Oxygenta Pharmaceutical Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2025

We have audited the financial statements of Oxygenta Pharmaceutical Limited (“the Company”), which comprise
the balance sheet as at March 31,2025, and the statement of Profit and Loss, statement of changes in equity and
statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
financial statements give the information required by the Companies Act, 2013(“the Act'') in the manner so
required and give a true and fair view in conformity with the Accounting Standards prescribed under section 133
of the Act read with Companies (Indian Accounting Standards) Rules, 2015 as amended and other accounting
principles generally accepted in India, of the state of affairs of the Company as at March 31,2025, and its loss,
changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of
the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company in accordance with
the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical
requirements that are relevant to our audit of the financial statements under the provisions of the Act and the
Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements
and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of the
financial statements. The results of our audit procedures, including the procedures performed to address the
matters below, provide the basis for our audit opinion on the accompanying financial statements.

S. No.	Key Audit Matter	Auditor’s Response
1.	Recognition of Expected Credit Loss on Trade Receivables under 109- Refer to Note No 38. The Company has recognised an expected credit loss (ECL) of Rs. 77.23 lakhs during the year. This was considered a key audit matter due to the material nature of trade receivables, first-time recognition of ECL, and the significant management judgment involved in building the provision matrix and estimating forward-looking information. The estimation involves use of historical default rates, customer-specific risks, and macroeconomic factors that can significantly impact the expected credit loss recognised.	In view of significance of the matter, we applied the following audit procedures in respect of this area, among others to obtain sufficient appropriate audit evidence: • We evaluated the Company’s ECL model and its compliance with the relevant accounting standard (109). • We tested the accuracy and completeness of the underlying data used in the model. • Obtained an understanding of and assessed the design, implementation and operating effectiveness of key controls relating to collection monitoring process, credit control process and estimation of expected credit losses. • Verified the calculation of ECL of each type of trade receivables according to the provision matrix.
	Contingent Liabilities related to Statutory Litigations (Income Tax, GST, TDS)- Refer to the Note No 50,51 and 52 The Company has disclosed contingent liabilities aggregating to Rs. 290.96 lakhs involving ongoing tax litigations under Income Tax, GST, and TDS. These matters are subject to interpretation of legal provisions and outcome of appellate proceedings. The determination of whether a present obligation exists, and the evaluation of the likelihood and quantum of outflow of resources require significant management judgment.	We obtained and reviewed management’s assessment and corroborative documentation including legal opinions, statutory notices, and submissions to tax authorities. We evaluated whether the disclosures provided in the financial statements adequately describe the nature of exposures and the management’s rationale for not recognising provisions in accordance with 37. We also assessed the completeness of disclosures against the Company’s legal and departmental correspondences.
2.	Revenue Recognition - Refer to Note 17 of financial statements During the year, the Company made substantial sales to an entity that is in the process of acquiring it. The timing, volume, and nature of these transactions raise concerns related to revenue recognition, commercial substance, arm''s length nature, and potential influence on reported financial performance prior to acquisition. As these sales could impact stakeholders'' perception of the company’s financial health and were significant in size, they required heightened audit attention.	In view of significance of the matter, we applied the following audit procedures in respect of this area, among others to obtain sufficient appropriate audit evidence: Our audit procedures included, among others, the following: • We reviewed the terms and conditions of the sales agreements with the prospective acquirer. • We examined whether these transactions were conducted at arm’s length and had commercial substance. • We assessed revenue recognition in accordance with 115 to ensure proper cut-off and recording. • We considered the impact of these sales on the Company’s overall financial performance and disclosures made regarding related party transactions and significant customers.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the
information included in the Management Discussion and Analysis,

Board''s report including annexures to Board''s report, Report on Corporate Governance and Business
Responsibility and Sustainability Report, but does not include the financial statements and our auditor''s report
thereon. The Management Discussion and Analysis, Board''s report including annexures to Board''s report,
Report on Corporate Governance and Business Responsibility and Sustainability Report is expected to be made
available to us after the date of this auditor''s report.

Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Management Discussion and Analysis, Board''s report including annexures to Board''s report,
Report on Corporate Governance and Business Responsibility and Sustainability Report, if we conclude that
there is a material misstatement therein, we are required to communicate the matter to those charged with
governance as required under SA 720 ‘The Auditor''s responsibilities Relating to Other Information''.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to
the preparation of these financial statements that give a true and fair view of the financial position, financial
performance, changes inequity 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. 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 statement that give a true and fair view and are free
from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the Company''s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing
our opinion on whether the company has internal financial controls with reference to financial statements in
place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our auditor''s report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes
it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be
influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work
and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the
financial statements.

We communicate with those charged with governance regarding, among other matters, the planned Scope and
timing of the audit and significant audit findings, including any significant deficiencies in Internal control that we
identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore, the key audit
matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”), issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Act, we give in “Annexure A” 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, the Statement of Changes in Equity and the
Statement of Cash Flow dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid 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 the written representations received from the directors as on 31st March, 2025 taken on
record by the Board of Directors, none of the directors is disqualified as on 31st March, 2025 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 with reference to financial statements of the
Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements
of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to
the explanations given to us the remuneration paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule11 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:

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; and

iii. There were no amounts which were required to be transferred to the Investor Education and Protection
Fund by the Company.

iv. a) The Management has represented that, to the best of it''s knowledge and belief, no funds have been

advanced or loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities
(“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.

b) The Management has represented, that, to the best of it''s knowledge and belief, no funds have been
received by the Company from any person(s) or entity(ies), including foreign entities (“Funding
Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall,
directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries.

c) Based on the audit procedures performed that have been considered reasonable and appropriate in
the circumstances, nothing has come to our notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above,
contain any material misstatement.

v. No Interim dividend has declared by the company during the year or the previous year so the provisions of
section 123 of the Companies Act, 2013 are not applicable to the company.

vi. Based on our examination, which included test checks, the Company has used an accounting software for
maintaining its books of account for the financial year ended March 31, 2025 which has a feature of
recording audit trail (edit log) facility and the same has operated throughout the year for all relevant
transactions recorded in the software. Further, during the course of our audit we did not come across any
instance of the audit trail feature being tampered with. Additionally, the audit trail of relevant prior years has
been preserved by the company as per the statutory requirements for record retention, to the extent it was
enabled and recorded in those respective years, as stated in Note 55(10) to the standalone financial
statements.

The company also uses some other software which doesn''t have the feature of recording audit trail (edit log)
facility was not enabled at the application layer of the accounting software relating to payroll for the period 1 April
2024 to 31 March 2025.

For A.M.REDDY & D.R.REDDY

Chartered Accountants

ICAI Firm Registration No. 009068S

Sd/-

D. Rama Krishna Reddy
Partner

Membership No. 209211
UDIN: 25209211BMJBOQ1517

Place: Hyderabad
Date: 30.05.2025

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Mar 31, 2024

To the Members of Oxygenta Pharmaceutical Limited Report on the Audit of the Financial Statements Opinion

We have audited the financial statements of Oxygenta Pharmaceutical Limited (“the Company”), which comprise the balance sheet as at March 31,2024, and the statement of Profit and Loss, statement of changes in equity and statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013(“the Act’) in the manner so required and give a true and fair view in conformity with the Accounting Standards prescribed under section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015 as amended and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2024, and its loss, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter

Auditor’s Response

Revenue Recognition - Refer to Note 2.17 of financial statements The Company recognizes revenue from product sales based on the specific terms and conditions of each transaction, which can vary across different customers. For sales transactions occurring near the Balance Sheet date, it is crucial to confirm that control of the goods has been transferred to the customers. Given that revenue recognition relies on management’s judgment regarding the transfer of control, we consider the cut-off of revenue to be a key audit matter.

Our audit procedures included, among others, the following: We gained an understanding of the revenue recognition process and evaluated the Company’s controls to ensure the timely and accurate recording of sales transactions. We have obtained an understanding of a sample of customer contracts. We tested the access and change management controls of the relevant IT system used to record shipments. Our revenue sample testing concentrated on sales recorded just before year-end, gathering evidence to support the proper timing of revenue recognition, based on the terms and conditions outlined in sales contracts and delivery documents.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis,

Board’s report including annexures to Board’s report, Report on Corporate Governance and Business Responsibility and Sustainability Report, but does not include the financial statements and our auditor’s report thereon. The Management Discussion and Analysis, Board’s report including annexures to Board’s report, Report on Corporate Governance and Business Responsibility and Sustainability Report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Management Discussion and Analysis, Board’s report including annexures to Board’s report, Report on Corporate Governance and Business Responsibility and Sustainability Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance as required under SA 720 ‘The Auditor’s responsibilities Relating to Other Information’.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, changes inequity 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. 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 statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned Scope and timing of the audit and significant audit findings, including any significant deficiencies in Internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore, the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in “Annexure B” 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, the Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid 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 the written representations received from the directors as on 31st March, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2024 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 with reference to financial statements 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 the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule11 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:

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; and

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. a) The Management has represented that, to the best of it’s knowledge and belief, as disclosed in the note

2.44(vi) to the Standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

b) The Management has represented, that, to the best of it’s knowledge and belief, as disclosed in the note 2.44(vii) to Standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. No Interim dividend has declared by the company during the year or the previous year so the provisions of section 123 of the Companies Act, 2013 are not applicable to the company.

vi. Based on our examination, which included test checks, the Company has used an accounting software for maintaining its books of account for the financial year ended March 31,2024 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1,2023, reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31,2024.

