To, The Members of

PANCHSHEEL OKCANICS LIMITED Report on the Financial Statements

We have audited the accompanying ind AS financial statement of panchsheel organics limited (the company) which comprise the statement of profit and loss including other Comprehensive Income), the Cash Flow Statement' (Including Changes in Equity for the year then ended, and a summary of significant and other explanatory information.

2. Management Responsibility for the IND AS Financial statements

The company Board of Director is responsibility for the matters in section 134(5)of the companies Act,2013(the act) with respect to the preparation of these Ind financial performance (including other comprehensive income ) give a true and fair view of the financial Company in accordance with the in the Companies (India including the Accounting Act. This responsibility also includes the maintenance of the of the Act for safeguarding of the assets of the accordance with the provisions irregularities; selection and application other reasonable and prudent; and design, implementation and estimates that are operating effectively for ensuring the accuracy and financial controls, that were and presentation of the Ind AS financial ^aCCOUntln8 ^records' relevant to the preparation misstatement, whether due to fraud or error.

Auditor's Responsibility

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

^{4. We have} taken in to account the provisions of the Act and Rules made there under including the accounting and auditing standards and matters which are required to be included in the audit report under provisions of the Act and the rules made there under.

5. We conducted our audit of the Ind AS financial statements in accordance with the Standard, . under section 143(10) of the Act and other applicable authoritative pronouncements issued by the 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 Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the 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 Ind AS financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statement.

8. in our Opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 Ind.a of the state of affairs of he, Company as at 31st March, 2018, and its profit (including other comprehensive income) its cash flows and the changes in equity for the year ended on that date.

9. The financial information of the Company for the year ended 31^st March, 2017 and the transition date opening balance | I sheet as at April 1, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements for the year ended March 31, 2017 and March 31, 2016 prepared in accordance with the Companies

I (Accounting Standards) Rules, 2006 (as amended) which were audited by us and by M/s. V. Shah & Associates respectively, on which We and M/s. V. Shah & Associates expressed an unmodified opinion dated May 30, 2017 and May 30, 2016 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

10. The Company is require to appoint Internal Auditor as per the requirements of Section 138 of the Companies Act, 2013., but has not appointed any during the year 2017-1S.

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

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section(ll) of Section 143 of the Companies Act, 2013 ("the Order") and on the basis of such checks of the books and records of the Company as we consider appropriate and according to the information and explanation given to us, we give in the Annexure-B a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

12. 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 appears from our examination of those books;

c. the Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), 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 Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act.

e. on the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, one of the Director Mr. Rajesli Turakhia is disqualified from being re-appointed as a director in terms of section 164(2)(a) of the Companies Act, 2013 as on 31^st March, 2018.The Director has informed that he has filed petition in NCLT for restoration of status from Disqualified to Active

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

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

i. The Company has disclosed the impact, if any, of pending litigations as at 31^st March, 2018 on its financial position in its Ind AS financial statements-Refer Note 27of the financial statements; ii. The Company did not have any long term contracts including derivative contracts as at March 31, 2018 for which there were any material foreseeable losses, iii. Read with Note of the Ind AS financial statements, there has been no delay in transferring amounts, required to be transferred to the Investor Education and Protector Fund by the Company during the year ended March 31,2018.

Annexure-A to the Independent Auditors Report

Referred to in paragraph 11(f) of the Independent Auditors Report of even date of the members of panchsheel organics limited on the Ind As financial statement for the year ended MARCH 31,2018

Report on the Internal Financial controls over financial reporting under clause (i) of sub-section 3 of section 143 of the companies Act,2013 (“the Act”)

1. We have audited the internal financial controls over financial of panchsteel organics limited (the company) as of march 31,2018 in conjunction with our auditor of the Ind AS financial statements of the company for the year ended on the that date.

Management Responsibility for internal financial controls.

1. The company’s management is responsible for establishing and maintain 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 charter accountants of India (ICAI) These responsibilities include the design implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to company 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. Act.

Auditors Responsibility

3. 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 of internal financial 143(10) of the Act to the extent applicable to an audit of internal financial control, both applicable to an audit of internal financial control and both issued by ICAL Those Standards and the Guidance Note require that I 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.

4. 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 Ind AS financial statements, whether due to fraud or error.

