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Auditor Report of Mangalore Chemicals & Fertilizers Ltd.

Mar 31, 2015

We have audited the accompany in(" financial statements of Mangalore Chemicals and Fertilizers 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 their significant accounting policies and other explanatory information.

2. Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Sub-section 5 of Section 134 of the Companies 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 of 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 n reasonable and prudent; and design, implementation and 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.

3. 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 Sub-section 10 of Section 143 of the Act. Those Standards require that we comply with ethical requirements and pan and perform the audit to obtain reasonable assurance about whether the financial statements are 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 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 in 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 statements.

4. Opinion

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

a) In case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2015;

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.

5. Emphasis of Matter

Without qualifying our opinion, attention is drawn to Note 36 to the financial statements, regarding the concession from Government of India for Urea being recognized on the basis of estimates. Adjustments, if any, on notification of final prices under the scheme, will be considered in the year in which such notifications are received.

6. Report on Other Legal and Regulatory Requirements

A. 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 said Order.

B. As required by Sub-section 3 of Section 143 of the Act, we report that:

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

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

c. The Balance Sheet, the Statement of Profit and Loss and 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 written representations received from the directors as on 31st March 2015 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March, 2015, from being appointed as a director in terms of Sub-section 2 of Section 164 of the Act.

f. With respect to the other matters to be included in the Auditors' 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.

ii. The Company has made provision, as required under the applicable law or accounting standard, 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.

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

b) The Fixed Assets have been physically verified by the Management during the course of the year and no material discrepancies were noticed on such physical verification.

2. a) The inventory has been physically verified during the year by the Management. In our opinion, the frequency of such verification is reasonable.

b) The procedures of physical verification of inventories of the Company 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 is maintaining proper records of inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. In our opinion and according to the information and explanation given to us, the Company has not granted loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the act. Accordingly, reporting under sub-clauses (a) and (b) of clause (iii) of paragraph 3 of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and nature of its business for the purchase of inventories and fixed assets and for the sale of goods and services. During the course of audit we have not observed any continuing failure to correct any major weaknesses in internal controls.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits. Accordingly, reporting under clause (v) of paragraph 3 of the Order is not applicable.

6. We have broadly reviewed the books of account relating to utilisation of materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records prescribed under Sub-section 1 of Section 148 of the Companies Act, 2013, and we are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we are not required to and have not carried out a detailed audit of the same.

7. a. The Company is regular in depositing undisputed statutory dues including Provident Fund, Employees'State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues applicable to it with the appropriate authorities.

b. According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax or Cess, which have not been deposited on account of any dispute, except:

Name of Nature of Amount Forum where the the Statute the dues (Rs. Lakhs) dispute is pending

Customs Act, 1962 Custom Duty 90.60 CESTAT

c. The amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under has been transferred to such Fund within time.

8. In our opinion, the Company has no accumulated losses at the end of the financial year and has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

9. 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. The Company has not issued any debentures.

10. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

11. According to the information and explanations given to us, the terms loans availed are applied for the purpose for which they are obtained.

12. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.



For K. P Rao & Co.

Chartered Accountants

Firm Regn. No. 003135S



K. Viswanath

Place : Mumbai Partner

Date : May 29, 2015 Membership No. 022812


Mar 31, 2014

1. Report on the Financial Statements

We have audited the accompanying financial statements of Mangalore Chemicals and Fertilizers Limited("the Company"), which comprise the Balance Sheet as at 31 st March, 2014, 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.

2. 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 Accounting Standards referred to in sub-section (3C) of Section 2II of the Companies Act, I956 ("the Act") read with the General Circular I5/20I3 dated I3 September 20I3 of the Ministry of Corporate Affairs in respect of Section I33 of the Companies Act, 20I3. This responsibility includes the design, implementation and maintenance of the internal control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

3. 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 the management, as well as evaluating the overall presentation of the financial statements.

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

4. Opinion

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

(i) In case of the Balance Sheet, of the state of affairs of the Company as at 3Ist March 2014

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

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

5. Emphasis of Matter

Without qualifying our opinion, attention is drawn to Note 35 regarding the concession from Government of India for Urea being recognized on the basis of estimates. Adjustments if any, on notification of final prices under the scheme, will be considered in the year in which the notifications are received.

6. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003, (''The order''), as amended, 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 said 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 2II of the Companies Act, I956 read with the General Circular I5/20I3 dated I3 September 20I3 of the Ministry of Corporate Affairs in respect of Section I33 of the Companies Act, 20I3.; and

e. On the basis of written representations received from the directors as on 3I March 2014, and taken on record by the Board of Directors, none of the directors are disqualified as on 3I March, 2014, from being appointed as a director in terms of clause (g) of sub-section (I) of Section 274 of the Companies Act, I956.

ANNEXURE TO AUDITOR''S REPORT

(REFERRED TO IN PARAGRAPH (6) OF OUR REPORT OF EVEN DATE)

We report that :

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

b. The Fixed Assets have been physically verified by the Management during the course of the year and no material discrepancies were noticed on such physical verification.

c. The Company has not disposed off any substantial part of its fixed assets during the year.

ii. a. The inventory has been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

b. The procedures of 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 is maintaining proper records of inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. The company has not taken/ granted any loans secured or unsecured from/ or to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 and therefore the clauses b, c, d, e, f and g of para (iii) of the Companies (Auditors Report) Order 2003 are not applicable.

iv. In our opinion and according to the information and explanation given to us, the internal control system for purchase of inventory, fixed assets and for the sale of goods is adequate and commensurate with the size of the company and the present nature of its business. During the course of audit we have not observed any continuing failure to correct major weakness in the internal control system.

v. a. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 30I of the Companies Act, I956 have been so entered.

b. According to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, I956 in respect of a party during the year relate to services of a specialized nature and hence no comparative market prices are available to determine whether it has been transacted at prevailing market prices.

vi. In our opinion and according to the information and explanation given to us, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, I956 and the rules framed there under are not applicable as the company has not accepted any deposits from the public.

vii. The Internal Audit is being conducted by Firms of Chartered Accountants and in our opinion, the scope and coverage of internal audit is commensurate with size and nature of Company''s Business.

viii. We have carried out a limited review of the books of account and cost records maintained by the company, pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(I)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have not however, made a detailed examination of such records with a view to determine whether they are accurate and complete.

ix. a. According to the information and explanation given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities. According to the information and explanation given to us, there are no undisputed statutory dues outstanding as at 3I* March 2014 for a period of more than six months from the date they became payable.

b. According to the information and explanation given to us, there are no amounts in respect of Sales Tax, Income Tax, Service Tax, Customs duty, Wealth Tax, Excise duty or Cess that have not been deposited on account of any dispute, except for the following cases:

Statement of Disputed Dues

Name of Nature of Amount Period to Forum where the statute the dues Rs. which the Dispute is pending Crores amount relates

Income Tax Income Tax 4.28 Previous Year DCIT Act, 1961 2007-08

Customs Act, Customs 0.91 Financial Year Commissioner 1962 Duty 2012-13 Order being appealed to CESTAT

x. In our opinion, the Company has no accumulated losses at the end of the financial year and has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the Company has not defaulted in payment of its dues to Banks and Financial Institutions.

(xii) The Company has not granted any loans and advances on security of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a Chit Fund /Nidhi /Mutual benefit trust/society.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. Hence, the requirements of this clause are not applicable to the company.

(xvi) According to the information and explanation given to us, the Company has prima facie applied the term loans for the purpose for which it was obtained.

(xvii)According to the information and explanations given to us and on an overall examination of the Balance Sheet and the Cash Flow Statement of the Company we report that prima facie no funds raised on short term basis have been utilized for any long-term investment purposes.

(xviii)According to the information and explanation given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 30I of the Companies Act, I956.

(xix) The Company has not issued any debentures.

(xx) According to the information and explanation given to us, the Company has not raised any money through public issue.

(xxi) According to the information and explanations given to us no material frauds on or by the company has been noticed or reported during the year under report.

