Auditor Report of Borax Morarji Ltd.

Mar 31, 2015

We have audited the accompanying Standalone Financial Statements of Borax Morarji Limited (‘the Company'), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow Statement, and a summary of significant accounting policies and other explanatory information for the nine months period then ended.

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 standalone financial position, standalone financial performance and standalone 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 Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. .

Auditor's Responsibility

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 Standalone 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 control 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 qualified audit opinion on the Standalone Financial Statements.

Basis for Qualified Opinion

1 Long Term Loans and Advances include amounts of $ 28 Lakhs deposited against disputed custom duty of 44.60 Lakhs levied by the Collector of Customs. Though the Company is hopeful of recovery of this amount in the absence of appropriate audit evidence we are unable to determine the extent of recovery possible in this case.

2 No provision has been made against the overdue trade receivables (net of advances) which are outstanding for more than 2 years amounting to Rs. 119.25 Lakhs.

Qualified Opinion

In our opinion, except for the possible effects of the matters described in the Basis for qualified opinion paragraph and to the best of our information and according to the explanations given to us, the Standalone Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015 and its Loss and its Cash Flows for the nine months period ended on that date.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor's Report) Order, 2015 issued by the Central Government of India in terms of sub-section 11 of Section 143 of the Companies Act, we enclose in the annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

d) In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the Directors as on March 31, 2015, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2015, from being appointed as a Director in terms of section 164(2) of the Act:

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 on its financial position in its Standalone Financial Statements - Refer Note 29 to the Standalone Financial Statements;

ii The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

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

ANNEXURE TO THE AUDITORS' REPORT

Referred to in Paragraph 1 on Report on Other Legal and Regulatory Requirements of our report.

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets, however the particulars regarding the location of some of the fixed assets of Chemical Division transferred to new manufacturing facility at Dahej, Gujarat, needs to be updated in the fixed asset register.

(b) A substantial portion of the fixed assets have been physically verified by the management during the period under the audit. In our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The inventories have been physically verified by the management at reasonable intervals during the period under audit. In our opinion, the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of inventory. The discrepancy noticed on verification between physical stock and the book records were not material and have been properly dealt with in the books of account.

(iii) The Company has not granted any loans, secured or unsecured to the companies, firm and other parties covered in the register maintained under section 189 of the Companies Act, Hence the provision of clause (iii) (a) & (b) are not applicable to the Company.

(iv) In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, with regards to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control.

(v) The Company had accepted deposits prior to the commencement of Companies Act, 2013 (Earlier deposits) which have remained unpaid as at

year end amounting to Rs. 152.47 Lacs and interest due thereon of Rs. 0.72 Lacs. We are informed that these earlier deposits will be repaid on the respective due dates as per the terms of acceptance of the same, in terms of explanation to Rule 19 of the Companies (Acceptance of Deposits) Rules, 2014.

The Company has not accepted any deposits during the year to which the provisions of section 73 to 76 of the Companies Act, 2013 and Companies (Acceptance of deposits) Rules, 2014 apply.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the Central Government of India, for the maintenance of cost records in respect of boric add under sub-section (I) of section 148 of the Companies Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the records of the Company and based on our Audit Procedures and according to the information and explanation given to us, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it have been generally regularly deposited during the period under audit with the appropriate authorities. According to the information and explanation given to us, no disputed amounts payable in respect of above were in arrears, as at 31sl March,2015 for a period of more than six months from the date on which they became payable.

(b) According to the records of the Company, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty and cess which have not been deposited on account of any disputes except in the case of the following :

Nature of dues Year Amount Forum where dispute (Rs. In Lacs) is pending

Excise Duty 2003-04 to Customs Excise and 2005-06 12.65 Service Tax Appellate Tribunal

Customs Duty 2002-03 16.60 Collector of Customs

(c) The amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time.

(viii) The Company has accumulated losses at the end of the nine months period ended 31st March, 2015 are more than fifty percent of the net worth as on the said date. The Company has incurred cash losses during the under audit and also in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution and bank. The Company has not issued any debentures.

(x) The Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) In our opinion, the term loans have been applied for the purpose for which the loans were obtained.

(xii) To the best of our knowledge and belief and according to the information and explanation given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For K. S. Aiyar & Co, Chartered Accountants Registration No: 100186W

Rajesh S. Joshi Place: Mumbai Partner Date : May 29, 2015 Membership No.: 38526

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Jun 30, 2014

We have audited the accompanying fi nancial statements of Borax Morarji Limited (''the Company''), which comprise the Balance Sheet as at June 30, 2014, the Statement of Profi t and Loss and the Cash Flow Statement for the fi fteen months period then ended, and a summary of signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (''the Act'') which shall continue to apply in respect of section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Basis for Qualifi ed Opinion

1 Long Term Loans and Advances include amounts of Rs. 64.73 Lakhs on account of insurance claim disputed by The New India Assurance Co. Ltd. in respect of loss of stock in chemical division due to fl ood during June 2002, Rs. 14.22 Lakhs receivable from State Trading Corporation of India Ltd. (STC) which is disputed by the party and Rs. 28 Lakhs deposited against disputed custom duty levied by the Collector of Customs. Though the Company is hopeful of recovery of all these amounts we are not certain of the quantum of settlements of the receivables.

