Report on the Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying Ind AS financial statements of CIMMCO LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement ofChanges in Equityfor the year then ended, and a summary ofthe significant accounting policies and other explanatory information.

Management’s Responsibility for the Ind AS Financial Statements

2. 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 Ind AS financial statements to give a true and fair view ofthe financial position, 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 specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 ofthe Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions ofthe Actforsafeguarding ofthe assets ofthe 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 ofadequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness ofthe accounting records, relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fairview and arefree from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

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

4. We have taken into account the provisions ofthe Act and the Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions ofthe Act and the Rules made thereunder.

5. We conducted our audit ofthe Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements 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 Ind AS financial statements are free from material misstatement.

6 An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditors’judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due tofraud 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 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 ofthe Ind AS financial statements.

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

Basis for qualified opinion

8. We draw your attention to Note 6 (a) to the Ind AS financial statements regarding certain claims amounting to Rs. 854.81 lacs (Rs. 854.81 lacs as at March 31,2017) net ofexpected credit loss of Rs. 3,097.53 lacs (Rs. 3,097.53 lacs as at March 31,2017), which has been considered good and recoverable by the management. Pending outcome of the Company’s appeal against the arbitration order and final decision ofthe Hon’ble High Court of Delhi, we are unable to comment on the recoverability of the above, and its consequential impact on these Ind AS financial statements.

Qualified Opinion

9. 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 except for the indeterminate effects of the matter referred to in Basis for Qualified Opinion paragraph above, give a true and fairview in conformity with the accounting principles generally accepted in India, ofthe state of affairs ofthe Company as at March 31,2018, and its total comprehensive income (comprising of loss and other comprehensive income), its cash flows and the changes in equityfor theyear ended on that date.

Emphasis of Matter

10. The Ind AS financial statements for theyear ended March 31,2017 have been revised by the management to include thefinancial information ofTitagarh Agrico Private Limited consequent to its amalgamation with the Company with effect from April 1, 2016, the appointed date, pursuant to the Order of National Company Law Tribunal dated October 16,2017 as referred to in Note41 to the Ind AS financial statements. Ouropinion is not modified in respect ofthis matter.

Other Matter

11. The Ind AS financial statements ofthe Company and Titagarh Agrico Private Limited (amalgamated with the Company with effect from April 1,2016as referred to in paragraph 10above) for theyearended March 31,2017, were audited by anotherfirm ofchartered accountants under the Companies Act, 2013 who, vide their reports dated May 18,2017, expressed a modified and an unmodified opinion respectively on those financial statements. Our opinion is not modified in respect ofthis matter.

Report on Other Legal and Regulatory Requirements

12. As required by the Companies (Auditor’s Report) Order, 2016, issued by the Central Government of India in terms ofsub-section (11)ofsection 143 of the Act (“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 the matters specified in paragraphs 3 and 4 of the Order.

13. As required by Section 143 (3) ofthe Act, we report that:

(a) We have sought and except for the indeterminate effects ofthe matter referred to in the Basis for Qualified Opinion paragraph above, 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, exceptfor the indeterminate effects ofthe matter referred to in the Basis forQualified Opinion paragraph above, proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination ofthose books.

(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement ofChanges in Equity dealt with by this Report are in agreement with the books ofaccount.

(d) In our opinion, except for the indeterminate effects of the matter referred to in the Basis for Qualified Opinion paragraph above, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 ofthe Act.

(e) On the basis ofthe written representations received from the directors as on March 31,2018taken on record by the Board of Directors, none ofthe directors is disqualified as on March 31,2018from being appointed as a director in terms ofSection 164 (2) ofthe Act.

(f) The qualification relating to the maintenance ofaccounts and other matters connected therewith are as stated in the Basis forQualified Opinion paragraph above.

(g) With respect to the adequacy ofthe internal financial controls with reference to financial statements ofthe Company and the operating effectiveness ofsuch controls, refer to our separate Report in Annexure A.

(h) With respect to the other matters to be included in the Auditors’Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its Ind AS financial statements - Refer Note 34 to the Ind AS financial statements.

ii. The Company has long-term contracts as at March 31, 2018 for which there were no material foreseeable losses. The Company did not have any derivative contracts as at March 31, 2018.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during theyearended March 31,2018.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for theyearended March 31,2018.

ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 13(g) of the Independent Auditors’ Report of even date to the members of Cimmco Limited on the Ind AS financial statements as of and for the year ended March 31,2018

Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financial statements of CIMMCO LIMITED (“the Company”) as of March 31, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

2. 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 ofinternal 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 ofthe 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 with reference to financial statements 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 deemed to be prescribed under section 143(10) ofthe Act 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 ICAI. 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 with reference to financial statements 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 ofthe internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud orerror.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Company’s internal financial controls system with reference tofinancial statements.

Meaning of Internal Financial Controlswith reference to financial statements

6. A company’s internal financial controls with reference tofinancial statements 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 controls with reference to financial statements 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 ofthe assets ofthe 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition ofthe company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financial statements

7. Because ofthe inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion orimpropermanagementoverrideofcontrols, material misstatementsdueto errororfraud may occurand not bedetected.Also, projections of any evaluation ofthe internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified Opinion

8. According to the information and explanations given to us and based on our audit, the following material weakness has been identified in the operating effectiveness ofthe Company’s internal financial controls with reference to financial statements as at March 31,2018:

The Company’s internal financial controls relating to review of Claims Receivable for appropriate provisioning did not operate effectively which resulted in non-ascertainment of adequate provision against certain Claims Receivable due from a customer (Refer the Basis for Qualified Opinion paragraph in the main audit report).

9. A’material weakness’is a deficiency, ora combination of deficiencies, in internal financial controls with reference tofinancial statements, such that there is a reasonable possibility that a material misstatement of Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

10. In our opinion, except for the effects of the material weakness described in the Basis for Qualified Opinion paragraph above, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit oflnternal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

11. We have considered the material weakness identified and reported above in determining the nature, timing and extent ofaudit tests applied in ouraudit ofthe Ind AS financial statements ofthe Companyfortheyearended March 31,2018, and the material weakness has affected our opinion on the Ind AS financial statements ofthe Companyfor theyear ended on that date and we have issued a qualified opinion on the Ind AS financial statements of the Company (Refer paragraph 9 of the main audit report).

Annexure B to Independent Auditors’ Report

Referred to in paragraph 12 of the Independent Auditors’Report of even date to the members of Cimmco Limited on the Ind AS financial statementsasofandfortheyear ended March 31,2018

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, offixed assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period ofthreeyears which, in our opinion, is reasonable having regard to the size ofthe Company and the nature ofits assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) The title deeds of immovable properties, as disclosed in Note 3(i) on property, plant and equipment and Note 3(ii) on investment properties to the Ind AS financial statements, are held in the name of the Company, except for the following [details of which are set out in Notes 3(i) and 3 (ii) to the Ind AS financial statements]:

ii. The physical verification of inventory (excluding stocks with third parties) have been conducted at reasonable intervals by the Management during theyear. In respect of inventory lying with third parties, these have substantially been confirmed by them.The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. 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 ofthe Act. Therefore, the provisions ofClause 3(iii), (iii)(a), (iii)(b) and (iii)(c) ofthe said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions ofSection 185 and 186 ofthe Companies Act, 2013 in respect ofthe loans and investments made, and guarantees and security provided by it, as applicable.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73, 74, 75 and 76 ofthe Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination ofthe records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations 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 in respect ofincome tax, service tax, value added tax, provident fund, duty of customs and goods and service tax with effect from July 1,2017, though there has been delay in a few cases, and is regular in depositing undisputed statutory dues, including employees’state insurance, sales tax, duty of excise, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of service-tax, value added tax and goods and service tax which have not been deposited on account of any dispute. The particulars of dues of income-tax, sales tax, duty ofcustoms, duty ofexcise and as at March 31,2018which have not been deposited on account ofadispute, are as follows:

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders, as applicable, as atthe balance sheet date.

ix. In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans have been applied, on an overall basis, for the purposes forwhich they were obtained. The Company has not raised any moneys by way of initial public offer and further public offer (including debt instruments).

x. During the course of our examination ofthe 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, we have neither come across any instance of material fraud by the Company oron the Company by its officers or employees, noticed or reported during theyear, nor have we been informed ofany such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule VtotheAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014are not applicable to it, the provisions ofClause 3(xii) ofthe Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of related party transactions have been disclosed in the Ind AS financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.

xiv. The Company has not made any preferential allotment or private placement ofshares orfully or partly convertible debentures during theyear under review. Accordingly, the provisions ofClause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions ofClause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered underSection 45-IA ofthe Reserve BankofIndia Act, 1934. Accordingly, the provisions ofClause 3(xvi) of the Order are not applicable to the Company.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009

Chartered Accountants

Avijit Mukerji

Place: Kolkata Partner

Date: May 29,2018 Membership No.: 056155