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Auditor Report of Alufluoride Ltd.

Mar 31, 2016

TO

The Members of Alufluoride Limited Visakhapatnam, A.P

Report on the Financial Statements

We have audited the accompanying standalone financial statements of Alufluoride Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

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

Auditor’s’ Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

Report on Other Legal and Regulatory

Requirements

1. As required by the Companies (Auditor’s Report) Order, 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 the paragraph 3 and 4 of the Order, to the extent applicable.

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

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

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the Directors as on 31st March, 2016 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 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 and amendments there to, 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 No. 28 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure A :

(Referred to in Paragraph 1 of ‘Report on Other Legal and Regulatory Requirements’ in our report of even date)

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

(b) The management has carried out physical verification of assets in accordance with a designed programme. In our opinion the periodicity of the physical verification is reasonable. No material discrepancies were noticed on such verification.

(c) According to the information and explanations furnished to us and on the basis of our examination of the records of the company and read together with Note no. 9 of the Financial Statements, the title deeds of immovable properties are held in the name of the Company.

(ii) The Inventories within the factory premises/stores have been physically verified by the management during the year and also at the year end. In our opinion, the frequency of verification is reasonable. The discrepancies noticed, upon verification, between physical stocks and book records were not material and such differences have been properly dealt with in the books of account.

(iii) As at the year end, there are no outstanding loans granted by the Company to parties covered in the Register maintained under Section 189 of the Act. As there are no outstanding loans as at 31-3-2016, Paragraphs 3 (iii) (a) to (c) of the Order is considered inapplicable.

(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 the Act, with respect to the loans, investments, guarantees and security.

(v) The company has not accepted any Deposits to which provisions of Sections 73 to 76 and other relevant provisions of the Act are applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148 of the Act and are of the opinion that prima-facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) According to the information and explanations given to us and on the basis of our examination

of the records of the Company, the Company is regular in depositing the undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues with the appropriate authorities. No such undisputed amounts payable were in arrears, as at 31.03.16 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, the following demands have not been deposited on account of disputes.

Name of the Statute

Nature of the dues and Period to which it relates

Amount in Rs.

Forum where the Dispute is pending as at 31.03.16

Income Tax Act

Demand raised on 19-01-14 in respect of Tax Collected at Source (TCS) for the Financial Year 2013-14.

56,480.00

Deputy Commissioner of Income Tax, CPC,(TDS)

Excise Act

Show cause Notice for Short Payment of Duty on Sale of Coal Fines during 2015-16.

16,66,610.00

Addl. Commissioner of Central Excise.

viii) In our opinion and according to the information and explanations given to us, the company does not have any loans or borrowings from a financial institution, Bank or Government. The company had not issued any Debentures.

(ix) The Company had not raised any money by way of Initial Public Offer or further Public Offer (including Debt Instruments) & Term Loans.

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

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid / provided for Managerial Remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly Paragraph 3 (xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, the transactions with related parties are in compliance with Section 177 and 188 of the Act, where applicable and details of such transactions have been disclosed in the Financial Statements as required by the applicable Accounting Standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into Non-Cash transactions with Directors or persons connected with them. Accordingly Paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Annexure - B

(Referred to in Paragraph 2 (f) of ‘Report on Other Legal and Regulatory Requirements’ in our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Alufluoride Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of Internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and Directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

According to the information and explanations given to us and based on our audit we are of the opinion that, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For RAO & KUMAR

Chartered Accountants,

FRN 03089S

CA V.V. RAM MOHAN

Hyderabad Partner

29 April, 2016 M No: 18788


Mar 31, 2015

We have audited the accompanying financial statements of ALUFLUORIDE LIMITED("the company"),which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss, 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

Management is responsible for the preparation of these financial statements in terms of the requirements of the Companies Act, 2013 (herein after referred to as "the Act") that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The Board of Directors of the company are responsible for maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, 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, which have been used for the purpose of preparation of the financial statements by the Directors of the Company, as aforesaid.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. While conducting the 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 rules made there under.

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, we considered 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 the adequate internal financial controls system over financial reporting in place and the 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 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 audit opinion on the financial statements.

