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Auditor Report of Coromandel International Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of COROMANDEL INTERNATIONAL LIMITED ("the Company"), which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

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

Auditor''s Responsibility

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

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

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

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

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

i. The Company has disclosed the impact of all pending litigations on its financial position in its financial statements in accordance with the generally accepted accounting practice - also refer Note 29 (b) and Note 39 to the financial statements;

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

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

(Referred to in paragraph 1 under ''Report on Other Legal and regulatory requirements'' section of our report of even date)

(i) Having regard to the nature of the Company''s business/ activities/ results during the year, clause (viii) of paragraph 3 of the Order are not applicable to the Company.

(ii) in respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(iii) in respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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

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

(iv) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. in respect of such loans:

(a) Having regard to the rollover of the loans, receipts of principal amounts and interest have been regular/ as per stipulations.

(b) There is no overdue amount in excess of Rs. 1 lakh remaining outstanding as at the year-end.

(v) in our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services and during the course of our audit we have not observed any major weaknesses in such internal control system.

(vi) According to the information and explanations given to us, the Company has not accepted any deposit during the year. in respect of unclaimed deposits, the Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013.

(vii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(viii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State insurance, income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State insurance, income- tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31 March, 2015 for a period of more than six months from the date they became payable.

(c) Details of dues of income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty , Value Added Tax and Cess which have not been deposited as on 31 March, 2015 on account of disputes are given below:

Name of Statute Nature of Forum where Dues Dispute is pending

The income Tax Act, 1961 income Tax income Tax Appellate Tribunal

Commissioner of income Tax (Appeals)

West Bengal Sales Tax Act, Sales tax Assistant Commissioner 1994 (Appeals)

Sales Tax Appellate Tribunal

Senior Joint Commissioner Commercial

Andhra Pradesh General Sales Tax Additional Sales tax Act, 1957 Commissioner Legal

Sales Tax Appellate Tribunal

Additional Deputy Commissioner

Uttar Pradesh Value Added Sales tax Sales Tax Appellate tax Act, 2008 Tribunal

Additional Commissioner (Appeals)

Maharashtra Value Added Tax Sales tax Joint Commissioner Act, 2002

Electricity Supply Act, Electricity High Court of Judicature 1948 Cess at Hyderabad for the State of Telangana and the State of Andhra Pradesh

Central Excise Act, 1944 Excise duty High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh

High Court of Judicature at Madras

Name of Statute Period to which the Amount Amount relates involved (rs in Lakhs}

The income Tax Act, 1961 1993-1994, 2005-06 to 2008-09 166

2004- 2005, 2005-06, 2007-2008 to 672 2011-2012

West Bengal Sales Tax Act, 1994 2002- 2003 4

2008-2009 14

2012-2013 1019

Andhra Pradesh General Sales Tax Act 1995-1996 to 27 1957 1997-1998

2000- 2001 to 70 2003- 2004 and 2005- 2006

2010-2011 7

Uttar Pradesh Value Added Tax Act, 2005- 2006 to 2007-2008 1 2008 2008-2009 111

Maharashtra Value Added Tax Act, 20022006- 2007 18

Electricity Supply Act, 1948 2003-2012 158

Central Excise Act, 1944 2003-2004 241

2001- 2003 7

Name of Statute Nature of Forum where Dues Dispute is pending

CESTAT

Commissioner (Appeals)

The Customs Act, 1962 Customs duty CESTAT

Commissioner of Customs (Appeals)

The Finance Act, 1994 Service tax Commissioner (Appeals)

CESTAT

High Court of Judicature at Madras

Name of Statute Period to which the Amount Amount relates involved (Rs. in Lakhs)

1998-2000, 2001-2002, 2002-2003, 7247 2004- 2005 to 2009-2010, March 2011 to January 2012, February 2012 to September 2012 and July 2012 to February 2013

2004 - 2005 3

The Customs Act 1962 1998-1999 11

2009-2010 23

2007- 2008 28

2005- 2006 to 2010-2011 344

The Finance Act 1994 2008- 2009 to 2010-2011 26

May 2011 to January 2014 122

2003-2004 2

(d) The Company has been regular in transferring amounts to the investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder within time.

