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Auditor Report of Batliboi Ltd.

Mar 31, 2016

TO THE MEMBERS OF BATLIBOI LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of BATLIBOI 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, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company''s branch at Udhna plant.

Management''s Responsibility for the Standalone Financial Statements

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

Auditor''s Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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.

Basis for Qualified Opinion

The Company has paid remuneration to the new Managing Director in excess of the ceiling under Schedule V of the Companies Act, 2013 by Rs.16.79 Lacs. The said Managing Director was appointed with effect from 1st February, 2016 and the terms and conditions of such appointment and the remuneration payable to him have been approved by the Board of Directors at its meeting held on 30th January, 2016 based on the recommendation of the Nomination and Remuneration Committee of the Board on 30th January, 2016 but subject to approval of the shareholders in the next general meeting of the Company and the Central Government as specified in the Schedule V of the Companies Act, 2013.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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 loss and its cash flows for the year ended on that date.

Other Matter

We did not audit the financial statements of Udhna Plant (“the branch”) included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs.6,455.41 Lacs as at 31st March, 2016 and total revenues of Rs.7,065.60 Lacs for the year ended on that date, as considered in the standalone financial statements. The financial statements of the said branch have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of the branch, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”) issued by the Government of India in terms of Subsection (11) of Section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the “Annexure I” a statement on the matters specified in the 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. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 and proper returns adequate for the purposes of our audit have been received from the branch not visited by us.

c. The reports on the accounts of the branch offices of the Company audited under Section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d. 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 and with the returns received from the branch not visited by us.

e. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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.

f. 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.

g. The qualification relating to payment of remuneration to the Managing Director in excess of the limits specified in Schedule V of the Companies Act, 2013 is as stated in the Basis for Qualified Opinion paragraph above.

h. 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 II”.

i. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note 15-III 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 - Refer Note 15-XII-D to the financial statements;

iii. There has been no delay in transferring the amounts required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE I TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE TO THE MEMBERS OF BATLIBOI LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2016

(i) 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 at reasonable intervals having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such verification were, in our opinion, not material and have been properly dealt with in the books of account.

c. According to the information and explanations given to us and based on verification of records, the title deeds of immovable properties are held in the name of the Company.

(ii) Physical verification of inventory has been conducted by the management at reasonable intervals during the year except in case of inventory lying with third parties where confirmations have been obtained. The discrepancies noticed on physical verification of inventory as compared to book records have been properly dealt with in the books of account.

(iii) Based on audit procedures applied by us and according to the information and explanations given to us, the Company has not granted any loans to Companies, Firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) According to the information and explanations given to us, the Company has not granted any loans, investments, guarantees and security during the year to which provisions of Section 185 and 186 of the Act apply.

The Company has given guarantees to banks for credit facilities/ performance guarantees extended by them to BEEL, a related party. The Company has strategic business relationship with the party and the party has extended reciprocal guarantee/ financial assistance on behalf of / to the Company, the terms and conditions of the guarantees are not prima facie prejudicial to the interest of the Company. The said guarantees were approved by the Company by a resolution passed at the Board Meeting dated 27th January, 2012 and in accordance with provisions of the Section 372 of the Companies Act, 1956.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public, within the meaning of Section 73 to 76 or any other relevant provisions of the Act and rules framed there under. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vi) We have broadly reviewed the cost records maintained by the Company in accordance with Section 148(1) of the Act and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) a. During the year there have been significant delays in depositing undisputed statutory dues such as Provident Fund,

Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Value Added Tax, Cess and Excise Duty with the appropriate authorities. In case of Wealth Tax, Custom Duty and other material statutory dues applicable to it, the Company has been regular in depositing the dues with the appropriate authorities;

According to the information and explanations given to us, and the records of the Company examined by us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty or Cess were in arrears, as at 31st March 2016 for a period of more than six months from the date they became payable.

b. In respect of Sales Tax and Excise Duty dues not deposited on account of disputes, the details of amounts involved and the forum where the disputes are pending, are as under:

Rs. in Lacs

Forum where dispute is pending

Amount

Sales Tax Appellate / Provisional Authority-up to Commissioner Level

53.62

Sales Tax Appellate Authority-Tribunal

25.53

Central Excise Appellate Tribunal

1.23

(viii) On the basis of verification of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks. The Company has not taken any loan from any financial institution or government or by way of issue of debentures.

