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Auditor Report of Balaji Amines Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Balaji Amines Limited ("the Company"), which comprise the Balance Sheet as at March 31,2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

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

Auditor's Responsibility

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

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

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 March 31, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order) issued by the Central Government in terms of sub-section (11) of section 143 of the Act, we give in Annexure a statement on matters specified in paragraphs 3 and 4 of the said 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 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) In the course of our audit we have not come across any transactions or matters which have any adverse effects on the functioning of the company.

(f) On the basis of the written representations received from the directors as on March 31,2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) In our opinion, the company has adequate internal financial control systems in place and the same are effective and commensurate with the nature of business of the company and the scale of its operations.

(h) 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 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.

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

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT

Reg :Balaji Amines Limited, Year Ended March 31,2015 Referred to in Para 1 of our report of even date under the heading "Report on Other Legal and Regulatory Requirements"

1. (a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets of the company have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

2. (a) The inventory has been physically verified at reasonable intervals during the year, by the management and internal auditors.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) The company is maintaining proper records of inventory and according to information and explanations given to us no material discrepancies have been noticed on such physical verification.

3. The company has granted unsecured loans to its wholly owned subsidiary viz., Bhagyanagar Chemicals Ltd. The loan is interest free and the principal repayment is as per terms agreed between the parties and in our opinion there are no overdue amounts.

4. In our opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of the business with regard to the purchase of the inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

5. The company has not accepted any deposits from the public.

6. We have broadly reviewed the records maintained by the company pursuant to the rules made by the Central Government for the maintenance of Cost Records under sub-section (1) of Section 148 of the Companies Act, and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not carried out a detailed audit of the same.

7. (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it. No undisputed amounts in respect of these statutory payments were in arrear as on March 31,2015 for a period of more than six months from the date they became payable.

(b) There are no amounts that are required to be transferred to Investor Education and Protection Fund.

8. The company does not have any accumulated losses.

9. The company has not defaulted in repayment of dues to financial institution or banks. The company has not issued debentures.

10. The company has not given guarantee for any loans taken by others.

11. The term loans have been applied for the purpose for which they have been obtained. 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 investments.

12. During the year misappropriation of coal purchases by two employees of the company has been detected by the management and legal proceedings initiated against the said employees. The stock of coal in transit has been misappropriated by the said employees of the company and the amount involved is Rs. 31.71 lacs.

For V.Sridhar & Co.,

Chartered Accountants, FRN : 006206S

Vemulapati Sridhar Proprietor ICAI Membership No : 202337 Secunderabad May 20, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Balaji Amines Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2014, 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 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 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, 2003 ("the Order") issued by the Central Government 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, 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 Balance Sheet, the Statement of Profit and Loss, and the 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, 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.

Re: Balaji Amines Limited, Year ended March 31, 2014.

Annexure to Auditor''s Report

Referred to in paragraph 1 under the head ''Report on Other Legal and Regulatory Requirements'', of our report of even date (I) a. The company has maintained proper records showing full particulars including quantitative particulars and situation of fixed assets.

b. The management of the company has carried out physical verification of the fixed assets at reasonable intervals during the year and according to information and explanations given to us no material discrepancies were noticed on such verification.

c. The Company has not disposed off substantial part of fixed assets during the year

(ii) a. The inventory has been physically verified at reasonable intervals during the year, by the management and internal auditors.

b. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c. The Company is maintaining proper records of inventory and according to information and explanations given to us no material discrepancies have been noticed on such physical verification.

(iii) The company has neither granted nor taken any loans secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of the business with regard to the purchase of the inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(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. We are of the opinion that each of these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from public.

(vii) The internal audit function is carried out by a firm of independent Chartered Accountants appointed by the management and in our opinion the same is commensurate with the size of the company and nature of its business.

(viii) We have broadly reviewed the records 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. However, we have not carried out a detailed audit of the same.

(ix) a. The company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it. No undisputed amounts in respect of these statutory payments were in arrear as on March 31, 2012 for a period of more than six months from the date they became payable.

b. The company has preferred an appeal to Commissioner of Income Tax (Appeals), Pune, in respect of Income Tax assessments for the Assessment Years 2007-08, 2008-09, 2009-10 and 2010-11. These issues are similar in all the years. Of these the appeals in respect of 2007-08, 2008-09 and 2009-10 have been partly allowed in Company''s favour and the Company has preferred a second appeal to Hon''ble Income Tax Appellate Tribunal, Pune. As regards Assessment Year 2010-11, the matter is pending before the Commissioner of Income Tax (Appeals), Pune. The amount of disputed tax involved in these years is Rs. 2.16 Crores as against which an amount of Rs. 1.11 Crore is paid and accounted under the head ''Short term loans and advances''. In addition to the above the company is in appeal against penalty amounting to Rs.1.47 crores pertaining to assessment years 2007-08 and 2008-09 before the Commissioner of Income Tax (Appeals), Pune. No amounts are deposited against the penalty demands.