(ix) in our opinion and according to the information and explanations given to us, having regard to the rollover of buyer''s credit by banks, the Company has not defaulted in the repayment of dues to financial institutions and banks. The Company has not issued any debentures.

(x) in our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xi) in our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained.

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

For Deloitte Haskins & Sells Chartered Accountants (Firm''s Registration No.008072S)

(Ganesh Balakrishnan) (Partner) SECUNDERABAD, 30 April 2015 (Membership No. 201193)


Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying fi nancial statements of COROMANDEL INTERNATIONAL LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profi t and Loss and the Cash Flow Statement for the year then ended, and a summary of the signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows of the Company in accordance with the Accounting Standards notifi ed under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) 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 fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of the reports of the other auditors on the fi nancial statements of entities referred to below in the Other Matter Paragraph, the aforesaid fi nancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the 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 Profi t and Loss, of the profi t of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fl ows of the Company for the year ended on that date.

Other Matter

We did not audit the accounts / fi nancial information of erstwhile Liberty Phosphate Limited and erstwhile Liberty Urvarak Limited for the year ended 31st March 2014 (refer Note 26 to the fi nancial statements which describes the amalgamation of Liberty Phosphate Limited and Liberty Urvarak Limited with the Company with effect from 1st April, 2013), whose accounts / fi nancial information refl ect total assets (net) of Rs. 42154 Lakhs as at 31st March, 2014, total revenues of Rs. 38940 Lakhs and net cash outfl ows amounting to Rs. 301 Lakhs for the year ended on that date, as considered in the fi nancial statements. These accounts / fi nancial information have been audited by other auditors whose reports have been furnished to us by the Management and our opinion, in so far as it relates to the amounts and disclosures included in respect of these entities, is based solely on the reports of the other auditors.

Our opinion is not qualifi ed in respect of this matter.

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, having regard to our comments in the Other Matter paragraph we give in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, having regard to our comments in the Other Matter paragraph we report that:

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

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

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

(d) In our opinion, the Balance Sheet, the Statement of Profi t and Loss, and the Cash Flow Statement comply with the Accounting Standards notifi ed under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

3. As required under provisions of Section 227(3) of the Act, we also report that on the basis of the written representations received from the directors as on 31st March, 2014 taken on record by the Board of Directors, none of the directors is disqualifi ed as on 31st March, 2014 from being appointed as a director in terms of Section 274(1) (g) of the Act.

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) Having regard to the nature of the Company''s business/activities/results during the year, clauses (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of paragraph 4 of the Order are not applicable to the Company.

(ii) In respect of its fi xed assets:

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

(b) The fi xed assets were physically verifi ed during the year by the Management in accordance with a regular programme of verifi cation which, in our opinion, provides for physical verifi cation of all the fi xed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verifi cation.

(c) The fi xed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fi xed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verifi ed during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifi cation of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

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

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act 1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs. 5 Lakhs to a party during the year. At the year-end, the outstanding balances of such loans granted aggregated Rs. 2556 Lakhs (number of parties two) and the maximum amount involved during the year was Rs. 4870 Lakhs (number of parties four).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the Company.

(c) Having regard to rollover of the loans, receipts of principal amounts and interest have been regular/as per stipulations.

(d) There are no overdue amounts outstanding as at year end.

In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has not taken any loans during the year. At the year-end, the outstanding balances of such loans taken was Rs. 127 Lakhs (number of parties one) and the maximum amount involved during the year was Rs. 26700 Lakhs (number of parties two) which includes the unsecured redeemable non-convertible fully paid bonus debentures issued in the previous year to a party in accordance with the Scheme of Arrangement approved by the High Court of Andhra Pradesh in that year and redeemed in the current year.

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interest of the Company.

(c) The payments of principal amounts and interest in respect of such loans are regular/ as per stipulations.

