit (financial performance including other comprehensive income), its Cash Flow and the changes in equity for the year ended on that date.

5. Emphasis of Matters

(a) Attention is invited to Note 56 of Standalone Ind AS Financial Statement During the year, the company has implemented SAP for certain business processes. Inventory valuations and raw material consumption have been worked out manually based on the other records available/physical Inventories taken by the management. Necessary up-dation in SAP modules shall be done in subsequent period.

(b) Attention is invited to Note 57 Standalone Ind AS Financial Statement The Company has noticed a fraud of Rs.196.89 Lakh approximately at Surat Unit and lodged FIR on 27.04.2018. This matter is under Investigation. In view of the management, there will not be any material financial impact on the financial results of the company.

Our report is not qualified in respect of the above matters.

6. Other Matters

The comparative financial information of the Company for the year ended 31^st March 2017 and the transition date opening balance sheet as at 1^st April 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) rules, 2006 audited by the predecessor auditors whose report for the year ended 31^st March 2017, and 31^st March 2016 dated 25^th May 2017 and 23^rd May 2016 respectively expressed an unmodified opinion on those standalone Ind AS financial statements. The adjustments to those financial statements for the difference in accounting principles adopted by the company on transition to the Ind AS have been audited by us.

Our opinion is not modified in respect of the above matter.

7. Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditor's 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, to the extent applicable.

(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 purpose of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit & Loss including Other Comprehensive Income, the statement of cash flows and 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 Standard(Ind AS) specified 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^st March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March 2018 from being appointed as a director in terms of Section 164(2) of the Act

f) The matter described in the Emphasis of matter Paragraph above, in our opinion, may not have an adverse effect on the functioning of the Company

g) 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 B".

h) With respect to the other matters to be included in the Auditor's 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 explanation given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements-Refer Note 47 of the standalone Ind AS 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 derivate contracts.

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

Annexure A" to the Independent Auditors' Report of even date on the Standalone Ind AS Financial Statements of Banswara Syntex Limited for the year ended 31^st March, 2018

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

b) The fixed assets were physically verified by the management during the year. There is a regular program of verification, which in our opinion, is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verifications.

c) Based on our verification and according to information and explanation given to us, The title deeds of immovable properties are held in the name of the company except one lease deed under execution of Daman Land as disclosed in Note no 2 of financial statement. Fourteen title deeds are mortgaged with the Banks/Financial Institution for securing the long term borrowings.

ii. The inventory has been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on comparison of physical verification with book records were not material and have been properly dealt with in the books of account.

iii. According to the information and explanation given to us by the management and records produced, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.Therefore, paragraph 3(iii) of the Order is not applicable to the Company.

iv. In our opinion and according to the information and explanation given to us, the Company has complied with the Provision of Section 186 of the Companies 2013 in respect of the Investment made. The company has not granted any loans and has not given any guarantee and security under the provision of Section 185 of the Companies Act 2013.

v. The Company has accepted deposits and complied with directives issued by the Reserve Bank of India and the provisions of the Companies Act 2013 and the rules frame there under. No order has been passed with respect to section 73 to 76 by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

vi. The Company has maintained cost records as required under section 148(1) of the Companies Act, 2013. However, we are neither required to carry out, nor have carried Out any detailed examination of such accounts and records.

vii. a. The Company is generally regular in depositing undisputed statutory dues including provident fund, Employees'State Insurance, income tax, sales tax, service-tax, duty of customs, duty of excise, value added tax, Goods & Service Tax, cess and any other statutory dues applicable with the appropriate authorities. According to the information and explanation given to us, there are no undisputed statutory dues which were outstanding as on 31.03.2018 for a period of more than six months from the date the same become payable.

b. According to information and explanation given to us, and as per our examination of records of the Company, following are the particulars of dues on account of sales tax, service tax, entry tax, trade tax, income tax, duty of customs, royalty, provident fund, duty of excise and cess matters that have not been deposited on account of dispute as on 31.3.2018.

viii. According to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to any financial institutions or banks, The Company has not taken any loan from the Government and has not issued any debentures.

ix. The Company has not made any public offer (including debts instruments) during the year. According to the information and explanations given to us, the money raised by the Company by way of terms loans have been applied for the purpose for which they were obtained.

x. The Company has noticed a fraud of Rs.196.89 Lakh approximately at Surat Unit and lodged FIR on 27.04.2018. This matter is under Investigation. In view of the management, there will not be any material financial impact on the financial results of the company. Refer Note 57 of Stanalone Ind AS financial statement.

xi. In our opinion and according to the information and explanations given to us, the Company has paid / provided for managerial remuneration within the limit specified in section 197 of the Companies Act 2013.

xii. The Company is not a Nidhi Company as specified in the Nidhi Rules, 2014. Thus, the requirements under para 3(xii) of the Companies (Auditor's Report) Order 2016 are not applicable to the Company.

xiii. According to the information and explanations given to us, all transactions with related parties are in compliance with section 177 and 188 of the 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 given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

xv. According to the information and explanations given to us, the Company has not entered into non-cash transactions with the directors or persons connected with him covered under the provisions of section 192 of the Companies Act, 2013.

xvi. According to the information and explanations given to us, the Company is not a Non-banking finance company, hence registration under section 45-IA of the Reserve Bank of India Act, 1934 does not arise. Accordingly, provision of clause 3(xvi) of the order is not applicable to the company.

Annexure B" to the Independent Auditors' Report of even date on the Standalone Ind AS Financial Statements of Banswara Syntex Limited for the year ended 31^st 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 over financial reporting of Banswara Syntex Limited ("the Company") as of 31^st March, 2018 in conjunction with our audit of the 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 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 (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 company's 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's 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 prescribed under section 143(10) of the Companies Act, 2013, 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 auditor's 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 Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's 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 company's 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company'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 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 and to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March, 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"

However, internal control needs further strengthening in respect of implementation of risk management and systems to ensure continued implementation of Company's risk management policy and strategy and documentation thereof, critical review and refresh process on an ongoing basis.

Emphasis of Matters

(a) Attention is invited to Note 56 of Standalone Ind AS Financial Statement. During the year, the company has implemented SAP for certain business processes. Inventory valuations and raw material consumption have been worked out manually based on the other records available/physical Inventories taken by the management. Necessary up-dation in SAP modules shall be done in subsequent period.

(b) Attention is invited to Note 57 of Standalone Ind AS Financial Statement .The Company has noticed a fraud of Rs.196.89 Lakh approximately at Surat Unit and lodged FIR on 27.04.2018. This matter is under Investigation. In view of the management, there will not be any material financial impact on the financial results of the company.

(c) The Company is processing data related to wages manually which needs to be improved since it increases the chances of error. More controls are needed i.e. surprise physical verification of workers on duties, cross checking of wages sheet by finance team before disbursement of wages by HR department

(d) Inventory management needs to be strengthen since there is manual intervention in respect of certain areas and these can be monitored in a better way with the help of ERP system.

Our report is not qualified in respect of the above matters.

For K.G SOMANI & CO.

Chartered Accountants

FRN 006591N

(K.G.Somani)

Partner

Membership No.006238

Place of Signature: New Delhi

Dated: 30^th May, 2018