For A.M.REDDY & D.R.REDDY Chartered Accountants ICAI Firm Registration No. 009068S

Sd/-

D. Rama Krishna Reddy Partner

Membership No. 209211 UDIN: 24209211BKHHRY5883

Place: Hyderabad Date: 30.05.2024

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Mar 31, 2023

We have audited the accompanying financial statements of OXYGENTA PHARMACEUTICAL LIMITED (Formerly known as S. S. ORGANICS LIMITED) (“the Company”), which comprise the Balance Sheet as at March 31,2023, and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended and notes to the financial statements, including a summary of the significant accounting policies and other explanatory information. (Hereinafter referred to as “financial statements”)

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (“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 March 31,2023, and its loss and Total Comprehensive Income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SA’s) specified under section 143(10) of the Act. Our responsibilities under those SA’s are further described in the “Auditor’s Responsibilities for the Audit of the Financial Statements” section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Financial Statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended March 31,2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussions and Analysis, Boards Report including annexures to Boards Report and Report on Corporate Governance but does not include the financial statements, and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Company’s management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under

section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

This 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.

In preparing the financial statements, management and Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SA’s, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management and Board of Directors.

• Conclude on the appropriateness of management and Board of Director’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report, to the extent applicable 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 (including other comprehensive income), the statement of changes in equity and the statement of cash flows dealt with by this Report are in agreement with relevant the books of account;

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time;

e) On the basis of the written representations received from the directors of the Company as on March 31,2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023 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 with reference to financial statements 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 the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid/provided by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act and

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 28 to the financial statements;

ii. The Company did not have any long-term contracts including derivate contracts for which there were any material foreseeable losses.

iii. The Company has no amount required to be transferred to the Investor Education and Protection Fund during the year.

iv. (a) The Management has represented that, to the best of it’s knowledge and belief, no funds (which are material

either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities

identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented to us that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. (a) The Company has neither declared nor paid any dividend during the year.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.

2. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For Gowri Shankar & Associates Chartered Accountants Firm’s Reg No: 015625S

Sd/-

S Gowri Shankar Partner

Place: Hyderabad M No: 234732

Date: 30^th May, 2023 UDIN: 22234732AJHTTH8750

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Mar 31, 2015

We have audited the accompanying financial statements of S.S. Organics Limited ("the Company"), which comprises the Balance Sheet as at March 31,2015, and the Statement of Profit and Loss and the 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 matters stated in sub-section (5) of section 134 of the Companies Act, 2013 ('the act') 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 Companies (Accounts) Rules, 2014. This responsibility 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 judgements and estimates that are reasonable and prudent; design, implementation and maintenance adequate internal financial controls, that are 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 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 subsection 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 control system over financial reporting and other 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.

Basis for Qualified Opinion

1. Debtors balance amounts to Rs.64,25,418/- in the financial statement. Management has not obtained any confirmation of balances from the debtors for amount Rs.14,69,117./-. In the absence of Debtors confirmations for our verification we are unable to comment on the appropriateness of the carrying values of such amount and its consequential effects, if any, on the financial statements are presently not ascertainable. Our audit report on the financial statements for the year ended March 31,2014 was also qualified for the same matter.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2015;

b) in the case of the Statement of Profit and Loss , of the loss for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

a) We draw attention to our comments to the financial statements which describe the uncertainty related to the outcome of the 21 lawsuits filed against the Company by various Statutory Authorities and Non Statutory concerns. Our opinion is not qualified in respect of these matters.

b) Attention is drawn to Note No.9 of the Notes to the Accounts of the Company, relating to major fire accident occurred on 07-Jan-2015, which damaged the Plant & Machinery, Buildings, QC Lab equipments, Furniture & Fixtures and Office Equipments, installed in one of the Blocks. We are of the opinion that the damage of the fixed assets during the financial year will not affect the Going Concern status of the Company due to the measures taken.

Management could not ascertain the damage of individual asset components. Based on the available information and the claim submitted with the Insurance Company, damaged assets were removed from the net block.

Management and the Insurance Company are in the process of evaluating the claim / loss occurred due to fire.

Actual outcome of the Insurance claim is not ascertained and due to lack of information loss could not be recognised in the current financial year 2014-15. On actual receipt of the claim, loss or profit if any will be accounted.

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.

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 purpose of our audit;

b) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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 branches; hence reporting under this clause is not applicable.

d) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

e) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

f) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may not have an adverse effect on the functioning of the Company.

g) On the basis of written representations received from the directors as on March 31,2015, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31,2015, from being appointed as a director in terms of sub-section (2) of section 164 of the Act.

h) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

i) 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 the explanations given to us:

I. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 20 (c) to the financial statements;

II. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

III. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company

Annexure to the Auditor's Report

The Annexure referred to in paragraph 7 of our report of even date to the members of S.S. Organics Limited, on the accounts of the company for the year ended 31st March, 2015.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

i.

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

ii.

(a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

iii. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 189 of Act.

iv. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

v. The Company has not accepted any deposits from the public covered under section 73 to 76 of the Companies Act, 2013.

vi. As per information & explanations given by the management, maintenance of cost records has been prescribed by the Central Government under sub-section (1) of section 148 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

vii. (a) The company is not regular in depositing the undisputed statutory dues including Income-tax, Sales-tax, Service Tax, cess with the appropriate authorities and there have been serious delays in a large number of cases. According to the information and explanation provided to us, arrears of undisputed amount outstanding as on 31st March, 2015 for a period more than six months from the date they became payable are as follows :

Statement of Arrears of Statutory Dues Outstanding for more than 6 Months

Nature of the Dues Amount (Rs.)

Sales Tax 33,01,137

Professional Tax 2,07,300

Service Tax 10,61,046

TDS 36,59,414

ESI 26,373

b) Statement of Disputed dues as required by the clause are as given under:

Name of Authority Nature of Dues Amount in Rs.

Customs Customs Duty Rs.62,40,052/- Department



Office of the Recovery Provident Fund Rs.29,94,301/- officer - Employees Provident Fund Organization

Income Tax Income Tax Rs.11,84,817/- Department

Income Tax Income Tax Rs.1,36,88,740/- Department



Income Tax Income Tax Rs.89,24,820/- Department



Income Tax Income Tax Rs.61,270/- Department



Name of Authority Financial year to Forum where which the amount disputes are pending relates

Customs 1996-97 Hon'ble Customs, Department Excise, Gold(Control) Appellate Tribunal, Bangalore

Office of the Recovery ----- Stay granted by High officer - Employees Court of Judicature Provident Fund - Hyderabad For the State Organization of Telangana & Andhra Pradesh

Income Tax 2004-05 Income Tax, Circle - Department 1(1), Hyderabad

Income Tax 2005-06 Asst. Commissioner of Department Income Tax, Circle - 8(1), Hyderabad

After reassessment dues as on date is of Rs.32,34,522/-.

Income Tax 2005-06 Dy. Commissioner of Department Income Tax, Circle - 1(1), Hyderabad

Income Tax 2008-09 CPC - Bangalore Department

(c) According to the information and explanation given to us, there were no amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under.

viii. The accumulated losses of the company at the end of the accounting period are more than the fifty percent of its net worth. The company has incurred cash loss of Rs.4,31,96,124/- during the financial year and Rs. 3,23,99,809/- immediately preceding financial year.

ix. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

x. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

xi. Based on our audit procedures and on the information given by the management, the term loans have been applied for the purpose which they were raised.

xii. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud has been noticed or reported during the course of audit.

For VDNR & Associates Chartered Accountants FRN:011251S

(Venkateswarlu D) Place: Hyderabad Partner Date:30-May-2015 M.No.028488

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Mar 31, 2014

We have audited the accompanying financial statements of S.S. Organics Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014. and 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

Management is responsible for the preparation 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control 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 financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 control relevant to the Company''s preparation and fair presentation of the financial statements 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 management, 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 qualified opinion.

Basis for Qualified Opinion

1. The Company''s fixed assets are carried at historical cost basis. Management has not charged depreciation for the period 1st April,2007 to 30th June,2013. Has depreciation of amount to Rs.5,97,79,393/- would have been provided in the books of accoount, the loss after taxes would be Rs. 10,26,62,648/- as against reported loss of the Rs. 4,28,83,255/-. Our audit report on the financiall statements for the year ended March 31, 2013 was also qualified for the same matter.

