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Auditor Report of Deepak Nitrite Ltd.

Mar 31, 2016

1 . We have audited the accompanying standalone financial statements of Deepak Nitrite Limited ("the Company"), which comprise the balance
sheet as at March 31, 201 6, and the related statements of profit and loss and cash flow for the year then ended, and a summary of the
significant accounting policies and other explanatory information. Management''s Responsibility for the Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section 1 34(5) of the Companies Act, 201 3 ("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 (as amended). 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

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

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

5. 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.

6. 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. 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.

7. 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

8. 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 March 31,
201 6, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor''s Report) Order, 2016, issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act (the "Order"), 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 I, a statement on the matters specified in paragraphs 3 and 4 of the Order.


10. 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 purpose of our audit;

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

c. The Balance Sheet, the Statement of Profit and Loss and Cash Flow 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 1 33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 201 4 (as amended);

e. On the basis of written representations received from the directors as on March 31, 201 6 taken on record by the Board
of Directors, none of the directors is disqualified as on March 31, 201 6, from being appointed as a director in terms of
Section 164(2) of the Act.

f. With respect to the adequacy of internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate report in Annexure II.

g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 1 1 of the Companies
(Audit and Auditors) Rules, 201 4 (as amended), in our opinion and to the best of our information and according to the
explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements
Refer Note 33 and 34 to the financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material
foreseeable losses, if any on long-term contracts including derivative contracts.

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 9 of our report of even date on the standalone financial statements of Deepak Nitrite Limited for the
year ended March 31, 201 6

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

(ii) The Company has a rotational programme for verification of its fixed assets over a period of 3 years. In our opinion,
the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. The
fixed assets have not been physically verified by the Company during the year and hence it is not possible to determine
whether there are any discrepancies with respect to the same.

(iii) The title deeds of immovable properties are held in the name of the Company.

2. Inventories have been physically verified by management at reasonable intervals during the year. The discrepancies noticed
on such verification were not material and have been adjusted in the books of account of the Company.

3. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register
maintained under section 1 89 of the Act. Accordingly, the provisions of para 3(iii) of the Order are not applicable to the Company.

4. The Company has not granted any loans or provided any guarantees or security to the parties covered under Section 1 85
and 186. According to the information and explanations given to us and to the best of our knowledge, the provisions of
sections 1 85 and 1 86 have been complied with in respect of the investment made by the Company.

5. In our opinion and according to the information and explanations given to us and as described in Note 10 to the financial
statements the Company has in respect of the deposits accepted by it complied with the directives issued by the Reserve
Bank of India to the extent applicable and the provisions of Sections 73-76 of the Act read with the Rules framed there under.
According to the information and explanations given to us and to the best of our knowledge and belief, no order has been
passed by the Company Law Board or the National Company Law Tribunal or the RBI or any other court or tribunal which is
to be complied with by the Company.

6. As informed to us, the maintenance of cost records has been prescribed by the Central Government under section 148(1)
of the Companies Act, 201 3, in respect of the activities carried on by the Company. We have broadly reviewed the books
of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by
the Central Government for the maintenance of cost records and are of the opinion that prima facie the prescribed accounts
and records have been maintained. We have not, however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.

7. (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, employees'' state
insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material
statutory dues, as applicable, with the appropriate authorities. According to the information and explanations given to
us no undisputed amounts payable in respect of such statutory dues are in arrears, as on March 31, 201 6 for a period
of more than six months from the date they became payable.

