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Auditor Report of Bharat Agri Fert & Realty Ltd.

Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying financial statements of Bharat Agri Fert and Realty Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and 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 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 and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of 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 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, 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 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 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 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, to the extent applicable.

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

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

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

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

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

e) on the basis of the written representations received from the directors as on 31st March, 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; and

f) with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and 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 as at March 31,2015 on its financial position in its financial statements as refer Note 29 and Note30;

ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, on long-term contracts. The Company has not entered into any derivative contract; and

iii. the Company do not have any outstanding amount to be transferred to the Investor Protection and Education Fund.

(Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

i. In respect of its fixed assets:

(a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all items over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

ii. In respect of its inventories:

a) The management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) In our opinion and according to the inf ormation and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii) (a) and (iii) (b) of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in aforesaid internal control systems.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public. Therefore, the provisions of the clause 3(v) of the Order are not applicable to the Company.

vi. We have broadly reviewed the books of accounts and records maintained by the Company pursuant to the Companies (Cost Records and audit) Rules, 2014 prescribed by the Central Government under sub section (1) of section 148 of the Act and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The content of these accounts and records have not been examined by us.

vii. In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Value added tax, Cess, Professional tax and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Value added tax, Cess, Professional tax and other material statutory dues were in arrears as at March 31,2015 for a period of more than six months from the date they became payable.

(b) According to the explanation given to us, the Company do not have any disputed statutory due which has not been deposited on account of dispute.

(c) The Company does not have any outstanding amount to be transferred to the Investor Protection and Education Fund.

viii. The Company does not have accumulated losses as at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

ix. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a bank during the year The Company does not have any borrowings from any financial institution and it has not issued any debentures.

x. In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of Clause 3(x) of the Order are not applicable to the Company.

xi. The Company has not raised any term loans. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the Company.

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, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For DESAISAKSENA & ASSOCIATES

Chartered Accountants

(Firm's Registration No: 102358W)

Sd/-

Alok K. Saksena

Place: Mumbai Partner

Date: 28th May, 2015 Membership No: 35170


Mar 31, 2014

We have audited the accompanying financial statements of Bharat Agri Fert and Realty Limited ("the Company") which comprise the Balance Sheet as at March 31,2014, 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 principles generally accepted in India including Accounting Standards referred to in sub-section (3C) of section 211 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs)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 misstatements.

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 of the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(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 of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs)of the Act;

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

Annexure to Independent Auditors'' Report

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

I. In respect of its fixed assets:

(a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

(c) In our opinion, during the year, the Company has not disposed off a substantial part of the fixed assets and in our opinion the going concern status of the Company is not affected.

ii. In respect of its inventories:

a) As explained to us, inventories of raw materials, finished goods pertaining to manufacturing division and finished apartments pertaining to construction division were physically verified during the year by the Management. According to the information and explanation given to us, keeping in view the nature of the operations of the Company, inventory of work-in-progress cannot be physically verified.

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

(c) The company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) 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 listed in the Register maintained under section 301 of the Companies Act 1956. As the Company has not granted any loans, secured or unsecured to the parties listed in the Register maintained under section 301 of the Companies Act 1956, paragraphs (iii) (b), (c) and (d) of the Order are not applicable.

(b) According to the information and explanations given to us, the Company has taken interest free loan from four parties and interest bearing loans from six parties listed in the Register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding at any time during the year and the yearend balance in respect of interest bearing loan is Rs.96,71,311/- and Rs.94,74,845/- respectively. The maximum amount outstanding at any time during the year and the yearend balance in respect of non interest bearing loan is Rs.2,33,25,000/- and Rs.2,33,25,000/- respectively.

(c) In our opinion and according to the information and explanations given to us, rate of interest and other terms and conditions of such loans taken by the Company are prima facie not prejudicial to the interest of the Company.

