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Auditor Report of Gujarat Fluorochemicals Ltd.

Mar 31, 2016

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Gujarat Fluorochemicals Limited ("the Company"), which comprise the Standalone Balance Sheet as at 31st March, 2016, the Standalone Statement of Profit and Loss and the Standalone Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

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

Auditor''s Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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 standalone 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016 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, 2016 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure I a statement on the matters specified in paragraph 3 and 4 of the said 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss, and the Standalone Cash Flow Statement dealt with by this Report are in agreement with the books of account.

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

(e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164

(2) of the Act.

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - see note no. 36 to the standalone financial statements;

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

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

In term of the Companies (Auditor''s Report) Order, 2016 ("the Order"), on the basis of information and explanation given to us and the

books and records examined by us in the normal course of audit and such checks as we considered appropriate, to the best of our knowledge and belief, we state as under:

1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies have been noticed on such verification. The title deeds of all immovable properties are held in the name of the Company.

2. The inventories were physically verified by the management at reasonable intervals during the year and no material discrepancies were noticed on physical verification of inventories as compared to book records.

3. The Company has granted unsecured loans, to one company covered in the register maintained under Section 189 of the Companies Act, 2013. The terms and conditions of the said loans are not, prima facie, prejudicial to the interest of the Company. The said party is regular in repayment of principal and payment of interest, as stipulated, and there are no overdue amounts.

4. The Company has complied with the provisions of Section 185 and Section 186 of the Act in respect of investments made or loans given or guarantee or security provided.

5. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Companies Act, 2013 and the Rules framed there under and hence the provisions of clause 3(v) of the Order are not applicable to the Company.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under Section 148(1) of the Companies Act, 2013 for activities of the Company to which the said Rules are made applicable, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

7. The Company is generally regular in depositing 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 any other statutory dues with the appropriate authorities and no amounts in respect of such statutory dues were in arrears, as at the end of the year, for a period of more than six months from the date they became payable.

Particulars of dues of sales tax, service tax, duty of customs, duty of excise and value added tax which have not been deposited on account of disputes are as under:

Nature of dues and the period to which the amount relates

Amount (Rs, in Lakh)

Forum where dispute is pending

Service-tax (Finance Act, 1994)

Penalty on delay payment of Service tax on Banking & Financial services in respect of External Commercial Borrowings - 10.09.2004 to 30.06.2007

6.85

Customs, Excise and Service Tax Appellate Tribunal, Ahmadabad

Central Excise Act, 1994

Excise Duty on freight recovered from customers -April 2007 to November 2007

363.34

Customs, Excise and Service Tax Appellate Tribunal, Ahmadabad

Central Excise Act,1994

Cenvat Credit availed on Capital goods - April 2006 to August 2011

51.59

Customs, Excise and Service Tax Appellate Tribunal, Ahmadabad

Central Excise Act, 1994

Excise Duty on freight recovered from customers -April 2012 to December 2012

154.88

Customs, Excise and Service Tax Appellate Tribunal, Ahmadabad

Central Excise Act, 1994

Excise Duty on freight recovered from customers -January 2013 to August 2013

57.72

Customs, Excise and Service Tax Appellate Tribunal, Ahmadabad

Customs Act, 1962

Differential duty on Import of Coal on high seas -April 2012 to May 2012

113.04

Customs, Excise and Service Tax Appellate Tribunal, Ahmadabad

Customs Act, 1962

Differential duty on Import of Coal on high seas -17th March, 2012 to 28th March, 2013

860.53

Customs, Excise and Service Tax Appellate Tribunal, Ahmadabad

Central Excise Act, ''1944

Excise Duty on freight recovered from customers -September 2013 to May 2014

12438

Customs, Excise and Service Tax Appellate Tribunal, Ahmadabad

Central Excise Act, ''''1944

Cenvat Credit availed on Services for setting up of plant - November 2013 to October 2014

1589

Commissioner (Appeals), Central Excise, Customs and Service Tax, Vadodara

Central Excise Act, ''''1944

Cenvat Credit availed on Gardening and Travel agent service - January 2013 to May 2015