(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services and during the course of our audit we have not observed any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction (other than the loans mentioned in paragraph (iv) above) is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956.

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

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

(x) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income- tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable.

(xi) In our opinion and according to the information and explanations given to us, having regard to the rollover of buyer''s credit by the banks, the Company has not defaulted in the repayment of dues to fi nancial institutions, banks and debenture holders.

(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and fi nancial institutions are not, prima facie, prejudicial to the interests of the Company.

(xiii) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained.

(xiv) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

(xv) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm''s Registration No. 008072S)

Ganesh Balakrishnan

Partner

HYDERABAD, 12 May, 2014 (Membership No. 201193)


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of COROMANDEL INTERNATIONAL LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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 Companies 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 controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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.

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

Opinion

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

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

(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

(c) in the 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, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

(e) On the basis of the written representations received from the directors as on 31st March, 2013 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 Section 274(1)(g) of the Act.

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

(i) Having regard to the nature of the Company''s business/ activities/results during the year, clauses (x), (xii), (xiii), (xiv), (xviii) and (xx) of paragraph 4 of the Order are not applicable to the Company.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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

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

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs.4,874 Lakhs to three parties during the year. At the year-end, the outstanding balances of such loans aggregated Rs.4,865 Lakhs and the maximum amount involved during the year was Rs.4,874 Lakhs (number of parties three).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) Having regard to rollover of the loans, receipts of principal amounts and interest have been regular/as per stipulations.

(d) There are no overdue amounts outstanding as at year end.

According to the information and explanations given to us, having regard to the issue of unsecured redeemable non- convertible fully paid bonus debentures (NCD) in accordance with the Scheme of Arrangement approved by the High Court of Andhra Pradesh, the Company has not taken any loans secured or unsecured from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) NCDs aggregating Rs.26,573 Lakhs were issued to a party during the year and at the year-end, the outstanding balance of such NCDs aggregated Rs.26,573 Lakhs and the maximum amount involved during the year was Rs.26,573 Lakhs.

(b) The rate of interest and other terms and conditions of such NCDs are in our opinion, prima facie, not prejudicial to the interests of the Company.

(c) As per the terms of NCDs, no amounts/interest was due for payment during the year.

(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services and during the course of our audit we have not observed any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs.5 lakhs (other than the loans mentioned in paragraph (iv) above) in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956.

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

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

(x) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth- tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth-tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth-Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2013 on account of disputes are given below:

Nature of Forum where Dispute is Name of Statute Dues pending

West Bengal Sales Tax Sales tax Assistant Commissioner (Appeals) Act, 1994 Joint Commissioner (Appeals)

Andhra Pradesh General Sales tax Additional Commissioner Legal Sales Tax Act, 1957 Sales Tax Appellate Tribunal

Uttar Pradesh Value Sales tax Sales Tax Appellate Tribunal Added Tax Act, 2008 Additional Commissioner (Appeals)

Rajasthan Value Added Sales tax Deputy Commissioner (Appeals) Tax Act, 2003

Electricity Supply Act, 1948 Electricity Cess High Court Andhra Pradesh

Central Excise Act, 1944 Excise duty High Court Andhra Pradesh

CESTAT

Commissioner (Appeals)

Department of Revenue

The Customs Act, 1962 Customs duty CESTAT

Commissioner (Appeals)

The Finance Act, 1994 Service tax CESTAT

Name of Statute Period to which the Amount involved Amount relates (Rs. in lakhs)

West Bengal Sales Tax Act 1994 2002-2003 4

2009-2010 13

Andhra Pradesh General Sales Tax Act 1957 1995-1996 to 1997-1998 27

2000-2001 to 2003-2004 70 and 2005-2006

Uttar Pradesh Value Added Tax Act 2008 2005-2006 to 2007-2008 18

2008-09 114

Rajasthan Value Added Tax Act 2003 2010-11 7

Electricity Supply Act 1948 2003-2012 158

Central Excise Act 1944 2003-04 241

1998-2000, 2001-02, 2002-03, 2004-05 to 2008-09 1,447 March 2011 to January 2012

2011-12 2

2009-2010 15

The Customs Act 1962 1998-1999 11

2009-2010 25

The Finance Act 1994 October 2007 to October 2011 59

(xi) In our opinion and according to the information and explanations given to us, having regard to the rollover of buyer''s credit by the banks, the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xiii) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xiv) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have, prima facie, not been used during the year for long- term investment.