Opinion

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 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 profit 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order,2015 ("the order") issued by Central Government of India in terms of sub- section (11) of section 143 of the Act, We give in the Annexure a statements 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 to the extent applicable that:

a. We have obtained all 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 examinations 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 Balance Sheet, Statement of Profit and Loss and Cash Flow Statement 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 31.03.2015 and taken on record by the Board of Directors, none of the director is disqualified as on 31.03.2015, from being appointed as a Director in terms of section 164 (2) of the Companies Act, 2013.

f. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditor's) 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 27 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. The company is not required to transfer any amounts to investor education and protection fund as on 31 March, 2015.

The Annexure referred to in our report to the members of ALUFLUORIDE LIMITED for the year ended 31st March, 2015. We report that:

(i) (a) whether the company is maintaining proper The Company has maintained proper records records showing full particulars, including showing full particulars, including quantitative quantitative details and situation of fixed assets; details and situation of fixed assets.

(b) whether these fixed assets have been The Fixed assets have been physically verified physically verified by the management at by the management during the year. There is a reasonable intervals; whether any material phased program of verification which in our discrepancies were noticed on such verification opinion is reasonable aving regard to the size and if so, whether the same have been properly of the Company and the nature of its assets. The dealt with in the books of account; frequency of verification is reasonable and no material discrepancies were noticed on such verification.

(ii) (a)whether physical verification of inventory has Inventory has been physically verified by the been conducted at reasonable intervals by the management at reasonable intervals during the management; year.

(b) Are the procedures of physical verification of The procedure for physical verification of inventory followed by the management inventory followed by the management is reasonable and adequate in relation to the size reasonable and adequate in relation to the size of the company and the nature of its business. of the company and the nature of its business. If not, the inadequacies in such procedures should be reported;

(c) Whether the company is maintaining proper The Company has maintained proper records records of inventory and whether any material of inventories and discrepancies noticed on discrepancies were noticed on physical physical verification as compared to the book verification and if so, whether the same have records were not material. However, the same been properly dealt with in the books of account; have been properly dealt with, in the books of accounts.

(iii) whether the Company has granted any loans, The Company has neither taken for granted secured or unsecured to companies, firms or any loan to companies, Firms or Other Parties other parties covered in the register maintained covered in the register, maintained under section under section 189 of the Companies Act. If so, 189 of Act

(a) whether receipt of the principal amount and - Not Applicable – interest are also regular; and

(b)If overdue amount is more than rupees one - Not Applicable – lakh, whether reasonable steps have been taken by the company for recovery of the principal and interest;

(iv) is there an adequate internal control system In our opinion according to the information and commensurate with the size of the company and explanations given to us, there is an adequate the nature of its business, for the purchase of internal control system commensurate with the inventory and fixed assets and for the sale of goods size of the Company and the nature of its and services. Whether there is a continuing business, for purchase of inventory and fixed failure to correct major weaknesses in internal assets and for the sale of goods and services. control system. In our opinion, there is no continuing failure to correct major weaknesses in internal control system.

(v) in case the Company has accepted deposits, the Company had not accepted any Deposits whether the directives issued by the Reserve from Public. As such, the directives issued by Bank of India and the provisions of sections 73 the Reserve Bank of India and provisions of to 76 or any other relevant provisions of the Sections 73 to 76 of the Act or any other relevant Companies Act and the rules framed there provisions of the Act and the rules framed there under, where applicable, have been complied under are not applicable. with- If not, the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not"

(vi) where maintenance of cost records has been We have broadly reviewed the records specified by the Central Government under maintained by the company pursuant to the rules sub-section (1) of section 148 of the Companies made by the Central Government for the Act, whether such accounts and records have maintenance of cost records Under section been made and maintained; 148(1) of the Companies Act 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained in respect of the applicable products.

(vii) (a) is the Company regular in depositing According to the records of the Company, undisputed statutory dues including provident Undisputed statutory dues including provident fund, employees' state insurance, income-tax, fund, employees state insurance, income tax, sales-tax, wealth tax, service tax, duty of customs, sales tax, wealth tax, service tax, customs duty, duty of excise, value added tax, cess and any excise duty, cess have generally been regularly other statutory dues with the appropriate deposited with the appropriate authorities. authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor.

(b) in case dues of income tax or sales tax or According to the records of the Company, there wealth tax or service tax or duty of customs or are no dues of Income tax, sales tax, customs duty of excise or value added tax or cess have duty, wealth tax, service tax, excise duty and cess not been deposited on account of any dispute, that have not been deposited on account of any then the amounts involved and the forum where dispute except for an unpaid demand of dispute is pending shall be mentioned. (A mere Rs.56,480/- raised on 19.01.2014 in respect of representation to the concerned Department Tax Collected at Source(TCS), DCIT, CPC(TDS) shall not constitute a dispute). during the financial year 2013-14.