2. Debtors balance amounts to Rs. 84,77,283/- in the financial statement. Management has not obtained any confirma- tion of balances from the debtors for amount of Rs. 37,48,991/-. In the absence of debtors confirmations for our verification we are unable to comment on the appropriateness of the carrying values of such amount and its conse- quential effects, if any, on the financial statements are presently not ascertainable. Our audit report on the financial statements for the year ended March 31, 2013 was also qualified for the same matter.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b) in the case of the Statement Profit and Loss, of the loss for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to our comments to the financial statements which describes the uncertainty related to the outcome of the 29 lawsuits filed against the Company by various Statutory Authorities and Non Statutory concerns. Our opinion is not quali- fied in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in para- graphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) we have 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account.;

d) except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting standards re- ferred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the Directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditor''s Report

The Annexure referred to in paragraph 1 of the Our report of even date to the members of S.S.Organics Limited, on the accounts of the Company for the year ended 31st March, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that :

(i)

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no mate- rial discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, there was no disposal of a substantial part of fixed assets. Howerer, during the year a part of Land has been disposed in the process of road widening and a compensation of Rs. 10,73,340/- has been received from National Highway Authority of India (NHAI), this does not affect the going concern assumption.

(ii)

(a) As explained to us, inventories (stores & consumables) have been physically verified during the year by the manage- ment at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedurers of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

(iii)

(a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loan, secured or unsecured to Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Consequently, the provisions of iii (b), iii (c), iii (d) of the of the order are not applicable to the Company.

(b). According to the information and explanations provided, the Company has taken loans from parties covered in the register to be maintained under section 301of the Companies act, 1956. The amount involved during the year was for Rs.2,26,42,081/- and the closing balance with respect to such parties stood at Rs.7,87,40,104/-.

(c). These amounts are interest free loans and other terms & conditions of loans taken by the Company which are unsecured are prima facie not prejudical to the interests of the Company.

(d). The amounts brought in are not having any specific period of repayment.

(iv) In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of countinuing failure to correct any weaknesses in the internal controls has been noticed.

(v)

(a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act has been entered in the register required to be maintained under that section.

(b) As per information & explanations given to us and in our opinion, the transaction entered into by the Company with parties covered u/s 301 of the Act and exceeding five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public covered under sections 58A and 58AA of the Compa- nies Act, 1956.

(vii) As per information & explanations given by the management, the Company has an internal audit system commensu- rate with its size and the nature of its business.

(viii) As per information & explanations given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

(ix) (a). The Company is not regularly in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales-Tax, Welth Tax, Service Tax, Cus- toms Duty, Excise Duty, Cess to the extent applicable with the appropriate authorities. According to the information and explanation provided to us, arrears of undisputed amount outstanding as on 31st March, 2014 for a period more than six months from the date they became payable are as follows :

Particulars of Dues Amount in Rs.

(i). Sales Tax 96,98,287.00

(ii). Professional Tax 1,53,800.00

(iii). Service Tax 1,18,155.00

(iv). Tax Deducted at Source 38,79,901.50

(v) Employees State Insurance 54,852.00

(vi) Providnet Fund 738.00

(b). The Statement of Disputed dues as required by the clause are as given under

Name of the Authority Nature of Dues Amount in Rs.

Customs Department Customs Duty Rs.62,40,052/-

Assistant Commissioner of Provident Fund, Pattancheru, Medak District Provident Fund Rs.13,74,918/-

Income Tax Department Fringe Benefit Rs.16,36,230/- Tax

Income Tax Department Income Tax Rs.89,24,820/-

Income Tax Department Income Tax Rs.47,63,920/-



Name of the Authority Financial Year to Forum where disputes whichthe amount are pending. relates

Customs Department 1996-97 Hon''ble Customs, Excise, Gold (Control) Appellate Tribunal, Bangalore

Assistant Commissioner of Employees Provident Fund Provident Fund, Appellate Tribunal, Pattancheru, Medak District New Delhi.

Income Tax Department 2005-06 Dy. Commissioner of Income Tax, Circle - 1(1) Hyderabad.

Income Tax Department 2005-06 Dy. Commissioner of Income Tax, Circle - 1(1) Hyderabad.

Income Tax Department 2005-06 Asst. Commissioner of Income Tax, Circle - 8 (1) Hyderabad.

(x) The accumulated losses of the Company at the end of the accounting period are more than the fifty percent of its net worth. The Company has incurred cash loss of Rs. 3,23,99,809/- during the financal year and immediately preced- ing financial year is of Rs.1,66,96,301/-.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture hold- ers.

(xii) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debebtures and other securites.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit funds / society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

(xiv) According to information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

(xvi) Based on our audit procedures and on the information given by the management, we report that the Company has not raised any term loans during the year.

(xvii) Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

(xix) The Company has no outstanding debentures during the period under audit.

(xx) The Company had not raised any money by public issues during the year.

(xxi) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case of the management.

Place: Hyderabad Date : 26-05-2014 for VDNR & ASSOCIATES Chartered Accountants Firm Reg. No. 011251S

Sd/- (Venkateswarlu .D) Partner Membership No.: 028488

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of S.S. Organics Limited ("the company"), which comprise the Balance Sheet as at March 31, 2013, and 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

Management is responsible for the preparation 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that 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 conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 control relevant to the Company''s preparation and fair presentation of the financial statements 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 management, 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 qualified audit opinion.

Basis for Qualified Opinion

In the financial year 2006-07, dispute was arisen between its Board of Directors and B Subba Reddy one of the share holder regarding the management of the company. Mr B Subba Reddy has taken the possession of the company forcibly and illegally on 20-10-2006, Mr. VN Sunanda Reddy aggrieved by the actions of Mr. B Subba Reddy approached the Hon''ble Company Law Board by filing Company Petition No: 14 of 2007. The Hon''ble CLB vide its judgement dt. 14.08.2009 allowed the company petition and held that all the actions of Mr. B Subba Reddy are Null and Void. Mr. B Subba Reddy has challenged the Hon''ble CLB order by filing a company application no: 22/09 before Hon''ble High Court ofA.P. The company application was dismissed upholding the orders of Hon''ble CLB on 22.02.2012. Mr. VN Sunanda Reddy has taken re-possession of the company on 16.05.2012 and started re-novating of the company.

1. The Company''s fixed assets are carried at historical cost basis. Management has not charged depreciation in its books of account amounting to Rs.96,48,790/-,which constitutes a departure from the Accounting Standards referred to in sub-section (3C) of section 211 of the Act. If depreciation would have been provided in the books of account then loss after taxes would be Rs.2,63,45,091/- as against reported loss ofRs. 1,66,96,301/-.

2. Management has not estimated and provided for Employee Benefit Liability which constitutes a departure from the Accounting Standards (AS-15) referred to in sub-section (3C) of section 211 of the Act.

3. Non Confirmation of Debtors Balances.

4. Non confirmation and reconciliation of Current Assets and Current Liabilities.

5. Non Identification of small scale industrial undertakings whose outstanding is more than one lakh rupees for more than 30 days.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of the Profit and Loss Account, of the profit/ loss for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to our comments to the financial statements which describes the uncertainty related to the outcome of the 27 lawsuits filed against the Company by various Statutory Authorities and Non Statutory concerns. Our opinion is not quali- fied in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in para- graphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agree- ment with the books of account.;

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

e) We have not received any written representations form the directors, as on 31st March,2013. So we are unable to comment whether any of those directors are disqualified from being appointed as a director as on 31s,March,2013 in terms of clause(g) of sub-section(l) of section 274 of the companies act, 1956;

Annexure to the Auditor''s Report Re: S.S.ORGANICS LIMITED

Refer to para 1 Report on Other Legal and Regulatory Requirements of my report of even date.

(i)

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

(b) All the assets have been physically verified by the management during the year, and there is also a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, the Company has not disposed off any substantial part of its Fixed Assets so as to affect its going concern status.

(ii)

(a) According to the information and explanations given to us, the Company has no Inventories through out the Year. Hence the Clauses (b) & (c) are not applicable for the Current Financial Year. (iii)

(a) According to the information and explanations given to us, the company has not granted any loan, secured or unse- cured to companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956. Accordingly the provisions of (iii) (b), (iii) (c), (iii) (d) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(e). As per information provided, the company has taken loans from parties covered in the register to be maintained under section 301of the companies act, 1956. The maximum amount involved during the year was Rs.4,73,66,287/- and the year end balance taken from such persons was Rs.4,44,62,160/-.