(ix) The Company has not raised any money from public and also has not taken any term loan during the year.

(x) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees having a material misstatement on the financial statements has been noticed or reported during the year.

(xi) According to the information and explanations given to us and based on verification of records, the managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013, except in case of the remuneration paid to the new Managing Director which is in excess of the ceiling under Schedule V of the Companies Act, 2013 (Refer Basis for Qualified Opinion paragraph in the Auditor''s Report).

(xii) The Company is not a Nidhi company and hence reporting under Clause (xii) of the order does not arise.

(xiii) According to the information and explanations given to us and based on verification of records and approvals of the Board of Directors, all transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.

(xvi) According to the information and explanations given to us, the Company is not a Non Banking Finance Company and therefore is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE II TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF BATLIBOI LIMITED

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 Batliboi Limited (“the Company”) as of 31st March, 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 the 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, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, 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.

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 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 V. SANKAR AIYAR & CO.

Chartered Accountants

Firm''s Registration No.109208W

Place: Mumbai ARVIND MOHAN

Date: 6th May, 2016 Partner

Membership No. 124082


Mar 31, 2015

We have audited the accompanying standalone financial statements of BATLIBOI LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the returns for the year ended on that date audited by the branch auditors of the Company's branch at Udhna plant.

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 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion, we draw attention to the Note 15-XIII-A in the financial statements which indicates that the Company has incurred cash losses during the current year and in the previous year and the Company's current liabilities exceeded its current assets as at Balance Sheet date. Considering the factors stated in the said note, the preparation of financial statements on going concern basis is not affected.

Other Matter

We did not audit the financial statements of Udhna Plant (the branch) included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs. 7,313.84 Lacs as at 31st March, 2015 and total revenues of Rs. 8,454.34 lacs for the year ended on that date, as considered in the standalone financial statements. The financial statements of the said branch have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order. In preparing the said statement, we have considered the statements made under the aforesaid order by the branch auditors who audited the accounts of the Company's Udhna plant.

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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

(d) 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 and with the returns received from the branches not visited by us.

(e) I n 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.

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 15-III 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- Refer Note 15-XII-D to the financial statements.

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

ANNEXURE REFERRED TO IN THE AUDITOR'S REPORT TO THE MEMBERS OF BATLIBOI LIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2015

(i) 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 at reasonable intervals having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such verification were, in our opinion, not material and have been properly dealt with in the books of account.

(ii) a. Physical verification of inventory has been conducted by the management at reasonable intervals during the year except in case of inventory lying with third parties where confirmations have been obtained.

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

c. The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records have been properly dealt with in the books of account.

(iii) Based on audit procedures applied by us and according to the information and explanations given to us, the Company has not granted any loans to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) I n our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are under specific marketing arrangements or goods of technical specification in respect of which comparable alternative quotations are not available, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system of the Company.

(v) During the year, the Company has not accepted any deposits from the public. In this regard there has not been any order by Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vi) We have broadly reviewed the cost records maintained by the Company in accordance with Section 148(1) of the Act and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) a. During the year there have been delays in depositing undisputed statutory dues such as Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Service Tax and Excise Duty with the appropriate authorities. However, there has not been any instance of non-payment of the aforesaid statutory dues to the appropriate authorities. In case of Wealth Tax, Custom Duty and other material statutory dues applicable to it, the company has been regular in depositing the dues with the appropriate authorities.