(c) whether the amount required to be As on 31 March, 2015 the Company is not transferred to investor education and protection required to transfer any amounts to Investor fund in accordance with the relevant provisions Education and Protection Fund. of the Companies Act, 2013 and rules made there under has been transferred to such fund within time.

(viii) whether in case of a Company which has been The Company does not have any accumulated registered for a period not less than five years, losses at the end of the financial year and has its accumulated losses at the end of the not incurred cash losses in the financial year financial year are not less than fifty per cent of and in the immediately preceding financial year. its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year;

(ix) whether the Company has defaulted in Based on our audit procedures and as per the repayment of dues to a financial institution or information and explanations given by the bank or debenture holders" If yes, the period management, we are of the opinion that the and amount of default to be reported; Company has not defaulted in repayment of dues to a financial institution or bank. The Company has not issued any debentures.

(x) whether the Company has given any guarantee On the basis of records examined by us and for loans taken by others from bank or financial information provided by the management, we institutions, the terms and conditions whereof are of the opinion that the Company has not are prejudicial to the interest of the company; given guarantees for loans taken by others from banks or financial institutions.

(xi) whether term loans were applied for the The Company has not taken any term loans purpose for which the loans were obtained; during the year.

(xii) whether any fraud on or by the company has According to the information and explanation been noticed or reported during the year; If yes, given to us, no fraud on or by the company has the nature and the amount involved is to be been noticed or reported during the year. indicated.

For RAO & KUMAR

Chartered Accountants,

FRN 03089S

CA V.V. RAM MOHAN

Place : Hyderabad Partner

Date : 22 May, 2015 M No: 18788


Mar 31, 2014

We have audited the accompanying financial statements of ALUFLUORIDE 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") read with the General Circular 15/2013 dated 15th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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 but not for the purpose of expressing an opinion on the effectiveness of the company''s internal control. 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 Profit and Loss Statement, 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.

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 paragraphs 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) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

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.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

As required by the Companies'' (Auditor''s Report) Order, 2003 and according to the information and explanations given to us during the course of the audit and on the basis of such checks as were considered appropriate we report that:

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

b) The fixed assets have been physically verified by the management during the year. There is a phased program of verification which in our opinion is reasonable having regard to the size of the company and the nature of its assets. The frequency of verification is reasonable and no material discrepancies were noticed on such physical verification.

c) No substantial part of fixed assets of the company has been disposed-off during the year, which would affect its status as a going concern.

2. a) Inventories have been physically verified during the year by the management at reasonable intervals.

b) The procedure for physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c) The Company has maintained proper records of inventories and discrepancies noticed on physical verification as compared to the book records were not material. However, the same have been properly dealt with, in the Books of Accounts.

3. a) According to the information and explanations given to us, the Company has not taken any loans from companies, firms or other parties covered in the Register, maintained under Section 301 of the Companies Act, 1956. The company has not granted any loans to companies, firms or other parties covered in the register, maintained under Section 301 of the Companies Act, 1956.

b) The company has neither taken nor granted any loans to companies, firms or other parties covered in the register, maintained under Section 301 of the Companies Act, 1956 and hence the sub-clauses (b), (c) & (d) are not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for purchase of inventory and fixed assets and for the sale of goods and services. In our opinion, there is no continuing failure to correct major weaknesses in internal control system.

5. In our opinion and according to the information and explanations given to us, the Company has not entered into any transactions of purchase and sale of goods, materials and services with any party, that needs to be entered in the register maintained under Section 301 of the Companies Act, 1956. As there are no such transactions, clause (b) of paragraph 4(v) is inapplicable.

6. The Company had not accepted any deposits from the public. As such, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Act and the rules framed there under are inapplicable.

7. In our opinion, the company has an Internal Audit system, the scope and coverage of which, in our opinion is required to be enlarged to be commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956 and we are of the opinion that prima-facie the prescribed accounts and records have been made and maintained in respect of the applicable products. We have however not made a detailed examination of the records with a view to determine whether they are accurate and complete.