872

Commissioner (Appeals-II), Central Excise, Customs and Service Tax, Surat

Central Excise Act, ''''1944

Excise Duty on freight recovered from customers -June 2014 to March 2015

7042

Commissioner (Appeals-II), Central Excise, Customs and Service Tax, Surat

Central Excise Act, ''''1944

Cenvat Credit availed on Equipment and Components in respect of Plant installed by Third party

33.01

Commissioner (Appeals-II), Central Excise, Customs and Service Tax, Surat

Central Excise Act, ''''1944

Interest on Reversal of Cenvat Credit on capital goods 2007-08 & 2008-09

220

Commissioner (Appeals-II), Central Excise, Customs and Service Tax, Surat

Commercial tax Gujarat, VAT proportionate ITC reduced on Capital

goods at the rate of 2%. In respect

of Ratio of OGS sales to Gross

turnover of sales

1800

Joint Commissioner of Commercial Tax (Appeal)

Commercial tax Gujarat, VAT Proportionate ITC reduced on Capital

goods at the rate of 2%. In respect of

Ratio of OGS sales to Gross turnover of

sales and Sales to SEZ (Gujarat) at Zero

rated tax assessed at full rate of tax at

5%.

49.33

Joint Commissioner of Commercial Tax (Appeal)

There are no dues of income tax which have not been deposited on account of disputes.

8. The Company has not defaulted in repayment of dues to banks or financial institutions and the Company did not have any borrowings from Government or by way of debentures.

9. The Company has applied the moneys raised by way of term loans for the purposes for which the moneys were raised. The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments).

10. No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

11. The Company has complied with the provisions of Section 197 of the Companies Act, 2013 regarding payment of managerial remuneration.

12. The Company is not a Nidhi Company and hence the provisions of clause 3(xii) of the Order are not applicable to the Company.

13. All transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013 and the details have been disclosed in the standalone financial statements etc, as required by the applicable accounting standards.

14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence the provisions of clause 3(xiv) of the Order are not applicable to the Company.

15. The Company has not entered into any non-cash transactions with directors or persons connected with them and hence the provisions of clause 3(xv) of the Order are not applicable to the Company.

16. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934 and hence the provisions of clause 3(xvi) of the Order are not applicable to the Company.

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

We have audited the internal financial controls with reference to financial statements over financial reporting of Gujarat Fluorochemicals Limited (“the Company”) as of 31st March, 2016 in conjunction with our audit of the standalone financial statements of the Company foi the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud oi tenor

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis fo< our audit opinion on the Company''s internal financial controls with reference to standalone financial statements system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fatly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions aw recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company a being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention of timely detection of unauthorized acquisition, use, of disposition of the company''s assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial control system with reference to financial statements system over financial reporting and such internal financial controls over financial reporting web operating effectively as at 31st March, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.

For Patankar & Associates,

Chartered Accountants

Firm''s Registration No. 107628W

M. Y. Kulkarni

Partner

Membership No. 035524

Place: Pune Date:

16th May, 2016


Mar 31, 2015

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

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash fows 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2015 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 paragraph 3 and 4 of the said Order.

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

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

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st 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 no. 36 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses 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.

Annexure to Independent Auditor''s Report to the members of Gujarat Fluorochemicals Limited on the standalone financial statements for the year ended 31st March, 2015 – referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date.

In term of the Companies (Auditors Report) Order, 2015 ("the Order"), on the basis of information and explanation given to us and the books and records examined by us in the normal course of audit and such checks as we considered appropriate, to the best of our knowledge and belief, we state as under:

1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies have been noticed on such verification.

2. The inventories were physically verified by the management at reasonable intervals during the year. The procedures of physical verification followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification of inventories as compared to book records.

3. The Company has granted unsecured loans to two companies covered in the register maintained under section 189 of the Companies Act. The parties are regular in repayment of principal and payment of interest and there are no overdue amounts.

4. In our opinion, there are generally adequate internal control procedures commensurate with the size of the Company and nature of its business for purchase of inventory and fxed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control systems in respect of these areas.