According to the information and explanations given to us, and the records of the Company examined by us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty or Cess were in arrears, as at 31st March 2015 for a period of more than six months from the date they became payable.

b. I n respect of Sales Tax and Excise Duty dues not deposited on account of disputes, the details of amounts involved and the forum where the disputes are pending, are as under:-

Forum where dispute is pending Amount (Rs. Lacs)

Sales Tax Appellate/Revisional Authority-up to Commissioner Level 53.62

Sales Tax Appellate Authority-Tribunal 35.66

Central Excise Appellate Tribunal 1.24

c. According to the information and explanations given to us and the records of the Company, there are no amounts which are required to be transferred to Investor Education and Protection Fund.

(viii) The Company does not have accumulated losses as at 31st March, 2015. The Company has incurred cash loss during the current financial year and in the immediately preceding financial year.

(ix) On the basis of verification of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks. The Company has not taken any loan from any financial institution or by way of issue of debentures.

(x) I n respect of guarantees given by the Company for loans taken by a related party from banks, having regard to the explanation that the Company has strategic business relationship with the related party and the party has extended reciprocal guarantee/charge on its current assets for financial assistance availed by the Company, the terms and conditions of the guarantees are, in our opinion, not prima facie prejudicial to the interests of the Company.

(xi) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, wherever the purpose is stipulated by the lender, the term loans raised have been applied for such purpose.

(xii) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India 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 V. Sankar Aiyar & Co., Chartered Accountants Firm Reg. No. 109208W sd/- Place: Mumbai [G. Sankar] Dated: 9th May, 2015 Partner Membership No.46050


Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Batliboi Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''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 Account, of the loss for the year ended on that date; and

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

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.

bb) The report on the accounts of the Company''s Udhna plant audited under Section 228 by the branch auditors has been forwarded to us as required by clause (c) of sub-section (3) of the section 228 and have been dealt with in preparing our report in the manner considered necessary by us.

c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from branches not visited by us.

d) In our opinion, the Balance Sheet, the 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, 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.

Our statement on the matters specified in para 4 and 5 of the Companies (Auditors Report) Order, 2003 ("the Order") as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, is given below. In preparing the said statement, we have considered the statements made under the aforesaid order by the branch auditors who audited the accounts of the Company''s Udhna plant.

(i) 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 at reasonable intervals having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such verification were, in our opinion, not material and have been properly dealt with in the books of account.

c. Since there is no disposal of substantial part of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

(ii) a. Physical verification of inventory has been conducted by the management at reasonable intervals during the year except in case of inventory lying with third parties where confirmations have been obtained.

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

c. The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records have been properly dealt with in the books of account.

(iii) Based on audit procedures applied by us and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, sub-clause (b) to (d) of sub-para (iii) of para 4 of the Order is not applicable.

(iv) a. Based on audit procedures applied by us and according to the information and explanations given to us, the Company has taken unsecured loans from two parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 618.78 Lacs and the year end balance aggregates Rs. 618.78 Lacs.

b. In our opinion, the rate of interest and other terms and conditions on which the aforesaid loans have been taken are prima facie, not prejudicial to the interest of the Company.

c. The Company is regular in repaying the principal amounts on aforesaid loans taken and has been regular in the payment of interest wherever stipulated.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are under specific marketing arrangements or goods of technical specification in respect of which comparable alternative quotations are not available, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system of the Company.

(vi) a. According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been so entered in a summarized form.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and exceeding the value of Rs. 5,00,000 in respect of any party, during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vii) During the year, the Company has not accepted any deposits from the public. In this regard there has not been any order by Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules 2011 prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) a. During the year there have been delays in depositing undisputed statutory dues such as Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Service-tax, and Excise-duty with the appropriate authorities. However, there has not been any instance of non-payment of the aforesaid statutory dues to the appropriate authorities. In case of Investor Education Protection Fund, Wealth Tax, Custom Duty and other material statutory dues applicable to it, the Company has been regular in depositing the dues with the appropriate authorities.

b. According to the information and explanations given to us, and the records of the Company examined by us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, customs duty, excise duty or cess were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

c. In respect of sales tax and excise duty dues not deposited on account of disputes, the details of amounts involved and the forum where the disputes are pending, are as under:- Forum where dispute is pending Amount (Rs. in Lacs) Sales Tax Appellate / Revisional Authority-up to Commissioner Level 53.62 Sales Tax Appellate Authority-Tribunal 35.66 Central Excise Appellate Tribunal 1.24

(xi) The Company does not have accumulated losses as at 31st March, 2014. The Company has incurred cash loss during the current financial year. However it has not incurred cash loss in the immediately preceding financial year.

