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Auditor Report of Fenoplast Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Fenoplast Limited ("the Company"), which comprise the Balance Sheet as at 31st 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 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 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 financial statements based on our audit.

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

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

Basis for Qualified Opinion

Note 23.1 to the financial statements, regarding excess managerial remuneration amounting to Rs.57.43 Lacs paid to Managing Director and Whole Time Director in excess of limits prescribed under Schedule XIII of the Companies Act, 1956 in the financial year 2013-14 for which approval from the Central Government is pending. The ultimate outcome of this matter cannot presently be determined, accordingly no adjustments have been made in the financial statements.

Our opinion is qualified in this matter.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion, 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, of the state of affairs of the Company as at 31st 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 of India in terms of sub-section (11) of section 143 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 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 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on31st 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 pending litigations on its financial position in its financial statements – Refer Note 31 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company Fenoplast Limited

Annexure to the Auditors' Report

The Annexure referred to in our report to the members of Fenoplast Limited for the year ended on 31st March, 2015. We report that:

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

(b) As explained to us, the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such physical verification.

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

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

(c) The Company has maintained proper records of its inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material;

(iii) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) The Company has not accepted deposits within the meaning of Section 73 to 76 of the Act and the rules framed thereunder.

(vi) We have broadly reviewed the cost records maintained by the company pursuant to the companies (Cost audit and records) Rules 2014 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 maintained.

(vii) (a) According to the information and explanations given to us and the records of the company examined by us, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, service tax, value added tax, sales tax, custom duty, excise duty, cess and other statutory dues as applicable with the appropriate authorities and there were no arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and records of the Company examined by us, the particulars of sales tax, income tax, customs duty, excise duty, service tax and wealth tax, as at 31st March, 2015 which have not been deposited on account of dispute pending, are as under:

Name of the Nature of the Amount Period to Forum where dispute Statute Dues (Rs. In which the is pending Lakhs) amount relates

Income-tax Act, 1961 Income-tax 2.20 1999-2000 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 Income-tax 31.90 2000-2001 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 Income-tax 10.44 2001-2002 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 Income-tax 1.89 2002-2003 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 Income-tax 4.55 2003-2004 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 Income-tax 74.66 2005-2006 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 Income-tax 45.62 2006-2007 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 Income-tax 17.38 2009-2010 Assistant Commissioner of Income Tax

Central Sales Tax Act, Central Sales 26.57 2009-2010 Deputy Commissioner of Sales 1956 Tax Sales Tax, Appeals

Central Sales Tax Act, Central Sales 26.97 2010-2011 Deputy Commissioner of Sales 1956 Tax Sales Tax, Appeals

Central Sales Tax Act, Central Sales 258.29 2011-2012 Deputy Commissioner of Sales 1956 Tax Sales Tax, Appeals

(c) There are no amounts to be transferred to investor education and protection fund in accor- dance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

(viii) The company has no accumulated losses and it has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year;

(x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions;

(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, other than temporary deployment pending application.

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

For M.Anandam & Co.,

Chartered Accountants

(Firm's Registration No. 000125S)

Place: Secunderabad M.V.Ranganath

Date : 27.05.2015 Partner

Membership.No: 028031


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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") read with General Circular 8/2014 dated 4th April, 2014 issued by Ministry of Corporate Affairs. 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

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.

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 Company''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.

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 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.

Emphasis on Matter

We draw attention to Note 23.1 to the financial statements, regarding excess managerial remuneration amounting to Rs.57.43 Lacs paid to Managing Director and Whole Time Director are in excess of limits prescribed under Schedule XIII of the Companies Act, 1956. As represented to us by the management, the Company is in the process of filing application to the Central Government for the approval of such excess remuneration. The ultimate outcome of the above matter cannot presently be determined, accordingly no adjustments have been made in the financial statements. Our opinion is not qualified in 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 of India in terms of sub-section (4A) of section 227 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 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 sub-section (3C) of section 211 of the Companies Act, 1956 read with General Circular 8/2014 dated 4th April, 2014 issued by Ministry of Corporate Affairs;

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 Re: Fenoplast Limited

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

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

b. As explained to us, the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of its business. No material discrepancies were noticed on such physical verification.

c. The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

ii. a. The inventories have been physically verified during the year by the management. In our

opinion, the frequency of verification is reasonable.