(b) According to the information and explanations given to us, dues of income-tax, sales tax, service tax, excise duty,
customs duty and work contract tax which have not been deposited on account of any dispute are as follows:

Name of the Statute Nature of Rs, in Period to

Work Contract
Tax Act of Work 11.65 1998-99 to 2004-05
Maharashtra Contract Tax

Central Excise
Act, 1 944 Excise Duty 1.28 April''11 to Oct''14

Central Excise
Act, 1 944 Excise Duty 10.34 Oct''l0 to Nov''l3

Central Excise
Act, 1 944 Excise Duty 206.79 July''98 to March''14

Central Sales
Tax Act Sales Tax 47.78 2005-06, 201 0-11
and 2011-12

Mumbai Stamp Act Stamp Duty 22.85 Mar-10

Hyderabad
Metropolitan
Water Sewerage 11.13 2008-09 to 2013-14
Supply & Sewerage
Act, 1989 Cess

Name of the Statute Forum where pending


Commissioner, Works Contract Tax

(Appeals)

Assistant Commissioner, Central Excise

Commissioner, Central Excise

Central Excise & Service Tax Appellate Tribunal

Additional Commissioner, Sales Tax

Chief Controller of Revenue Authorities High Court of Andhra Pradesh


8. 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 loans or borrowings to any financial institution or bank or Government. The Company has not raised any money via
debentures.

9. The Company has not raised any moneys by way of initial public offer or further public offer during the year and hence the provisions
of para 3(ix) of the Order are not applicable to the Company. According to the information and explanations given to us and to the best of our
knowledge and belief, the money raised by way of term loans have been applied for the purposes for which these were raised.

1 0. 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 by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been
informed of any such case by the Management.

1 1 . The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the
provisions of Section 1 97 read with Schedule V to the Act.

1 2. According to the information and explanations given to us, the Company is not a Nidhi Company and hence, the provisions
of para 3(xii) of the Order are not applicable to the Company.

1 3. According to the information and explanations given to us, the related party transactions entered into by the Company are
in accordance with the provisions of section 1 77 and 1 88 of the Act.

14. According to the information and explanations given to us and to the best of our knowledge and belief the placement
of equity shares of the Company to Qualified Institutional Buyers during the year under, is in in compliance with the
requirements of Section 42 of the Act. The amounts raised have been used for the purpose for which these have been raised
and pending such utilization have been deployed in liquid mutual funds as per permissible under the Placement Document
issued by the Company at the time of the issue

1 5. According to the information and explanations given to us and to the best of our knowledge and belief, the Company has
not entered into any non-cash transactions with its directors or persons connected with them. Accordingly, the provisions of
para 3(xv) of the Order are not applicable to the Company.

1 6. According to the information and explanations given to us the Company is not required to be registered under Section 45-IA
of the Reserve Bank of India Act, 1 934.


For B. K. Khare & Co.

Chartered Accountants

Firm''s Registration Number 105102W

Himanshu Chapsey

Mumbai Partner

May 9, 2016 Membership Number: 105731


Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Deepak Nitrite Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statements of Profit and Loss and Cash Flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

1. 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 notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

6. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (here in after referred to as the "Order"), 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 Order.

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

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

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

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

d. In our opinion, the Balance Sheet, the Statements of Profit and Loss and Cash Flow Statement dealt with by this report, comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

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

Annexure Referred to in Paragraph 6 of our Report of Even Date

i) FIXED ASSETS

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

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed during the verification were not material and have been properly dealt with in the books of accounts.

(c) We are of the opinion that, Company has not disposed off substantial part of fixed assets during the year.

ii) INVENTORY

(a) Inventory has been physically verified during the year by the management at regular intervals. In our opinion, the frequency of verification is reasonable. In respect of stocks of raw materials lying with converters, the management has obtained confirmation certificates with regard to the respective closing stock.

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

(c) In our opinion, the Company is maintaining proper records of inventory. Having regard to the size of the operations of the Company and the nature of stocks held, the discrepancies noticed on verification between physical stocks and book records have been properly dealt with in the books of accounts.

iii) LOANS AND ADVANCES GRANTED/TAKEN FROM CERTAIN ENTITIES

As informed, the Company has not taken or granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of the clause 4 (iii) (b), (c), (d), (f) and (g) of the Companies (Auditor''s Report) Order, 2003 are not applicable and hence not commented upon.

iv) INTERNAL CONTROL SYSTEM

In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed asset and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control procedures.