(xii) Based on audit procedures applied by us and according to the information and explanations given to us, there was no non-payment of dues to banks during the year.

(xiii) According to the information and explanations given to us and based on our examination of the books of account, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) The provisions of special statute applicable to chit fund / mutual benefit fund / societies are not applicable to the Company.

(xv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause (xiv) of Para 4 of the Order are not applicable.

(xvi) In respect of guarantees given by the Company for loans taken by a related party from banks, having regard to the explanation that the Company has strategic business relationship with the related party and the party has extended reciprocal guarantee / charge on its current assets for financial assistance availed by the Company, the terms and conditions of the guarantees are, in our opinion, not prima facie prejudicial to the interests of the Company.

(xvii) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, wherever the purpose is stipulated by the lender, the term loans raised during the year have been applied for such purpose.

(xviii) According to the information and explanations given to us and on an overall examination of the cash flow statement, short term funds to the extent of Rs. 580.94 lacs have been used for meeting the losses incurred during the year. Further the Company has explained that the steps are being taken to augment long term funds.

(xix) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xx) The Company has not issued any secured debentures during the year, and accordingly, no securities were required to be created.

(xxi) The Company has not raised any money by public issue during the year. Therefore, the requirement of disclosure by the management on the end use of money raised by public issue and verification of the same is not applicable.

(xxii) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India 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 V. Sankar Aiyar & Co.,

Chartered Accountants

Firm Reg. No. 109208W

sd/-

Place: Mumbai [G. Sankar]

Dated: 23rd May, 2014 Partner

Membership No.46050


Mar 31, 2012

1. We have audited the attached balance sheet of Batliboi Ltd., as at 31st March, 2012 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 Companyths 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 misstatements. 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 reasonable basis for our opinion.

3. As required by the Companies Auditorths Report Order, 2003, issued by the Company Law Board in terms of sub-section (4A) of section 227 of the Companies Act, 1956 as amended by the Companies (Auditorths Report) (Amendment) Order, 2004, 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 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 purposes 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

(iii) The report on the accounts of Udhna Plant audited by the branch auditors of the Company has been forwarded to us and has been appropriately dealt with in preparing our report;

(iv) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account and with the audited returns received from the branch of the Company;

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

(vi) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31st March, 2012 from being appointed as Director of the Company under Clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant accounting policies and notes forming part of financial statements give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India:

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

(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 REFERRED TO IN OUR REPORT TO THE MEMBERS OF BATLIBOI LTD. FOR THE YEAR ENDED 31st MARCH, 2012

Our statement on the matters specified in para 4 and 5 of the Companies (Auditors Report) Order, 2003 ("the Order") as amended by the Companies (Auditorths Report) (Amendment) Order, 2004, is given below. In preparing the said statement, we have considered the statements made under the aforesaid order by the branch auditors who audited the accounts of the Companyths Udhna plant.

(i) (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 at reasonable intervals having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such verification were, in our opinion, not material and have been properly dealt with in the books of account.

(c) Since there is no disposal of substantial part of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

(ii) (a) Physical verification of inventory has been conducted by the management at reasonable intervals during the year except in case of inventory lying with third parties where confirmations have been obtained.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and the same have been properly dealt with in the books of account.

(iii) Based on audit procedures applied by us and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, sub-clause (b) to (d) of sub-para (iii) of para 4 of the Order is not applicable.

(iv) (a) Based on audit procedures applied by us and according to the information and explanations given to us, the Company has taken unsecured loans from parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs 677 lacs and the year end balance aggregates Rs 677 lacs.