2 No provision has been made against the overdue trade receivables (net of advances) of Chemical division which are outstanding for more than 2 years amounting to Rs. 157.63 Lakhs.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects for the matters described in the Basis for Qualifi ed Opinion Paragraph, the net impact of which is unascertained, the fi nancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at June 30, 2014;

(ii) in the case of the Statement of Profi t and Loss, of the loss for the period of fi fteen months ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash fl ows for the period of fi fteen months ended on that date.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''s Report) Order, 2003 (as amended) (''the Order'') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we enclose in the annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the Order.

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

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

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

c) The Balance Sheet, Statement of Profi t and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profi t and Loss and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act:

e) On the basis of written representations received from the directors as on June 30, 2014, and taken on record by the Board of Directors, none of the directors is disqualifi ed as on June 30, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act:

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 1 under the heading ''Report on Other Legal and Regulatory Requirements'' of our Report of even date on the fi nancial statements for the Fifteen months ended 30th June, 2014 of Borax Morarji Limited.)

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fi xed assets however the particulars regarding the location of some of the fi xed assets needs to be updated in the fi xed asset register.

(b) A substantial portion of the fi xed assets have been physically verifi ed by the management during the period under audit. In our opinion the frequency of verifi cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifi cation.

(c) Fixed assets disposed off during the period under audit were not substantial. According to the information and explanations given to us, we are of the opinion that the disposal of fi xed assets has not affected the going concern status of the Company.

(ii) (a) The inventories have been physically verifi ed by the management at reasonable intervals during the period under audit. In our opinion, the frequency of verifi cation is reasonable.

(b) The procedure of physical verifi cation of inventories followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verifi cation between physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) (a) The Company has not granted unsecured loans, secured or unsecured to the companies, fi rms and other parties covered in the Register maintained under Section 301 of the Act. Hence the provisions of clause (iii) (a), (b), (c), (d) of paragraph 3 are not applicable to the company.

(b) The Company has taken an unsecured loan from Company, fi rms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved in the current period under audit amounted to Rs. 925.47 Lacs and the Fifteen months period ended balance as on 30th June, 2014 of loans taken from such parties is Rs. 25.47 Lacs.

(c) Based on the information and explanations given to us, we are of the opinion that the rate of interest and other terms and conditions of loans taken from such parties covered in the Register maintained under Section 301 are not prima facie prejudicial to the interests of the company.

(d) According to the information and explanations given to us, repayments of the principal and interest have been regularly made as stipulated.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory, fi xed assets and with regard to the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal controls.

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have so been entered.

(b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Sec 301 of the Companies Act,1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. As informed to us, no order has been passed by the Company Law Board, National Law Tribunal or Reserve Bank of India or any other court or any other tribunal.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the order made by the Central Government of India, for the maintenance of cost records in respect of Boric Acid under Section 209 (1) (d) of the Companies Act and we are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have, however not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the records of the Company and based on our Audit Procedures and according to the information and explanation given to us, the Company is generally regular in depositing Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it have been generally regularly deposited during the period under audit with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at June 30, 2014 for a period of more than six months from the date on which they became payable.

(b) According to the records of the Company, there are no dues of Sales tax, Income tax, Customs duty, Wealth tax, Service tax, Excise duty and cess which have not been deposited on account of any dispute except in the case of the following :

Nature of dues Year Amount (Rs. in Lacs)

Excise Duty 2003-04 to 2005-06 12.65

Customs Duty 2002-03 16.60

Nature of Dues Forum where dispute is pending

Excise Duty Customs Excise and Service Tax Appellate Tribunal

Customs Duty Collector of Customs

(x) The Company has accumulated losses at the end of the fi fteen months ended 30th June, 2014 are more than fi fty percent of the net worth as on the said date. The Company has incurred cash losses during the under audit and also in the immediately preceding fi nancial year.

(xi) In our opinion and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any fi nancial institution and banks. The Company has not issued any debentures.

(xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion the Company is not a chit fund or a nidhi / mutual benefi t fund / society. Therefore the provisions of clause 4(xiii) of the Companies (Auditor''s Report) (Amendment) Order, 2004 are not applicable to the Company.

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

(xv) In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or fi nancial institutions are not prejudicial to the interest of the Company.