v) CONTRACTS OR ARRANGEMENT REFERRED TO IN THIS SECTION 301 OF THE COMPANIES ACT,1956

(a) Based on audit procedures applied by us, we are of the opinion that the 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) In our opinion, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 and exceeding the value of Rs.5 Lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) PUBLIC DEPOSITS

In our opinion, Company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules 1975, with regard to the deposits accepted from the public. We are further informed that 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 intimating the contravention of the said provisions.

vii) INTERNAL AUDIT SYSTEM

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

viii) COST RECORDS

We have broadly reviewed the books of accounts 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 section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We however, have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) STATUTORY DUES

(a) The Company is generally regular in depositing with appropriate authorities 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.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, investor education and Protection Fund, Employees'' State Insurance, Income-tax, Wealth-tax, Service tax, Sales-tax, Customs duty, Excise duty, Cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom duty, Excise duty and Cess on account of dispute are as follows:

Name of the Statue Nature of Dues Amount Period to which the Forum where pending ( Rs.in lakhs) amount relates

Work Contract Tax Work contract Tax 11.65 1998-99 to 2004-05 Commissioner of Works Act of Maharashtra Contract Tax (Appeals)

Central Excise Excise duty 3.44 Oct''05 to July''10 Commissioner of Excise Act, 1944

Central Excise Excise duty 10.69 Oct''10 to Nov''13 Commissioner of Excise Act, 1944

Central Excise Excise duty 187.65 July''98 to Feb''11 Central Excise Service Tax Act, 1944 Appellate Tribunal

Central Excise Excise duty 19.73 Jan''12 to May''13 Central Excise Service Tax Act, 1944 Appellate Tribunal

Mumbai Stamp Act Stamp duty 22.85 Mar'' 10 Chief Controller of Revenue Authorities

Hyderabad Sewerage Cess 11.13 2008-09 to 2013-14 High Court Metropolitan Water Supply & Sewerage Act, 1989

x) ACCUMULATED LOSSES

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

xi) DUES TO FINANCIAL INSTITUTIONS, BANKS AND DEBENTURE HOLDERS

Based on our audit procedures, we are of the opinion that the Company has not defaulted in the repayment of dues to Financial Institutions and Banks.

xii) SECURITY FOR LOANS & ADVANCES GRANTED

According to the information and explanations given to us, in our opinion the company has maintained adequate documentation with respect to loan granted on the basis of security by way of pledge of shares, debentures and other securities.

xiii) SPECIAL STATUTE

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

xiv) DEALINGS/TRADING IN SHARES, SECURITIES, DEBENTURES AND OTHER INVESTMENTS

In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly , the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

xv) GUARANTEES GIVEN

The Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

xvi) TERM LOANS

Based on the information and explanations given to us, term loans were, prima facie, applied for the purpose for which the loans were obtained.

xvii) UTILISATION OF FUNDS

On an overall examination of the Balance Sheet and the Cash Flow of the Company, we report that no funds raised on short- term basis have been used for long-term investment.

xviii) PREFERENTIAL ALLOTMENT OF SHARES

The Company has not made any preferential allotment of shares during the year.

xix) SECURITY FOR DEBENTURES ISSUED

The Company has not issued any debentures during the year.

xx) PUBLIC ISSUE OF EQUITY SHARES

During the year, the Company has not raised any money by public issue.

xxi) FRAUDS NOTICED

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.

For B. K. Khare & Co.

Chartered Accountants

Firm Registration Number 105102W



Prasad V Paranjape

Place: Mumbai Partner

Date: May 2, 2014 Membership Number 47296


Mar 31, 2013

1. Report on the Financial Statements

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

2. 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 sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor''s Responsibility

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

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

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

4. Opinion

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

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

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

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

5. Report on Other Legal and Regulatory Requirements

5.1 As required by ''the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "Order"), 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 Order.

5.2 As required by section 227(3) oftheAct, we reportthat:

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

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956, nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable bythe Company.