(x) The company does not have any accumulated losses.

(xi) The company has not defaulted in repayment of dues to financial institution or banks. The Company has not issued debentures.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other such securities.

(xiii) The Company is not a chit fund or a nidhi /mutual fund / society.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to information and explanations given to us the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) The term loans have been applied for the purpose for which they have been obtained. According to 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 investments.

(xix) The company has not issued any debentures.

(xx) The company has not raised any monies from public issues in the year under review.

(xxi) According to 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, V. SRIDHAR & CO.

Chartered Accountants

FRN.006206S

Vemulapati Sridhar

Proprietor

Membership No. 202337

Secunderabad May 07, 2014.


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fi nancial statements of Balaji Amines Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profi t and Loss and Cash Flow Statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows 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 system relevant to the preparation and presentation of the fi nancial 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 fi nancial 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 fi nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fi nancial 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 fi nancial 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 fi nancial statements. We believe that the audit evidence we have obtained is suffi cient 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 fi nancial 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 Statement of Profi t and Loss, of the profi t for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash fl ows 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 in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specifi ed 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, the Statement of Profi t 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 Balance Sheet, the Statement of Profi t and Loss, and the 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 disqualifi ed as on March 31, 2013, 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 notifi cation 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.

Re: Balaji Amines Limited, Year ended March 31, 2013.

ANNEXURE TO AUDITOR''S REPORT

Referred to in paragraph 1 under the head ''Report on Other Legal and Regulatory Requirements'', of our report of even date

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

b. The management of the company has carried out physical verifi cation of the fi xed assets at reasonable intervals during the year and according to information and explanations given to us no material discrepancies were noticed on such verifi cation.

c. The Company has not disposed off substantial part of fi xed assets during the year

(ii) a. The inventory has been physically verifi ed at reasonable intervals during the year, by the management and internal auditors.

b. The procedures of physical verifi cation of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c. The Company is maintaining proper records of inventory and according to information and explanations given to us no material discrepancies have been noticed on such physical verifi cation.

(iii) The company has neither granted nor taken any loans secured or unsecured to/from companies, fi rms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of the business with regard to the purchase of the inventory and fi xed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(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. We are of the opinion that each of these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from public.

(vii) The internal audit function is carried out by a fi rm of independent Chartered Accountants appointed by the management and in our opinion the same is commensurate with the size of the company and nature of its business.

(viii) We have broadly reviewed the records 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. However, we have not carried out a detailed audit of the same.

(ix) a. The company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it. No undisputed amounts in respect of these statutory payments were in arrear as on March 31, 2012 for a period of more than six months from the date they became payable.

b. The company has preferred an appeal to Commissioner of Income Tax (Appeals), Pune, in respect of Income Tax assessments for the Assessment Years 2007-08, 2008-09, 2009-10 and 2010-11. These issues are similar in all the years. Of these the appeals in respect of 2007-08, 2008-09 and 2009-10 have been partly allowed in Company''s favour and the Company has preferred a second appeal to Hon''ble Income Tax Appellate Tribunal, Pune. As regards Assessment Year 2010-11, the matter is pending before the Commissioner of Income Tax (Appeals), Pune. The amount of disputed tax involved in these years is Rs. 2.16 Crores as against which an amount of Rs. 1.11 Crore is paid and accounted under the head ''Short term loans and advances''. In addition to the above the company is in appeal against penalty amounting to Rs.1.47 crores pertaining to assessment years 2007-08 and 2008-09 before the Commissioner of Income Tax (Appeals), Pune. No amounts are deposited against the penalty demands.

(x) The company does not have any accumulated losses.

(xi) The company has not defaulted in repayment of dues to fi nancial institution or banks. The Company has not issued debentures.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other such securities.

(xiii) The Company is not a chit fund or a nidhi /mutual fund / society.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to information and explanations given to us the company has not given any guarantees for loans taken by others from banks or fi nancial institutions.

(xvi) The term loans have been applied for the purpose for which they have been obtained.

(xvii) According to 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 investments.