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

c. The Company has maintained proper records of its inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. a. The Company has not granted any loan during the year to companies, firms or other parties

covered in the register maintained under section 301 of the Companies Act, 1956. Consequently the requirements of Clauses (iii) (b), (iii) (c) and (iii) (d) of paragraph 4 of the Order are not applicable.

b. The Company has taken unsecured loan from one party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 39.19 Lacs and the year-end balance of loan taken is Rs.Nil.

c. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from the parties covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie prejudicial to the interest of the Company.

d. The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. a. According to the information and explanations given to us, we are of the opinion that the

transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. We are 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.

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

viii. We have broadly reviewed the 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 1956, and are of the opinion that prima facie the prescribed cost records have been maintained.

ix. a. According to the information and explanations given to us and the records of the Company

examined by us, the Company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, service tax, sales tax, custom duty, excise duty, cess and other statutory dues as applicable with the appropriates authorities and there were no arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable. b. According to the information and explanations given to us and records of the Company examined by us, the particulars of sales tax, income tax, customs duty, excise duty, service tax and wealth tax, as at 31st March, 2014 which have not been deposited on account of dispute pending, are as under:

Name of the Statute Nature of Amount Period to which the Dues (Rs. In the amount Lakhs) relates

Income-tax Act,1961 Income-tax 41.23 1986-1995

Income-tax Act, 1961 Income-tax 2.2 1999-2000

Income-tax Act, 1961 Income-tax 31.9 2000-2001

Income-tax Act, 1961 Income-tax 10.44 2001-2002

Income-tax Act, 1961 Income-tax 1.89 2002-2003

Income-tax Act, 1961 Income-tax 4.55 2003-2004

Income-tax Act, 1961 Income-tax 74.66 2005-2006

Income-tax Act, 1961 Income-tax 45.62 2006-2007

Central Sales Tax Act Central Sales 26.57 2009 2010 1956

Central Sales Tax Act, Central Sales 26.97 2010-2011 1956

Nmae of the Director Forum where dispute is pending

Income-tax Act,1961 High Court of Andhra Pradesh

Income-tax Act,1961 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act,1961 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act,1961 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act,1961 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act,1961 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act,1961 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act,1961 Income-tax Appellate Tribunal, Hyderabad

Central Sales Tax Act Deputy Commissioner of Sales Tax, Appeals 1956

Central Sales Tax Act Deputy Commissioner 1956

x. The Company has no accumulated losses and it has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution, bank or debenture holders.

xii. According to information and explanations given to us and based on the documents and records produced to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. In our opinion and according to the information and explanation given to us, the Company is not dealing in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xvi. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

xvii. In our opinion and according to the information and explanation to us, and on an overall examination of the Balance sheet of the Company, we report that no funds raised on short-term basis have been used for long term investments.

xviii. The Company has not made any preferential allotment of shares during the year to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures during the year.

xx. The Company has not raised any funds on public issue and hence disclosure on the end use of money raised by the public issue is not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For M. Anandam& Co., Chartered Accountants (Firm Regn.No.000125S) M.V. Ranganath Partner M.No.028031

Place: Secunderabad Date: 30th May, 2014


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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.

Auditor''s 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 ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the 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. 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.

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 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 31st, 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.

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 of India in terms of sub-section (4A) of section 227 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 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 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 sub-section (3C) of section 211 of the Companies Act, 1956;

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

Annexure

Re: Fenoplast Limited

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

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

b. As explained to us, the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such physical verification.

c. The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

ii. a. The inventories have been physically verified during the year by the manage- ment. In our opinion, the frequency of verification is reasonable.