(xv) According to the information and explanations given to us, during the period covered by our audit report, the Company had issued unsecured redeemable non-convertible fully paid bonus debentures in accordance with the Scheme of Arrangement approved by the High Court of Andhra Pradesh. Such debentures did not require creation of security.

(xvi) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 008072S)

Ganesh Balakrishnan

Partner

SECUNDERABAD, April 23, 2013 (Membership No.201193)


Mar 31, 2012

1. We have audited the attached Balance Sheet of COROMANDEL INTERNATIONAL LIMITED ("the Company") as at 31 March 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

d. in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

e. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

5. On the basis of the written representations received from the directors as on 31 March 2012 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2012 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company's business/ activities/result, clauses (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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

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

(iv) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs. 4950 Lakhs to three parties during the year. All the loans granted were repaid before the year end and the maximum amount involved during the year was Rs. 4950 Lakhs (number of parties three).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) The receipts of principal amounts and interest have been as per stipulations.

(d) There are no outstanding as at year end.

According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and accordingly clauses 4 (iii)(f) and (g) of CARO are not applicable.

(v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs (other than the loans mentioned in paragraph (iv) above) in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A & 58AA or any other relevant provisions of the Companies Act, 1956.

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

(ix) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of fertilisers and insecticides and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

(x) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31 March, 2012 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31 March, 2012 on account of disputes are given below:

Statute Nature of Dues Forum where Dispute is pending

Karnataka Sales Tax Value added tax Joint Commissioner (Appeals) Act, 1957

West Bengal Sales Tax Sales tax Assistant Commissioner Act, 1994 (Appeals)

Andhra Pradesh General Sales tax Additional Commissioner Legal Sales Tax Act, 1957

Sales Tax Appellate Tribunal

Uttar Pradesh Value Sales tax Additional Commissioner Added Tax Act, 2008 (Appeals)

Electricity Supply Electricity Cess High Court Andhra Pradesh Act, 1948

Central Excise Act, 1944 Excise duty High Court Andhra Pradesh

CESTAT

Commissioner (Appeals)

The Customs Act, 1962 Customs duty CESTAT

Commissioner (Appeals) The Finance Act, 1994 Service tax CESTAT



Statue Period to which the Amount involved amount relates (Rs. in lakhs)

Karnataka Sales Tax Act, 1957 2005-06 to 34 2007-08

West Bengal Sales Tax Act, 1994 2002-2003 4

Andhra Pradesh General Sales Tax Act, 1957 1995-1996 to 27 1997-1998,

2000-2001 to 70 2003-2004 and

Uttar Pradesh Value Added Tax Act, 2008 2005-2006 2005-2006 to 30 2007-2008, 2010-11

Electricity Supply Act, 1948 2003-2012 158

Central Excise Act, 1944 2003-04 241

1998-2000, 2001-02, 2002-03, 2004-05 to 2008-09 222

2005-07 and 2011-12 14

The Customs Act, 1962 1998-1999 11

2009-2010 25

The Finance Act, 1994 October 2007 to October 2011 59

(xi) In our opinion and according to the information and explanations given to us, having regard to the rollover of buyer's credit by the banks, the Company has not defaulted in the repayment of dues to banks and financial institutions. The Company has not issued any debentures.

(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not prima facie prejudicial to the interests of the Company.