9. a) According to the records of the company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

b) According to the information and

explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty and cess are in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable.

c) According to the information and

explanations given to us there are no dues of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any pending dispute except for a unpaid demand ofRs.56,480/-raised on 19/01/2014 in respect of Tax Collected at Source (TCS) , DCIT - CPC (TDS) during the Financial Year.

10. In our opinion, the Company has no accumulated losses and has not incurred cash losses either in the current financial year or in the immediately preceding financial year.

11. In our opinion the company does not have any dues to a financial institution or bank. The Company has not issued any debentures.

12. In our opinion and according to the information and explanations given 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.

13. 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.

14. In our opinion, the company does not deal or trade in shares, securities, debentures and other investments with a view to make profits. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

15. We are informed that the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to information and explanations given to us, the Company had not availed any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

18. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act, during the year.

19. According to the information and explanations given to us, the Company had not issued debentures during the year.

20. According to the information and explanations given to us, the company has not raised money by public issues during the year.

21. On the basis of our examination and according to the information and explanations given to us, no fraud, on or by the Company, has been noticed or reported during the year.

For RAO & KUMAR Chartered Accountants FRN.03089S

CA ANIRBAN PAL Place :Hyderabad Partner Date : 2 May, 2014 sMemb. No. 214919


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of ALUFLUORIDE 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 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 mgde 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 Statement, 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.

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 paragraphs 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) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the Directors as on March 31, 2013, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 ot the Companies Act,1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

As required by the Companies'' (Auditor''s Report) Order, 2003 and according to the information and explanations given to us during the course of the audit and on the basis of such checks as were considered appropriate we report that:

1. a) The Company has maintained proper

records showing full particulars including quantitative details and situation of fixed assets.

b) The fixed assets have been physically verified by the management during the year. There is a phased program of verification which in our opinion is reasonable having regard to the size of the company and the nature of its assets. The frequency of verification is reasonable and no material discrepancies were noticed on such physical verification.

c) No substantial part of fixed assets of the company has been disposed-off during the year, which would affect its status as a going concern

2. a) Inventories have been physically verified during the year by the management at reasonable intervals.

b) The procedure for physical verification of inventory 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 has maintained proper records of inventories and discrepancies noticed on physical verification as compared to the book records were not material. However, the same have been properly dealt with, in the Books of Accounts.

3. a) According to the information and

explanations given to us, the Company has not taken any loans from companies, firms or other parties covered in the Register, maintained under Section 301 of the Companies Act, 1956. The company has not granted any loans to companies, firms or other parties covered in the register, maintained under Section 301 of the Companies Act, 1956. .

b) The company has neither taken for granted any loans to companies, firms or other parties covered in the register, maintained under Section 301 of the Companies Act, 1956 and hence the sub-clauses (b), (c) & (d) are not applicable.

4. 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 purchase of inventory, fixed assets and sale of goods & services. In our opinion, there is no continuing failure to correct major weaknesses in internal control.

5. In our opinion and according to the information and explanations given to us, the Company has not entered into any transactions of purchase and sale of goods, materials and services with any party, that needs to be entered in the register maintained under Section 301 of the Companies Act, 1956. As there are no such transactions, clause (b) of paragraph 4(v) is inapplicable.

6. The Company had not accepted any deposits from the public. As such, the directives issued by the Reserve Bank of India and the provisions of Section 58A & 58AA of the Act and the rules framed there under are inapplicable.

7. In our opinion, the company has an Internal Audit system, the scope and coverage of which, '' in our opinion is required to be enlarged to be commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956 and we are of the opinion that prima-facie the prescribed accounts and records have been made and maintained in respect of the applicable products. We have however not made a detailed examination of the records with a view to determine whether they are accurate and complete.

9. a) According to the records of the company,

the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales-tax, customs duty, excise duty and cess are in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us there are no dues of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute except for Rs.15,00,000/- payable on Income Tax Assessment pending before CIT (Appeals) for the Assessment Year 2007-08.

10. In our opinion, the Company has no accumulated losses and has not incurred cash losses either in the current financial year or in the immediately preceding financial year.

11. In our opinion the company does not have any dues to banks and financial institutions. The Company has not issued any debentures.

12. In our opinion and according to the information and explanations given 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.

13. 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.

14. In our opinion, the company does not deal or trade in shares, securities, debentures and other investments with a view to make profits.