5. The Company has not accepted any deposits within the meaning of sections 73 to 76 of the Companies Act, 2013 and the Rules framed there under and hence the provisions of clause 3(v) of the Order are not applicable to the Company.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under section 148(1) of the Companies Act, 2013 for activities of the Company to which they said Rules are made applicable, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

7. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employee''s state insurance, income-tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it. There are no undisputed amounts payable in respect of such statutory dues which were in arrears as at 31st March, 2015 for a period of more than six months from the date they become payable.

Particulars of dues of service tax, duty of customs, duty of excise which have not been deposited on account of disputes are as under:

Name of the Statute Nature of dues and the period to which the amount relates

Service-tax (Finance Act, 1994) Penalty on delay payment of Service tax on Banking & Financial services in respect of External Commercial Borrowings - 10.09.2004 to 30.06.2007

Central Excise Act, 1944 Excise Duty on freight recovered from customers - April 2007 to November 2007

Central Excise Act, 1944 Cenvat Credit availed on Capital goods - April 2006 to August 2011 Central Excise Act, 1944 Excise Duty on freight recovered from customers - April 2012 to December 2012

Central Excise Act, 1944 Excise Duty on freight recovered from customers - January 2013 to August 2013

Customs Act, 1962 Diferential duty on Import of Coal on high seas - April 2012 to May 2012

Customs Act, 1962 Diferential duty on Import of Coal on high seas - 17th March, 2012 to 28th March, 2013

Name of the Statute Amount Forum where dispute is pending (Rs,in Lakh)

Service tax 6.85 Customs, Excise and Service (Finance Act, 1994) Tax Appellate Tribunal, Ahmedabad

Central Excise Act, 1944 363.34 Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Central Excise 51.59 Customs, Excise and Service Act, 1944 Tax Appellate Tribunal, Ahmedabad

Central Excise 154.88 Customs, Excise and Service Act,1944 Tax Appellate Tribunal, Ahmedabad

Central Excise 57.72 Customs, Excise and Service Act, 1944 Tax Appellate Tribunal, Ahmedabad

Customs Act,1962 113.04 Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad (appeal fled on 26th May, 2015)

Customs Act,1962 860.53 Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad - (appeal fled on 26th May, 2015)

There are no dues of income tax, sales tax, wealth tax or cess, which have not been deposited on account of disputes.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made there under has been transferred to such fund within time.

8. The Company does not have accumulated losses. The Company has not incurred cash losses during the current year and in the immediately preceding financial year.

9. The Company has not defaulted in repayment of dues to banks or financial institutions and the Company did not have any borrowings by way of debentures.

10. The terms and conditions on which the Company has given guarantee for a loan taken by its step-subsidiary company from a bank, are not, prima facie, prejudicial to the interest of the Company.

11. The Company has applied the term loans for the purpose for which these loans were raised.

12. No fraud on or by the Company has been noticed or reported during the course of our audit.



For Patankar & Associates,

Chartered Accountants

Firm''s Registration No. 107628W

M. Y. Kulkarni

Partner

Membership No. 035524

Place: Pune

Date: 28th May, 2015


Mar 31, 2013

Report on the financial statements

We have audited the accompanying financial statements of Gujarat Fluorochemicals Limited (''the Company''), which comprise the Balance Sheet as at 31st March, 2013 and the Statement of Profit and Loss and Cash Flow Statement of the Company 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 and 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 controls 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 said financial statements 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, 2013;

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

iii. in the case of the Cash Flow Statement, of the cash flows 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 with by this Report are in agreement with the books of accounts.

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 Act.

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

ANNEXURE REFERRED TO IN INDEPENDENT AUDITOR''S REPORT TO THE MEMBERS OF GUJARAT FLUOROCHEMICALS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2013

In terms of the Companies (Auditor''s Report) Order, 2003, on the basis of information and explanations given to us and the books and records examined by us in the normal course of audit and such checks as we considered appropriate, to the best of our knowledge and belief, we state as under:

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

The Company has drawn out a regular program of verification of fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies have been noticed on such verification.

Fixed assets disposed of during the year were not substantial and therefore do not affect the going concern assumption.

2. The inventories were physically verified by the management at reasonable intervals during the year.

In our opinion, 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.

In our opinion, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification of inventories as compared to book records.

