Auditor Report of Coastal Corporation Ltd.

Mar 31, 2023

Coastal Corporation Limited,

Visakhapatnam

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of COASTAL CORPORATION LIMITED, Visakhapatnam (“the Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effect, if any, of the matter described in the “Basis for Qualified Opinion paragraph" below, the accompanying standalone financial statements give the information required by the Companies Act, 2013 (“the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS") and other Accounting Principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for qualified Opinion

Attention is invited to Note No. 38A to the accompanying Ind AS financial statements, regarding commission provided of Rs. 14.24 lakhs to Independent Directors which is subject to the approval of the general body.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

SL. No.	Key Audit Matter	How our audit addressed the Key Audit Matter
1	Valuation of Investments in Unquoted Equity Shares of M/s Coastal Developers Pvt Ltd:
	The valuation of the investments	We assessed the managements'' approach to valuation for these
	involves judgement and continues to	investments by performing the following procedures:
	be an area of inherent risk because	• Understood and evaluated the procedure followed by the management
	quoted prices are not readily avail-	to gather the data inputs used in the valuation models.
	able.	• We assessed the appropriateness of the methodology applied in determining the fair value of the investments.
	Refer: Note 5c to the Standalone Ind	• We evaluated the methodology and assumptions used by management,
	AS financial statements	including reasonableness of the market value considered for immovable properties by comparing it with the guideline values determined by the State Government for similar properties. • We tested the calculation of the fair value based on the assumptions applied. • We found the disclosures in the standalone Ind AS financial statements to be appropriate. Conclusion: Based on the work performed and the evidence obtained, we consider the methodology and assumptions used by management to be appropriate.
2	Purchase cost of Raw Shrimps
	Company procures its principle raw	Our audit approach consisted testing of the design and operating
	materials from the agents and farmers of aquaculture and the price of the	effectiveness of the internal controls and substantive testing as follows:
	same is highly volatile to the market	• We have evaluated the design and tested the implementation of internal
	conditions.	controls relating to procurement of raw materials and payments made to the agents and suppliers of the raw materials with source documentation.
	The tentative prices of the raw shrimps	• We have performed the test of controls over procurement procedure to
	are published by the local farmers of	evaluate the operating effectiveness of the controls placed in recognition
	aquaculture through online app. ac-	of the purchase costs.
	qubrahma.in. Based upon the produc-	• We have performed test of details through correlating the raw materials
	tion requirements, export commitments	procured with that of the material processed based on the production
	of the company and after considering	reports.
	the tentative prices, the management	• We tested the payments made to the suppliers based on the credit terms
	decides the price at which the raw materials have to be procured.	of payments. Conclusion: Based on the work performed, we found the raw material costs recorded to be correct based on available evidence.

Information Other than the Standalone financial statements and Auditor''s Report thereon

The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board of Directors'' Report including Annexures to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the financial statements and our auditor''s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the above specified reports, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance. We have nothing to report in this regard.

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 Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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.

In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone financial statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in ''''Annexure- A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, based on our audit 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 standalone Balance Sheet, the standalone Statement of Profit and Loss including Other Comprehensive Income, standalone Statement of Changes in Equity and the standalone Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS 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 March 31,2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting

g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:

The commission to the Independent Directors by the company is in accordance with the provisions of the sec.197, which is subject to the approval of general body.

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

i The Company does not have any major pending litigations that would impact its financial position.

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

iii There is no delay in transferring the amounts, which were required to be transferred, to the “Investor Education and Protection Fund" by the Company.

iv a. The Management has represented that, to the best of its knowledge and belief, except as disclosed in the note 54(e) to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(i.e.), including foreign entities (“Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

b. The Management has represented, that, to the best of its knowledge and belief, as disclosed in the note 54(e) to the accounts, no funds have been received by the Company from any person(s) or entity(i. e), including foreign entities (“Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

c. Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any material misstatement.

v The interim dividend declared and paid by the Company during the year is in accordance with section 123 of the Companies Act 2013.