Accordingly, the provisions of clause 4(xiv)'' of * the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

15. We are informed that the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to information and explanations given to us, the Company had not availed any . term loan during the year. .

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. The Company has not raised any funds on long-term basis during the year.

18. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act, during the year.

19. According to the information and explanations given to us, the Company had not issued debentures during the year.

20. According to the information and explanations given to us, the company has not raised money by public issues during the year.

21. On the basis of our examination and according to the information and explanations given to us, no fraud, on or by the Company, has been noticed or reported during the year.

For RAO & KUMAR

Chartered Accountants

FRN. 03089S



CA V.V.RAM MOHAN

Place :Visakhapatnam Partner

Date : 6 May, 2013 Memb. No. 18788


Mar 31, 2012

1. We have audited the attached Balance Sheet of Alufluoride Limited, as at 31st March 2012, and also the Statement of Profit and Loss account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's report) Order, 2003(as amended), 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. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and the 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 accounts 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 Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance sheet, Statement of Profit and Loss Account and Cash Flow Statement dealt with by this report, comply with accounting standards referred 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 31st March 2012 and taken on record by the Board of Director, we report that none of the Directors are disqualified as on 31st March, 2012 from being appointed as Directors in terms of Clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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;

(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2012;

(ii) In the case of the Statement of Profit and Loss Account of the PROFIT for the year ended on that date; and

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

ANNEXURE TO AUDITORS' REPORT

Referred to in paragraph 3 of our Report of even

date

1. (a) The Company has maintained proper

records showing full particulars including quantitative details and situation of fixed assets.

(b) All assets have been physically verified by the management during the year. There is a phased program of verification which in our opinion is reasonable having regard to the size of the company and the nature of its assets. The frequency of verification is reasonable and no material discrepancies were noticed on such physical verification.

(c) No substantial part of fixed assets of the company has been disposed off during the year, which would effect its status as a going concern.

2. (a) Inventories have been physically verified

during the year by the management at reasonable intervals.

(b]f The procedure for physical verification of inventory 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 has maintained proper records of inventories and discrepancies noticed on physical verification as compared to the book records were not material. However, the same have been properly dealt with, in the Books of Accounts.

3. (a) According to. the information and

explanations given to us, the Company has not taken any loans from companies, firms or other parties covered in the Register, maintained under Section 301 of the Companies Act, 1956. The company has not granted any loans to companies, firms or other parties covered in the Register, maintained under Section 301 of the Companies Act, 1956.

(b) The Company has neither taken nor granted any loans from companies, firms or other parties covered in the Register, maintained under Section 301 of the Companies Act, 1956 and hence the sub-clauses

(b), (c) & (d) are not applicable.

4. 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 regards to purchase of inventory, fixed assets and with regard to the sale of goods and services. In our opinion there is no continuing failure to correct major weaknesses in internal control.

5. According to the information and explanations given to us, in our opinion there are no transactions of purchase and sale of goods, material and services that need to be entered into the register maintained under section 301 of the Companies Act, 1956. As there are no such transactions, clause (b) of paragraph 4(v) is inapplicable.

6. The Company had not accepted any deposits from the public. As such, the directives issued by the Reserve Bank of India and the provisions of Section 58A & 58AA of the Act and the rules framed there under are inapplicable.

7. In our opinion, the company has an Internal Audit system, the scope and coverage of which, in our opinion is required to be enlarged to be commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1 )(d) of the Compariies Act, 1956 and we are of the opinion that prima-facie the prescribed accounts and records have been made and maintained in respect of the applicable products. We have however not made a detailed examination of the records with a view to determine whether they are accurate and complete.

9. (a) According to the records of the Company,

the company has been regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other material Statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March, 2012, for a period of more than six months from the date they became payable except for Rs.35,00,000/- payable for Income Tax Assessment pending before CIT (Appeals) for the A.Y 2007-08.

(c) According to the information and explanations given to us there are no dues of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute.

10. In our opinion, the Company has no accumulated losses and has not incurred any cash losses in the current financial year but Rs.2.97 Lacs in the immediately preceding financial year.

11. In our opinion, the company does not have any dues to banks and no debentures are issued.

12. In our opinion and according to the information and explanations given 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.

13. 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.

14. 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.

15. We are informed that the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to information and explanations given to us, the Company had not availed any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. The Company has not raised any funds on long-term basis during the year.

18. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act, during the year.