(b) In our opinion, the rate of interest and other terms and conditions on which the aforesaid loans have been taken are prima facie, not prejudicial to the interest of the Company.

(c) The Company is regular in repaying the principal amounts on aforesaid loans taken as stipulated and has been regular in the payment of interest.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are under specific marketing arrangements or goods of technical specification in respect of which comparable alternative quotations are not available, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system of the Company.

(vi) (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been so entered in a summarized form.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and exceeding the value of Rs 5,00,000 in respect of any party, during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vii) During the year, the Company has not accepted any deposits from the public. In this regard there has not been any order by Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) (a) During the year the Company has been regular, except for some delays in few cases, in depositing undisputed statutory dues including Provident Fund, Employeesth State Insurance, Income-tax, Investor Education Protection Fund, Sales-tax, Wealth Tax, Service Tax, Custom Duty and Excise Duty and other material statutory dues applicable to it with the appropriate authorities.

(b) According to the information and explanations given to us, and the records of the Company examined by us, no undisputed amounts payable in respect of Income-Tax, Wealth-tax, Service-Tax, Customs Duty, Excise Duty or cess were in arrears, as at 31st March 2012 for a period of more than six months from the date they became payable.

(c) In respect of Sales Tax and Excise Duty dues not deposited on account of disputes, the details of amounts involved and the forum where the disputes are pending, are as under:-

Forum where dispute is pending Amount (Rs Lacs)

Sales Tax Appellate/Revisional Authority-up to Commissioner Level 53.62

Sales Tax Appellate Authority-Tribunal 35.66

Central Excise Appellate Tribunal 1.24

(xi) The Company does not have accumulated losses as at 31st March, 2012. The Company has not incurred cash loss during the current financial year and in the immediately preceding financial year.

(xii) Based on audit procedures applied by us and according to the information and explanations given to us, the Company has not defaulted in repayment of its dues to Banks during the year.

(xiii) According to the information and explanations given to us and based on our examination of the books of account, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) The provisions of special statute applicable to chit fund/mutual benefit fund/societies are not applicable to the Company.

(xv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause (xiv) of Para 4 of the Order are not applicable.

(xvi) In respect of guarantees given by the Company for loans taken by a related party from banks, having regard to the explanation that the Company has strategic business relationship with the related party and the party has extended reciprocal guarantee/charge on its current assets for financial assistance availed by the Company, the terms and conditions of the guarantees are, in our opinion, not prima facie prejudicial to the interests of the Company.

(xvii) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, wherever the purpose is stipulated by the lender, the term loans raised during the year have been applied for such purpose.

(xviii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company and the cash flow statement and considering that the company has taken long term loan from a bank towards capital expenditure, prima-facie, funds raised on short term basis have not been utilised for long term investment.

(xix) The Company- has made preferential allotment of Redeemable Non-cumulative Preference Shares during the year to a party covered in the register maintained under section 301 of the Companies Act, 1956. The price at which these shares have been issued is not prejudicial to the interest of the company.

(xx) The Company has not issued any secured debentures during the year, and accordingly, no securities were required to be created.

(xxi) The Company has not raised any money by public issue during the year. Therefore, the requirement of disclosure by the management on the end use of money raised by public issue and verification of the same is not applicable.

(xxii) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India 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 V. Sankar Aiyar & Co.

Chartered Accountants

Firm Regn. No. 109208W

Sd/-

(G. Sankar)

Place : Mumbai, Partner

Date : 23rd May, 2012 Membership No.: 46050


Mar 31, 2011

1. We have audited the attached balance sheet of Batliboi Ltd., as at 31st March, 2011 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 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 auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in 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 reasonable basis for our opinion.