ANNEXURE REFERRED TO IN PARAGRAPH 5 OF OURREPORT OF EVEN DATE

i) FIXED ASSETS

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

(b) All the assets have not been physically verified by the management during the year, but there is a regular programme of verification which, in our opinion is reasonable, having regard to the size of the Company and the nature of its assets. Discrepancies noticed during the verification were not material and have been properly dealt with in the books of accounts.

(c) We are ofthe opinion that, the Company has not disposed off substantial part of fixed assets during the year.

ii) INVENTORY

(a) Inventory has been physically verified during the year by the management at regular intervals. In our opinion, the frequency of verification is reasonable. In respect of stocks of raw materials lying with converters, the management has obtained confirmation certificates with regard to the respective closing stock.

(b) In our opinion, the procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size ofthe Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. Having regard to the size ofthe operations ofthe Company and the nature ofthe stocks held, the discrepancies noticed on verification between physical stocks and book records have been properly dealt with in the books of accounts.

iii) LOANSAND ADVANCES GRANTED/TAKEN FROMCERTAIN ENTITIES

As informed, the Company has not taken or granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of the clause 4 (iii) (b), (c), (d), (f) and (g) ofthe Companies (Auditor''s Report) Order, 2003, are not applicable and hence not commented upon.

iv) INTERNAL CONTROL SYSTEM

In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed asset and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control procedures.

v) CONTRACTS OR ARRANGEMENT REFERRED TO IN THIS SECTION 301 OF THE COMPANIES ACT, 195

(a) Based on the audit procedures applied by us, we are of the opinion that the 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) In our opinion, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 and exceeding the value of Rs. 5 Lacs in respect of any party during the year have been made at prices which are reasonable, having regard to prevailing market prices at the relevanttime.

vi) PUBLIC DEPOSITS

In our opinion, the Company has complied with the provisions of Section 58A, 58AA or any other relevant provisions ofthe Companies Act, 1956, and the Companies (Acceptance of Deposit) Rules 1975, with regard to the deposits accepted from the public. We are further informed that 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 intimating the contravention ofthe said provisions.

vii) INTERNAL AUDIT SYSTEM

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

viii) COST RECORDS

We have broadly reviewed the books of accounts 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 section 209 (1) (d) ofthe Companies Act, 1956, and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We, however, have not made a detailed examination ofthe records with a view to determine whether they are accurate or complete.

ix) STATUTORY DUES

(a) The Company is generally regular in depositing with appropriate authorities 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.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty, Cess and other undisputed statutory dues were outstanding at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs duty, Excise duty and Cess on account of dispute are as follows:

Name of the Statute Nature of Dues Amount (Rs. in Lacs)

Work Contract Tax Act Work Contract Tax 11.65 of Maharashtra

Central Excise Act, 1944 Excise duty 7.23

Central Excise Act, 1944 Excise duty 85.61

Central Excise Act, 1944 Excise duty 5.31

Mumbai Stamp Act Stamp duty 27.25

Name of the Statute Period to which Forum where the amount relates pending

Work Contract Tax Act of maharashtra 1998-99 to 2004-05 Commissioner of Works Contract Tax (Appeals)

Central Excise Act 1944 2011-12 to 2012-13 Commissioner of Excise

Central Excise Act 1944 2004-05 to 2009-10 Central Excise Service Tax appellate tribunal

Central Excise Act 1944 2003-04 and 2005-06 Central Excise Service Tax appellate tribunal

Mumbai Stamp Act 2009-10 Chief Controller of Revenue Authorities

x) ACCUMULATED LOSSES

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

xi) DUES TO FINANCIAL INSTITUTIONS, BANKS AND DEBENTURE HOLDERS

Based on our audit procedures, we are of the opinion that the Company has not defaulted in the repayment of dues to Financial Institutions and Banks.

xii) SECURITY FOR LOANS & ADVANCES GRANTED

According to the information and explanations given to us, in our opinion the company has maintained adequate documentation with respect to loan granted on the basis of security by way of pledge of shares, debentures and other securities.