(xviii) The Company has not made any preferential allotment during the year.

(xix) The Company has not issued any debentures.

(xx) The Company has not raised any monies from public issues in the year under review.

(xxi) According to 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 V. Sridhar & Co.

Chartered Accountants FRN No: 006206 S

Vemulapati Sridhar

Proprietor

ICAI Memb.No:202337

Secunderabad,

May 11, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of Balaji Amines Limited, as at March 31, 2012, the Statement of ' Profit and Loss and also 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.

We conducted our audit in accordance with Auditing Standards generally accepted in India. The said 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.

As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government 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 paragraphs 4 and 5 of the said Order. -

Further to our comments in the Annexure referred to in paragraph 3 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 account 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 Statement of Profit and Loss and the Cash Flow statement dealt with by this report are in agreement with the books of accounts

iv) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the 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;

v) On the basis of written representations received from the Directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 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 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 the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

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.

Re: Balaji Amines Limited, Year ended March 31,2012

Annexure to Auditors' Report

(Referred to in paragraph 3 of our report of even date)

(i) a. The company is maintaining proper records showing full particulars including quantitative particulars and situation of fixed assets.

b. The fixed assets of the company have been has physically verified by the management, at reasonable intervals during the year and according to information and explanations given to us no material discrepancies were noticed on such verification.

c. The Company has not disposed off substantial part of fixed assets during the year

(ii) a. The inventory has been physically verified by the management during the year at reasonable intervals.

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

c. The Company is maintaining proper records of inventory and according to information and explanations given to us no material discrepancies have been noticed on such physical verification.

(iii) The company has neither granted nor taken any loans secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion, there are adequate internal control procedures commensurate with the size of-the company and the nature of the business with regard to the purchase of the inventory, fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(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. We are of the opinion that each of these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from public.

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

(viii) We have broadly reviewed the records 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. However, we have not carried out a detailed audit of the same.

(ix) a. The company is 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. No undisputed amounts in respect of these statutory payments were in arrear as on March 31, 2012 for a period of more than six months from the date they became payable, b. The company has preferred an appeal to Commissioner of Income Tax (Appeals) in respect of Income Tax assessment for Assessment Years 2007-08, 2008-09 and 2009-10. The issues are similar in all the three years. Of these the appeals in respect of 2007-08 and 2008-09 have been partly allowed in Company's favour and the Company has preferred appeal to Income Tax Appellate Tribunal. As regards Assessment Year 2009-10, the matter is pending before the Commissioner of Income Tax (Appeals). The amount of disputed tax involved in these three years is Rs. 2.00 Crores as against which an amount of Rs. 1.00 Crore is paid and accounted under the head 'Short term loans and advances'.

(x) The company does not have any accumulated losses.

(xi) The company has not defaulted in repayment of dues to financial institution or banks. The Company has not issued debentures.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other such securities.

(xiii) The Company is not a chit fund or a nidhi /mutual fund / society. '

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to information and explanations given to us the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) The term loans have been applied for the purpose for which they have been obtained.

(xvii)According to 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 investments. No long term funds have been used to finance short term assets except permanent working capital.

(xix) The company has not issued any debentures.

(xx) The company has not raised any monies from public issues in the year under review.

(xxi) According to 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, V. Sridharft Co.

Chartered Accountants

FRN. 006206 S

Vemulapati Sridhar

Proprietor

Membership No. 202337

Secunderabad May 03,2012.


Mar 31, 2011

1. We have audited the attached Balance Sheet of Balaji Amines Limited, as at March 31, 2011, the Profit and Loss account and also 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 Auditing Standards generally accepted in India. The said 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 (Auditors Report) Order, 2003 issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1 956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 account 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 the Cash Flow statement dealt with by this report are in agreement with the books of accounts

(iv) In our opinion, the Balance Sheet, the Profit and Loss account and the 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;

(v) On the basis of written representations received from the Directors, as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1 956.

(vi) 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, 1 956, 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, 2011;

b) in the case of the Profit and Loss account, 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.

Annexure to Auditors Report Referred to in paragraph 3 of our report of even date.

(i) a. The company is maintaining proper records showing full particulars including quantitative particulars and situation of fixed assets.

b. The fixed assets of the company have been has physically verified by the management, at reasonable intervals during the year and according to information and explanations given to us no material discrepancies were noticed on such verification.

c. The Company has not disposed off substantial part of fixed assets during the year.