3. As required by the Companies Auditor's Report Order, 2003, issued by the Company Law Board in terms of sub-section (4A) of section 227 of the Companies Act, 1956 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, 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 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 purposes 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

iii. The report on the accounts of Udhna Plant audited by the branch auditors of the Company have been forwarded to us and have been appropriately dealt with in preparing our report;

iv. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account and with the audited returns received from the branch of the Company;

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

vi. On the basis of written representations received from the - directors and taken on record by the Board of Directors, we report that'none of the directors of the Company is disqualified as on 31st March, 2011 from being appointed as director of the Company under Clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vii, In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant accounting policies and notes to accounts in schedule 17 give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India:

(a) I n the case of the balance sheet, of the state of affairs of the Company as at 31s1 March, 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 REFERRED TO IN OUR REPORT TO THE MEMBERS OF BATLIBOI LTD. FOR THE YEAR ENDED 31st MARCH, 2011

Our statement on the-matters specified in para 4 and 5 of the Companies

(Auditors Report) Order, 2003 ("the Order") as amended by the

Companies (Auditor's Report) (Amendment) Order, 2004, is given below. In preparing the said statement, we have considered the statements made under the aforesaid order by the branch auditors who audited the accounts of the Company's Udhna plant.

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 at reasonable intervals having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such verification were, in our opinion, not material and have been properly dealt with in the books of account.

c. Since there is no disposal of substantial part of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

2. a. Physical verification of inventory has been conducted by

the management at reasonable intervals during the year except in case of inventory lying with third parties where confirmations have been obtained.

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

c. The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and the same have been properly dealt with in the books of account.

3. Based on audit procedures applied by us and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, sub-clause (b) to (d) of sub-para (iii) of para 4 of the Order is not applicable.

4. a Based on audit procedures applied by us and according to

the information and explanations given to us, the company has taken unsecured loans from four parties covered in the register maintained under section 301 of the Companies

Act, 1956. The maximum amount involved during the year wasRs. 132.00 Lacs and the year end balance aggrega tes Rs. 122.00 Lacs.

b. In our opinion, the rate of interest and other terms and conditions on which the aforesaid loans have been taken are prima facie, not prejudicial to the interest of the company.

c. The Company is regular in repaying the principal amounts on aforesaid loans taken as stipulated and has been regular in the payment of interest.

5. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are under specific marketing arrangements or goods of technical specification in respect of which comparable alternative quotations are not available, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system of the Company.

6. a. According to the information and explanations given to us,

we are of the opinion that the particulars of all contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been so entered in a summarized form.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, and exceeding the value of Rs. 5,00,000 in respect of any party, during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

7. During the year, the Company has not accepted any deposits from the public. In this regard there has not been any order by Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

9. The Centra! Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

10. a. During the year the Company has generally been regular in

depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Investor Education Protection Fund, Sales-tax, Wealth Tax, Service Tax, Custom Duty and Excise Duty and other material statutory dues applicable to it with the appropriate authorities.

b. According to the information and explanations given to us, and the records of the Company examined by us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, customs duty, excise duty or cess were in arrears, as at 31st March 2011 for a period of more than six months from the date they became payable.

. c. In respect of sales tax and excise duty dues not deposited on account of disputes, the details of amounts involved and the forum where the disputes are pending, are as under:-

Forum where dispute is pending Rs. Lacs

Sales Tax Appellate / Revisional Authority-up to Commissioner Level 53.62

Sales Tax Appellate Authority-Tribunal 35.66

Central Excise Appellate Tribunal 1.24

11. The Company does not have accumulated losses as at 31st March, 2011. The Company has not incurred cash loss during the current financial year but had incurred cash loss in the immediately preceding financial year.

12. Based on audit procedures applied by us and according to the information and explanations given to us, the Company has not defaulted in repayment of its dues to Banks during the year.

13. According to the information and explanations given to us and based on our examination of the books of account, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

14. The provisions of special statute applicable to chit fund / mutual benefit fund / societies are not applicable to the Company.

15. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly-the provisions of Clause (xiv) of Para 4 of the Order are not appiicable.

16. In respect of guarantees given by the Company for loans taken by a related party from banks, having regard to the

explanation that the Company has strategic business relationship with the related party and the party has extended reciprocal guarantee / charge on its current assets for financial assistance availed by the Company, the terms and conditions of the guarantees are, in our opinion, not prima facie prejudicial to the interests of the Company.

