TO,

THE MEMBERS OF PRAG BOSIMI SYNTHETICS LIMITED

Report on the Financial Statement

We have audited the accompanying standalone financial statements of PRAG BOSIMI SYNTHETICS LIMITED, which comprise the Balance Sheet as at 31^st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the 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 and presentation of these standalone financial statements that give a true and fair view of financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified u/s 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. Thus responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

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

We have taken into account the provisions of the Act and the Rules made there under, including 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 there under.

We conducted our audit in accordance with the Standard on Auditing specified u/s 143(10) of the Act and other authoritative pronouncement issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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 disclosures in the financial statements. The procedures selected depend on the auditor's judgments, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place adequate internal financial controls systems over financial reporting and operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating 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 audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2016 and its loss 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 ("The Order") issued by the Central Government in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "order") and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the "Annexure B", a statement on 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 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 and the cash flow statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified u/s. 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor's Report in accordance with the Rule 11 of the Companies (Audit and Auditor's) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any 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 during the year ended 31^st March, 2016.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT FOR THE YEAR ENDED 31^st MARCH, 2016 OF PRAG BOSIMI SYNTHETICS LIMITED.

The Annexure referred to in our Independent Auditors Report to the members of the company on the standalone

financial statements for the year ended 31^st March 2016, we report that:

(i) In respect of its Fixed Assets:

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

(b) The assets have been physically verified by the management in accordance with the phased programmed of verification adopted by the Company. In our opinion, the frequency of the verification is reasonable having regard to the size of the Company and nature of fixed assets. No material discrepancies have been noticed in respect of the assets physically verified during the year.

(c) Title Deeds of immovable properties are held in the name of the company.

(ii) In respect of its Inventories:

As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals. Inventory lying with the third parties and in transit have been verified by the management with reference to the confirmation received from them and/or subsequent receipt of goods.

(iii) (a) 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.

(b) The company has taken unsecured loans of Rs. 42, 94, 46,649/- from Managing Director and other related parties during the year. The terms of the loan repayment are not prima facie prejudicial to the interest of the Company.

(c) The Company has not taken any loans, secured or unsecured, except as stated in iii (b) above from companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) No deposits within the meaning of Section 73 to 76 or any other relevant provision of the Act and Rules framed there under have been accepted by the Company.

(v) The Company is required to maintain cost records pursuant to the Order of the Central Government under section 148(1) of the Companies Act, 2013. We are informed that the Company did not have any manufacturing activities; hence cost records are not maintained.

(vi) The Company has following undisputed amounts outstanding towards statutory dues for more than 6 months as on 31^st March, 2016:

(vii) In terms of Corporate Debt Restructuring (CDR), the company issued 8% Optionally Cumulative Convertible Debentures (OCCD) of Rs. 57.52 crores in March 2011 to be redeemed by March 2013 but the company could not repay entire principal amount and interest due to various operational and financial constraints. However, the company has already settled under OTS Scheme Principal amount of Rs. 46.23 Crores (80% of Rs.57.52 crores). The details of balance overdue amount for over three years are as follows:

We are informed that the company is in negotiation for One Time Settlement with the aforesaid banks/ institutions.

North Eastern Development Finance Corporation Ltd: Overdue Loan Amount of Rs. 4.99 crores (Principal amount Rs. 3.50 crores plus interest of Rs. 1.49 crores) for over four years:

As per the compromise settlement with the aforesaid institution in September 2008, Rs. 3.50 crores were to be repaid after moratorium period of two years from 01/12/2008 and to be paid over a year of 4 years with equal six monthly installments and fixed interest @ 8% per annum was to be levied on balance outstanding. However, due to various operational and financial constraints it could not be repaid by December 2014.

We are informed that the company is negotiating for One Time Settlement.

(viii) During the year, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities.

(ix) The Company is not a dealer or trader in shares, securities, debentures and other investments.

(x) In our opinion and according to information and explanations given to us, the Company has not given guarantee for loans taken by others from Banks or financial institutions except reported in the accounts.

(xi) According to the information and explanations given to us, in our opinion, funds raised on short term basis have not been used for long term basis or vice versa.

(xii) During the year, the Company has not made any preferential allotment of shares to the parties and companies covered and recorded in the Register maintained under section 189 of the Act.

(xiii) The Company has not raised any money by way of public issue during the year.

(xiv) During the year, no fraud by the company or fraud on the Company by its officers or employees has been noticed or reported.

For Bharat Shroff & Co. For AMD & Associates

Chartered Accountants Chartered Accountants

(Firm Reg. No.131026W) (Firm Regn.No.318191E)

Bharat B. Shroff Debashish Bordoloi

Proprietor Partner

(Membership No. 014822) (Membership No. 068018)

Place: Mumbai Place : Guwahati

Date: 30th May 2016 Date : 30th May 2016