(xiii) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xiv) In our opinion and according to the information and explanations given to us and on an overall examination of the

Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xv) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Registration No. 008072S)

Ganesh Balakrishnan

Partner HYDERABAD, April 23, 2012 (Membership No.201193)






Mar 31, 2011

1. We have audited the attached Balance Sheet of Coromandel International Limited (the Company), as at March 31, 2011, and the related Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on March 31, 2011 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto, give in the prescribed manner the information required by the Act and, give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

ANNEXURE TO AUDITORS REPORT [Referred to in paragraph 3 of the Auditors Report of even date to the members of Coromandel International Limited on the financial statements for the year ended March 31, 2011]

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

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

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been

physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year to be entered in the register required to be maintained under that Section. Accordingly, the question of commenting on transactions made in pursuance of such contracts or arrangements does not arise.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by Reserve Bank of India and the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted in earlier years from the public. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to

us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax, wealth tax and customs duty which have not been deposited on account of any dispute. The particulars of dues of sales-tax, service tax, excise duty and cess as at March 31, 2011 which have not been deposited on account of dispute are as follows:

Name of the Nature of Dues Amount Years to which Forum where the

Statute (Rs. in Lakhs) they relate dispute is pending

Karnataka Turnover Tax on chemical mixture 8.33 1993-1994 to Sales Tax Appellate Tribunal Sales tax Act, fertilizers 1996-1997 1957

Andhra Pradesh Sales tax on scrap sales, Taxable 115.32 1995-1996 Appellate Deputy commissioner Sales General Sales Tax turnover/Tax on stock transfer/Tax to Tax, Sales Tax Appellate Tribunal /Joint Act, 1957 on Government of India Subsidy/ 2005-2006 Commissioner of Commercial Taxes/ Lease rentals/ Set-offs Commercial tax Officer/Assistant Commissioner (CT)

West Bengal Disallowance of tax adjustment, 3.90 2002-2003 Assistant Commissioner (Appeals), Sales Tax Act, surcharge and penalties West Bengal 1994

Tamil Nadu Disallowance on Stock Transfers 0.98 2001-2002 Sales Tax Appellate Tribunal General Sales Tax Act, 1959

Electricity Supply Cess on generation 155.06 2003-2004 to Honble High Courts of Madras and Act, 1948 of electricity 2008-2009 Andhra Pradesh

Central Excise Disallowance/ demands 501.33 1999-2003 Commissioner (Appeals)/Customs, Act, 1944 relating to excise duty Excise, Service Tax Appellate Tribunal and Honble High Courts of Andhra Pradesh and Mumbai

The Customs Penalty on customs duty 10.84 1998-1999 Customs, Excise, Service Tax Act, 1962 Appellate Tribunal, Mumbai

Orissa VAT Act, Disallowance of input tax credit 11.3 2005-2009 Additional Commissioner of 2004 Commercial Tax

UP VAT Act Disallowance of 29.27 2005-2008 to Additional Commissioner of exemption benefit 2010-2011 Commercial Taxes and Appellate Tribunal

10. The Company has no accumulated losses as at March 31, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not raised any money by public issues during the year.

20. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

21. The other clauses, (iii)(b), (iii)(c), (iii)(d), (iii)(f), (iii)(g), (v)(b) and (xix) of paragraph 4 of the Companies (Auditors Report) Order 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, are not applicable in the case of the Company for the current year, since in our opinion there is no matter which arises to be reported upon under the aforesaid order.

For Price Waterhouse

Firm Registration Number 007568S Chartered Accountants

Anupam Dhawan

Place : Hyderabad Partner

Date : April 21, 2011 Membership No. F-84451


Mar 31, 2010

To the Members of Coromandel International Limited (formerly Coromandel Fertilisers Limited)

1. We have audited the attached Balance Sheet of Coromandel International Limited (formerly Coromandel Fertilisers Limited) (the Company1), as at March 31, 2010, and the related Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1 956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Subsidy income for the year includes an amount of Rs.264,712.00 Lakhs recognised based on management understanding of the prevailing concession scheme in respect of certain elements which have been notified and based on their estimates in respect of the period where the final notification has not been issued. Necessary adjustments to such accrual and consequential impact, if any, on net profits and net assets, will be accounted for by the management on final announcement/determination of the subsidy receivable. (Refer Note XIX on Schedule 18.)