(d) There are no stipulations with regard to repayment of principal and payment of interest. Accordingly question of overdue do not arise.

iv. In our opinion, and according to the information and explanation given to us, having regard to the explanation, except that some of the items purchased are of a special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any major weaknesses in such internal control systems.

v. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956;

(a) In our opinion and according to the information and explanations given to us, since, there were no transactions of sale & purchase during the year with the parties covered under Register maintained under section 301 of the Companies Act, 1956, therefore ,the provisions of clause 4(v) (a) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(b) In our opinion and according to the information and explanations given to us, as there are no contracts or agreements that need to be entered into register maintained under section 301 Companies Act 1956, therefore the provisions of clause 4(v) (b) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

vi. According to the information and explanations given to us, in our opinion the Company has complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed there under. To the best of our knowledge and according to the information and explanations given to us, the Company has not received any order under above-mentioned sections from the Company Law Board, National Company Law Tribunal, Reserve Bank of India or any Court or any other Tribunal.

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

viii. 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.

ix. In respect of statutory dues :

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess, Service tax and any other material statutory dues have been generally regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31,2014 for a period of more than six months from the date of becoming payable other than undisputed statutory dues mentioned below:

Sr. Nature Year to which Amount No. Nature of Statute of Dues Liability pertains (Rs.)

Sales Tax Sales April 99 1 Deferral Tax to 67,18,347 Loan Loan July 2001

Total 67,18,347

Sr. Date of Net No. Nature of Statute Due Dates Payment Due

31/3/2009 31/3/2010 31/03/2011 40,00,000/- Sales Tax 31/03/2012 40,00,000/ 1 Deferral 31/03/2013 paid on 27,18,347 Loan Rs. 1,35,000 various each month dates. starting from 01/01/2009

27,18,347

(b) According to the explanation given to us, the disputed statutory dues aggregating Rs. 6,53,333/- that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Sr. Nature of Nature Year to which Amount No. Statute of Dues Liability (Rs.) pertains Interest on Sales Tax 2002-2003 1 Bombay Sales dues till the date of to 6,00,079 Tax Act assessment order. 2004-2005

Interest on Central Sales 2002-2003 2 Central Tax dues till the date to 53,254 Sales Tax Act of assessment order. 2003-2004

Total 6,53,333

Sr. Nature of Due Dates Forum where dispute No. Statute is pending Maharashtra 1 Bombay Sales 08/04/2010 Sales Tax Tax Act Tribunal

Maharastra 2 Central 08/04/2010 Sales Tax Sales Tax Act Tribunal

x. The Company does not have accumulated losses as at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions or banks.

xii. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. According to information and explanations given to us, we are of the opinion that the Company is not trading in shares, debentures and other investments. Therefore, the provisions of clause 4(xiv) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

xv. In our opinion and according to the 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 Company has not raised term loans during the year. The Company did not have any outstanding term loan at the beginning of the year. Therefore the provisions of clause 4(xvi) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, prima facie, we are of the opinion that no funds raised on short-term basis have been used for long-term investments.

xviii. According to the information and explanations given to us, the Company has not made preferential allotment of shares during the accounting year.

xix. According to the information and explanations given to us, the Company has not issued any debentures; hence the question of creation of securities or charge does not arise.

xx. The Company has not raised any monies by way of public issue during the year.

xxi. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For Desai Saksena & Associates Chartered Accountants (Firm''s Registration No: 102358W)

Place: Mumbai Alok K Saksena Date: 29th May, 2014 Partner Membership No: 35170


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Bharat Agri Fert and Realty Limited ("the Company") which comprise the Balance Sheet as at March 31,2013, 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 forthe 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 principles generally accepted in India including Accounting Standards referred to in sub-section (3C) of section 211 ofthe 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 whetherthe financial statements are free from material misstatements.

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 ofthe 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 ofthe 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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(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 of India in terms of subsection (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 ouraudit;

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 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 Act;

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

Annexure to the Independent Auditors'' Report

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

I. In respect of its fixed assets:

The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets on the basis of available information.

(b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

(c) In our opinion, during the year, the Company has not disposed off a substantial part of the fixed assets and in our opinion the going concern status of the Company is not affected.

ii. In respect of its inventories:

a) As explained to us, inventories of raw materials, finished goods pertaining to manufacturing division and finished apartments, pertaining to construction division were physically verified during the year by the Management. According to the information and explanation given to us, keeping in view the nature of the operations of the Company, inventory of work-in-progress cannot be physically verified.

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

(c) The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) 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 listed in the Register maintained under section 301 of. the Companies Act 1956. As the Company has not granted any loans, secured or unsecured to the parties listed in the Register maintained under section 301 of the Companies Act 1956, paragraphs (iii) (b), (c)and (d) of the Order are not applicable.