5. 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

6. 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 Ind AS 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 lnd AS 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) prov.de reasonable assurance

Independent Auditors Report, (Contd.)

paragraph 11(f) of the Independent Auditors’ Report of even date to the members of Panchsheel Organics on the ind As finical statement for the year ended March 31,2018

7. regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the lnd AS financial statements.

Inherent limitations of Internal Financial Controls Over Financial Reporting

8. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of or improper management override of controls, material misstatements due to error or fraud may occur and not s. elected. 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 cause of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

9. In our opinion, subject to our note no. 10 of the main report, 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 March 31, 2018, based on the internal control over financial reporting criteria established b\ the Company - commensurate with the size of the company and nature of its business 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.

Annexure-B to the Independent Auditors Report

Referred to in paragraph (10) of the Independent Auditors report of even date to the members of panhsheel organics limited on the Ind AS financial statements for the year ended March 31,2018.

I (a) The records of the Company for fixed asset, showing full particulars including quantitative details and situations of fixed assets are still under preparation.

(b) According to the information and explanation in records in opinion it is difficult to verify accounting to management representation, the management claims that they have verified the fixed assets during the year and due to he fixed assets during the year, and due to proper to internal control at the factory there are no chance of discrepancies as informed to us the management is trying their best to prepare records of fixed assets as required.

(c) According to the information and explanation in absence of records in our opinion it is difficult to verify according to required. As informed to us the management is trying their of the company.

II As per the information furnished, the inventories have been physically verified by the management during the year once in a year having regard to the nature of stocks the frequency of the physical verification is reasonable discrepancies noticed on verification of inventories as compared to book record h u ^{venflcatl0n 1S} reasonable, discrepancies noticed on HI As per the information furnished and from verification records have been properly dealt with in the books of accounts..

III.As per the information furnished and from verification of the records we are of the opinion that the company has not granted any interest free loans to companies firms or other parties covered in the register maintained under section 189 of the companies Act,2013 hence para3 (a) (b) (c) f the order is not applicable.

IV In our opinion and according to the information and explanation given to us and from verification of the records the company has not granted any loans or provided any guarantee or security to the parties covered under section 185 further the company has complied with the provisions of section 186 of the Act, in respect of the loans and investments made and guarantees and security provided by it.

V The company has not accepted any deposits during the year from the public within the meaning of the provisions of sections 73 to 76 of the companies Act,2013 and the rules framed there under.

^VI1 (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance Fund, Income-tax, Sales-tax, service tax, Custom Duty, Excise Duty, Cess and other material statutory dues as applicable with appropriate authorities.

(b) According to the records of the Company examined by us and the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Service Tax, Custom Duty, Sales Tax, Excise Duty, PF, ESIC and any other statutory dues which have remained outstanding as at 3>^st March, 2018 for a period of more than six months from the date they become payable.

According to the records of the Company and information and explanation given to us and record verified by us the outstanding dues of Sales-tax, Custom Duty, Excise Duty, Income tax, service tax, cess which have not been deposited on account of dispute with the appropriate authorities are given below: _

VIII. Based on our audit procedures and the information and explanations given b} the management debenture opinion that the Company has not defaulted in repayment of its dues to any banks or financial institutes and debenture

IX. We have verified the records of the Company, and of the opinion that the company has not raised way of public offer (including debt instruments). The amount of term loan which company have received were applied tor

X. During the course of our examination of the books and records the books and records of the Company, carried out in accepted auditing practice, and according to the information and explanations given to us, instances 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.

XI. The Company has provided for managerial remuneration in accordance with the requisite approvals mandated by the Provisions of Section 197 read with Schedule V to the Act.

XII. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xu) of the Order are not applicable to the Company

XIII As per the verification of the records, We are of the opinion that all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have AS Financial Statements as required under Ind AS 24, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014.

XIV The Company has not made any preferential allotment or private placement of shares or fully °r partly convertible debentures during the year under review. Accordingly the provisions of Clause 3(xiv) is not applicable to the. Company

XV. The Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly the provisions of Clause 3(xv) is not applicable to the Company.

XVII have been informed that the company is not required to be registered under section 45-1A of the Reserve Bank of India Act, 1934. Accordingly the provisions of Clause 3(xvi) is not applicable to the Company.

For Jayesh R. Shah & Co

Chartered Accountants

Firm Registration No. 104182W

Jayesh Shah

Proprietor

Membership No. 033864

Place: Mumbai

Date: 07^th June, 2018