xiii) SPECIALSTATUTE

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

xiv) DEALINGS/TRADING IN SHARES, SECURITIES, DEBENTURES AND OTHERINVESTMENTS

In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are notapplicabletothe Company.

xv) GUARANTEES GIVEN

The Company has not given any guarantee for loans taken by others, from banks or financial institutions during the year.

xvi) TERM LOANS

Based on the information and explanations given to us, term loans were, prima facie, applied for the purpose for which the loans were obtained.

xvii) UTILISATION OFFUNDS

On an overall examination of the Balance Sheet and the Cash Flow of the Company, we reportthat no funds raised on short-term basis have been used for long-term investment.

xviii) PREFERENTIALALLOTMENT OF SHARES

The Company has not made any preferential allotment of shares during the year.

xix) SECURITY FOR DEBENTURESISSUED

The Company has notissued any debentures during theyear.

xx) PUBLIC ISSUE OFEQUITYSHARES

During theyear, the Company has not raised any money by public issue.

xxi) FRAUDS NOTICED

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 theyear, nor have we been informed of such case by the management.

For B.K.KHARE & COMPANY

Chartered Accountants

FRN: 105102W

Place: Mumbai

Prasad Paranjape

Date: May 9, 2013 Partner

M. No. 47296


Mar 31, 2012

1. We have audited the attached Balance Sheet of DEEPAK NITRITE LIMITED as at March 31, 2012 and the related Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed with reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1 956, 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 enclose in the Annexure, a statement on the matters specified in paragraph 4 & 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 these books.

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

(d) In our opinion, the said Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with, the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

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

(f) 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 March 31, 2012;

(ii) in the case of the Statement of Profit and Loss, 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 REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EvEN DATE

i) FIXED ASSETS

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

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed during the verification were not material and have been properly dealt with in the books of accounts.

(c) We are of the opinion that, Company has not disposed off substantial part of fixed assets during the year.

ii) INVENTORY

(a) Inventory has been physically verified during the year by the management at regular intervals. In our opinion, the frequency of verification is reasonable. In respect of stocks of raw materials lying with converters, the management has obtained confirmation certificates with regard to the respective closing stock.

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

(c) In our opinion, the Company is maintaining proper records of inventory. Having regard to the size of the operations of the Company and the nature of stocks held, the discrepancies noticed on verification between physical stocks and book records been properly dealt with in the books of accounts.

iii) LOANS AND ADVANCES GRANTED / TAKEN FROM CERTAIN ENTITIES

According to the information and explanations given to us, the Company has not taken or granted secured or unsecured loans from/to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

iv) INTERNAL CONTROL SYSTEM

In our opinion, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed asset and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control procedures.

v) CONTRACTS OR ARRANGEMENT REFERRED TO IN THIS SECTION 301 OF THE COMPANIES ACT, 1956

(a) Based on audit procedures applied by us, we are of the opinion that the 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) In our opinion, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 and exceeding the value of Rs 5 lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) PUBLIC DEPOSITS

In our opinion, Company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975, with regard to the deposits accepted from the public. We are further informed that 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 intimating the contravention of the said provisions.

vii) INTERNAL AUDIT SYSTEM

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

viii) COST RECORDS

We have broadly reviewed the books of accounts 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 section 209 (1)

(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We, however, have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) STATUTORY DUES

(a) Company is generally regular in depositing with appropriate authorities 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.