(b) According to the information and explanations given to us, the Company has taken interest free loan from four parties and interest bearing loans from six parties listed in the Register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding at any time during the year and the year end balance in respect of interest bearing loan is Rs.48,60,257/- and Rs.48,59,845/- respectively. The maximum amount outstanding at any time during the year and year end balance in respect of non interest bearing loan is Rs.1,00,35,000/- and Rs.85,00,000/-respectively.

(c) In our opinion and according to the information and explanations given to us, other terms and conditions of such loans taken by the Company are prima facie not prejudicial to the interest of the Company.

(d) These loans are in the nature of fixed deposits which are repaid or renewed on the due dates as per the discretion of the depositors.

iv. In our opinion, and according to the information and explanation given to us, having regard to the explanation, except that some of the items purchased are of a special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any major weaknesses in such internal control systems.

v. In respect ofthe contracts or arrangements referred to in Section 301 of the Companies Act, 1956;

(a) In our opinion and according to the information and explanations given to us, since, there were no transactions of sale 86 purchase during the year with the parties covered under Register maintained under section 301 ofthe Companies Act, 1956, therefore ,the provisions of clause 4(v) (a) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(b) In our opinion and according to the information and explanations given to us, as there are no contracts or agreements that need to be entered into register maintained under section 301 Companies Act 1956, therefore the provisions of clause 4(v) (b) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

vi In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of clause 4(vi) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

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

viii. 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) ofthe 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.

ix. In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess, Service tax and any other material statutory dues, applicable to it the Company have been generally regularly deposited with the appropriate authorities.

Details of outstanding undisputed statutory dues are as follows:

(b) According to the explanation given to us, the disputed statutory dues aggregating Rs. 43,55,559/- that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

x. The Company does not have accumulated losses as at the end ofthe financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

xi. Based on our audit procedures and according to the information and explanations given to us, we are ofthe opinion that the Company has not defaulted in the repayment of dues to financial institutions or banks.

xii. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. According to information and explanations given to us, we are ofthe opinion that the Company is not trading in shares, debentures and other investments. Therefore, the provisions of clause 4(xiv) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

xv. In our opinion and according to the 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 Company has not raised term loans during the year. The Company did not have any outstanding term loan at the beginning of the year. Therefore the provisions of clause 4(xvi) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, prima facie, we are of the opinion that no funds raised on short-term basis have been used for long-term investments.

xviii. According to the information and explanations given to us, the Company has not made preferential allotment of shares during the accounting year.

xix. According to the information and explanations given to us, the Company has not issued any debentures; hence the question of creation of securities or charge does not arise.

xx. The Company has not raised any monies byway of public issue during the year.

xxi. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For DESAI SAKSENA & ASSOCIATES

Chartered Accountants

(FRN102358W)

Dr.Alok K. Saksena

Place: Mumbai Partner

Date: 16th May, 2013 M.No. 35170


Mar 31, 2012

1. We have audited the attached Balance Sheet of BHARAT FERTILISER INDUSTRIES LIMITED, as at 31st March, 2012, the Profit and Loss Account of the Company and the Cash Flow Statement of the Company 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 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 ("the Order") (as amended) issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraph 4 and 5 of the said Order to the extent applicable.

4. Further to our comments in the Annexure, referred to in paragraph 3, 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 and Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and the Profit and Loss Account and Cash Flow Statement dealt with by this report comply with 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 31,2012 and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) Further to our comments in the Annexure, referred to in paragraph 3, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies & Notes to the Accounts thereon give the information required by the Companies Act, 1956, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

Referred to in paragraph 3 of the Auditors' Report of even date.

i. In respect of its fixed assets:

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

(b) As per the explanation given to us, the Company has designed a phased programme for the physical verification of its fixed assets and accordingly a portion of the fixed assets are verified every year to cover all the items in reasonable time frame. Pursuant to the said programme, during the year also a portion of fixed assets of the Company has been physically verified by the management. As explained to us, no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, during the year, the Company has not disposed off a substantial part of the fixed assets and in our opinion the going concern status of the Company is not affected.

ii. In respect of its inventories:

a) As explained to us, inventories of raw materials, finished goods pertaining to manufacturing division and finished apartments, pertaining to construction division were physically verified during the year by the Management. According to the information and explanation given to us, keeping in view the nature of the operations of the Company, inventory of work-in-progress cannot be physically verified.