As stated in note 19F to the financial statements, the Board of Directors of the Company have recommended final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

For, BRAHMAYYA & CO. Chartered Accountants Firm Reg No. 000513S

Sd/-

C.V. RAMANA RAO Partner

Place: Visakhapatnam Partner Membership No. 018545

Date: 30.05.2023 UDIN: 23018545BGXDNX8078

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Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Coastal Corporation Limited (“the Company”), which comprise the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss (including other comprehensive income) for the year then ended, the Cash Flows and the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the Ind AS financial statements”).

Management’s Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS 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 Ind AS 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 of the standalone Ind AS financial statements 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 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 standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of 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 standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS 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 31 March 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

Attention is drawn to Note no. 15 and Note no. 1.2(iii) to the standalone financial statements wherein the company has recognised revenue on Shipment in Transit amounting to Rs 41.72 crores, in accordance with industry practice and entitlement of export subsidies.

Our opinion on the above matter is not modified.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Independent Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of subsection (11) of Section 143 of the Act, we give in the “Annexure A”, 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 including other comprehensive income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.

e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect of the adequacy of the Internal Financial Controls over Financial Reporting of the company and its operating effectiveness of such controls, refer to our separate report in “Annexure B”.

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

i. The Company does not have any pending litigations which would impact its financial position in its standalone Ind AS 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund.

ANNEXURE ‘A’ TO INDEPENDENT AUDITORS’ REPORT

[Referred to in paragraph 1 under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date]

(i) (a) The company is in the process of updating and maintaining records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets have not been physically verified by the management during the year.

(c) The title deeds of the immovable properties held by the Company is in the name of the Company.

(ii) According to the information and explanations given to us, the inventory of the Company has been physically verified by the management during the course of the year and no material discrepancies were noticed on such physical verification.

(iii) The company has granted unsecured loan to its wholly owned Subsidiary company covered in the register maintained under section 189 of the Companies Act, 2013.

(a) The amount outstanding as at 31/03/2018 is Rs. 1020.48 lakhs and based on the information and explanations given by the management, the terms and conditions are not prejudicial to the interest of the Company.

(b) The payment of interest has been stipulated and the repayments are regular.

(c) In our opinion, reasonable steps have been taken by the Company for the recovery of the principal amounts and interest in respect of loan.

(iv) According to the information and explanations given to us, the company does not have any loans, investments, guarantees, and security which are subject to provisions of section 185 and 186 of the Companies Act, 2013. Therefore the provisions of Para 3(iv) of the Companies (Auditors Report), 2016 are not applicable to the Company.

(v) According to the information and explanations given to us, the Company has not accepted deposits from the public, and in our opinion and according to the information and explanation given to us, the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under are not applicable.

(vi) To the best of our knowledge and as explained to us, the Central Government has not prescribed maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013 in the case of this company.

(vii) (a) According to the information and explanations given to us and as per our verification of the records of the company, the company has been regular in depositing undisputed statutory dues including Provident fund, Employees’ state insurance, Income Tax, Sales Tax, Goods and Service Tax, Cess and other statutory dues with the appropriate authorities during the year.

(b) 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, Goods and Service Tax, Cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of Income tax, Sales tax, Goods and Service Tax, Cess and other statutory dues which have not been deposited on account of dispute.

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to financial institution, bank, government or dues to debenture holders.

(ix) According to the information and explanations given to us, there were no monies raised by way of initial public offer or further public offer (including debt instruments) and no term loans were obtained during the year. Therefore the provisions of Para 3(ix) of the Companies (Auditors Report), 2016 is not applicable to the Company.

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

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

ANNEXURE ‘B’ TO INDEPENDENT AUDITORS’ REPORT

[Referred to in paragraph (f) under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date]

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

We have audited the internal financial controls over financial reporting of the Company as at 31 March 2018 in conjunction with our audit of the Balance Sheet as at 31st March 2018, the statement of profit and loss and cash flow statement annexed for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

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

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing (‘the Standards’), issued by the ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls Over Financial Reporting

A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. This includes those policies and procedures that :

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected.

Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, the Company has maintained, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. However, the existing policies, systems, procedures and internal controls followed by the Company have to be appropriately documented.