3. The Company has granted loan to one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 19670 lacs and the year-end balance is Rs. 19670 lacs. In our opinion, the rate of interest and other terms and conditions on which this loan is granted are not, prima facie, prejudicial to the interest of the Company. The company is regular in repayment of principal and interest.

The Company has not taken any loan, secured or unsecured, from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion, there are generally adequate internal control systems commensurate with the size of the Company and nature of its business for purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control systems in respect of these areas.

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

In our opinion, the transactions made in pursuance of contract or arrangement entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs in respect of any party during the year have been made at a price which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of section 58A, 58AA or any other relevant provisions of the Companies Act,1956 and the Rules framed there under and hence the provisions of clause 4(vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

9. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employee''s State Insurance, Income-tax, Sales-tax, Wealth-tax, Service-tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.

No undisputed amounts payable in respect of Income-tax, Wealth-tax, Sales-tax, Service-tax, Customs Duty, Excise Duty and Cess were in arrears, as at the end of the year, for a period of more than six months from the date they became payable.

Particulars of dues of Income-tax, Sales-tax, Wealth-tax, Service-tax, Custom Duty, Excise Duty or Cess, which have not been deposited on account of disputes, are as under:

Name of the Nature of dues and the period Amount Statute to which the amount relates (Rs. in lacs)

Gujarat Sales Sales Tax for the year 1995-96 13.35 Tax

Income Tax Income Tax for the FY 2009-10 1001.67

Income Tax Income Tax-Penalty for the FY 2009-10 113.00

Income Tax Income Tax for the FY 2010-11 2122.17

Service Tax Service tax 01.04.2005 to 31.03.2006 2.43

Service Tax Service tax for the year 2009-10 & 20.54 2010-11

Service Tax Service tax interest and penalty for the 6.85 period 10.09.2004 to 30.06.2007

Service Tax Service tax April 2009 to 1.20 September 2009

Custom Duty Custom duty, interest and penalty for 964.36 material in bonded warehouse.

Name of the Statute Forum where dispute is pending

Gujarat Sales Tax Joint Commissioner of Sales Tax, Vadodara

Income Tax Commissioner of Income Tax (Appeals) (I), Vadodara.

Income Tax Commissioner of Income Tax (Appeals) (I), Vadodara

Income Tax Commissioner of Income Tax (Appeals) (I), Vadodara.

Service Tax Commissioner of Central Excise & Customs (Appeals), Vadodara

Service Tax Commissioner of Central Excise & Customs (Appeals), Vadodara

Service Tax Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad.

Service Tax Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad.

Custom Duty Commissioner of Central Excise & Customs (Appeals), Ahmedabad.

10. The Company does not have accumulated losses. The Company has not incurred cash losses during the current year and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to banks.

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

13. 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 are not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures and other investments and hence the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

15. According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

16. In our opinion, the term loans availed during the year by the Company were applied for the purpose for which they were raised.

17. In our opinion, on an overall examination of the Balance Sheet and the Cash Flow Statement, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18. During the year the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. There are no debentures issued and outstanding during the year and hence the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

20. The Company has not raised any money by way of public issues during the year.

21. No fraud on or by the Company was noticed or reported during the course of our audit.

For Patankar & Associates

Chartered Accountants

Firm Registration No. 107628W

Pune (M.Y.Kulkarni)

Dated: 30th May, 2013 Partner

Membership No. 035524


Mar 31, 2012

1. We have audited the attached Balance Sheet of Gujarat Fluor chemicals 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 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 of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

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

(i) 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;

(ii) 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;

(iii) 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;

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, they said accounts, read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITOR'S REPORT TO THE MEMBERS OF GUJARAT FLUOROCHEMICALS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2012

In terms of the Companies (Auditors Report) Order, 2003, on the basis of information and explanations given to us and the books and records examined by us in the normal course of audit and such checks as we considered appropriate, to the best of our knowledge and belief, we state as under:

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

The Company has drawn out a regular program of verification of fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies have been noticed on such verification.

Fixed assets disposed of during the year were not substantial and therefore do not affect the going concern assumption.

2. The inventories were physically verified by the management at reasonable intervals during the year.

In our opinion, 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.