(xvi) In our opinion, the term loans have been applied for the purpose 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 report that funds raised on short-term basis aggregating to Rs. 779.75 have been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has made preferential allotment of preference shares amounting to Rs. 900 Lacs to a party covered in the register maintained under Section 301 of the Companies Act, 1956. The price at which such shares have been issued is not prejudicial to the interests of the Company.

(xix) According to the information and explanations given to us, no debentures were issued during the period.

(xx) The Company has not raised any money by way of public issue during the period under audit.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the course of our audit

For K. S. Aiyar & Co, Chartered Accountants Registration No: 100186W

Satish K. Kelkar Place: Mumbai Partner Date : August 13, 2014 Membership No.: 38934

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Mar 31, 2012

Report on the accounts for the year ended on 31st March, 2012 in compliance with Section 227(2) of the Companies Act, 1956

1. We have audited the attached Balance Sheet of Borax Morarji Ltd., as at 31st March, 2012, and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. .

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(a) 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;

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

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

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss 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 to the extent applicable;

(e) On the basis of written representations received from the Directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Directors of the Company are 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) Long Term Loans and Advances include amounts ofRs. 64.73 Lacs on account of insurance claim disputed by New India Assurance Co. Ltd in respect of loss of stock in Chemical Division due to flood during June, 2002 (Refer Note No. 14(c)(i)), t 14.22 lacs receivable from State Trading Corporation of India Ltd. STC (Refer Note 14 (c)(ii)) which is disputed by the part and Rs. 28.00 Lacs deposited against disputed Custom Duty levied by Collector of Customs (Refer Note No 29(2)(a)(iv)). Though the Company is hopeful of recovery of these amounts we are not certain of the quantum of settlements of the receivables.

(g) No provision has been made against overdue debtors for more than two years amounting to Rs. 22.26 Lacs (Net). Management is of the opinion that it is fully recoverable.

(h) Short Term Loans and Advances include Rs. 47.67 Lacs (Refer Note 19 (b)(i)) on account of expenses towards Proposed Right Issue which has not taken place till date. In our opinion the amount needs to be charged off as expenses to Statement of Profit & Loss.

(i) Subject to paras (f),(g)&(h) above ,the net impact of which on the Statement of Profit and Loss and on the Reserves is unascertained, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes 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 Statement of Profit and Loss, of the Loss of the Company for the year ended on that date and

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

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our Report of even date on the Accounts for the year ended on 31a March, 2012 of Borax Morarji Limited)

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

(b) A substantial portion of the fixed assets have been physically verified by the management during the year in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The Fixed assets disposed off during the year were not substantial. According to the information and explanation given to us; we are of the opinion that the disposal off the fixed assets has not affected the going concern status of the company.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and properly dealt with in the books of account.

(iii) (a) The Company has not granted any loans, secured or unsecured to the Companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Therefore, sub clause (b), (c) and (d) of paragraph 3 are not applicable.

(e) The Company has taken unsecured loan from one Company, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved in the current year amounted to Rs. 530 Lacs and the balance at the end of the year is f 530 Lacs.

(f) The loans taken by the Company are interest free and no terms of repayment have been stipulated. In our opinion, the rates of interest and other terms and conditions of 'oans taken by the Company are not prima fade prejudicial to the interest of the Company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weaknesses have been noticed m the internal controls.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered

(b) In our opinion and according to the information and explanations given to us, these transactions have been made at prices which are reasonable having regards to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. As informed to us, no order has been passed by the Company Law Board, National Law Tribunal or Reserve Bank of India or any other court or any other tribunal.

(vii) In our opinion and according to the explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business.

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

(ix) (a) According to the records of the Company and based on our Audit Procedures and according to the information and explanation given to us, the Company is regular in depositing Provident Fund, Investor Education Protection Fund, Employees' Stats insurance. Income - Tax, Wealth Tax, Service Tax, Custom Duty, Excise - Duty, Cess and other material statutory dues applicable to 9 during the year with appropriate authorises except in case of undisputed Sales Tax Dues oft.30.48 Lacs which have remained outstand as at 31st March, 2012 for a period of more than six months from the date it became payable.

(b) According to the records of the Company, there are no dues of Sales Tax, Income-Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute except in the case of the following:

(Rs.. In Lacs)

Name of statute/Nature of Period to which the Forum where dispute is pending Amount Involved dues amount relates

Excise Duty 2003-04 to 2005-06 Customs, Excise and Service Tax Appellate Tribunal 12.65

Customs Duty 2007-08 Assistant Commissioner of Customs 18.22

Customs Duty 2002-03 Coflector of Customs 16.60

Excise Duty 2006-07 to 2010-11 Central Excise & Appellate Tribunal 246.56

(x) The Company does not have any accumulated losses at the end of the financial year and has incurred cash losses during the financial year covered by our audit but no such cash loss in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution and banks. The Company has not issued any Debentures.