(f). These amounts are interest free and other terms and conditions of loans taken by the company which are unsecured are prima facie not prejudicial to the interests of the company. (g). The amounts brought in are having no specific repayment period.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v)

(a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, The company has outstanding unse- cured loans as on the balance sheet date Rs. 5,60,98,024/- which were accepted by the company during the period prior to and subsequent to the reference to the Hon''ble BIFR under SICA. Any shortfall of funds in the implementation of the scheme should be met by the company/promoters as per sanctioned scheme of the Hon''ble BIFR. In this scenario, we are not in a position to express our views with regard to applicability of provisions of Sections 58 A and 58AAof the Act and the rules framed there under as on 31st March 2013.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. (viii) According to the information and explanations given to us, there are no production activities carried out during the

financial year. Therefore Cost records to be maintainable under section 209 (1) (d) of the Companies Act 1956 are not maintained. (ix) (a). The Company is generally not regular in depositing Statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other statutory dues with appropriate authorities. According to the information and explanation given to us, Arrears of undisputed amount outstanding as at 31st March 2013 for a period of more than six months from the date they became payable are as follows

(x) The company is Sick Industrial Company with in the meaning of clause (o) of sub-section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The accumulated losses of the company at the end of the ac- counting period are more than the fifty percent of its net worth. Further, the Company has incurred cash losses during the financial year is Rs. 1,66,96,301/- covered by our audit and the immediately preceding financial year is Rs.23,59,496/-.

(xi) As per the information received and explanations given to us, the Company has no outstanding dues to any Banks or financial institutions or debenture holders.

(xii) As explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the Company is not required to maintain any records thereof.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institu- tions.

(xvi) The company has not obtained any Term Loans during the period under review.

(xvii) According to the information and explanations given to us, the funds raised during the period under review on short term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Com- pany had not issued any debentures.

(xx) The Company had not raised any money by public issues during the period covered by audit.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

Place: Hyderabad

Date: 29 May 2013 for VDNR & ASSOCIATES

Chartered Accountants

Firm Reg. No. 011251S

Sd/-

(D. Venkateswarlu)

Partner

Membership No.: 028488

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of S S ORGANICS LIMITED, as at 31st March, 2012 the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These Financial State- ments are the responsibility of the Company''s Management. Our responsibility is to express an opinion on the financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Attention is drawn to our comments on the accounts as under:

- Dispute was arisen among its Board of Directors regarding the Management of the company and a Case was filed before the Hon''ble High Court by its Board of Directors. The Hon''ble High Court in its order dated 22-2-2012 has given a favorable orders to the Present Management of the Company by declaring that the Transations of Previous Manage- ment was declared as Null and void. So while preparing the Audited Financial of the Current financial year we have considered the Transactions purely done by the Present Management of the Company.

- Accounting policy number ''5'' & Notes No.8.1 regarding Non-provision of Gratuity on Actuarial Valuation and Leave encashment Salary as per Accounting Standard-15.

- Note No. 17(a) Regarding non- availability of statutory records pertaining to Finance, Central Excise, sales and pur- '' chases, Commercial Taxes, PF, ESI, Secretarial records etc.

- Note No. 12.1 Regarding non-confirmation of Debtors Balances.

- Note No. 17(b) Regarding non-confirmation and reconciliation of certain Current Assets and Current Liabilities.

- Note No 16.1 Regarding Non-identificationof Small scale industrial Undertakings whose outstanding is more than Rupees on lakh for more than 30 days.

- Note No. 11.1 regarding inclusion of amount paid to Central Excise Department consequent to Search proceedings by the said Department. Pending information of outcome of the said proceedings, the liability, if any cannot be ascertained and provided for in these accounts.

- Note No. (1) (a) of accounting policies regarding preparation of accounts on principles applicable to the going concern.

- Note No. 17(i) Regarding Non-Provisiion of Depreciation on Fixed assets

- Note No. 17(j) Regarding Pending Legal cases against the company

5. Further to our comments in the annexure referred to above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii) The balance sheet, the profit and loss account and cash flow statement dealt with by this report are in agreement with the books of accounts;

iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except in clause 4 above.

v) We have not received any written representations from the directors, as on 31st March, 2012, So we are unable to comment whether any of those Directors are disqualified from being appointed as a Director as on 31st March, 2012 in terms of clause (g) of sub-section (1) of Sec. 274 of the Companies Act, 1956;

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our comment in Para 4 above, read in conjunction with the Notes annexed there with give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of balance sheet, of the state of affairs of the company as at 31st March, 2012;

(b) in the case of profit and loss account, of the Loss for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date:

Annexure to the Auditor''s Report

Re: S S ORGANICS LIMITED

Referred to in paragraph 3 of my report of even date.

(i)

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

(b) All the assets have been physically verified by the management during the year, and there is also a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, the company has not disposed off any substantial part of its Fixed Assets so as to affect its going concern status.

(ii)

(a) According to the information and explanations given to us, the company has no Inventories through out the year. Hence the clauses (b) & (c) are not applicable for the Current Financial Year.

(iii)

(a) According to the information and explanations given to us, the register under Section 301 of the Companies Act, 1956 is not traceable. The Management has informed that, the Company has not granted any loans, secured or unsecured to companies, firms and others in the Register maintained under Section 301 of the Companies Act 1956. Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(b). As per information provided, the company has taken loans from parties covered in the register to be maintained under section 301 of the companies act, 1956. The maximum amount involved during the year was Rs.71,10,591/- and the year end balance taken from such persons was Rs.71,10,591/-

(c). These amounts are interest free and other terms and conditions of loans taken by the company which are unsecured are prima facie not prejudicial to the interests of the company.

(d). The amounts brought in are having no specific repayment period.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v)

(a) According to the information and explanations given to us, the register under section 301 of the Companies Act 1956 is not traceable. We are unable to comment on the same in the absence of such register furnished to us.

(b) We are unable to comment whether any transactions exceeding the value of rupees five lakhs in respect of any party during the year were been made at prices which are reasonable having regard to prevailing market prices at the relevant time, in the absence of such register.

(vi) In our opinion and according to the information and explanations given to us, The company has outstanding unsecured loans as on the balance sheet date Rs. 1,84,08,455/- which were accepted by the company during the period prior to and subsequent to the reference to the Hon''ble BIFR under SICA. Any shortfall of funds in the implementation of the scheme should be met by the company/promoters as per sanctioned scheme of the Hon''ble BIFR. In this scenario, we are not in a position to express our views with regard to applicability of provisions of Sections 58 A and 58AAoftheAct and the rules framed there under as on 31st March, 2012.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Cost records to be maintainable under section 209 (1)

(d) of the Companies Act 1956 are not traceable. Hence We are unable to comment on the same in the absence of such register furnished to us.

(ix) (a). The Company is generally not regular in depositing Statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other statutory dues with appropriate authorities. According to the information and explanation given to us, arrears of undisputed amount out- standing as at 31st March 2012 for a period of more than six months from the date they became payable are as follows

Nature of Dues Due Amount in Rs.

(i). Provident Fund Rs.89,285/-

(ii). Employees State Insurance Rs.25,997/-

(iii). Tax deducted at source Rs.28,81,678/-

(iv). Fringe Benefit Tax Rs.3,31,799//-

(v). Sales Tax Rs.55,90,096/-

(vi) Professional Tax Rs. 1,37,450/-

(b). The Statement of Disputed dues as required by the clause are as given under

Name of the Authority Nature of Dues Amount in Rs.

Customs Duty Department Customs Duty Rs.62,40,052/-

Assistant Commissioner of Provident Fund, Pattancheru, Medak District Provident Fund Rs.13,74,918/-

Name of the Authority Financial Year to which Forum where disputes the amount relates are pending.

Customs Duty Department FY: 1996-97 Hon''ble Customs, Excise, Gold (Control) Appellate Tribunal, Bangalore

Assistant Commissioner of Provident Fund, Pattancheru, Medak District - Employees Provident Fund Appellate Tribunal,New Delhi.

(x) The company is Sick Industrial Company with in the meaning of clause (o) of sub-section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The accumulated losses of the company at the end of the account- ing period are more than the fifty percent of its net worth. Further, the Company has incurred cash losses during the financial year is Rs.23,59,496/- covered by our audit and the immediately preceding financial year is Rs. 15,05,310/-

(xi) As per the information received and explanations given to us, the Company has no outstanding dues to any Banks or financial institutions or dentures holders.

(xii) As explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the Company is not required to maintain any records thereof.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) The company has not obtained any Term Loans during the period under review.

(xvii) According to the information and explanations given to us the funds raised during the period under review on short term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company had not issued any debentures.

(xx) The Company had not raised any money by public issues during the period covered by audit.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

Place: Hyderabad

Date: 28-03-2013 VDNR & ASSOCIATES

Chartered Accountants

Sd/-

D. Venkateswarlu

Partner

Membership No.: 028488

Firm Reg. NO.011251S

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of S S ORGANICS LIMITED, as at 31st March, 2011 the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These Financial State- ments are the responsibility of the Company''s Management. Our responsibility is to express an opinion on the financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) order, 2003 issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Attention is drawn to our comments on the accounts as under:

- Dispute was arisen among its Board of Directors regarding the Management of the company and a Case was filed before the Hon''ble High Court by its Board of Directors. The Hon''ble High Court in its order dated 22-2-2012 has given a favorable orders to the Present Management of the Company by declaring that the Transations of Previous Manage- ment was declared as Null and void. So while preparing the Audited Financial of the Current financial year we have considered the Transactions purely done by the Present Management of the Company.