(b) There are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom duty, Excise duty and Cess which have not been deposited on account of dispute except in respect of (i) Sales Tax of Rs 6.97 lacs under the Central Sales Tax Act for F.Y. 2005-2006 which is pending before Commissioner of Sales Tax (Appeals), and Rs 1 1 .65 lacs under the Works Contract Tax Act of Maharashtra pending before Commissioner of Works Contract Tax (Appeals) at CBD Belapur, Navi Mumbai, (ii) Interest and penalty of Rs 85.61 lacs payable on differential Excise duty pending before CESTAT for the years from 2004-05 to 2009-10, Excise Duty alongwith interest and penalty of Rs 5.31 lacs which is pending before CESTAT for the years 2003-04 and 2005-06 and (iii) Rs 99.36 lacs in respect of disputed liability relating to non utilisation of industrial plot within specified time frame.

x) ACCUMULATED LOSSES

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

xi) DUES TO FINANCIAL INSTITUTIONS, BANKS AND DEBENTURE HOLDERS

Based on our audit procedures, we are of the opinion that the Company has not defaulted in the repayment of dues to Financial Institutions and Banks.

xii) SECURITY FOR LOANS & ADVANCES GRANTED

In our opinion, Company has maintained adequate documents with respect to loan granted on the basis of security by way of pledge of shares & other securities.

xiii) SPECIAL STATUTE

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

xiv) DEALINGS/TRADING IN SHARES, SECURITIES , DEBENTURES AND OTHER INVESTMENTS

In our opinion Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) GUARANTEES GIVEN

Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

xvi) TERM LOANS

To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were prima facie, applied by the Company during the year for the purposes for which the loans were obtained, other than temporary development pending application.

xvii) UTILISATION OF FUNDS

On an overall examination of the Balance Sheet and the Cash Flow of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii) PREFERENTIAL ALLOTMENT OF SHARES

Company has not made any preferential allotment of shares during the year.

xix) SECURITY FOR DEBENTURES ISSUED

Company has not issued any debentures during the year.

xx) PUBLIC ISSUE OF EQUITY SHARES

During the year Company has not raised any money by public issue.

xxi) FRAUDS NOTICED

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.



For B.K.KHARE & COMPANY

Chartered Accountants

Santosh Parab

Place: Mumbai Partner

Date: May 4, 2012 Membership No. 47942

(Firm Registration No. 105102W)


Mar 31, 2011

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

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

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, 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 enclose in the Annexure a statement on the matters specified in paragraph 4 & 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 these 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 said Balance Sheet, Profit Loss Account and Cash Flow Statement comply with, the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that 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 Companies Act, 1956.

(f) 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 March 31,2011; and

(ii) in the case of the Profit and Loss Account, ofthe profit forthe year ended on that date.

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

Annexure Referred to in Paragraph 3 of our Report of Even Date:

i) FIXED ASSETS:

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

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed during the verification were not material and have been properly dealt with in the books of accounts.

(c) We are of the opinion that, Company has not disposed off substantial part of fixed assets during the year.

ii) INVENTORY:

(a) Inventory has been physically verified during the year by the management at regular intervals. In our opinion, the frequency of verification is reasonable. In respect of stocks of raw materials lying with converters, the management has obtained confirmation certificates with regard to the respective closing stock.

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

(c) In our opinion, the Company is maintaining proper records of inventory. Having regard to the size of the operations of the Company and the nature of stocks held, the discrepancies noticed on verification between physical stocks and book records been properly dealt with in the books of accounts.

iii) LOANS AND ADVANCES GRANTED / TAKEN FROM CERTAIN ENTITIES:

According to the information and explanations given to us, the Company has not taken or granted secured or unsecured loans from/to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

iv) INTERNAL CONTROL SYSTEM:

In our opinion, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed asset and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control procedures.

v) CONTRACTS OR ARRANGEMENT REFERRED TO IN THIS SECTION 301 OF THE COMPANIES ACT, 1956:

(a) Based on audit procedures applied by us, we are of the opinion that the 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) In our opinion, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 and exceeding the value of Rs. 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) PUBLIC DEPOSITS:

In our opinion, Company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules 1975, with regard to the deposits accepted from the public. We are further informed that 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 intimating the contravention of the said provisions.

vii) INTERNAL AUDIT SYSTEM:

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

viii) COST RECORDS:

We have broadly reviewed the books of accounts 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 section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We however have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) STATUTORY DUES:

(a) Company is generally regular in depositing with appropriate authorities 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.