In our opinion, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification of inventories as compared to book records.

3. The Company has granted loan to one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 18700 lacs and the year-end balance is Rs. 18700 lacs. In our opinion, the rate of interest and other terms and conditions on which this loan is granted are not, prima facie, prejudicial to the interest of the Company. The company is regular in repayment of principal and interest.

The Company has not taken any loan, secured or unsecured, from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion, there are generally adequate internal control systems commensurate with the size of the Company and nature of its business for purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control systems in respect of these areas.

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

In our opinion, the transactions made in pursuance of contract or arrangement entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs in respect of any party during the year have been made at a price which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of section 58A, 58AA or any other relevant provisions of the Companies Act,1956 and the Rules framed there under and hence the provisions of clause 4(vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of the Company's products to which they said Rules are made applicable, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

9. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & 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.

No undisputed amounts payable in respect of Income-tax, Wealth-tax, Sales-tax, Service-tax, Customs Duty, Excise Duty and Cess were in arrears, as at the end of the year, for a period of more than six months from the date they became payable.

Particulars of dues of Income-tax, Sales-tax, Wealth-tax, Service-tax, Custom Duty, Excise Duty or Cess, which have not been deposited on account of disputes, are as under:

Name of the Nature of dues and the period Amount Forum where dispute is pending Statute to which the amount relates (Rs. in lacs)

West Bengal Sales Tax for the period 1995-96 2.83 Sales Tax Appellate Tribunal, Kolkatta

wSales Tax Sales Tax for the period 1997-98 1.30 Asst. Commissioner (Appeals), WBST, Kolkatta

Gujarat Sales Sales Tax for the year 1995-96 13.35 Joint Commissioner of Sales Tax, Vadodara Tax

Income Tax TDS & Interest on TDS for 2007-08, 35.53 Commissioner of Income Tax (Appeals) (IV), 2008-09 & 2009-10 Vadodara.

Service Tax Service tax 01.04.2005 to 31.03.2006 2.43 Commissioner of Central Excise & Customs (Appeals), Vadodara

Service Tax Service tax for the year 2009-10 & 20.54 Commissioner of Central Excise & Customs 2010-11 (Appeals),Vadodara

Service Tax Service tax interest and penalty for the 6.85 Customs, Excise and Service Tax Appellate period 10.09.2004 to 30.06.2007 Tribunal, Ahmedabad.

Service Tax Service tax April 2009 to September 2009 1.20 Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad.

10. The Company does not have accumulated losses. The Company has not incurred cash losses during the current year and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to banks.

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

13. 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 are not applicable to the Company.

14. The company is not dealing or trading in shares, securities, debentures and other investments and hence the provisions of clause 4(xiv) of the Companies (Auditor's Report)Order ,2003 are not applicable to the Company.

15. According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

16. In our opinion, the term loans availed during the year by the Company were applied for the purpose for which they were raised.

17. In our opinion, on an overall examination of the Balance Sheet and the Cash Flow Statement, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18. During the year the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. There are no debentures issued and outstanding during the year and hence the provisions of clause 4(xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

20. The Company has not raised any money by way of public issues during the year.

21. No fraud on or by the Company was noticed or reported during the course of our audit.

For Patankar & Associates

Chartered Accountants

Firm Registration No. 107628W

Pune, (M.Y.Kulkarni)

Dated: 25th May, 2012 Partner

Membership No. 35524


Mar 31, 2011

1. We have audited the attached Balance Sheet of Gujarat Fluorochemicals Limited (the "Company"), as at 31st March, 2011 and also the Profit and 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.

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 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 of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

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

(i) 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;

(ii) 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;

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

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the director is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITOR’S REPORT TO THE MEMBERS OF GUJARAT FLUOROCHEMICALS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2011

In terms of the Companies (Auditor’s Report) Order, 2003, on the basis of information and explanations given to us and the books and records examined by us in the normal course of audit and such checks as we considered appropriate, to the best of our knowledge and belief, we state as under:

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

The Company has drawn out a regular program of verification of fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies have been noticed on such verification.

Fixed assets disposed of during the year were not substantial and therefore do not affect the going concern assumption.