17. According to the information and explanations given to us and the records of the Company examined by us, in our opinion, . wherever the purpose is stipulated by the lender, the term loans raised during the year have been applied for such purpose.

18. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company and the cash flow statement, prima-facie, funds raised on short term basis have not been utilised for long term investment.

19. The Company has made a preferential allotment of Redeemable Non-cumulative Preference Shares during the year to parties covered in the register maintained under section 301 of the Companies Act, 1956. The price at which these shares have been issued is not prejudicial to the interest of the company.

20. The Company has not issued any secured debentures during the year, and accordingly, no securities were required to be created.

21. The Company has not raised any money by public issue during the year. Therefore, the requirement of disclosure by the management on the end use of money raised by public issue and verification of the same is not applicable.

22. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India 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 V. Sarvfcar Aiyar & Co. Chartered Accountants Firm Regn. No-109208W

Sd- (S. Venkatraman)

Place: Mumbai Partner Date: 18th May, 2011. Membership No.:034319


Mar 31, 2010

We have audited the attached balance sheet of Batliboi Ltd., 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.

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 misstatements. 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 reasonable basis for our opinion.

As required by the Companies Auditors Report Order, 2003, issued by the Company Law Board in terms of sub-section (4A) of section 227 of the Companies Act, 1956 as amended by the Companies (Auditors Report) (Amendment) Order, 2004, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

1. Attention is invited to Note No. 9 of Schedule 17(11) regarding recognition of deferred tax assets in respect of Unabsorbed Depreciation/ Loss in Income Tax. According to AS 22 "Accounting for Tax on Income" evidence is a matter of fact and to be convincing should be available in the concrete form so as to constitute virtual certainty. In our opinion improved performance, higher order inflow and future projections are not convincing evidence so as to satisfy the test of virtual certainty to recognize Deferred Tax Asset in respect of Unabsorbed Depreciation / Loss in Income Tax.

2. Further to our comments in the Annexure referred to above, we report that:-

i. we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

iii. the reports on the accounts of Udhna Plant audited by the branch auditors of the Company have been forwarded to us and have been appropriately dealt with in preparing our report;

iv. the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account and with the audited returns received from the branch of the Company;

v. in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the mandatory accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

vi. on the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2010 from being appointed as director of the Company under Clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vii. in our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to para 1 above which has the effect of understating loss for the year and deferred tax liability and consequential impact on the reserves and surplus to the extent of Rs. 278.44 lacs read with the significant accounting policies and notes to accounts in schedule 17 give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India:

(a) In the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2010.

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

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date. ANNEXURE REFERRED TO IN OUR REPORT TO THE MEMBERS OF BATLIBOI LTD. FOR THE YEAR ENDED 31st MARCH, 2010

Our statement on the matters specified in oara 4 and 5 of the Companies (Auditors Report) Order, 2003 ("the Order") as amended by the Companies (Auditors Report) (Amendment) Order, 2004, is given below. In preparing the said statement, we have considered the statements made under the aforesaid order by the branch auditors who audited the accounts of the Companys Udhna plant.

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

b. On the basis of the information and explanations given to us, we are of the opinion that the fixed assets have been physically verified by the management during the year at reasonable intervals having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such verification were, in our opinion, not material and have been properly dealt with in the books of account.

c. Since there is no disposal of substantial part of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

2. a. On the basis of the information and explanations given to us,

we are of the opinion that the physical verification of inventory has been conducted by the management at reasonable intervals during the year except in case of inventory lying with third parties where confirmations have been obtained.

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

c. On the basis of our examination of the records of inventory, we are of the opinion that, the Company is maintaining proper records of inventory. Discrepancies noticed on physical verification of inventory were, in our opinion, not material, and the same have been properly dealt with in the books of account.