(b) There are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom duty, Excise duty and Cess which have not been deposited on account of dispute except in respect of (i) Sales Tax of Rs. 6.97 Lacs under the Central Sales Tax Act for F.Y. 2005-2006 which is pending before Commissioner of Sales Tax (Appeals), and Rs. 10.14 Lacs under the Commercial Tax Act of Andhra Pradesh at Hyderabad pending before Commissioner of Commercial Tax (Appeals), ii) Interest and penalty of Rs.59.34 Lacs payable on differential Excise duty pending before CESTAT for the years from 1998-99 & 2001-02 to 2004-05, Excise Duty alongwith interest and penalty of Rs. 5.31 Lacs which is pending before CESTAT for the years 2003-04 and 2005-06 and iii) Rs. 25.47 lacs in respect of disputed liability relating to non-utilisation of industrial plot within specified time frame.

x) ACCUMULATED LOSSES:

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

xi) DUES TO FINANCIAL INSTITUTIONS, BANKS AND DEBENTURE HOLDERS:

Based on our audit procedures, we are of the opinion that the Company has not defaulted in the repayment of dues to Financial Institutions and Banks.

xii) SECURITY FOR LOANS & ADVANCES GRANTED:

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

xiii) SPECIAL STATUTE:

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

xiv) DEALINGS/TRADING IN SHARES, SECURITIES, DEBENTURES AND OTHER INVESTMENTS:

In our opinion Company is not dealing in or trading in shares, securities, debentures and other investments.

xv) GUARANTEES GIVEN:

Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

xvi) TERM LOANS:

According to the information and explanations given to us, the Company has not taken any Term Loan during the year.

xvii) UTILISATION OF FUNDS:

On an overall examination of the Balance Sheet and the Cash Flow of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii) PREFERENTIAL ALLOTMENT OF SHARES:

Company has not made any preferential allotment of shares during the year.

xix) SECURITY FOR DEBENTURES ISSUED:

Company has not issued any debentures during the year.

xx) PUBLIC ISSUE OF EQUITY SHARES:

During the year Company has not raised any money by public issue.

xxi) FRAUDS NOTICED:

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.

For B.K.KHARE & COMPANY

Chartered Accountants

Santosh Parab

Partner

Place: Mumbai Membership No. 47942

Date : May 6, 2011 Firm Registration No : 105102W


Mar 31, 2010

1. We have audited the attached Balance Sheet of DEEPAK NITRITE LIMITED as at 31st March, 2010 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed with 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, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, 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 enclose in the Annexure a statement on the matters specified in paragraph 4 & 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 these 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 said Balance Sheet, Profit Loss Account and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

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

(f) 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 31st March, 2010; and

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

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

Annexure Referred to in Paragraph 3 of our Report of Even Date:

i) FIXED ASSETS:

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

(b) All the assets have not been physically verified by the management during the year, but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed during the verification were not material and have been properly dealt with in the books of accounts.

(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.

ii) INVENTORY:

(a) Inventory has been physically verified during the year by the management at regular intervals. In respect of stock lying with third parties, the management has obtained confirmation certificates. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion, the Company is maintaining proper records of inventory. Having regard to the size of the operations of the Company and the nature of stocks held, the discrepancies noticed on verification between physical stocks and book records have been properly dealt with in the books of accounts.

iii) LOANS AND ADVANCES GRANTED TO / TAKEN FROM CERTAIN ENTITIES:

According to the information and explanations given to us, the Company has not taken or granted any secured or unsecured loans from/to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

iv) INTERNAL CONTROL SYSTEM:

In our opinion, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control procedures.

v) CONTRACTS OR ARRANGEMENT REFERRED TO IN SECTION 301 OF THE COMPANIES ACT, 1956:

(a) In our opinion and according to the information and explanations given to us, the 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) In our opinion and according to information and explanations given to us, in respect of transactions which have been made in pursuance of contracts or arrangement entered in the register maintained under section 301 and exceeding the value of Rs. 5,00,000/- in respect of any party during the year, we are not in the position to compare the prices with the prevailing market prices or prices charged to other parties as there have been no other such purchases or sales of exact type of goods, materials or sales of service, and hence we have relied on the managements representation as to reasonableness of such prices.