2. The inventories were physically verified by the management at reasonable intervals during the year.

In our opinion, 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.

In our opinion, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification of inventories as compared to book records.

3. The Company has granted loan to one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 13300 lacs and the year-end balance is Rs. 13300 lacs. In our opinion, the rate of interest and other terms and conditions on which this loan is granted are not, prima facie, prejudicial to the interest of the Company. The company is regular in repayment of interest and no amounts were due towards repayment of principal.

The Company has not taken any loan, secured or unsecured, from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion, there are generally adequate internal control systems commensurate with the size of the Company and nature of its business for purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control systems in respect of these areas.

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

In our opinion, the transactions made in pursuance of contract or arrangement entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs in respect of any party during the year have been made at a price which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of section 58A, 58AA or any other relevant provisions of the Companies Act,1956 and the Rules framed there under and hence the provisions of clause 4(vi) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of the Company’s products to which the said Rules are made applicable, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

9. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employee’s State Insurance, Income-tax, Sales-tax, Wealth- tax, Service-tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.

No undisputed amounts payable in respect of Income-tax, Wealth-tax, Sales-tax, Service-tax, Customs Duty, Excise Duty and Cess were in arrears, as at the end of the year, for a period of more than six months from the date they became payable.

Particulars of dues of Income-tax, Sales-tax, Wealth-tax, Service-tax, Custom Duty, Excise Duty or Cess which have not been deposited on account of disputes are as under:

Name of the Nature of dues and the period Amount Statute to which the amount relates (Rs. in lacs)

West Bengal Sales Tax for the period 1995-96 2.83 Sales Tax

Sales Tax for the period1997-98 1.30

Gujarat Sales Sales Tax for the year 1995-96 13.35 Tax

Sales Tax for the year 2001-02 1.79

Income Tax TDS & Interest on TDS for 2007-08, 71.53 2008-09 & 2009-10

Income Tax Income Tax for the financial year 3083.99 2007-08

Service Tax Service tax interest and penalty for 6.85 the period 10.09.2004 to 30.06.2007

Service Tax Service tax interest & penalty for 15.41 the period 01.04.2005 to 30.09.2009



Name of the Statue Forum where dispute is pending

West Bengal Sales Tax Sales Tax Appellate Tribunal, Kolkatta

Asst. Commissioner (Appeals), WBST, Kolkatta

Gujarat Sales Tax Joint Commissioner of Sales Tax, Vadodara

Deputy Commissioner (Appeals), of Sales Tax, Ahmedabad

Income Tax Commissioner of Income Tax (Appeals) (VI), Vadodara.

Income Tax Commissioner of Income Tax (Appeals) (I), Vadodara.

Service Tax Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Service Tax Commissioner Central Excise and Customs (Appeals), Vadodara.

10. The Company does not have accumulated losses. The Company has not incurred cash losses during the current year and in t e immediately preceding financial ye r.

11. The Company has not defaulted in repayment of d es to banks

12. The Company has not granted loans and advance on the bas s of security by way of pledge of shares, debentures o other securities.

13. The Company s not a chit fund or a nidhi/mutual benefit fund/soci ty. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

14. The Company has invested in shares, mutual funds, bonds, debentures and other securities in the course of its investment activity. In our opinion, proper records have been maintained of the transactions and contracts and timely entries have been made therein. These investments are held by the Company in its own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

15. According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

16. In our opinion, the term loans availed during the year by the Company were applied for the purpose for which they were raised.

17. In our opinion, on an overall examination of the Balance Sheet and the Cash Flow Statement, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18. During the year the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. There are no debentures issued and outstanding during the year and hence the provisions of clause 4(xix) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

20. The Company has not raised any money by way of public issues during the year.

21. No fraud on or by the Company was noticed or reported during the course of our audit.

For Patankar & Associates

Chartered Accountants

Firm Registration No. 107628W

Pune, (M.Y.Kulkarni)

Dated: 27th May, 2011 Partner

Membership No. 35524


Mar 31, 2010

1. We have audited the attached Balance Sheet of Gujarat Fluorochemicals Limited (the "Company"), as at 31st March, 2010 and also the Profit and 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.