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

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

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

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

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on March 31, 201 0 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub- section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto, give in the prescribed manner the information required by the Act and subject to our comments in paragraph 4 above, the impact of which cannot be ascertained at this stage, give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

ANNEXURE TO AUDITORSREPORT

[Referred to in paragraph 3 of the Auditors Report of even date to the members of Coromandel International Limited (formerly Coromandel Fertilisers Limited) on the financial statements for the year ended March 31, 2010]

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

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

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year to be entered in the register required to be maintained under that Section. Accordingly, the question of commenting on transactions made in pursuance of such contracts or arrangements does not arise.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by Reserve Bank of India and the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Compqnies (Acceptance of Deposits) Rules, 1 975 with regard to the deposits accepted in earlier years from the public. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax, wealth tax and customs duty which have not been deposited on account of any dispute. The particulars of dues of sales-tax, service tax, excise duty and cess as at March 31, 2010 which have not been deposited on account of dispute are as follows:

Name of the Nature of Dues Amount Years to which Forum where the Statute (Rs. in Lakhs) they relate dispute is pending

Karnataka Turnover Tax on chemical mixture 8.33 1993-1994 to Sales Tax Appel late Tribunal Sales tax Act, fertilizers 1996-1997 1957

Andhra Pradesh Sales tax on scrap sales, Taxable 133.68 1995-1996 Appellate Deputy commissioner Sales General Sales turnover/Tax on stock tran sfer/Tax to Tax, Sales Tax Appellate Trib unal/Joint Tax Act, 1957 on Government of India Subsidy/ 2005-2006 Commissioner of Commercial Taxes/ Lease rentals/ Set-offs Commercial tax Officer/Assistant Commissioner (CT)

West Bengal- Disallowance of tax adjustment, 3.90 2002-2003 Assistant Commis sioner (Appeals), Sales Tax Act, surcharge and penalties West Bengal. 1994

Gujarat Sales Tax on Stock Transfers, Tax on 4.28 2001-02 to Appellate Deputy commissioner Tax Act, 1969 non-submission of forms 2003-04 Sales Tax, Sales Tax Appellate Tribunal

Bombay Sales Tax on non-subm ission of forms 2.57 2003-04 Appellate Deputy commissioner Tax Act, 1959 Sales Tax, Sales Tax Appellate Tribunal

Tamil Nadu Disallowance on Stock Transfers 0.98 2001-02 Sales Tax Appel late Tribunal General Sales Tax Act, 1959

Electricity Supply Cess on gene ration 152.66 2003-2004 to Honble High Courts of Madras and Act, 1948 of electricity 2008-2009 Andhra Pradesh

Central Excise Disallowance/ demands relating 481.36 1999-2003 Commissioner (Appeals)/Customs, Act, 1944 excise duty Excise, Service Tax Appellate Tribunal and Honble High Courts of Andhra Pradesh and Mumbai

The Customs Penalty on customs duty 10.84 1998-1999 Customs, Excise, Service Tax Act, 1962 Appellate Tribunal, Mumbai



10. The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

1 1. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which fhey were obtained. However, as at March 31, 2010, short term loans amounting to Rs. 25,500 Lakhs have been temporarily placed in fixed deposits pending utilisation for the purpose for which they were obtained.

1 7. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the

information and explanations given to us, there are no funds raised on a short-term basis which have been used for long- term investment.

1 8. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

1 9. The Company has not raised any money by public issues during the year.

20. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

21. The other clauses, (iii)(b), (iii)(c), (iii)(d), (iii)(f), (iii)(g), (v)(b) and (xix) of paragraph 4 of the Companies (Auditors Report) Order 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, are not applicable in the cgse of the Company for the current year, since in our opinion there is no matter which arises to be reported upon under the aforesaid order.

For Price Waterhouse Firm Registration Number 007568S Chartered Accountants

Anupam Dhawan Place : Hyderabad Partner Date : April 22, 2010 Membership No. F-84451



 
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