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

(c) The Company has maintained proper records of inventories. As explained to us there were no material discrepancies noticed on the physical verification of inventory as compared to the book records.

iii. In respect of loans secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) 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 listed in the Register maintained under section 301 of the Companies Act 1956. As the Company has not granted any loans, secured or unsecured to the parties listed in the Register maintained under section 301 of the Companies Act 1956, paragraphs (iii) (b), (c) and (d) of the Order are not applicable.

vii. The Company has an internal audit system commensurate with the size of the Company and the nature of its business.

viii. As per the information and explanation given to us, the Central Government has prescribed the maintenance of cost records under clause (d) of sub section (d) of section 209 of the Companies Act, 1956 for the Fertiliser unit of the Company. However the Company has not maintained the same as there was no own production.

ix (a) According to the information, explanations and records of the Company, in respect of statutory and other dues, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess, Service Tax and any other statutory dues, applicable to it, with the appropriate authorities during the year. The Company has not paid various undisputed statutory liabilities viz. Sales Tax, Central Sales Tax, VAT dues as at 31st March 2012 for a period more than six months from the date they became payable. Details of the same are as under Sr. Nature Year to which Amount No. Nature Statute of Dues Liability pertains (Rs.)

Sales Tax (including 2001-2002 1 and Surcharge Turn Sales tax to 70,79,205 Over Tax) dues 2005

Central Sales 2001-02 2 Central Sales tax Tax dues to 10,63,853 2003-2004

Value 2005-06 3 Value Added Tax to 1,43,995 Added Tax 2007-2008

Wrong 2004-2005 3,71,269 4 Custom Duty Classifi cation to 5,52,281 of material 2005-2006

April 99 5 Sates Tax Sales Tax to 52,65,000 Deferral Loan Loan July 2001

2010-11 6 Service Tax Service Tax to 1,11,23,200 2011-12

2010-11 7 Value added Tax Value added to 36,10,158 Tax 2011-12

2011 8 Income Tax Act, 1961 Income Tax to 1,06,69,421 2012

Nature of Statute Due Dates Date of Net Payment Due

Sales Tax (including 08/04/2010 - 75,79,205 and Surcharge Turn Over Tax)

Central Sales Tax 08/04/2010 - 10,63,853

Value Added Tax On various dates from FY 2005-06 - 1,43,995 to FY2007-08

Custom Duty 27/05/2011 - 3,71.269 5,52,281

Sales Tax 31/3/2009 Deferral to Loan 31/3/2012 Rs.1,35,000 - 52,65,000 each month starting from 01/01/2009

Service Tax 5th of the - 1,11,23,200 every month

Value added Tax 21st of next month from - 36,10,158 end of each

Income Tax Act,1961 85,00,000 15th on various September date up to 20,16,731 2011 15th March 2012

(b) According to the explanation given to us, there are no statutory dues which have not been deposited on account of dispute.

x. The Company does not have accumulated losses as at 31st March 2012. The Company has not incurred cash losses during the financial year covered by the audit. The Company has not incurred cash losses in the immediately preceding financial year.

xi. Based on our audit procedure and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions or banks.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the Company has not granted any loans and advances on the basis security by way of pledge of shares, debentures and any other securities.

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

xiv. According to information and explanations given to us, we are of the opinion that the Company is not trading in shares, debentures and other investments. Therefore, the provision of clause 4(xiv) of Companies (Auditor's Report) Order 2003, are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the Company has not given guarantees, for loans taken by others from banks or financial institutions.

xvi. The Company has not raised term loans during the year. The Company had also did not have any outstanding term loan at the beginning of the year. Therefore the provisions of clause 4(xvi) of Companies (Auditor's Report) Order 2003, are not applicable to the Company.

xvii. 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 no funds raised on short-term basis prima facie, have been used for long-term investments.

xviii. According to the information and explanations given to us, the Company has not made preferential allotment of shares during the accounting year.

xix. According to the information and explanations given to us, the Company has not issued any debentures; hence the question of creation of securities or charge does not arise.

xx. The Company has not raised any money by way of public issue during the year.

xxi. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.