vi) PUBLIC DEPOSITS:

In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules 1975, with regard to the deposits accepted from the public. We are further informed that 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 Tribunal intimating the contravention of the said provisions.

vii) INTERNAL AUDIT SYSTEM:

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

viii) COST RECORDS:

We have broadly reviewed the books of accounts maintained by the Company relating to the manufacture of Para Nitro Chloro Benzene and Ortho Nitro Chloro Benzene, pursuant to the rules made by the Central Government of India for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We however have not made a detailed examination of the records with a view to determine 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 under section 209 (1) (d) of the Companies Act, 1956, for any other product of the company.

ix) STATUTORY DUES:

(a) According to the information and explanations given to us and according to the books and records as examined by us, in our opinion, the Company is generally regular in depositing with appropriate authorities 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.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax,

Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty and Cess were in arrears, as on 31 st March, 2010 for a period of more than six months from the date they became payable. (c) There are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty and Cess which have not been deposited on account of dispute except in respect of (i) Sales Tax of Rs. 61.60 Lacs and Rs. 15.52 Lacs for F.Y. 2001-02 and F.Y. 2005-06 under the Central Sales Tax Act and Rs. 51.70 Lacs under the Bombay Sales Tax Act for F.Y. 2001-2002 pending before the Commissioner of Sales Tax (Appeals), Commercial Tax of Rs. 10.14 Lacs for F.Y. 2008-09 pending before the Deputy Commissioner of Commercial Tax (Appeals) ii) Customs demand for Rs. 1001 Lacs which is pending before CESTAT for the years 1993-94 to 1996-97. iii) Interest and penalty of Rs. 44.76 Lacs which is pending before CESTAT for the years 1998-99 and 1999-2000, Excise Duty of Rs. 3.41 Lacs and Rs. 1.90 Lacs which is pending before CESTAT for 2002-03, 2003-04 and 2005-06 iv) Income tax of Rs.13.40 Lacs for A. Y. 2002-03 and Rs. 7.48 Lacs for A. Y. 2006-07 in respect of which the appeal is pending before Income Tax Appellate Tribunal. x) ACCUMULATED LOSSES:

The Company does not have accumulated losses as at the end of the year and the Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. xi) DUES TO FINANCIAL INSTITUTIONS, BANKS AND DEBENTURE HOLDERS:

In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to Financial Institutions and Banks. xii) SECURITY FOR LOANS & ADVANCES GRANTED:

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

In our opinion, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/society are not applicable to the Company. xiv) DEALINGS/TRADING IN SHARES, SECURITIES, DEBENTURES AND OTHER INVESTMENTS:

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

According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. xvi) TERM LOANS:

In our opinion and according to the information and explanations given to us, the term loans availed by the Company were, prima facie, applied by the Company for the purposes for which they were raised. xvii) UTILISATION OF FUNDS:

Based on the information and explanations given to us and on an overall examination of Balance Sheet and Cash Flow of the Company, in our opinion, funds raised on short term basis have not been used for long term investments.

xviii) PREFERENTIAL ALLOTMENT OF SHARES:

The Company has not made any preferential allotment of shares during the year.

xix) SECURITY FOR DEBENTURES ISSUED:

The Company has not issued any debentures during the year.

xx) CONVERSION OF WARRANTS INTO EQUITY SHARES:

We have verified the end use of money raised by the conversion of detachable warrants allotted along with rights issue on 5th May, 2006, with the terms of issue, and the management has disclosed the same vide Note No. 8 of Schedule 22 on Notes to Accounts. xxi) FRAUDS NOTICED:

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.

For B.K.KHARE & COMPANY Chartered Accountants Santosh Parab Partner Membership No. 47942 Firm Registration No. 105102W Place: Mumbai Date : 14th May, 2010

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