For K.P. Rao & Co.,

Chartered Accountants

Firm Reg. No. 003135S

Sd/-

K Viswanath

Place : Visakhapatnam Partner

Date : May 25, 2018 Membership No. 022812

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Mar 31, 2014

I have audited the accompanying financial statements of M/S. Coastal Corporation Limited (The Company), which comprise the Balance sheet at 31st March, 2014, the Statement of Profit and Loss and 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 Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Section 211 (3C) of the Com- panies Act, 1956 ("The Act") and in accordance with the accounting principles generally accepted in India. 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.

Auditors'' Responsibility:

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Standards on Auditing issued by the Institute of Char- tered Accountants of India. Those Standards require that I 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 disclo- sures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion:

In my opinion and to the best of my information and according to the explanations given to me , 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 case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(b) In the case of the Statement of Profit & Loss, of the profit of the company for the year ended on that date; and

(c) In case of the Cash flow statement, of the cash flows of the company for the year ended on that date.

Report on other legal and regulatory requirements:

1. As required by the Companies (Auditor''s Report) order, 2003 ("The Order") issued by the Central Government in terms of Section 227 (4A) of the Act, I give in the Annexure a state- ment on the matters specified in paragraphs 4 and 5 of the order.

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

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

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

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

d) In my opinion, the Balance Sheet, the statement of Profit and Loss and the Cash flow Statement comply with the Accounting Standards referred to in Section (3C) of section 211 of the Companies Act, 1956.

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

Annexure to the Independent Auditors'' Report

(Referred to in paragraph 1 under ''Report on other Legal and Regulatory requirements'' section of my report of even date)

On the basis of such checks as I considered appropriate and according to the information and explanation given to me during the course of my audit, I report that:

1. (a) The company has maintained proper records showing full particulars including quantita- tive details and situation of its fixed assets.

(b) As explained to me, fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) In my opinion and according to the information and explanations given to me, there are no sales of substantial part of fixed assets during the year and therefore does not affect the going concern assumption.

2. (a) As explained to me, inventories have been physically verified during the year by the man- agement at reasonable intervals.

(b) In my opinion and according to the information and explanations given to me, the proce- dures 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 my opinion and on the basis of my examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) According to the information and explanations given to me and on the basis of my examina- tion of the books of account, the Company has not granted any loans, secured or unse- cured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 except for advances to the tune of Rs.66.50 lakhs to two of the companies in which two of the directors are interested. The advances are purely temporary and have been paid back.

(e) According to the information and explanations given to me and on the basis of my examina- tion of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and accordingly sub clauses (f) & (g) are not applicable to the company.

4. In my opinion and according to the information and explanations given to me, there is generally an adequate internal control procedure commensurate with the size of the com- pany and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of my audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) Based on the audit procedures applied by me and according to the information and expla- nations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) As per the information and explanation given to me and in my opinion the transactions entered into by the company with parties covered under section 301 of the Act does not exceeds five lakhs rupees in financial year and therefore requirement of reasonableness of transactions does not arise.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been maintained. However we have not made any detailed examination of the cost records with regard to their accuracy.

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Excise Duty, Cess and other statu- tory dues have generally been regularly deposited with the appropriate authorities. Accord- ing to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to me, there are no amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

10. The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by my audit and in the immediately preceding financial year.

11. Based on my audit procedures and on the information and explanations given by the man- agement, I am of the opinion that, the Company has not defaulted in repayment of dues to any financial institution or bank.

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

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provi- sion of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to me, the Company is not trading in Shares, Mutual funds & other Investments.

15. According to the information and explanations given to me, the Company has not given any guarantees for loans taken by others from a bank or financial institution.

16. The Company has taken term loan during the Financial Year and the Term Loan has been applied for the purpose for which it was obtained.

17. Based on the information and explanations given to me and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, I report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to me by the management, I report that the Company has not made any preferential allotment of shares during the year.

19. The Company has not issued any debentures .

20. The Company has not raised any money by public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to me, I report that no fraud on or by the Company has been noticed or reported during the year, nor have I been informed of such case by the management.