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 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 of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

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

(i) 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;

(ii) 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;

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

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the director 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;

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010.

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT TO THE MEMBERS OF GUJARAT S LUOROCHEMICALS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31s MARCH, 2010

In term of the Companies (Auditors Report) Order, 2003, on the basis of information and explanations given to us and the books and records examined by us in the normal course of audit and such checks as we considered appropriate, to the best of our knowledge and belief, we state as under:

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

The Company has drawn out a regular 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 assets. No material discrepancies have been noticed on such verification.

Fixed assets disposed of during the year were not substantial and therefore do not affect the going concern assumption.

2. The inventories were physically verified by the management at reasonable intervals during the year.

In our opinion, 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.

In our opinion, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification of inventories as compared to book records.

3. The Company has granted loan to one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 13200 lacs and the year-end balance is Rs. 12200 lacs. In our opinion, the rate of interest and other terms and conditions on which this loan is granted are not, prima facie, prejudicial to the interest of the Company. The company is regular in repayment of principal and payment of interest. There is no overdue amount in respect of this loan.

The Company has not taken any loan, secured or unsecured, from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion, there are generally adequate internal control systems commensurate with the size of the Company and nature of its business for purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control systems in respect of these areas.

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

In our opinion, the transactions made in pursuance of contract or arrangement entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs in respect of any party during the year have been made at a price which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time, except for transactions for purchase of services where no comparison of prices could be made available as these services are of special nature.

6. The Company has not accepted any deposits from the public within the meaning of section 58A, 58AA or any other relevant provisions of the Companies Act,1956 and the Rules framed there under and hence the provisions of clause 4(vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of the Companys products to which the said Rules are made applicable, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

9. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & 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.

No undisputed amounts payable in respect of Income-tax, Wealth-tax, Sales-tax, Service-tax, Customs Duty, Excise Duty and Cess were in arrears, as at the end of the year, for a period of more than six months from the date they became payable.

Particulars of dues of Income-tax, Sales-tax, Wealth-tax, Service-tax, Custom Duty, Excise Duty or Cess which have not been deposited on account of disputes are as under:

Name of the Nature of dues and the period Amount Forum where dispute Statute to which the amount relates (Rs. in is pending lacs) West Bengal Sales Tax for the period 1995-96 2.83 Sales Tax Appellate Tribunal, Kolkatta Sales Tax Sales Tax for the period1997-98 1.30 Asst. Commissioner (Appeals), WBST, Kolkatta Gujarat Sales Tax Sales Tax for the year 1995-96 13.35 Sales Tax Appellate Tribunal, Ahmedabad Sales Tax for the year 2001-02 1.79 Deputy Commissioner (Appeals), Ahmedabad Income Tax TDS & Interest on TDS for 2007-08, 71.53 Commissioner ofIncome Tax (Appeals) 2008-09 & 2009-10 TDS (VI), Vadodara. Service Tax Service tax interest and penalty for 9.08 Director General of Central Excise and the period 10.09.2004 to 30.06.2007 Intelligence, Ahmedabad-Zonal Unit Service Tax Service tax interest & penalty for 2.83 Commissioner Central Excise and Customs the period 01.04.2005 to 31.03.2006 (Appeals), Vadodara.

10. The Company does not have accumulated losses. The Company has not incurred cash losses during the current year and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to banks.

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

13. The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

14. The Company has invested in shares, mutual funds, bonds, debentures and other securities in the course of its investment activity. In our opinion, proper records have been maintained of the transactions and contracts and timely entries have been made therein. These investments are held by the Company in its own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

15. According to information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

16. In our opinion, the term loans availed during the year by the Company were applied for the purpose for which they were raised.

17. In our opinion, on an overall examination of the balance sheet and the cash flow statement, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18. During the year the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. There are no debentures issued and outstanding during the year and hence the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

20. The Company has not raised any money by way of public issues during the year.

21. No fraud on or by the Company was noticed or reported during the course of our audit.

For Patankar & Associates Chartered Accountants Place: Pune. S.S.Agrawal Dated: 22nd May, 2010 Partner Membership No. 49051 Firm Registration No. 107628W