Report on the Financial Statements

We have audited the accompanying financial statements of AURANGABAD DISTILLERY LIMITED. (''the Company") which comprise the balance sheet as at 31st March 2018, the statement of profit and loss and Cash flow Statement for the year then ended and a summary of 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 sec 134(5) of the Company Act, 2013 with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Principles generally accepted in India including the accounting Standards Specified under Section 133 of the act, read with rule 7 of the Companies(Accounts) rules 2014. This responsibility also includes maintenance of the adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Comany and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making jugdements 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 accounting records, relevant to the preparation and presentation of the financial reporting framework that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's 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 accouting 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 disclosures in the financial statements. 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. In making those risk 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 an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 31st March 2018 and its profit 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 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 available.

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

a. We have sought 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 Company does not have any branch office and accodingly Section 143 (8) of the Act does not apply.

d. The balance sheet and statement of profit and loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

e. In our opinion, the balance sheet, statement of profit and loss and cash flow statement comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; and

f. In our opinion no financial transactions or matters have any adverse effect on the functioning of the Company.

g. On the basis of the written representations received from the directors as on 31 March 2018, and 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, and

h. In our opinion no qualification, reservation or adverse remark relating to the maintenance of accounts and other matters connected therewith;

i. 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'

j. With respect to the others 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:

1] The Company does not have any pending litigations which would impact its financial position

2] The company did not have any long term contracts including derivative contracts for which there were any material foreseeable Losses.

3] Since there are no amounts liable to be transferred to the Investor Education and Protection Fund by the Company, the clause 11 (c) of Chapter X of the Companies (Audit and Auditors) Rules 2014 is not applicable.

Annexure "A" to the Auditor's Report

The Annexure referred to in our Independent Auditors Report to the members of the company on the financial Statements for the year ended 31 March 2018, we report that :

1.In respect of its Fixed Assets :

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

b) As explained to us, all the fixed assets have been physically verified during the year by the management in accordance with a regular programme of verification of fixed assets at reasonable intervals 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 explanation given to us , no material discrepancies were noticed on such physical verification.

c) According to the information and explanation given to us and on the basis of our examination of records of the company, the title deeds of immovable properties are held in the name of company.

2.In respect of its Inventories :

a) The inventory has been physically verified by the management during the year at reasonable interval. In respect of inventory lying with third parties, these substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

b) In our opinion the procedure of physical verification of inventory followed by management are reasonable and adequate in relation to the size of the company and nature of its business.

c) On the basis of our examination of inventory records, in our opinion, the company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification.

3. As per information given to us, the company has not granted any loans to parties covered in the register maintained under Section 189 of the Companies Act, 2013 (the Act) Accordingly para 3(iii) of the Order is not applicable.

4. In our opinion and according to the information and explanation given to us, the Company has complied with the provisions of section 185 and 186 of the Act in respect of loans and investments made.

5 In our opinion and according to information and explanations given to us, the company has not accepted deposits from the public during the year. Therefore the provisions of clause (v) of paragraph 3 of the order is not applicable to the company.

6. As per paragraph 3(vi) of the order the maintenance of cost records under Section 148(1) of the Companies Act, 2013 are prescribed by the Central Government vide Rule 3 of the Companies (Cost Records and Audit) Rules 2014, however the company has not produced cost audit report for our verification.

7. a) According to information and explanations given to us and the records of the company examined by us in our opinion the company is regular in depositing the undisputed statutory dues including Income Tax, Profession Tax dues, Provident Fund, Sales Tax, Service Tax, Duty of customs, Duty of excise, Goods and Service Tax, Cess and other statutory dues with the appropriate authorities. According to information given to us there are no arrears of outstanding statutory dues as applicable with the appropriate authorities.

b) According to information and explanations given to us and the records of the company examined by us, there are no dues of service tax , custom duty, Goods and service Tax and cess which have not been deposited on account of any dispute.

8. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank, Government during the year.

9. In our opinion and according to the information and explanations given to us, the company has not raised any money by the way of initial public offer.

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, no material instance of fraud on or by the company noticed or reported during the year.

11. According to the information and explanation given to us, the company has paid/provided managerial remuneration in accordance with requisite approvals mandated by provisions of section 197 read with Schedule V of the companies act, 2013.

12. According to the information and explanation given to us, the company is not a nidhi company . Accordingly para 3(xii) of the Order is not applicable.

13. According to the information and explanation given to us, based on our examination of the records of the Company, transactions with the related parties are in compliance with the sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

14. According to the information and explanation given to us, based on our examination of the records of the Company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the order is not applicable to the company.

15. According to the information and explanation given to us, based on our examination of the records of the Company, the company has not entered into non-cash transactions with directors or persons connected with them. Accordingly para 3(xv) of the Order is not applicable.

16. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of Companies Act, 2013 ('the Act')

We have audited the internal financial controls over financial reporting of Aurangabad Distillery Ltd. ('the Company') as of 31st March 2018 in conjuction with our audit of the standalone 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 the business, including adherence to the 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.

Auditors' 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, 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 and, 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 were 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 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 the 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, 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 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.

For Natesh & Associates

Chartered Accountants

FRN 106957W

Ramamurthi Natesh

Proprietor

M. No. 036481

Place : Aurangabad

Date: 25th May 2018