- Accounting policy number ''5'' & Notes No.3 in schedule number ''J'' regarding Non-provision of Gratuity on Actuarial Valuation and Leave encashment Salary as per Accounting Standard-15.

- Note No. (1) Regarding non- availability of statutory records pertaining to Finance, Central Excise, sales and pur- chases, Commercial Taxes, PF, ESI, Secretarial records etc.

- Note No. 2 Regarding non-confirmation of Debtors Balances.

- Note No.4 Regarding non-confirmation and reconciliation of certain Current Assets and Current Liabilities.

- Note No 5 Regarding Non-identificationof Small scale industrial Undertakings whose outstanding is more than Rupees on lakh for more than 30 days.

- Note No. 13 regarding the amount paid to Central Excise Department consequent to Search proceedings by the said Department. Pending information of outcome of the said proceedings, the liability, if any cannot be ascertained and provided for in these accounts.

- Note No. (1) (a) of accounting policies regarding preparation of accounts on principles applicable to the going concern.

- Note No. 14 Regarding Non-Provisiion of Depreciation on Fixed assets

- Note No. 15 Regarding Pending Legal cases against the company

5. Further to our comments in the annexure referred to above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii) The balance sheet, the profit and loss account and cash flow statement dealt with by this report are in agreement with the books of accounts;

iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except in clause 4 above.

v) We have not received any written representations from the directors, as on 31sl March, 2011, So we are unable to comment whether any of those Directors are disqualified from being appointed as a Director as on 31st March, 2011 in terms of clause (g) of sub-section (1) of Sec. 274 of the Companies Act, 1956;

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our comment in Para 4 above, read in conjunction with the Notes annexed there with give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of balance sheet, of the state of affairs of the company as at 31st March, 2011;

(b) in the case of profit and loss account, of the Loss for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date:

Annexure to the Auditor''s Report

Re: S S ORGANICS LIMITED

Referred to in paragraph 3 of my report of even date.

(i)

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

(b) Since the Management has not physically verified the fixed assets of the company during the year, we are uanble to comment on the reasonability of the verification regarding to the size of the company and material discrepancies of fixed assets.

(c) Though the Company has not disposed off any substantial part of its Fixed Assets during the year. In our opinion and according to the information and explanations given to us, during the previous years, the plant and equipment are went to dilapidated condition. This affects the going concern status.

(ii)

(a) According to the information and explanations given to us, the company has no Inventories through out the year. Hence the clauses (b) & (c) are not applicable for the Current Financial Year.

(iii)

(a) According to the information and explanations given to us, the register under Section 301 of the Companies Act, 1956 is not traceable. The Management has informed that, the Company has not granted any loans, secured or unsecured to companies, firms and others in the Register maintained under Section 301 of the Companies Act 1956. Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(b). As per information provided, the company has taken loans from parties covered in the register to be maintained under section 301 of the companies act, 1956. The maximum amount involved during the year was Rs.5,405,251/- and the year end balance taken from such persons was Rs.5,405,251/-

(c). These amounts are interest free and other terms and conditions of loans taken by the company which are unsecured are prima facie not prejudicial to the interests of the company.

(d). The amounts brought in are having no specific repayment period.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v)

(a) According to the information and explanations given to us, the register under section 301 of the Companies Act 1956 is not traceable. We are unable to comment on the same in the absence of such register furnished to us.

(b) We are unable to comment whether any transactions exceeding the value of rupees five lakhs in respect of any party during the year were been made at prices which are reasonable having regard to prevailing market prices at the relevant time, in the absence of such register.

(vi) In our opinion and according to the information and explanations given to us, The company has outstanding unsecured loans as on the balance sheet date Rs. 1,64,61,5151- which were accepted by the company during the period prior to and subsequent to the reference to the Hon''ble BIFR under SICA. Any shortfall of funds in the implementation of the scheme should be met by the company/promoters as per sanctioned scheme of the Hon''ble BIFR. In this scenario, we are not in a position to express our views with regard to applicability of provisions of Sections 58 A and 58AA of the Act and the rules framed there under as on 31s March, 2011.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Cost records to be maintainable under section 209 (1)

(d) of the Companies Act 1956 are not traceable. Hence We are unable to comment on the same in the absence of such register furnished to us.

(ix) (a). The Company is generally not regular in depositing Statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other statutory dues with appropriate authorities. According to the information and explanation given to us, arrears of undisputed amount out- standing as at 31st March 2011 for a period of more than six months from the date they became payable are as follows

Nature of Dues Due Amount in Rs.

(i). Provident Fund Rs.89,285/-

(ii). Employees State Insurance Rs.25,997/-

(iii).Tax deducted at source Rs.27,41,860/-

(iv). Fringe Benefit Tax Rs.3,31,799/-

(v). Sales Tax Rs.42,18,688/-

(vi) Professional Tax Rs. 1,37,450/-

(b). The Statement of Disputed dues as required by the clause are as given under

Name of the Authority Nature of Dues Amount in Rs.

Customs Duty Department Customs Duty Rs.62,40,052/-

Assistant Commissioner of Provident Fund, Pattancheru, Medak District Provident Fund Rs.13,74,918/-

Name of the Authority Financial Year to which Forum where disputes the amount relates are pending.

Customs Duty Department FY: 1996-97 Hon''ble Customs, Excise, Gold (Control) Appellate Tribunal, Bangalore

Assistant Commissioner of Provident Fund, Pattancheru, Medak District - Employees Provident Fund Appellate Tribunal, New Delhi.

(x) The company is Sick Industrial Company with in the meaning of clause (o) of sub-section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The accumulated losses of the company at the end of the account- ing period are more than the fifty percent of its net worth. Further, the Company has incurred cash losses during the financial year is Rs.15,05,310/-covered by our audit and the immediately preceding financial year is Rs. 15,55,218/-

(xi) As per the information received and explanations given to us, the Company has no outstanding dues to any Banks or financial institutions or dentures holders.

(xii) As explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the Company is not required to maintain any records thereof.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) The company has not obtained any Term Loans during the period under review.

(xvii) According to the information and explanations given to us the funds raised during the period under review on short term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company had not issued any debentures.

(xx) The Company had not raised any money by public issues during the period covered by audit.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

Place: Hyderabad

Date: 28-03-2013 VDNR & ASSOCIATES

Chartered Accountants

Sd /-

D. Venkateswarlu

Partner

Membership No.: 028488

Firm Reg. No. 011251S

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of SS ORGANICS LIMITED, as at 31st March, 2010 the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed there to. These Financial Statements are the responsibility of the Company''s Management. Our responsibility is to express an opinion on the financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) order, 2003 issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Attention is drawn to our comments on the accounts as under:

- Dispute was arisen among its Board of Directors regarding the Management of the company and a Case was filed before the Humble High Court by its Board of Directors. The Humble High Court in its order dated 22-2-2012has given a favorable orders to the Present Management of the Company by declaring that the Transitions of Previous Management was declared as Null and void. So while preparing the Audited Financial of the Current financial year we have considered the Transactions purely done by the Present Management of the Company.

- Accounting policy number ‘5'' & Notes No.3 in schedule number ''J'' regarding Non-provision of Gratuity on Actuarial Valuation and Leave encashment Salary as per Accounting Standard-15.

- Note No. (1) Regarding non- availability of statutory records pertaining to Finance, Central Excise, sales and purchases, Commercial Taxes, PF, ESI, Secretarial records etc.

- Note No. 2 Regarding non-confirmation of Debtors Balances.

- Note No.4 Regarding non-confirmation and reconciliation of certain Current Assets and Current Liabilities.

- Note No 5 Regarding Non-identification of Small scale industrial Undertakings whose outstanding is more than Rupees on lakh for more than 30 days.

- Note No. 13 regarding the amount paid to Central Excise Department consequent to Search proceedings by the said Department. Pending information of outcome of the said proceedings, the liability, if any cannot be ascertained and provided for in these accounts.

- Note No. (1) (a) of accounting policies regarding preparation of accounts on principles applicable to the going concern.

- Note No. 14 Regarding Non-Provision of Depreciation on Fixed assets

- Note No. 15 Regarding Pending Legal cases against the company

5. Further to our comments in the annexure referred to above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii) The balance sheet, the profit and loss account and cash flow statement dealt with by this report are in agreement with the books of accounts;

iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except in clause 4 above.

v) We have not received any written representations from the directors, as on 31st March, 2010, So we are unable to comment whether any of those Directors are disqualified from being appointed as a Director as on 31st March, 2010 in terms of clause (g) of sub-section (1) of Sec. 274 of the Companies Act, 1956;

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our comment in Para 4 above, read in conjunction with the Notes annexed there with give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of balance sheet, of the state of affairs of the company as at 31st March, 2010;

(b) in the case of profit and loss account, of the Loss for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date:

(i)

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

(b) Since the Management has not physically verified the fixed assets of the company during the year, we are unable to comment on the reasonability of the verification regarding to the size of the company and material discrepancies of fixed assets.