For DESAI SAKSENA& ASSOCIATES

Chartered Accountants

(FRN102358W)

Dr. S.N. Desai

Place: Mumbai Partner

Date: 12th June 2012 M.No.32546


Mar 31, 2011

1. We have audited the attached Balance Sheet of BHARAT FERTILISER INDUSTRIES LIMITED, as at 31st March, 2011, the Profit and Loss Account of the Company and the Cash Flow Statement of the Company 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 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 ("the Order") (as amended) issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraph 4 and 5 of the said Order to the extent applicable.

4. a) The Balances of sundry debtors, creditors, certain loans & advances and deposits are subject to confirmation and reconciliation.

b) The impact of remark of Para 4(a)) on the Profit & Loss Account and Balance Sheet cannot be ascertained.

5. Subject to our comments in paragraph 4(a) & (b) above and our comments in the Annexure, referred to in paragraph 3, 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 and Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and the Profit and Loss Account and Cash Flow Statement dealt with by this report comply with 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 31,2011 and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) subject to paragraph 4 (a) & (b) above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies & Notes to the Accounts thereon give the information required by the Companies Act, 1956, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

Annexure to the Auditors' Report Referred to in paragraph 3 of the Auditors' Report of even date. i. In respect of its fixed assets:

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

(b) As per the explanation given to us, the Company has designed a phased programme for the physical verification of its fixed assets and accordingly a portion of the fixed assets are verified every year to cover all the items in reasonable time frame. Pursuant to the said programme, during the year also a portion of fixed assets of the Company has been physically verified by the management. As explained to us, no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, during the year, the Company has not disposed off a substantial part of the fixed assets and in our opinion the going concern status of the Company is not affected.

ii. In respect of its inventories:

a) As explained to us, inventories of raw materials, finished goods pertaining to manufacturing division and finished apartments, pertaining to construction division were physically verified during the year by the Management. According to the information and explanation given to us, keeping in view the nature of the operations of the Company, inventory of work-in-progress cannot be physically verified.

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

(c) The Company has maintained proper records of inventories. As explained to us there were no material discrepancies noticed on the physical verification of inventory as compared to the book records.

iii. In respect of loans secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) 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 listed in the Register maintained under section 301 of the Companies Act 1956. As the Company has not granted any loans, secured or unsecured to the parties listed in the Register maintained under section 301 of the Companies Act 1956, paragraphs (iii) (b), (c)and (d) of the Order are not applicable.

(b) According to the information and explanations given to us, the Company has taken interest free loan from three parties listed in the Register maintained under section 301 of the Companies Act 1956. In respect of the said loans, the maximum amount outstanding at anytime during the year and the year end balance is Rs.3,76,306/-.

c) The above-mentioned loan in non-interest bearing. In our opinion and according to the information and explanations given to us, other terms and conditions of such loans given by the Company are prima facie, not prejudicial to the interest of the Company.

d) The principal amount is repayable on demand and there is no repayment schedule.

iv. In our opinion, and according to the information and explanation given to us, having regard to the explanation, except that some of the items purchased are of a special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any major weaknesses in such internal control systems.

v. lnrespect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956;

a) In our opinion and according to the information and explanations given to us, since, there were no transactions of sale & purchase during the year with the parties covered under Register maintained under section 301 of the Companies Act, 1956, therefore ,the provisions of clause 4(v) (a) of Companies (Auditor's Report) Order 2003, are not applicable to the Company.

b) In our opinion and according to the information and explanations given to us, as there are no contracts or agreements that need to be entered into register maintained under section 301 Companies Act 1956, therefore ,the provisions of clause 4(v) (b) of Companies (Auditor's Report) Order 2003, are not applicable to the Company.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of clause 4(vi) of Companies (Auditor's Report) Order 2003, are not applicable to the Company.

vii. The Company has an internal audit system commensurate with the size of the Company and the nature of its business.

viii. As per the information and explanation given to us, the Central Government has prescribed the maintenance of cost records under clause (d) of sub section (d) of section 209 of the Companies Act, 1956 for the Fertiliser unit of the Company. However the Company has not maintained the same.

