FUTURE GRANULES Auditors Report

1. We have audited the accompanying standalone financial statements of
Granules India Limited ("the Company"), which comprises the Balance
Sheet as at March 31, 2016, 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 Standalone Financial Statements

2. The Company''''s Board of Directors are responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these standalone financial statements
that give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with accounting
principles generally accepted in India, including the Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and the 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 standalone financial statements that give a true
and fair view and are free from material misstatement, whether due to
fraud or error.

Auditor''''s Responsibility

3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing, issued by the
Institute of Chartered Accountants of India, as specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the standalone financial statements are free
from material misstatement.

4. 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 controls 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. 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.

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

Opinion

6. In our opinion and to the best of our information and according to
the explanations given to us, the standalone financial statements give
the information required by the Act in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2016, its Profit and its cash flows for the year ended on
that date.

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor''''s report) Order, 2016 ("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'''', a statement on the matters specified in paragraphs 3 and 4 of the
Order.

8. As required by section 143 (3) of the Act, we report that:

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

(b) In our opinion proper books of account as required by law have been
kept by the Company so far as it 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) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of written representations received from the directors
as on March 31, 2016, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 2016, 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
over financial reporting 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 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 disclosed the impact of pending litigations on its
financial position in its standalone financial statements - Refer Note
2.40 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.

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

(b) Fixed assets have been physically verified by the management during
the period and no material discrepancies were identified on such
verification.

(c) Based on our audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and
according to the information and explanations given by the management,
title deeds of all the immovable properties are held in the name of the
Company.

(ii) (a) The Inventories of raw materials, packing materials,
consumables, stores, work-in-progress and finished goods have been
physically verified during the year at regular intervals by the
management.

(b) The procedures of physical verification of stocks followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business. In respect of finished goods
lying with the consignees, the certificate given by the management is
relied upon.

(c) The company is maintaining the proper records for recording the
inventory and the discrepancies noticed on verification of stocks as
compared to books were not material and have been properly dealt with
in the books of accounts.

(iii) The Company has granted loans to parties covered in the register
maintained under section 189 of the Act and complied with the
provisions of the said Act..

(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of section
185 and 186 of Act, in respect of loans, investments, guarantees, and
security to the extent applicable to it.

(v) According to the information and explanations given to us, the
company has not accepted any deposits from the public within the
meaning of section 73 to 76 of the Act and the rules framed thereunder.
Therefore, the provisions of clause 3(v) of the order are not
applicable to the Company.

(vi) The Central Government has prescribed maintenance of cost records
under the provisions of Section 148(1) of the Companies Act, 2013 in
respect of manufacturing activities of the company. The company has
maintained accounts and records of such activities.

(vii) (a) The company is regular in depositing with appropriate
authorities undisputed statutory dues including Provident Fund,
Employees State Insurance, Income tax, Wealth Tax, Sales tax, Service
tax, Customs Duty, Excise Duty, Cess and other applicable statutory
dues with the appropriate authorities. According to the information and
explanations given to us no undisputed amounts payable in respect of
outstanding statutory dues as at the last day of the year ending
31.03.2016 for period exceeding 6 months from the date they became
payable.

(b) Reference is invited to Note No.2.40 regarding pending litigations
with various authorities in respect of Income- tax, Customs duty, Sales
tax, Service tax, Excise duty, Cess.

(viii) According to the records of the Company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution, bank, Government or
debenture holders as at the Balance Sheet date.

(ix) According to the information and explanations given to us and
based on our verification, the Company has not raised moneys by way of
public issue and moneys raised by way of term loans were applied for
the purpose for which the loans were obtained.

(x) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.

(xi) In our opinion, the managerial remuneration has been paid or
provided in accordance with the requisite approvals mandated by the
provisions of section 197 read with Schedule V of the Companies Act,
2013.

(xii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
3(xii) of the Order are not applicable to the Company.

(xiii) In our opinion, all the transactions with the related parties
are in compliance with section 177 and 188 of the Act, where applicable
and the details have been disclosed in the notes to the financial
statements as required by applicable accounting standards.

(xiv) During the year, the Company has made preferential allotment of
warrants to promotors and promotor group entities numbering 40,95,230
warrants Rs. 84.91 each and 1,86,56,000 warrants Rs. 95.30 each totalling
to Rs.21256.43 lakhs. Out of the said warrants, a total of 40,95,230 at
Rs.84.91 each and 72,55,000 at Rs.95.30 each were converted into equity
shares of Rs.1/- each. The company has complied with the requirement of
section 42 of the Companies Act 2013 for the allotment of
warrants/shares and has applied the funds received there from for the
purpose for which the funds were raised.

(xv) According to the information and explanations given to us and on
an overall examination of the financial statements of the Company, we
report that the Company has not entered into any non-cash transaction
with directors or persons connected with him.

(xvi) In our opinion, the Company is not required to be registered
under section 45-IA of the Reserve Bank of India Act, 1934.

For Kumar & Giri

Chartered Accountants

FRN 001584S



Sd/-

J.Bhadra Kumar

Partner

Membership No.025480



Place: Hyderabad

Date: April 28, 2016

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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