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Auditor Report of Coastal Corporation Ltd.

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


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


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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