Ganesha Ecosphere Ltd.

We have audited the accompanying standalone financial statements of Ganesha Ecosphere Limited (the Company), which comprise the Balance Sheet as at 31st March 2015, 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 Standalone 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 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 adequate accounting records in accordance with the provisions of the Act for safeguarding of 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. Auditor''s 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, 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 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 the 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 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 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 31st March 2015, 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, 2015 (''the order''), issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act, we give in the Annexure 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 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 under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. e. On the basis of written representations received from the directors as on 31st March 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of Section 164(2) of the Act. f. 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 explanations given to us: i. The Company has disclosed the impact of pending litigations as at 31st March 2015 on its financial position in its financial statements - Refer Note 38 to the financial statements. ii. In our opinion and as per the information and explanations provided to us, the Company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for 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 31st March 2015. ANNEXURE TO INDEPENDENT AUDITORS'' REPORT Referred to in Paragraph 1 under the heading of Report on Other Legal and Regulatory Requirements of our report of even date to the members of Ganesha Ecosphere Limited on the standalone financial statements as of and for the year ended 31st March 2015. (1) (i) The Company is maintaining proper records showing full particulars including quantitative details & situation of fixed assets on the basis of available information. (ii) As explained to us, the fixed assets are physically verified by the management, according to a phased programme designed to cover all the items over a period of three years, which in our opinion is reasonable, having regard to the size of the Company & nature of its assets. Pursuant to the programme, a portion of fixed assets has been physically verified by the management during the year and as informed to us, no material discrepancies were noticed on such physical verification. (2) (i) As explained to us, inventory except for goods in transit has been physically verified by the management at reasonable intervals during the year. (ii) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. (iii) On the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records. (3) (i) According to the information and explanations given to us, the Company had granted unsecured loan to a Director covered in the register maintained under section 189 of the Companies Act, 2013 prior to his appointment as a director in the Company. (ii) The principal amount as well as interest has, regularly, been repaid and there is no balance outstanding as on 31st March 2015. (4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system. (5) According to the information and explanations given to us, the Company has not accepted any deposit, in terms of the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under. Further, the deposits accepted by the Company before the commencement of the Companies Act, 2013, had been repaid during the Year. (6) In respect of business activities of the company, maintenance of cost records has not been specified by the Central Government under sub-section (1) of section 148 of the Companies Act. (7) (i) According to the records of the Company, undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, duty of customs, duty of excise, Value Added Tax and other material statutory dues have been generally regularly deposited with the appropriate authorities .There are no outstanding Statutory dues as at the last day of the financial year under audit for a period of more than six months from the date they became payable. (ii) According to the records of the Company and as per the information and explanations given to us, the disputed statutory dues as at 31st March 2015 that have not been deposited on account of matters pending before appropriate authorities are as under: Name of the Statute Nature of the Dues Amount (Rs.) U. P. Trade Tax Act, 1948 Entry Tax 156030* U. P. Trade Tax Act, 1948 Entry Tax 666061* U. P. Trade Tax Act, 1948 Entry Tax 571833* Central Excise Act,1944 Service tax 285007* & Penalty Income Tax Act, 1961 Income Tax 2818417 Deducted at Source Name of the Statute Forum where dispute is pending U. P. Trade Tax Act, 1948 Supreme Court U. P. Trade Tax Act, 1948 Supreme Court U. P. Trade Tax Act, 1948 Supreme Court Central Excise Act,1944 Commissioner (Appeals), Central Excise & Service Tax Allahabad Income Tax Act, 1961 Commissioner of Income Tax (Appeals), Kanpur * Net of amount deposited under dispute. (iii) According to the information and explanation given to us, there is no amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made thereunder. (8) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date and in the immediately preceding financial year. (9) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution, banks and debenture holders. (10) In our opinion and according to the information & explanations given to us, the Company has not given any guarantee for loans taken by others from Bank or financial institutions. Therefore clause 3(x) of the Companies (Auditor''s Report) Order 2015 is not applicable to the Company. (11) In our opinion, and according to the information and explanations given to us by the management, the term loans have been applied for the purposes for which they were obtained. (12) Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and according to the information and explanations given to us by the management, in our opinion, no fraud by the Company has been noticed or reported during the course of our audit but in respect of fraud on the Company we have been informed that the company imported Pet bottle Scrap (raw material) from an overseas supplier but later on during Inspection of sealed Containers jointly with custom authorities, Gravels were found instead of Pet Bottle Scrap in Containers. Due to this fraud, the company had suffered a loss to the tune of Rs.26,44,757/- on account of Cost of material paid to supplier, ocean freight & Custom Duty. The company had lodged Police Complaint and investigations are in progress. FOR MEHROTRA RAKESH KUMAR & CO., Chartered Accountants (Registration No. 002978C) (Deepak Seth) Place: Kanpur Partner Dated: 30th May, 2015 Membership No. 073081