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

c. The Company has maintained proper records of its inventories. The discrepan- cies noticed on verification between the physical stocks and the book records were not material.

iii. a. The Company had granted interest free advances to two parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs..25.87 Lacs and year-end balance is Rs.. Nil. The Company has written off these advances during the year.

b. The Company has taken unsecured loans one party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was

Rs.. 13.85 Lacs and the year-end balance of loans taken is Rs..8.83 Lacs.

c. In our opinion, the rate of interest and other terms and conditions on which loans have been taken from the parties covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie prejudicial to the interest of the Company.

d. The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. a. According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. We are 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.

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

viii. We have broadly reviewed the 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 1956, and are of the opinion that prima facie the prescribed cost records have been maintained.

ix. a. According to the information and explanations given to us and the records of the company examined by us, the Company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, service tax, sales tax, custom duty, excise duty, cess and other statutory dues as applicable with the appropriates authorities and there were no arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us and records of the Company examined by us, the particulars of sales tax, income tax, customs duty, excise duty, service tax and wealth tax, as at 31st March, 2013 which have not been deposited on account of dispute pending, are as under:

Nature of Amount Name of the Statute the Dues (Rs. In Lakhs)

Income-tax Act, 1961 Income-tax 41.23

Income-tax Act, 1961 Income-tax 2.2

Income-tax Act, 1961 Income-tax 31.9 Income-tax Act, 1961 Income-tax 10.44

Income-tax Act, 1961 Income-tax 1.89

Income-tax Act, 1961 Income-tax 4.55

Income-tax Act, 1961 Income-tax 77.66

Income-tax Act, 1961 Income-tax 48.62

Central Sales Tax Act, Central 8.38 1956 Sales Tax

Central Sales Tax Act, Central 26.57 1956 Sales Tax

Name Period to which Forum where the amount relates dispute is pending

Income-tax Act, 1961 1986-1995 High Court of Andhra Pradesh

Income-tax Act, 1961 1999-2000 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 2000-2001 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 2001-2002 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 2002-2003 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 2003-2004 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 2005-2006 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 2006-2007 Income-tax Appellate Tribunal, Hyderabad

Income-tax Act, 1961 2008-2009 Deputy Commissioner of Sales Tax, Appeals

Income-tax Act, 1961 2009-2010 Deputy Commissioner of Sales Tax, Appeals

x. The Company has no accumulated losses and it has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution, bank or debenture holders.

xii. According to information and explanations given to us and based on the documents and records produced to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. In our opinion and according to the information and explanation given to us, the Company is not dealing in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xv. I n ou r opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

xvi. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

xvii. In our opinion and according to the information and explanation to us, and on an overall examination of the Balance sheet of the Company, we report that no funds raised on short-term basis have been used for long term investments.

xviii. The Company has not made any preferential allotment of shares during the year to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures during the year.

xx. The Company has not raised any funds on public issue and hence disclosure on the end use of money raised by the public issue is not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For M. Anandam & Co.,

Chartered Accountants

(Firm Regn.No.000125S)

M. V Ranganath

Place : Secunderabad Partner

Date :25th May, 2013 M.No.028031


Mar 31, 2012

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

2. We conducted our audit in accordance with 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 mis statement. 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, we annex hereto 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 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) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with requirements of the accounting standards referred to in Sub-section (3C) of section 211 of the Companies Act, 1956

d) The Balance Sheet, Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the books of account;

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 from being appointed as a director of the Company under 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, they said accounts read together with the Significant Accounting Policies and notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March 2012;

ii. In the case of the Statement of Profit and Loss, of the Profit of the company for the year ended on that date; and

iii. In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

Annexure to Auditors' Report

Referred to in paragraph 3 of our report of even

date

i. (a) The Company has maintained proper

records showing full particulars including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, the Company has a phased programme of verification of fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its business.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

ii. (a) As per the information and explanations

given to us, physical verification of inventories is carried out by the Company at regular intervals during the year. In our opinion the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. As informed by the management, the discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. (a) The company has granted interest free

advances to two parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs 25.87 Lakhs and the year-end balance is Rs.25.87 lakhs.

(b) According to the information and explanations given to us and in our opinion, the terms and conditions on which advances have been given to company are not prima facie prejudicial to the interest of the company.