(c) Though the Company has not disposed off any substantial part of its Fixed Assets during the year. In our opinion and according to the information and explanations given to us, during the previous years, the plant and equipment are went to dilapidated condition. This affects the going concern status.

(ii)

(a) According to the information and explanations given to us, the company has no Inventories throughout the year. Hence the clauses (b) & (c) are not applicable for the Current Financial Year.

(iii)

(a) According to the information and explanations given to us, the register under Section 301 of the Companies Act, 1956 is not traceable. The Management has informed that, the Company has not granted any loans, secured or unsecured to companies, firms and others in the Register maintained under Section 301 of the Companies Act 1956. Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(b). As per information provided, the company has taken loans from parties covered in the register to be maintained under section 301 of the companies act, 1956. The maximum amount involved during the year was Rs.46,52,875/- and the yearend balance taken from such persons was Rs.46,52,875/-

(c). These amounts are interest free and other terms and conditions of loans taken by the company which are unsecured are prima facie not prejudicial to the interests of the company.

(d). The amounts brought in are having no specific repayment period.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v)

(a) According to the information and explanations given to us, the register under section 301 of the Companies Act 1956 is not traceable. We are unable to comment on the same in the absence of such register furnished to us.

(b) We are unable to comment whether any transactions exceeding the value of rupees five lakhs in respect of any party during the year were been made at prices which are reasonable having regard to prevailing market prices at the relevant time, in the absence of such register.

(vi) In our opinion and according to the information and explanations given to us, The company has outstanding unsecured loans as on the balance sheet date Rs. 1,55,55,339/- which were accepted by the company during the period prior to and subsequent to the reference to the Hon''ble BIFR under SICA. Any shortfall of funds in the implementation of the scheme should be met by the company/promoters as per sanctioned scheme of the Hon''ble BIFR. In this scenario, we are notin a position to express our views with regard to applicability of provisions of Sections 58 A and 58AAofthe Act and the rules framed there under as on 31s March, 2010.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Cost records to be maintainable under section 209 (1)

(d) of the Companies Act 1956 are not traceable. Hence We are unable to comment on the same in the absence of such register furnished to us.

(ix) (a). The Company is generally not regular in depositing Statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other statutory dues with appropriate authorities. According to the information and explanation given to us, arrears of undisputed amount out- standing as at 31s! March 2010 for a period of more than six months from the date they became payable are as follows

Nature of Dues Due Amount in Rs.

(i). Provident Fund Rs.89,285/-

(ii). Employees State Insurance Rs.25,997/-

(iii).Tax deducted at source Rs.25,94,004/-

(iv). Fringe Benefit Tax Rs.3,31,799/-

(v). Sales Tax Rs.41,29,770/-

(vi) Professional Tax Rs. 1,37,450/-

(b). The Statement of Disputed dues as required by the clause are as given under

Name of the Authority Nature of Dues Amount in Rs. Financial Year to which Forum where disputes the amount relates are pending.

Customs Duty Department Customs Duty Rs.62,40, 052/- FY: 1996- 97 Humble Customs, Excise, Gold (Control) Appellate Tribunal, Bangalore

Assistant Commissioner of Provident Fund, Pattancheru, Medak
(x) The company is Sick Industrial Company within the meaning of clause (o) of sub-section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The accumulated losses of the company at the end of the account- ing period are more than the fifty percent of its net worth. Further, the Company has incurred cash losses during the financial year is Rs. 15,55,218/- covered by our audit and the immediately preceding financial year is Rs. 20,65,205/-

(xi) As per the information received and explanations given to us, the Company has no outstanding dues to any Banks or financial institutions or dentures holders.

(xii) As explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the Company is not required to maintain any records thereof.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) The company has not obtained any Term Loans during the period under review.

(xvii) According to the information and explanations given to us the funds raised during the period under review on short term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company had not issued any debentures.

(xx) The Company had not raised any money by public issues during the period covered by audit.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

Place: Hyderabad

Date: 28-03-2013 VDNR & ASSOCIATES

Chartered Accountants

Sd/-

D. Venkateswarlu

Partner

Membership No.: 028488

Firm Reg. No. 011251S

---

Mar 31, 2009

1. We have audited the attached Balance Sheet of S S ORGANICS LIMITED, as at 31st March, 2009 the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed there to. These Financial Statements are the responsibility of the Company''s Management. Our responsibility is to express an opinion on the financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) order, 2003 issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Attention is drawn to our comments on the accounts as under:

- Dispute was arisen among its Board of Directors regarding the Management of the company and a Case was filed before the Hon''ble High Court by its Board of Directors. The Hon''ble High Court in its order dated 22nd February 2012 has given a favorable orders to the Present Management of the company by declaring that the Transactions of Previous Management was declared as Nuli and void. So while preparing the Audited Financials of the Current financial year, we have considered the Transactions purely done by the Present Management of the Company.

- Accounting policy number ''5'' & Notes No.3 in schedule number ''K'' regarding Non-provision of Gratuity on Actuarial Valuation and Leave encashment Salary as per Accounting Standard-15.

- Note No. (1) Regarding non- availability of statutory records pertaining to Finance, Central Excise, sales and pur- chases, Commercial Taxes, PF, ESI, Secretarial records etc.

- Note No. 2 Regarding non-confirmation of Debtors Balances.

- Note No.4 Regarding non-confirmation and reconciliation of certain Current Assets and Current Liabilities.

- Note No 5 Regarding Non-identificationof Small scale industrial Undertakings whose outstanding is more than Rupees on lakh for more than 30 days.

- Note No. 13 regarding inclusion of amount paid to Central Excise Department consequent to Search proceedings by the said Department. Pending information of outcome of the said proceedings, the liability, if any cannot be ascertained and provided for in these accounts.

- Note No. (1) (a) of accounting policies regarding preparation of accounts on principles applicable to the going concern.

- Note No. 14 Regarding Non-Provisiion of Depreciation on Fixed assets ,

- Note No. 15 Regarding Pending Legal cases against the company

5. Further to our comments in the annexure referred to above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii) The balance sheet, the profit and loss account and cash flow statement dealt with by this report are in agreement with the books of accounts;

iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except in clause 4 above.

v) We have not received any written representations from the directors, as on 31st March, 2009, So we are unable to comment whether any of those Directors are disqualified from being appointed as a Director as on 31st March, 2008 in terms of clause (g) of sub-section (1) of Sec. 274 of the Companies Act, 1956;

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our comment in Para 4 above, read in conjunction with the Notes annexed there with give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of balance sheet, of the state of affairs of the company as at 3151 March, 2009;

(b) in the case of profit and loss account, of the Loss for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date:

Annexure to the Auditor''s Report

Re: S S ORGANICS LIMITED

Referred to in paragraph 3 of my report of even date.

(i)

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

(b) Since the Management has not physically verified the fixed assets of the company during the year, we are uanble to comment on the reasonability of the verification regarding to the size of the company and material discrepancies of fixed assets.

(c) Though the Company has not disposed off any substantial part of its Fixed Assets during the year. In our opinion and according to the information and explanations given to us, during the year, the plant and equipment are went to dilapidated condition. This affects the going concern status.

(ii)

(a) According to the information and explanations given to us, the company has no Inventories through out the year. Hence the clauses (b) & (c) are not applicable for the Current Financial Year.

(iii)

(a) According to the information and explanations given to us, the register under Section 301 of the Companies Act, 1956 is not traceable. The Management has informed that, the Company has not granted any loans, secured or unsecured to companies, firms and others in the Register maintained under Section 301 of the Companies Act 1956. Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(b). As per information provided, the company has taken loans from parties covered in the register to be maintained under section 301 of the companies act, 1956. The maximum amount involved during the year was Rs.40,01,838/- and the year end balance taken from such persons was Rs. 40,01,838/-.

(c). These amounts are interest free and other terms and conditions of loans taken by the company which are unsecured are prima facie not prejudicial to the interests of the company.

(d). The amounts brought in are having no specific repayment period.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v)

(a) According to the information and explanations given to us, the register under section 301 of the Companies Act 1956 is not traceable. We are unable to comment on the same in the absence of such register furnished to us.

(b) We are unable to comment whether any transactions exceeding the value of rupees five lakhs in respect of any party during the year were been made at prices which are reasonable having regard to prevailing market prices at the relevant time, in the absence of such register.