Sd/- (V.V.S.BHAGAVAN) CHARTERED ACCOUNTANT M NO. 8571

Place : Visakhapatnam Date : 28.05.2014

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Mar 31, 2013

Report on the Financial Statements

I have audited the accompanying financial statements of M/S. Coastal Corporation Limited (The Company), which comprise the Balance sheet at 31 st March, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility forthe Financial Statements:

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Section 211 (3C) of the Com- panies Act, 1956 ("The Act") and in accordance with the accounting principles generally accepted in India. 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 errbr.

Auditors'' Responsibility:

My responsibility is to express an opinion on these financial statement based on my audit. I con- ducted my audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that I 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 disclo- sures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion:

In my opinion and to the best of my information and according to the explanations given to me , 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 case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2013;

(b) In the case of the Statement of Profit & Loss, of the profit of the company for the year ended on that date; and

(c) In case of the Cash flow statement, of the cash flows of the company for the year ended on that date.

Report on other legal and regulatory requirements:

1. As required by the Companies (Auditor''s Report) order, 2003 ("The Order) issued by the Central Government in terms of Section 227 (4A) of the Act, I give in the Annexure a state- ment on the matters specified in paragraphs 4 and 5 of the order.

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

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

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

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

d) In my opinion, the Balance Sheet, the statement of Profit and Loss and the Cash flow Statement comply with the Accounting Standards referred to in Section (3C) of section 211 of the Companies Act, 1956.

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

Annexure to the Independent Auditors'' Report

{Referred to in paragraph 1 under ''Report on other Legai and Regulatory requirements'' section of my report of even date)

On the basis of such checks as I considered appropriate and according to the information and explanation given to me during the course of my audit, I report that:

1. (a) The company has maintained proper records showing full particulars including quantita- tive details and situation of its fixed assets.

(b) As explained to me, fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) In my opinion and according to the information and explanations given to me, there are no sales of substantial part of fixed assets during the year and therefore does not affect the going concern assumption.

2. (a) As explained to me, inventories have been physically verified during the year by the management at reasonable intervals.

(b) In my opinion and according to the information and explanations given to me, the procedures of physical verification of inventories followed by the management are reason- able and adequate in relation to the size of the company and the nature of its business.

(c) In my opinion and on the basis of my examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) According to the information and explanations given to me and on the basis of my examination of the books of account, 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 except for advances to the tune of Rs.121.49 lakhs to two of the companies in which two of the directors are interested for redemption of preference shares to the tune of Rs.157.33 lakhs. The residual amounts have been received/settled.

(e) According to the information and explanations given to me and on the basis of my examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and accordingly sub clauses (f) & (g) are not applicable to the company.

4. In my opinion and according to the information and explanations given to me, there is g e n e ral ly a n a de q u ate i nte m al control p race d u re com m ensu rate with th e s ize of the com pa ny and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of my audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) Based on the audit procedures applied by me and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) As per the information and explanation given to me and in my opinion the transactions entered into by the company with parties covered under section 301 of the Act does not exceeds five iakhs rupees in financial year and therefore requirement of reasonableness of transactions does not arise.

6. The Company has not accepted any deposits from the public covered under section 58A and 58Mofthe Companies Act, 1956.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been maintained. However we have not made any detailed examination of the cost records with regard to their accuracy.

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Excise Duty, Cess and other statu- tory dues have generally been regularly deposited with the appropriate authorities. Accord- ing to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to me, there are no amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duly which have not been deposited on account of any disputes.

10. The Company does not have any accumulated loss and has not incurred cash loss dunntj the financial year covered by my audit and in the immediately preceding financial year.

11. Based on my audit procedures and on the information and explanations given by the man- agement, I am of the opinion that, the Company has not defaulted in repayment of dues to any financial institution or bank.

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

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to me, the Company is not trading in Shares, Mutual funds & other Investments.

15. According to the information and explanations given to me, the Company has not given any guarantees for loans taken by others from a bank or financial institution.

16. The Company has taken term loan during the Financial Year and the Term Loan has been applied for the purpose for which it was obtained.

17. Based on the information and explanations given to me and on an overall examination of the Balance Sheet of the Company as at 31 st March, 2013,1 report that no funds raised on short- term basis have been used for long-term investment by the Company.