(c) As explained by the management, the Company is in the process of taking reasonable steps for recovery of the principal amount.

(d) The company has taken an interest free loan from one party covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs 28.85 Lakhs and the year-end balance is Rs.13.85 Lakhs.

(e) The company is regular in repaying the principal amounts as stipulated.

iv. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures 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. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. (a) According to the information and

explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act 1956, exceeding the value of rupees five lakhs 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. The Company has not accepted deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

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

viii. In our opinion and accordingly to the information and explanations given to us, the company has made and maintained accounts and records prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956.

ix. (a) According to the information and explanations given to us, and on the basis of our examination of books of account, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employee state insurance, sales tax, customs duty, wealth tax, service tax, Excise duty, Cess and other statutory dues

applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues are outstanding as at 31st March, 2012 for a period of more than six months from the date they become payable.

(b) The disputed statutory dues aggregating to Rs.138.36 Lakhs have not been deposited on account of disputed matters as on 31st March, 2012 pending before the appropriate authorities are as under:

Name of the Nature Amount Financial Forum where statute of dues (Rs in Lakhs) Year dispute is pending

Income Tax Act, 1961 Income-tax 41.23 1986-1995 High Court of Andhra Pradesh

Income Tax Act, 1961 Income-tax 2.20 1999-2000 ITAT

Income Tax Act, 1961 Income-tax 31.90 2000-2001 ITAT

Income Tax Act, 1961 Income-tax 10.44 2001-2002 ITAT

Income Tax Act, 1961 Income-tax 1.89 2002-2003 ITAT

Income Tax Act, 1961 Income-tax 4.55 2003-2004 ITAT

Central Sales Tax Act, CST 40.28 2006-2007 Deputy Commis sioner of Sales 1956 Tax, Appeals

Central Sales Tax Act, CST 5.87 2007-2008 Deputy Commis sioner of Sales 1956 Tax Appeals

x. The Company does not have accumulated losses as at 31st March 2012 and has not incurred cash losses during the year covered by our audit and immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. According to the information and explanation given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

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

xiv. In our opinion and according to the information and explanations given to us, 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 are not applicable to the company.

xv. In our opinion and 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. Accordingly, the provisions of Clause 4 (xv) of the companies (Auditor's report) order, 2003 are not applicable to the company.

xvi. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

xvii. 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 no funds raised on short term basis were applied for long-term investment.

xviii. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in register maintained under section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, there were no debentures issued by the company during the period. Accordingly, Clause 4 (xix) of Companies (Auditor's Report) Order, 2003 is not applicable.

xx. According to the information and explanations given to us, the Company has not raised any funds on public issue and hence disclosure on the end use of money raised by the public issue is not applicable to the Company.

xxi. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M. ANANDAM & CO.,

Chartered Accountants

(Firm Regn.No.000125S)

(M.V.Ranganath)

Place: Secunderabad Partner

Date: 30th May 2012 Membership. No.028031


Mar 31, 2011

We have audited the attached Balance Sheet of Fenoplast Limited as at 31st March 2011 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company-s management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with 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.

2. 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, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the annexure referred to in paragraph 2 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 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) In our opinion, the Balance Sheet, Profit and Loss account and Cash flow statement dealt with by this report comply with requirements of the accounting standards referred to in Sub-section (3C) of section 211 of the Companies Act, 1956 except as referred in clause (f) below;

d) The Balance Sheet, Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the books of account;

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 of Company are disqualified from being appointed as a director of the Company under clause (g) of subsection (1) of section 274 of the Companies Act, 1956;

f) Subject to - Accounting Policy No.8 read with Note No.7 in Schedule No. XVII regarding provision of gratuity and leave encashment - the company has not provided liability in accordance with the Accounting Standard - 15 "Employee Benefits".

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to Para 3 (f) above and consequential effect not ascertainable on the profit for the year, assets and liabilities of the company and read together with the Company-s accounting policies and notes thereto, 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 st March 2011;

ii. In the case of the Profit & Loss account,of the Profit of the company for the year ended on that date; and

iii. In the case of Cash flow statement, of the Cash Flows for the year ended on that date.