19. According to the information and explanations given to us, the Company had not issued debentures during the year.

20. According to the information and explanations given to us, the company has not raised money by public issues during the year.

21. 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.

For RAO &-KUMAR

Chartered Accountants

FRN. 03089S

CA V.V.RAM MOHAN

Place :Visakhapatnam Partner

Date : 30 July , 2012 Memb. No. 18788


Mar 31, 2010

1. We have audited the attached Balance Sheet of Alufluoride Limited, as at 31st March 2010, and also the Profit and Loss account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for bur opinion.

3. As required by the Companies {Auditors report) Order, 2003, issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we consider appropriate and according to the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and the 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 accounts as required by law have been kept by the company so far as appears from our examination of the books;

(c) The Balance sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report, comply with accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(e) In our opinion and based On information and explanation given to us, none of the Directors are disqualified as on 31st March, 2010 from being appointed as Directors in terms of Clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to and read together with the Significant Accounting Policies and Notes forming part of accounts given by way of Schedule L to the Accounts, give the

. information required by the Companies Act, 1956, in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India;

(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31s March 2010;

(ii) In the case of the Profit and Loss Account of the PROFIT for the year ended on that date; and

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

ANNEXURE TO AUDITORS REPORT

Referred to in paragraph 3 of our Report of even date.

1. (a) The Company has maintained proper

records showing full particulars including quantitative details and situation of fixed assets.

(b) All assets have been physically verified by the management during the year. There is a phased program of verification which in our opinion is reasonable having regard to the size of the company and the nature of its assets. The frequency of verification is reasonable and no material discrepancies were noticed on such physical verification.

(c) No substantial part of fixed assets of the company has been disposed off during the year, which would effect its status as a going concern.-

2. (a) Inventories have been physically verified

during the year by the management at reasonable intervals. "

(b) The procedure for physical verification of inventory 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 has maintained proper records of inventories and discrepancies noticed on physical verification as compared to the book records were not material. However, the same have been properly dealt with, in the Books of Accounts.

3. (a) The Company has not taken any loans from

companies, firms or other parties covered in the Register, maintained under Section 301 of the Companies Act, 1956. The company has not granted any loans to companies, firms or other parties covered in the Register, maintained under Section 301 of the Companies Act, 1956.

(b) The Company has neither taken nor granted any loans from companies, firms or

other parties covered in the Register, maintained under Section 301 of the Companies Act, 1956 and hence the sub- clauses (b), (c) & (d) are not applicable.

4. There are adequate internal control procedures commensurate with the size of the,company and the nature of its business with regards to purchase of inventory, fixed assets and with regard to the sale of goods. In our opinion there is no continuing failure to correct major weaknesses in internal control.

5. According to the information and explanations given to us, in our opinion there are no transactions of purchase and sale of goods, material and services that need to be entered into the register maintained under section 301 of the Companies Act, 1956. As there are no such transactions, clause (b) of paragraph 4(v) is inapplicable.

6. The Company had not accepted any deposits from the public. As such, the directives issued by the Reserve Bank of India and the provisions of Section 58A & 58AA of the Act and the rules framed there under are inapplicable.

7. In our opinion, the company has an Internal Audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima-facie the prescribed accounts and records have been made and maintained in respect of the applicable products. We have however not made a detailed examination of the records with a view to determine whether they are accurate and complete.

9. (a) According to the records of the Company,

the company has been regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other material Statutory dues applicable to it.

(b) According to • the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31s" March 2010, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us there are no dues of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute.

10. In our opinion, the •Company has no accumulated losses and has not incurred cash losses in the current financial year and in the immediately preceding financial year. y

11. In our opinion, the company does not have any dues to banks and no debentures are issued.

12. In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledga of shares, debentures and other securities.

13. 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.

14. 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 (Auditors Report) Order, 2003 are not applicable to the Company.

15. We are informed that the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to information and explanations given to us, the Company had not availed any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. The Company has not raised any funds on long-term basis during the year.

18. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act, during the year.

19. According to the information and explanations given to us, the Company had not issued debentures during the year."

20. According to the information and explanations given to us, the Company has not raised money by public issues during the year.

21. 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.

For M/s. RAO & KUMAR

Chartered Accountants FRN. 03089S

CA V. V. RAM MOHAN Partner Memb. No. 18788

Visakhapatnam 30 July, 2010

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