(ii) a. The inventory has been physically verified by the management during the year at reasonable intervals.

b. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c. The Company is maintaining proper records of inventory and according to information and explanations given to us no material discrepancies have been noticed on such physical verification.

(iii) The company has neither granted nor taken any loans secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 3 01 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us there is adequate internal control system 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 the internal control.

(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 3 01 of the Companies Act, 1956 have been so entered.

b. We are of the opinion that each of these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from public.

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

(viii) The Central Government has not prescribed maintenance of cost records to the company.

(ix) a. The company is 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. No undisputed amounts in respect of these statutory payments were in arrear as on March 31, 2011 for a period of more than six months from the date they became payable.

b. The company is in appeal before the Commissioner of Income Tax (Appeals) in respect of disputed tax for the Assessment Years 2007-08 and 2008-09. The amount of tax demand disputed for these two years is Rs. 2.28 Crores as against which the company has paid Rs.0.96 Crores.

(x) The company does not have any accumulated losses.

(xi) The company has not defaulted in repayment of dues to financial institution or banks. The Company has not issued debentures.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other such securities.

(xiii) The Company is not a chit fund or a nidhi /mutual fund / society.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to information and explanations given to us the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) The term loans have been applied for the purpose for which they have been obtained.

(xvii) According to 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 investments. No long term funds have been used to finance short term assets except permanent working capital.

(xix) The company has not issued any debentures.

(xx) The company has not raised any monies from public issues in the year under review.

(xxi) According to 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 V. Sridhar & Co., Chartered Accountants FRN No. 006206S

Vemulapati Sridhar Proprietor Membership No. 202337 Secunderabad, April 28, 2011


Mar 31, 2010

1. We have Audited the attached Balance Sheet of Balaji Amines Limited, as at March 31, 2010, the Profit and Loss account and also 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 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 (Auditors Report) Order, 2003 issued by the Central Government 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 paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 account as required by law have been kept by the company so far as appears from our examination of those books

(iii) The Balance Sheet, Profit and Loss account and the Cash Flow statement dealt with by this report are in agreement with the books of accounts

(iv) In our opinion, the Balance Sheet, the Profit and Loss account and the 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;

(v) On the basis of written representations received from the Directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 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 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 the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

b) in the case of the Profit and Loss account, 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.

ANNEXURE TO THE AUDITORS REPORT Re : Balaji Amines Limited Referred to in paragraph 3 of our report of even date.

(i) a. The company is maintaining proper records showing full particu -lars including quantitative particulars and situation of fixed assets.

b. The management of the Company, during the year, at reasonable intervals has physically verified the fixed assets. According to information and explanations given to us no material discrepancies were noticed on such verification.

c. The Company has not disposed off substantial part of fixed assets during the year

(ii) a. The inventory has been physically verified by the management during the year and the frequency of such

verification is reasonable.

b. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c. The Company is maintaining proper records of inventory and according to information and explanations given to us no material discrepancies have been noticed on such physical verification

(iii) a. The company has granted loan to Bhagyanagar Chemicals Limited (a subsidiary). The maximum balance in the account during the year was Rs.90.05 lacs and the year end balance is Rs.84.21 lacs. The company has not taken any loans during the year.

b. In our opinion the rates of interest and other terms and conditions granted as above are not prima facie prejudicial to the interests of the company.

c. The payments to the company in respect of the said loans are as per the terms agreed to by the parties.

(iv) In our opinion and according to the information and explanations given to us there is adequate internal control system 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 the internal control.

(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. We are of the opinion that each of these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from public.

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

(viii) The Central Government has not prescribed maintenance of cost records to the company.

(ix) a. The company is 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 information and explanations given to us, no undisputed amounts in respect of Income Tax,Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and Cess were in arrear as on March 31, 2010 for a period of more than six months from the date they became payable.

(x) The company does not have any accumulated losses.

(xi) The company has not defaulted in repayment of dues to financial institution or banks. The Company has not issued debentures.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other such securities.

(xiii) The Company is not a chit fund or a nidhi/mutual fund/society.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to information and explanations given to us the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) In our opinion the term loans have been applied for the purpose for which they have been obtained.

(xvii) According to 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 investments. No long term funds have been used to finance short term assets except permanent working capital.

(xix) The company has not issued any debentures.

(xx) The company has not raised any monies from public issues in the year under review.

(xxi) According to 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 V.Sridhar & Co.,

Chartered Accountants Firm No. 006206S

VEMULAPATI SRIDHAR

Proprietor

ICAI Membership No. 202337

April 29, 2010 Hyderabad



 
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