(vi) In our opinion and according to the information and explanations given to us, The company has outstanding unsecured loans as on the balance sheet date Rs. 1,48,18,903/- which were accepted by the company during the period prior to and subsequent to the reference to the Hon''ble BIFR under SICA. Any shortfall of funds in the implementation of the scheme should be met by the company/promoters as per sanctioned scheme of the Hon''ble BIFR. In this scenario, we are not in a position to express our views with regard to applicability of provisions of Sections 58 A and 58AAof the Act and the rules framed there under as on 31st March, 2009.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Cost records to be maintainable under section 209 (1)

(d) of the Companies Act 1956 are not traceable. Hence We are unable to comment on the same in the absence of such register furnished to us.

(ix) (a). The Company is generally not regular in depositing Statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other statutory dues with appropriate authorities. According to the information and explanation given to us, arrears of undisputed amount out- standing as at 31st March 2009 for a period of more than six months from the date they became payable are as follows

Nature of Dues Due Amount, in Rs.

(i). Provident Fund Rs.89,285/-

(ii). Employees Stale insurance Rs.25,997/-

(iii).Tax deducted at source Rs.24,39,472/-

(iv). Fringe Benefit Tax Rs.3,27,163/-

(v). Sales Tax Rs.40,36,587/-

(vii) Professional Tax Rs. 1,37,450/-

(b). The Statement of Disputed dues as required by the clause are as given under

Name of the Authority Nature of Dues Amount in Rs.

Customs Duty Department Customs Duty Rs.62.40,052/-

Assistant Commissioner of Provident Fund, Pattancheru, Medak District Provident Fund Rs.13,74,918/-

Name of the Authority Financial Year to which Forum where disputes the amount relates are pending.

Customs Duty Department FY:1996-97 Hon ble Customs, Excise, Gold (Control) Appellate Tribunal, Bangalore

Assistant Commissioner of Provident Fund, Pattancheru, Medak District - Employees Provident Fund Appellate Tribunal, New Delhi.

(x) The company is Sick industrial Company with in the meaning of clause (o) of sub-section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) The accumulated losses of the company at the end of the account- ing period are more than the fifty percent of its net worth. Further, the Company has incurred cash losses during the financial year is Rs.20,65,205/- covered by our audit and the immediately preceding financial year is Rs. 30,31,700/-

(xi) As per the information received and explanations given to us, the Company has no outstanding dues to any Banks or financial institutions or dentures holders.

(xii) As explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the Company is not required to maintain any records thereof.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion, the Company has not given any guarantees for bans taken by others from banks or financial institutions.

(xvi) The company has not obtained any Term Loans during the period under review.

(xvii) According to the information and explanations given to us the funds raised during the period under review on short term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has net made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company had not issued any debentures.

(xx) The Company had not raised any money by public issues during the period covered by audit.

(xxi) According to the information and explanations given to us, no fraud or or by the Company has been noticed or reported during the course of our audit.

Place: Hyderabad VDNR & ASSOCIATES

Date: 28-03-2013 Chartered Accountants

Sd/-

D. Venkateswarlu

Partner

Membership No.: 028488

Firm Reg. No. 011251S

---

Mar 31, 2008

1. We have audited the attached Balance Sheet of S S ORGANICS LIMITED, as at 31st March, 2008 the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed there to. These Financial Statements are the responsibility of the Company''s Management. Our responsibility is to express an opinion on the financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) order, 2003 issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Attention is drawn to our comments on the accounts as under:

- Dispute was arisen among its Board of Directors regarding the Management of the company and a Case was filed before the Hon''ble High Court by its Board of Directors. The Hon''ble Company Law Board, Chennai,in its order dated 14-08-2009 held that all the actions of Mr, B. Subba Reddy management as Null and Void. The Hon''ble Company Law Board orders are upheld by the Hon''ble High Court of A.R in its order dated 22-2-2012 . So while preparing the Audited Financials of the Current financial year, we have considered the Transactions purely done by the Present Management of the Company.

- Accounting policy number ''5'' & Notes No.3 in schedule number ''O'' regarding Non-provision of Gratuity on Actuarial Valuation and Leave encashment Salary as per Accounting Standard-15.

- Note No. (1) Regarding non- availability of statutory records pertaining to Finance, Central Excise, sales and pur- chases, Commercial Taxes, PF, ESI, Secretarial records etc.

- Note No. 2 Regarding non-confirmation of Debtors Balances.

- Note No.4 Regarding absence of Closing Inventory Values

- Note No 5 Regarding non-confirmation and reconciliation of certain Current Assets and Current Liabilities.

- Note No. 14 regarding inclusion of Rs. 15,00,000/- under Loans and advances which was paid to Central Excise Department consequent to Search proceedings by the said Department. Pending information of outcome of the said proceedings, the liability, if any cannot be ascertained and provided for in these accounts.

- Note No. (1) (a) of accounting policies regarding preparation of accounts on principles applicable to the going concern.

- Note No. 16 Regarding Pending Legal cases against the company

5. Further to our comments in the annexure referred to above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii) The balance sheet, the profit and loss account and cash flow statement dealt with by this report are in agreement with the books of accounts;

iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except in clause 4 above.

v) We have not received any written representations from the directors, as on 31st March, 2008, So we are unable to comment whether any of those Directors are disqualified from being appointed as a Director as on 31st March, 2007 in terms of clause (g) of sub-section (1) of Sec. 274 of the Companies Act, 1956;

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our comment in Para 4 above, read in conjunction with the Notes annexed there with give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generallyaccepted in India:

(a) in the case of balance sheet, of the state of affairs of the company as at 31st March, 2008;

(b) in the case of profit and loss account, of the Loss for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date:

Annexure to the Auditor''s Report

Re: S S ORGANICS LIMITED

Referred to in paragraph 3 of my report of even date.

(i)

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

(b) Since the Management has not physically verified the fixed assets of the company during the year, we are uanble to comment on the reasonability of the verification regarding to the size of the company and material discrepancies of fixed assets.

(c) Through the Company has not disposed off any substantial part of its Fixed Assets, In our opinion and according to the information and explanations given to us, during the year, the plant and equipment are went to dilapidated condition. This affects the going concern status.

(ii)

(a) According to the information and explanations given to us, the company has no Inventories through out the year. Hence the clauses (b) & (c) are not applicable for the Current Financial Year.

(iii)

(a) According to the information and explanations given to us, the register under Section 301 ofthe Companies Act, 1956 is not traceable. The Management has informed that, the Company has not granted any loans, secured or unsecured to companies, firms and others in the Register maintained under Section 301 ofthe Companies Act 1956. Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(b). As per information provided, the company has taken loans from parties covered in the register to be maintained under section 301 of the companies act, 1956. The maximum amount involved during the year was Rs.31,30,339/-. and the year end balance taken from such persons was Rs.31,30,339/-.

(c). These amounts are interest free and other terms and conditions of loans taken by the company which are unsecured are prima facie not prejudicial to the interests ofthe company.

(d). The amounts brought in are having no specific repayment period.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size ofthe Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v)

(a) According to the information and explanations given to us, the register under section 301 ofthe Companies Act 1956 is not traceable. We are unable to comment on the same in the absence of such register furnished to us.

(b) We are unable to comment whether any transactions exceeding the value of rupees five lakhs in respect of any party during the year were been made at prices which are reasonable having regard to prevailing market prices at the relevant time, in the absence of such register.

(vi) In our opinion and according to the information and explanations given to us, The company has outstanding unsecured loans as on the balance sheet date Rs. 1,37,79,203/- which were accepted by the company during the period prior to and subsequent to the reference to the Hon''ble BIFR under SICA. Any shortfall of funds in the implementation ofthe scheme should be met by the company/promoters as per sanctioned scheme ofthe Hon''ble BIFR. In this scenario, we are not in a position to express our views with regard to applicability of provisions of Sections 58 A and 58AAof the Act and the rules framed there under as on 31s March, 2008.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Cost records to be maintainable under section 209 (1)

(d) of the Companies Act 1956 are not traceable. Hence We are unable to comment on the same in the absence of such register furnished to us.

(ix) (a). The Company is generally not regular in depositing Statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other statutory dues with appropriate authorities. According to the information and explanation given to us, arrears of undisputed amount outstanding as at 31st March 2008 for a period of more than six months from the date they became payable are as follows

Nature of Dues Due Amount in Rs.

(i). Provident Fund Rs.89,285/-

(ii). Employees State Insurance Rs.25,997/-

(iii).Tax deducted at source Rs.22,48,139/-

(iv). Fringe Benefit Tax Rs.3,12,853/-

(v). Sales Tax Rs.39,93,397/-

(vii) Professional Tax Rs.1,37,450/-

(b). The Statement of Disputed dues as required by the clause are as given under

Name of the Authority Nature of Dues Amount in Rs.

Customs Duty Department Customs Duty Rs.62,40,052/-

Assistant Commissioner of Provident Fund, Pattancheru, Medak District Provident Fund Rs.13,74,918/-

Name of the Authority Financial Year to which Forum where disputes the amount relates are pending.