ANNEXURE referred to in paragraph 2 of our Report of even date:

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

(b) According to the information and explanations given to us, the Company has a phased programme of verification of fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its business.

(c) The Company has not disposed of any substantial part of its fixed assets so as to affect its going concern status.

ii. (a) As per the information and explanations given to us, physical verification of inventories are carried out by the Company at regular intervals during the year. In our opinion the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. As informed by the Management, the discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. (a) The company has granted interest free advance to one entity covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs 20.88 Lakhs and the year-end balance is Rs.20.88 lakhs.

(b) According to the information and explanations given to us and in our opinion, the terms and conditions on which advances have been given to company are not prima facie prejudicial to the interest of the company.

(c) As explained by the management, the Company is in the process of taking reasonable steps for recovery of the principal amount.

(e) The company has taken an interest free loan from one party covered in the register

maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs 55.00 Lakhs and the year-end balance is Rs.28.84 Lakhs.

(f) The company is regular in repaying the principal amounts as stipulated

iv. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures 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. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act 1956, exceeding the value of rupees five lakhs 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. The Company has not accepted deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal.

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

viii.The Central Government has not prescribed rules for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956.

ix. (a) According to the information and explanations given to us, and on the basis of our examination of books of account, the Company has been regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employee state insurance, sales-tax, customs duty, wealth tax, service tax, Excise duty, Cess and other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues are outstanding as at 31st March, 2011 for a period of more than 6 months from the date they become payable.

(b) The disputed statutory dues aggregating to Rs.113.84 Lakhs have not been deposited on account of disputed matters pending before the appropriate authorities are as under

Name of the Nature Amount not Financial Forum where statute of dues deposited Year dispute is (Rs in Lakhs) pending

Income Tax Act, 1961 Income Tax 41.23 1986-1995 High Court of Andhra Pradesh

Income Tax Act, 1961 Income Tax 28.72 1999-2000 The Commissio ner of Income Tax (Appeals) -II

Income Tax Act, 1961 Income Tax 3.61 2002-2003 The Commissi oner of Income Tax (Appeals) -II Central Sales Tax CST 40.28 * 2006-2007 Deputy Commissioner of Act, 1956 Sales Tax Appeals

Total 113.84

* Bank Guarantee is given for the equivalent amount

x. The Company does not have accumulated losses as at 31st March 2011 and has not incurred cash losses during the year covered by our audit and immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. According to the information and explanation given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of securities by way of pledges of shares, debentures and other securities.

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

xiv. In our opinion and according to the information and explanations given to us, 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 are not applicable to the company.

xv. In our opinion and 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. Accordingly, the provisions of Clause 4 (xv) of the companies (Auditor-s report) order, 2003 are not applicable to the company.

xvi. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

xvii. 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 no funds raised on short term basis were applied for long-term investment.

xviii. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in register maintained under section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, there were no debentures issued by the company during the period. Accordingly, Clause 4 (xix) of Companies (Auditor-s Report) Order, 2003 is not applicable.

xx. According to the information and explanations given to us, the Company has not raised any funds on public issue and hence disclosure on the end use of money raised by the public issue is not applicable to the Company. xxi. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M. ANANDAM &CO., Chartered Accountants (Firm Regn.No.000125S) Place: Secunderabad Date: 27th May, 2011 (M.V.Ranganath) Partner Membership. No.028031


Mar 31, 2010

We have audited the attached Balance Sheet of Fenoplast Limited as at 31st March 2010 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with 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.