19. The Company has not issued any debentures .

20. The Company has not raised any money by public issue during the year.

21 Performed and the information and explanations given to during th evear nor have been informed of such case by the management.

Place: Visakhapatnam.

Date : 29.05.2013 (V.V.S.BHAGAVAN)

CHARTERED ACCOUNTANT

M No. 8571

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Mar 31, 2012

I have examined the attached Balance Sheet of M/s. Coastal Corporation Ltd., (Formerly known as Coastal Trawlers Ltd.), Visakhapatnam as at 31st March, 2012, the Statement of Profit and Loss for the year ended 31st March, 2012 and the Cash Flow Statement for the year ended on that date both annexed hereto. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.

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

A. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956,1 enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

B. Further to my comments above, I report that:

i) I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of my audit.

ii) In my opinion, proper books of account, as required by Law have kept by the Company so far as appears from my examination of such books.

iii) The Company's Balance Sheet and Statement of Profit and Loss dealt with the above are in agreement with the books of account.

iv) In my opinion, the Statement of Profit and Loss and Balance Sheet comply with the accounting standards referred to in sub-section (3c) of section 211 of the Companies Act, 1956.

v) Based on 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 is disqualified as on 31st March,2012 from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of Companies Act, 1956.

vi) In my opinion and to the best of my information and according to the explanations given to me, the said Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement read with significant accounting policies and 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.

a) in so far it relates to the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2012 and

b) in so far it relates to the Statement of Profit and Loss , of the Profit for the year ended on that date.

c) in so far it relates to the Cash Flow Statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

Referred to in paragraph 1 of my Report of even date

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

b) All the assets have been physicaify verified by the management during the year and no material discrepancies were noticed on such verification.

c) During the year there are no sales of substantial part of Fixed Assets which will effect the company's status as a going concern.

2. a) As explained to me, the inventory has been physically verified during the year by the management. In my opinion, the frequency of verification is reasonable.

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

c) In my opinion and according to the information and explanations given to me and on the basis of my examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account

3. According to the information and explanations given to me, the Company has not taken loans or granted any loans from/to the parties covered under section 301 of the Companies Act, 1956.

4. In my opinion and according to the information and explanation given to me, there are adequate internal control procedures commensurate with the size of the Company and nature of its business. During the course of my audit, no major weaknesses have been noticed in the internal controls.

5. a) According to the information and explanation given to me I am of the opinion that the transactions that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanation given to me the transactions made in pursuance of arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 in respect of other parties or reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public.

7. The company has an internal audit system and in my opinion the scope and coverage of internal audit is commensurate with the size of the company and the nature of its business.

8. Maintenance of cost records is not required under the provisions of Sec.209 (1) (d) of the Companies Act, 1956.

9. According to the records of the company and information and explanation given to me, the company is in general regular in depositing undisputed statutory dues including Provident Fund, Employee's State Insurance, Income-Tax, Cess and other statutory dues with the appropriate authorities. As on 31st march 2012 there are no dues which are outstanding for a period of more than 6 months from the date they became payable.

10. The Company has no accumulated losses as on 31st March 2012. Further it has not incurred any cash loss in the financial year under report and in the immediately preceding financial year.

11. According to the information and explanations given by the Management, I am of the opinion that the company has not defaulted in repayment of dues to Banks.

12. According to the information and explanations given to me, the Company has not granted any loans and advances on the basis of Security by way of pledge of shares and other securities.

13. The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Societies are not applicable to the company.

14. The company is not dealing or trading in shares or securities.

15. The company has not given any loans or guaranteed any loans taken by others from Banks or financial institutions.

16. The Company has taken term loan during the Financial Year and the Term Loan has been applied for the purpose for which it was obtained.

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

18. The Company has not made any preferential allotment during the yeas to parties and companies covered under register maintained under Section :*01 of the Companies Act 1956.

19. The Company has not issued any Debentures.

20. The Company has not raised any money from public.

21. To the best of my knowledge and belief and according to the information and explanation given to me, no fraud on or by the Company has been noticed or reported during the year.