(xii) In on our examination of documents and records and information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of Shares, Debentures and other securities.

(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 the Order are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in Shares, Securities, Debentures and other investments. Accordingly the provisions of Clause 4 (xiv) of the Order are not applicable to the Company.

(xv) According to the information given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) In our opinion, the term loans have been applied for the purpose 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 report that the no funds raised on short-term basis have been used for long-term investment.

(xviii)The Company has not made any preferential allotment of Shares to parties and Companies during the year covered in the Register maintained under Section 301 of the Companies Act 1956.

(xix) The Company has not issued any Debentures during the financial year and therefore the question of creating security in respect thereof does not arise.

(xx) The Company has not raised money by public issue during the year.

(xxi) Based on the audit procedures performed and according to the information and explanations given and representations made by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For K. S. Aiyar & Co.

Chartered Accountants FRN: 100186W

Rajesh Joshi

Place: Mumbai Partner Date: 30th May, 2012 Membership No.38526

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Mar 31, 2010

1. We have audited the attached Balance Sheet of Borax Morarji 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.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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

(a) 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;

(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, 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, 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 to the extent applicable;

(e) On the basis of written representations received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the directors of the Company are disqualified as on 31st March, 2010 from being appointed as a director, in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(f) Advance recoverable in cash or in kind include Rs. 71,65,255/- (Refer Note 12 - Notes to Accounts) in respect of loss of stock in chemical division due to flood during June 2002. The Solicitors have advised the Company to file proceedings against New India Assurance Co. Ltd. before the State Consumer Redressal Commission (SCRQ under the provisions of the Consumer Protection Act, 1986 (CPA), Though the Company is hopeful of recovery, we are not certain of the quantum of settlement of the claim.

(g) Subject to (f) above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes 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, 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 flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT (REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE)

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

(b) A substantial portion of the fixed assets have been physically verified by the management during the year in our opinion the frequency of verification is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The Company has disposed off all assets of its Timber Division during the year. According to the information and explanation given to us; we are of the opinion that the disposal of the fixed assets has not affected the going concern status of the Company.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and properly dealt with in the books of account.

(iii) (a) The Company has not granted any loans, secured or unsecured to the Companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Therefore, sub-clause (b), (c) and (d) are not applicable.

(e) The Company has taken unsecured loan from one Company, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, the details of which is as under:

Opening balance Taken during the year Closing balance (Rs.> (Rs.> (Rs.>

1,00,00,000/- 1,00,00,000/- 2,00,00,000/-

(f) The loans taken by the Company are interest free. In our opinion, the rates of interest and other terms and conditions of loans taken by the Company are not prima facie prejudicial to the interest of the Company.

(g) The loans taken by the Company are interest free and no terms of repayment have been stipulated.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal controls.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, these transactions have been made at prices which are reasonable having regards to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. As informed to us, no order has been passed by the Company Law Board, National Law Tribunal or Reserve Bank of India or any other court or any other tribunal.

(vii) The Company has an internal audit system. In our opinion, the internal audit coverage in the area of fixed assets and contractor payments needs to be further strengthened so as to be commensurate with the size and nature of its business.

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

(ix) (a) According to the records of the Company, the company is regular in depositing Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Service-Tax, Custom Duty, Excise-Duty, Cess and other material statutory dues applicable to it during the year with appropriate authorities. Based on our audit procedures and according to the information and explanations given to us, there are no arrears of undisputed statutory dues which remained outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, there are no dues of Sales Tax, Income-Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute except in the case of the following:

Name of Statute/ Period to which Forum where Amount involved Nature of dues the amount relates dispute is pending (Rs.)

Service Tax 2004-05 Assistant Commiss -ioner of Service Tax 5,34,452/-

Excise Duty 2003-04 to 2005-06 Customs Excise and Service Tax Appellate 12,64,822/- Tribunal

Customs Duty 2007-08 Assistant Commissioner of Customs 18,22,127/-

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

(xi) In our opinion and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution and banks. The Company has not issued any debentures.

(xii) Based on our examination of documents and records and information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(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 the Order are not applicable to the Company.

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

(xv) According to the information given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) In our opinion, the term loans have been applied for the purpose 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 report that the no funds raised on short-term basis have been used for long-term investment.

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

(xix) The Company has not issued any debentures during the financial year and therefore the question of creating security in respect thereof does not arise.

(xx) The Company has not raised money by public issue during the year.

(xxi) Based on the audit procedures performed and according to the information and explanations given and representations made by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For K. S. Aiyar & Co.

Chartered Accountants

Registration No: 100186W

Satish Kelkar Partner (M. No. 38934) Place : Mumbai Date : 21st May, 2010