ix. (a) According to the information, explanations and records of the Company, in respect of statutory and other dues, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess, Service Tax and any other statutory dues, applicable to it, with the appropriate authorities during the year. The Company has not paid various undisputed statutory liabilities viz. Sales Tax, Central Sales Tax and VAT dues. Details of the same are as under.

sr. Particulars Nature Year to which No. of Dues Liability pertains Sales Tax (including 2001-2002 1 and Surcharge Turn Sales tax to Over Tax) dues 2005

2 Central Sales tax Central Sales 2001-02 Tax dues to 2003-2004

Valua 2005-06 3 Value Added Tax Added Tax to 2007-2008 Wrong 2004-2005 4 Custom Duty Classification to of material 2005-2006

April 99 5 Sales Tax Sales Tax to Deferral Loan Loan ju|y 2001





Amount Date of Net Particulars (Rs.) Due Dates Payment Due

Sales Tax 0,60,143 08/04/2010 - 70,60,143 (including and Surcharge Turn Over Tax)

Central Sales 10,63,853 08/04/2010 - 10,63,853 tax On various Value Added 1,44,794 dates from - 1,44,794 Tax to FY2005- 06 FY2007-08

Custom Duty 3,71,269 27/05/2011 - 3,71,269 5,52,281 5,52,281

Sales Tax 31/3/2009 to 81,05,000 31/3/2011 81,05,000 Rs. 16,21,000 each year.

(b) According to the records of the Company and the information and explanations given to us, details of statutory dues, which have not been deposited on account of dispute, are given below:

Financial Year to Forum where Particulars which matter pertains matter is pending Amt Rs.

Service Tax 2010 - 2011 Bombay High Court 48.81,467

Value Added 2010-2011 Supreme Court 26,37,457

Tax

x. The Company does not have accumulated losses as at 31st March 2011. The Company has not incurred cash losses during the financial year covered by the audit. The Company has not incurred cash losses in the immediately preceding financial year.

xi. Based on our audit procedure and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions or banks.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the Company has not granted any loans and advances on the basis security by way of pledge of shares, debentures and any other securities.

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

xiv. According to information and explanations given to us, we are of the opinion that the Company is not trading in shares, debentures and other investments. Therefore, the provision of clause 4(xiv) of Companies (Auditor's Report) Order 2003, are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the Company has not given guarantees, for loans taken by others from banks or financial institutions.

xvi. The Company has raised new term loans during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised.

xvii. 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 no funds raised on short-term basis prima facie, have been used for long-term investments.

xviii. The Company has not made any allotment of shares during the year. Accordingly the question of preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956, or otherwise, does notarise.

xix. According to the information and explanations given to us, the Company has not issued any debentures; hence the question of creation of securities or charge does not arise.

xx. The Company has not raised any money byway of public issu & during the year.

xxi. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For DESAI SAKSENA & ASSOCIATES

Chartered Accountants (FRN102358VW)

Dr. S.N. Desai Partner M.No.32546 Place: Mumbai Date: 12 th August 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of BHARAT FERTILISER INDUSTRIES LIMITED, as at 31sl March, 2010, the Profit and Loss Account of the Company and the Cash Flow Statement of the Company 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 statements presentation. We believe that ouraudit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 ("the Order") (as amended) issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraph 4 and 5 of the said Order to the extent applicable.

4. a) The Balances of sundry debtors, creditors, loans & advances and deposits are subject to reconciliation and confirmation.

b) The impact of remark of Para 4(a) & (b)) on the Profit & Loss Account and Balance Sheet cannot be ascertained.

5. Subject to our comments in paragraph 4(a) & (b) above and our comments in the Annexure, referred to in paragraph 3, 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 and Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and the Profit and Loss Account and Cash Flow Statement dealt with by this report comply with 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 31,2010 and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31sl March 2010 from being appointed as directors in terms of Clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) subject to paragraph 4 (a) & (b) above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies & Notes to the Accounts thereon and give the information required by the Companies Act, 1956, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

ii) in the case of the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

Annexure to the Auditors Report

Referred to in paragraph 3 of the Auditors Report of even date. i. In respect of its fixed assets:

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

(b) As per the explanation given to us, the Company has designed a phased programme for the physical verification of its fixed assets and accordingly a portion of the fixed assets are verified every year to cover all the items in reasonable time frame. Pursuant to said programme, during the year also a portion of fixed assets of the Company has been physically verified by the management. As explained to us, no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion, during the year the Company has not disposed off a substantial part of fixed assets and in our opinion the going concern status of the Company is not affected.

ii. In respect of its inventories:

(a) As explained to us, inventories pertaining to manufacturing division, raw materials, finished goods and finished flats, construction work in progress pertaining to construction division were physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

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

(c) The company has maintained proper records of inventories. As explained to us there were no material discrepancies noticed on the physical verification of inventory as compared to the book records.

iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) 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 listed in the Register maintained under section 301 of the Companies Act 1956.As the Company has not granted any loans, secured or unsecured to the parties listed in the Register maintained under section 301 of the Companies Act 1956, paragraphs (iii) (b), (c) and (d) of the Order are not applicable.

(b) According to the information and explanation given to us, the Company has not taken any loans, secured or unsecured, from Companies, firms or other parties listed in the Register maintained under section 301 of Companies Act 1956. As the Company has not taken any loans, secured or unsecured from parties listed in the Register mentioned under section 301 of Companies Act 1956, paragraphs (iii) (f) and (g) of the order are not applicable.

iv. In our opinion, and according to the information and explanation given to us, having regard to the explanation, except that some of the items purchased are of a special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any major weaknesses in such internal control systems. v. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956;

a) In our opinion and according to the information and explanations given to us, there were no transactions of sale & purchase during the year with the parties covered under register maintained under section 301 of the Companies Act, 1956.

b) In our opinion and according to the information and explanations given to us, there are no contracts or agreements that need to be entered into register maintained under section 301 Companies Act 1956, paragraph (v) (b) of the order is not applicable.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of clause (vi) of paragraph 4 of the Order are not applicable. vii. The Company does not have an internal audit system.

viii. As per the information and explanation given to us, the Company is required to maintain cost accounting records. However the Company has not maintained the same due to inconsistent production.

ix. (a) According to the information, explanations and records of the Company, in respect of statutory and other dues, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess, Service Tax and any other statutory dues, applicable to it, with the appropriate authorities during the year. The Company has not paid various undisputed statutory liabilities viz. sales tax, Central sales tax and VAT dues. Details of the same are as under.

Sr. No. Particulars Year to which Liability Amount pertains (Rs.)

1 Sales Tax (including and Surcharge and TOT) 2001 -2002 to 2005 70,60,143

2 Central Sales tax 2001-02 to 2003-2004 10,63,853

3 Value Added Tax 2005-06 to 2007-2008 14,56,144

2004-2005 7,69,712

4 Custom Duty 2005-2006 9,97,297

(b) According to the explanation given to us, there are no statutory dues, which have not been deposited on account of dispute.

x. The Company has accumulated losses as at 31st March 2010.The accumulated loss of the Company is not exceeding fifty percent of its networth. The Company has not incurred cash losses during the financial year covered by the audit.The Company has incurred cash losses in the immediately preceding financial year. xi. Based on our audit procedure and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of restructured dues to banks.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the company has not granted any loans and advances on the basis security by way of pledge of shares, debentures and any other securities.

xiii. Inouropinion.the Company isnota chitfund or a nidhi/mutual benefit fund/society. Therefore the provisions of clause

(xiii) of Companies (Auditors Report) Order 2003, are not applicable to the Company.

xiv. According to information and explanations given to us, we are of the opinion that the Company is not trading in shares, debentures and other investments. Therefore the provision of clause 4(xiv) of Companies (Auditors Report) Order 2003, are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the Company has not given guarantees, for loans taken by others from banks or financial institutions.

xvi. The Company has not raised new term loans during the year. The term loan outstanding at the beginning of the year have been applied for the purpose for which they were raised.

xvii. The Company has not raised any short term loans during the year. xviii According to the information and explanations given to us, the Company has not made any allotment of shares.

xix. According to the information and explanations given to us, the Company has not issued any debentures; hence question of creation of securities do not arise.

xx. The Company has not raised any money by way of public issue during the year.

xxi. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For DESAISAKSENA & ASSOCIATES

Chartered Accountants

(FirmR.N.102358W)

Dr.S.N.Desai

Place: Mumbai Partner

Date: 06/08/2010 M.No.32546







 
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