3. According to the information and explanations given to us, the Company has, during the year, not granted any loans, secured or unsecured to companies, firms or other parties covered in the registermaintainedunderSection301 of the Companies Act, 1956. Therefore paragraph 4(iii)(b), (c) and (d) of the Order is not applicable.

4. a. According to the information and explanations given to us, the company had taken unsecured loan in the earlier year front a party covered in the register maintained under section 301 of the Companies Act, 1956. The said loan has been repaid during the year. The iTiaximum amojnt involved during the year was Rs. 154.06 Lacs and he year ?.nd balance aggregates Rs. Nil Lacs.

b. In our opinion, the rate of interest and other terms and conditions on which the aforesaid loans have been taken are prima facie, not prejudicial to the interests of the company.

c. The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

5. On the basis of our examination of the books and records of the Company and according to the information and explanations given to us and having regard to the explanation that some of the items purchased are under specific marketing arrangements or goods of technical specification in respect of which comparable alternative quotations are not available, in our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. We have neither come across nor been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

6. a. In respect of contracts and arrangements referred to in Section 301 of the Companies Act 1956, the transactions under those contracts and arrangements have been entered in a summarised form in the register required to be maintained underthat section.

b. In our opinion the transactions in pursuance of contracts and arrangements referred to above made during the financial year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except in case of some transactions where we are unable to comment owing to the specialised nature of the items involved and absence of any comparable prices.

7. During the year, the Company has not accepted any deposits from the public. In this regard there has not been any order by Company Law Board, National Company Law Tribunal or Reserve Bank of India orany Court or any other Tribunal.

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

9. As explained to us maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

10. a. During the year the Company has generally been regular in

depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Investor Education Protection Fund, Sales-tax, Wealth Tax, Service Tax, Custom Duty and Excise Duty and other material statutory dues applicable to it with the appropriate authorities.

b. According to the information and explanations given to us and the records of the Company examined by us, there were no dues as at 31s March, 2010, of income tax, wealth tax, service tax, customs duty or cess that have not been deposited on account of any dispute. In respect of sales tax and excise duty dues not deposited on account of disputes, the details of amounts involved and the forum where the disputes are pending, are as under: -

Forum where dispute is pending Amount (Rs. Lacs)

Sales TaxAppellate/Revisional 54.04

Authority-up to Commissioner Level

Sales Tax Appellate Authority-Tribunal 35.66

Central Excise Appellate Tribunal 1.24

11. The Company does not have accumulated losses as at 31st March, 2010. The Company has incurred cash loss during the current financial year and in the immediately preceding financial year.

12. On the basis of the information and explanations given to us and the records of the Company examined by us, the Company has not defaulted in repayment of its dues to Banks during the year. The Company has during the year not taken any loans from Financial Institutions and has not issued any debentures.

13. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

14. The provisions of special statute applicable to chit fund / mutual benefit fund / societies are not applicable to the Company.

15. In respect of the Companys dealing in shares and other investments, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments held by the Company have been held in its own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

16. In respect of guarantees given by the Company for loans taken by other parties from banks, having regard to the explanation that the Company has strategic business relationship with the parties and the parties have extended reciprocal guarantee / financial assistance on behalf of / to the Company, the terms and conditions of the guarantees are, in our opinion, not prima facie considered prejudicial to the interests of the Company.

17. According to the information and explanations given to us and the records of the Company examined by us, in our opinion, wherever the purpose is stipulated by the lender, the term loans raised during the year have been applied for such purpose.

18. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that prima-facie, as on 31 March, 2010, funds raised on short term basis have not been utilised for long term investments.

19. The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

20. The Company has not issued any secured debentures during the year, and accordingly, no securities were required to be created.

21. The Company has not raised any money by public issues during the year. Therefore the requirement of disclosure by the man- agement on the end use of money raised by public issues and verification of the same is not applicable.

22. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India 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 V. Sankar Aiyar & Co. Chartered Accountants

(S. Venkatraman) Partner

Membership No.:034319

Firm Regn. No.: 109208 W

Place: Mumbai Date: 8th May, 2010

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