Sd/-

Place : VISAKHAPATNAM (C) (V.V.S. BHAGAVAN)

Date : 31.08.2012 Chartered Accountant

M.No: 008571

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Mar 31, 2010

I have examined the attached Balance Sheet of M/s. Coastal Corporation Ltd., (Formerly known as Coastal Trawlers Ltd.), Visakhapatnam as at 31st March. 2010, the Profit and Loss Account for the year ended 31st March, 2010 and the Cash Flow Statement for the year ended on that date both annexed hereto. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audit.

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

A. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956. I enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

B. Further to my comments above, I report that:

i) I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of my audit.

ii) In my opinion, proper books of account, as required by Law have kept by the Company so far as appears from my examination of such books.

iii) The Company's Balance Sheet and Profit and Loss Account dealt with the above are in agreement with the books of account.

iv) In my opinion, the Profit and Loss Account and Balance Sheet comply with the accounting standards referred to in sub-section (3c) of section 211 of the Companies Act, 1956.

v) Based on representations made by all the Directors of the Company and the information and explanations made available, the Directors of the Company do not prima facie have any dis-qualification as referred to in Clause (g) of sub-section (1) of Sec.274 of the Act 1956.

vi) In my opinion and to the best of my information and according to the explanations given to me, the said Balance Sheet, the Profit and Loss Account and the Cash Flow Statement read with significant accounting policies and 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.

a) in so far it relates to the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2010 and

b) in so far it relates to the Profit and Loss Account, of the Profit for the year ended on that date.

c) in so far it relates to the Cash Flow Statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITOR’S REPORT Referred to in paragraph 1 of my Report of even date

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

b) All the assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

c) During the year there are no sales of substantial part of Fixed Assets which will effect the company's status as a going concern.

2. a) As explained to me, the inventory has been physically verified during the year by the management. In my opinion, the frequency of verification is reasonable,

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

c) In my opinion and according to the information and explanations given to me and on the basis of my examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

3. According to the information and explanations given to me, the Company has not taken any loans from the parties covered under section 301 of the Companies Act, 1956.

4. In my opinion and according to the information and explanation given to me, there are adequate internal control procedures commensurate with the size of the Company and nature of its business. During the course of my audit, no major weaknesses have been noticed in the internal controls

5. a) According to the information and explanation given to me I am of the opinion that the transactions that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanation given to me the transactions made in excess of Rupees Five lakhs in respect of the party listed in the register maintained under section 301 of the Companies Act, 1956 have been made during the normal course of business and at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public.

7. The company has an internal audit system and in my opinion the scope and coverage of internal audit is commensurate with the size of the company and the nature of its business.

8. Maintenance of cost records is not required under the provisions of Sec.209 (1)(d)of the Companies Act, 1956.

9. According to the records of the company and information and explanation given to me, the company is in general regular in depositing undisputed statutory dues including Provident Fund, Employee’s State Insurance, Income-Tax, Cess and other statutory dues with the appropriate authorities. As on 31st march 2010 there are no dues which are outstanding for a period of more than 6 months from the date they became payable.

10. The Company has no accumulated losses as on 31st March 2010. Further it has not incurred any cash loss in the financial year under report and in the immediately preceding financial year.

11. According to the information and explanations given to me, the Company has not granted any loans and advances on the basis of Security by way of pledge of shares and other securities.

12. The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Societies are not applicable to the company.

13. The company is not dealing or trading in shares or securities.

14. The company has not given any guarantee for loans taken by others from Banks or financial institutions.

15. The Company has not taken any term loans during the Financial Year.

16. According to the information and explanations given tome and on an overall examination of the balance sheet of the Company, I report that no funds raised on short-term basis have been used for long-term investment by the Company and vice versa.

17. The Company has made preferential allotment to parties and companies cohered under register maintained under Section 301 of the Companies Act, 1956.

18. The Company has not issued any Debentures.

19. The Company has not raised any money from public.

20. To the best of my knowledge and belief and according to the information and explanation given to me, no fraud on or by the Company has been noticed or reported during the year.



(V.V.S. BHAGAVAN)

Chartered Accountant