Customs Duty Department FY: 1996-97 Hon''ble Customs, Excise, Gold (Control) Appellate Tribunal, Bangalore

Assistant Commissioner of Provident Fund, Pattancheru, Medak District - Employees Provident Fund Appellate Tribunal, New Delhi.

(x) The company is Sick Industrial Company with in the meaning of clause (o) of sub-section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The accumulated losses of the company at the end of the account ing period are more than the fifty percent of its net worth. Further, the Company has incurred cash losses during the financial year is Rs. 30,31,700/- covered by our audit and the immediately preceding financial year is Rs.560,93,766/-

(xi) As per the information received and explanations given to us, the Company has no outstanding dues to any Banks or financial institutions or dentures holders.

(xii) As explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the Company is not required to maintain any records thereof.

(xiii) In our opinion, the Company is not a chit fund ora nidhi/mutual benefit fund/society. Therefore, the provisions of clause

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accord ingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) The company has not obtained any Term Loans during the period under review.

(xvii) According to the information and explanations given to us the funds raised during the period under review on short term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company had not issued any debentures.

(xx) The Company had not raised any money by public issues during the period covered by audit.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

Place: Hyderabad

Date: 28-03-2013 VDNR & ASSOCIATES

Chartered Accountants

Sd /-

D. Venkateswarlu

Partner

Membership No.: 028488

Firm Reg. No.011251S

---

Mar 31, 2007

1. We have audited the attached Balance Sheet of S S ORGANICS LIMITED, as at 31st March, 2007 the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These Financial State- ments are the responsibility of the Company''s Management. Our responsibility is to express an opinion on the financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) order, 2003 issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Attention is drawn to our comments on the accounts as under:

- Dispute was arisen among its Board of Directors regarding the Management of the company and a Case was filed before the Hon''ble High Court by its Board of Directors. The Hon''ble Company Law Board, Chennai,in its order dated 14-08-2009 held that all the actions of Mr, B. Subba Reddy management as Null and Void. The Hon''ble Company Law Board orders are upheld by the Hon''ble High Court of A.R in its order dated 22-2-2012 . So while preparing the Audited Financials of the Current financial year, we have considered the Transactions purely done by the Present Management of the Company.

- Accounting policy number ''5'' & Notes No.3 in schedule number ''O'' regarding Non-provision of Gratuity on Actuarial Valuation and Leave encashment Salary as per Accounting Standard-15.

- Note No. (1) Regarding non- availability of statutory records pertaining to Finance, Central Excise, sales and pur- chases, Commercial Taxes, PF, ESI, Secretarial records etc.

- Note No. 2 Regarding non-confirmation of Debtors Balances.

- Note No.4 Regarding absence of Closing Inventory Values

- Note No5 Regarding non-confirmation and reconciliation of certain Current Assets and Current Liabilities.

- Note No. 6 Regarding Non-identification of Small scale industrial Undertakings whose outstanding is more than Ru- pees one lakh for more than 30 days.

- Note No. 11 & 12 Regarding Non-Furnishing of Quantitative details of Raw materials and production, stocks of finished goods details.

- Note No. 18 regarding inclusion of Rs. 15,00,000/- under Loans and advances which was paid to Central Excise Department consequent to Search proceedings by the said Department. Pending information of outcome of the said proceedings, the liability, if any cannot be ascertained and provided for in these accounts.

- Note No. (1) (a) of accounting policies regarding preparation of accounts on principles applicable to the going concern.

- Note No. 20 Regarding Pending Legal cases against the company

5. Further to our comments in the annexure referred to above, we report that:

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii) The balance sheet, the profit and loss account and cash flow statement dealt with by this report are in agreement with the books of accounts;

iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except in clause 4 above.

v) We have not received any written representations from the directors, as on 31st March, 2007, So we are unable to comment whether any of those Directors are disqualified from being appointed as a Director as on 31st March, 2007 in terms of clause (g) of sub-section (1) of Sec. 274 of the Companies Act, 1956;

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our comment in Para 4 above, read in conjunction with the Notes annexed there with give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generallyaccepted in India:

(a) in the case of balance sheet, of the state of affairs of the company as at 31st March, 2007;

(b) in the case of profit and loss account, of the Loss for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date:

Annexure to the Auditor''s Report

Re: S S ORGANICS LIMITED

Referred to in paragraph 3 of my report of even date.

(i)

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

(b) Since the Management has not physically verified the fixed assets of the company during the year, we are uanble to comment on the reasonability of the verification regarding to the size of the company and material discrepancies of fixed assets.

(c) Through the Company has not disposed off any substantial part of its Fixed Assets, In our opinion and according to the information and explanations given to us, during the year, the plant and equipment are went to dilapidated condition. This affects the going concern status.

(ii)

(a) According to the information and explanations given to us, the Inventories has not been physically verified during the year. Hence we are unable to comment on reasonability of frequency of verification of Inventories.

(b) In the absence of information relating to physical verification of inventories by the Management, we are unable to comment whether the procedures followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is not furnished records of its inventories and material discrepancies, if any between the physical stocks and the book records is not ascertainable.

(iii)

(a) According to the information and explanations given to us, the register under Section 301 of the Companies Act, 1956 is not traceable. The Management has informed that, the Company has not granted any loans, secured or unsecured to companies, firms and others in the Register maintained under Section 301 of the Companies Act 1956. Accordingly the provisions of (iii) (b), (iii) (c ), (iii) (d) of the Companies (Auditors Report) Order 2003 (as amended) are not applicable to the Company.

(b). As per information provided, the company has taken loans from parties covered in the register to be maintained under section 301of the companies act, 1956. The maximum amount involved during the year was Rs.22,53,339/-. and the year end balance taken from such persons was Rs.22,53,339/-.

(c). These amounts are interest free and other terms and conditions of loans taken by the company which are unsecured are prima facie not prejudicial to the interests of the company.

(d). The amounts brought in are having no specific repayment period.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v)

(a) According to the information and explanations given to us, the register under section 301 of the Companies Act 1956 is not traceable. We are unable to comment on the same in the absence of such register furnished to us.

(b) We are unable to comment whether any transactions exceeding the value of rupees five lakhs in respect of any party during the year were been made at prices which are reasonable having regard to prevailing market prices at the relevant time, in the absence of such register.

(vi) In our opinion and according to the information and explanations given to us, The company has outstanding unsecured loans as on the balance sheet date Rs. 1,30,51,828/- which were accepted by the company during the period prior to and subsequent to the reference to the Hon''ble BIFR under SICA. Any shortfall of funds in the implementation of the scheme should be met by the company/promoters as per sanctioned scheme of the Hon''ble BIFR. In this scenario, we are notin a position to express our views with regard to applicability of provisions of Sections 58 A and 58AAoftheAct and the rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Cost records to be maintainable under section 209 (1) (d) of the Companies Act 1956 are not traceable. Hence We are unable to comment on the same in the absence of such register furnished to us.

(ix) (a). The Company is generally not regular in depositing Statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise, Cess, Wealth Tax, Service Tax and other statutory dues with appropriate authorities. According to the information and explanation given to us, arrears of undisputed amount outstanding as at 31st March 2007 for a period of more than six months from the date they became payable are as follows

Nature of Dues Due Amount in Rs.

(i). Provident Fund Rs.89,285/-

(ii). Employees State Insurance Rs.25,997/-

(iii).Tax deducted at source Rs.19,99,895/-

(iv). Fringe Benefit Tax Rs. 1,99,427/-

(v). Sales Tax Rs.39,86,317/-

(vi) Excise Duty Rs. 10,44,653/-

(vii) Professional Tax Rs. 1,37,450/-

(b). The Statement of Disputed dues as required by the clause are as given under

Name of the Authority Nature of Dues Amount in Rs.

Customs Duty Department Customs Duty Rs.62,40,052/-

Assistant Commissioner of Provident Fund, Pattancheru, Medak District Provident Fund Rs.13,74,918/-

Name of the Authority Financial Year to which Forum where disputes the amount relates are pending.

Customs Duty Department FY: 1996-97 Hon''ble Customs, Excise, Gold (Control) Appellate Tribunal, Bangalore

Assistant Commissioner of Provident Fund, Pattancheru, Medak District - Employees Provident Fund Appellate Tribunal, New Delhi.

(x) The company is Sick Industrial Company with in the meaning of clause (o) of sub-section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The accumulated losses of the company at the end of the account- ing period are more than the fifty percent of its net worth. Further, the Company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) As per the information received and explanations given to us, the Company has no outstanding dues to any Banks or financial institutions or dentures holders.

(xii) As explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities and the Company is not required to maintain any records thereof.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) The company has not obtained any Term Loans during the period under review.

(xvii) According to the information and explanations given to us the funds raised during the period under review on short term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company had not issued any debentures.

(xx) The Company had not raised any money by public issues during the period covered by audit.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

Place: Hyderabad VDNR & ASSOCIATES

Date: 28-03-2013 Chartered Accountants

Sd/-

D. Venkateswarlu

Partner

Membership No.: 028488