2. 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, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the annexure referred to in paragraph 2 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 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) In our opinion, the Balance Sheet, Profit and Loss account and Cash flow statement dealt with by this report comply with requirements of the accounting standards referred to in Sub-section (3C) of section 211 of the Companies Act, 1956 except as referred in clause (f) (i) below;

d) The Balance Sheet, Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the books of account;

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 of Company are disqualified from being appointed as a director of the Company under clause (g) of subsection (1) of section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our knowledge and according to the explanations given to us, subject to

i) Accounting policy No. 8 in Schedule No. XVI regarding non-provision of gratuity and leave encashment as required under Accounting Standard -15 Employee Benefits.

ii) Note No.7 in Schedule No.XVII regarding reconciliation and confirmation in respect of Debtors, Creditors and Loans and Advances.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to the foregoing observations and consequential effect not ascertainable on the profit for the year, assets and liabilities of the company and read together with the Companys accounting policies and notes thereto, 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 st March 2010;

II. In the case of the Profit & Loss account, of the Profit of the company for the year ended on that date; and

III.In the case of Cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE referred to in paragraph 2 of our Report of even date:

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

(b) According to the information and explanations given to us, the Company has a phased programme of verification of fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its business.

(c) The Company has not disposed of any substantial part of its fixed assets so as to affect its going concern status.

ii. (a) As per the information and explanations given to us, physical verification of finished goods and raw materials were carried out by the company at regular intervals during the year except for stock in transit, materials lying with the third parties and with the warehouse are done by the management at the year-end.

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

(c) The Company is maintaining proper records of inventory. As informed by the Management, the discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. (a) The company has granted interest free advance to one entity covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved during the year was Nil and the aggregate year-end balance of advance granted to such entity was Rs.20.88 lakhs. The company has not taken any loans from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) According to the information and explanations given to us and in our opinion, the terms and conditions on which advances have been given to companies, firms or other parties listed in register under section 301 of the companies act, 1956 are not primae facie, prejudicial to the interest of the company.

(c) The companies are regular in repaying the principal amounts as stipulated.

(d) According to the information and explanations given to us and in our opinion, The Company is in the process of taking reasonable steps for recovery of the principal amounts.

iv. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures 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. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act 1956, exceeding the value of rupees five lakhs 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. The Company has not accepted deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

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

viii. The Central Government has not prescribed rules for the maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956.

ix. (a) According to the information and explanations given to us, and on the basis of our examination of books of account, the

Company has been regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employee state insurance, sales-tax, customs duty, wealth tax, service tax, Excise duty, Cess and other statutory dues applicable to it.

(b) According to the records of the company and the information and explanations given to us, there are dues of income tax aggregating Rs. 90.32 Lakhs, which have not been deposited on account of various disputes. The details of which are set out in Note 1(b) of Schedule XVII. We have been further informed that there are no dues in respect of wealth tax, customs duty and cess, which have not been deposited on account of any dispute.

x. The Company does not have accumulated losses as at 31st March 2010 and has not incurred cash losses during the year covered by our audit and immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. According to the information and explanation given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of securities by way of pledges of shares, debentures and other securities.

xiii. In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, 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 (Auditors report) order, 2003 are not applicable to the company.

xv. In our opinion and 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. Accordingly, the provisions of Clause 4 (xv) of the companies (Auditors report) order, 2003 are not applicable to the company.

xvi. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

xvii.ln 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 no funds raised on short term basis were applied for long-term investment.

xviii.According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in register maintained under section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, there were no debentures issued by the company during the period. Accordingly, Clause 4 (xix) of Companies Audit Report Order, 2003 is not applicable.

xx. According to the information and explanations given to us, the Company has not raised any funds on public issue and hence disclosure on the end use of money raised by the public issue is not applicable to the Company.

xxi. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M. ANANDAM &CO., Chartered Accountants

Place : Secunderabad (M.V.Ranganath)

Date: 30-06-2010 Partner

Membership. No.028031


Mar 31, 2009

We have audited the attached Balance Sheet of Fenoplast Limited as at 31st March 2009 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with 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.

2. 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, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the annexure referred to in paragraph 2 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 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) In our opinion, the Balance Sheet, Profit and Loss account and Cash flow statement dealt with by this report comply with requirements of the accounting standards referred to in Sub-section (3C) of section 211 of the Companies Act, 1956 except as referred in clause (f) (i) below;

d) The Balance Sheet, Profit and Loss Account and Cash flow statement dealt with by this report are in agreement wiih the books of account;

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 tt e directors of Company are disqualified from being appointed as a director of the Company under clause (g) of subsection (1) of section 274 of the Companies Act, 1956,

f) In our opinion and to the best of our knowledge and according to the explanations given to us, subject to

i) Accounting policy No. 8 in Schedule No. XV regarding non-provision of gratuity and leave encashment as required under Accounting Standard -15 Employee Benefits.

ii) Note No.7 in Schedule No.XVI regarding reconciliation and confirmation in respect of Debtors, Creditors and Loans and Advances.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to the foregoing observations and consequential effect not ascertainable on the profit for the year, assets and liabilities of the company and read together with the Companys accounting policies and notes thereto, 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 Con ,pany as at 31 st March 2009;

II. In the case of the Profit & Loss account, of the Profit of the company for the year ended on that date; and

III.In the case of Cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE referred to in paragraph 2 of our Report of even date.

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

(b) According to the information and explanations given to us, the Company has a phased programme of verification of fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its business.

(c) The Company has not disposed of any substantial part of its fixed assets so as to affect its going concern status.

ii. (a) As per the information and explanations given to us, physical verification of finished goods and raw materials were carried out by the company at regular intervals during the year except for stock in transit, materials lying with the third parties and with the warehouse are done by the management at the year-end.

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

(c) The Company is maintaining proper records of inventory. As informed by the Management, the discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. (a) The company has granted interest free advances to one entity covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved during the year was Nil and the aggregate year-end balances of advance granted to such entity was Rs.20.88 lakhs. The company has not taken any loans from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) According to the information and explanations given to us and in our opinion, the terms and conditions on which advances have been given to companies, firms or other parties listed in register under section 301 of the companies act, 1956 are not primae facie, prejudicial to the interest of the company.

(c) The companies are regular in repaying the principal amounts as stipulated.

(d) According to the information and explanations given to us and in our opinion, The Company is in the process of taking reasonable steps for recovery of the principal amounts.

iv. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures 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. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act 1956, exceeding the value of rupees five lakhs 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. The Company has not accepted deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under. We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

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

viii. The Central Government has not prescribed rules for the maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956.

ix. (a) Excepting Rs 9.95 lakhs in respect of income tax and Rs 1.32 lakhs in respect of fringe benefit tax, according to the information and explanations given to us, and on the basis of our examination of book? of account, the Company has been regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employee state insurance, sales-tax, customs duty, wealth tax, service tax, Excise duty, Cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed dues payable in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess were in arrears, as at 31st March 2009 for a period of more than six months from the date they become payable.

(c) According to the records of the company and the information and explanations given to us, there are dues of income tax aggregating Rs. 106.90 Lakhs, which have not been deposited on account of various disputes. The details of which are set out in Note 1 (b) of Schedule XVI. We have been further informed that there are no dues in respect of wealth tax, customs duty and cess, which have not been deposited on account of any dispute.

x. The Company does not have accumulated losses as at 31st March 2009 and has not incurred cash losses during the year covered by our audit and immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. According to the information and explanation given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of securities by way of pledges of shares, debentures and other securities.

xiii. In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly the provisions of clause 4 (xiii) of

the Companies (Auditors Report) Order, 2003 are not applicable to the Company. xiv. In our opinion and according to the information and explanations given to us, 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 (Auditors report) order, 2003 are not applicable to the company.

xv. In our opinion and 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. Accordingly, the provisions of Clause 4 (xv) of the companies (Auditors report) order, 2003 are not applicable to the company.

xvi. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

xvii.ln 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 no funds raised on short term basis were applied for long-term investment.

xviii.According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in register maintained under section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, there were no debentures issued by the company during the period. Accordingly, Clause 4 (xix) of Companies Audit Report Order, 2003 is not applicable.

xx. According to the information and explanations given to us, the Company has not raised any funds on public issue and hence disclosure on the end use of money raised by the public issue is not applicable to the Company.

xxi. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M. ANANDAM &CO., Chartered Accountants

Place: Secunderabad

Date: 30-06-2009 (M.V.Ranganath)

Partner Membership. No.028031



 
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