For K. P. RAO & CO. Chartered Accountants Firm Regn. No. 003135S

Desmond J. Rebello Place : Bangalore Partner Date : May I5, 2014 Membership No. 015140


Mar 31, 2013

1. Report on the Financial Statements

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

2. 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 Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. This responsibility ncludes the design, implementation and maintenance of the internal control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

3. 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, ncluding 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 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 the management, as well as evaluating the overall presentation of the financial statements.

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

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the nformation 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:

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

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

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

5. Emphasis of Matter

Without qualifying our opinion, attention is drawn to Note 35 regarding the concession from Government of India for Urea being recognized on the basis of estimates. Adjustments if any, on notification of final prices under the scheme, will be considered in the year in which the notifications are received.

6. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003, (The order''), as amended, 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 said 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; and

e. On the basis of written representations received from the directors as on 31 March 2013, and taken on record by the Board of Directors, none of the directors are disqualified as on 31 March, 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 TO AUDITOR''S REPORT

(REFERRED TO IN PARAGRAPH (6) OF OUR REPORT OF EVEN DATE)

We report that :

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

b. The Fixed Assets have been physically verified by the Management during the course of the year and no material discrepancies were noticed on such physical verification.

c. The Company has not disposed off any substantial part of its fixed assets during the year.

ii. a. The inventory has been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

b. The procedures of 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 is maintaining proper records of inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. The company has not taken/ granted any loans secured or unsecured from/ or to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act,1956 and therefore the clauses b, c, d, e, f and g of para (iii) of the Companies (Auditors Report) Order 2003 are not applicable.

iv. In our opinion and according to the information and explanation given to us, the internal control system for purchase of inventory, fixed assets and for the sale of goods is adequate and commensurate with the size of the company and the present nature of its business. During the course of audit we have not observed any continuing failure to correct major weakness in the internal control system.

v. a. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered. b. According to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 in respect of a party during the year relate to services of a specialized nature and hence no comparative market prices are available to determine whether it has been transacted at prevailing market prices.

vi. In our opinion and according to the information and explanation given to us, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable as the company has not accepted any deposits from the public.

vii. The company has an Internal Audit System and in our opinion, the scope and coverage of internal audit is commensurate with size and nature of company''s business.

viii. We have carried out a limited review of the books of account and cost records 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 maintained. We have not however, made a detailed examination of such records with a view to determine whether they are accurate and complete.

ix. a. According to the information and explanation given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities. According to the information and explanation given to us, there are no undisputed statutory dues outstanding as at 31st March 2013 for a period of more than six months from the date they became payable. b. According to the information and explanation given to us, there are no amounts in respect of Sales Tax, Income Tax, Service Tax, Customs duty, Wealth Tax, Excise duty or Cess that have not been deposited on account of any dispute, except for the following cases:

Statement of Disputed Dues

Name of Nature of Amount Period to Forum where the statute the dues Rs. which the Dispute is Crores amount pending relates

Income Tax Income Tax 6.93 Previous CIT Act, 1961 Year 2008-09

Customs Act, Customs Duty 0.91 Financial Commissioner 1962 Year Order being 2012-13 appealed to CESTAT

x. In our opinion, the Company has no accumulated losses at the end of the financial year and has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

xi. In our opinion and according to the information and explanation given to us, the Company has not defaulted in payment of its dues to Banks and Financial Institutions.

xii. The Company has not granted any loans and advances on security of shares, debentures and other securities..

xiii. In our opinion, the Company is not a Chit Fund /Nidhi /Mutual benefit trust/society

xiv. The Company is not dealing or trading in shares, securities, debentures and other investments.

xv. According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. Hence, the requirements of this clause are not applicable to the company.

xvi. According to the information and explanation given to us, the Company has prima facie applied the term loans for the purpose for which it was obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet and the Cash Flow Statement of the Company we report that prima facie no funds raised on short term basis have been utilized for any long-term investment purposes.

xviii.According to the information and explanation given to us, 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.

xix. The Company has not issued any debentures.

xx. According to the information and explanation given to us, the Company has not raised any money through public issue.

xxi. According to the information and explanations given to us no material frauds on or by the company has been noticed or reported during the year under report.

For K. P. RAO & CO. Chartered Accountants

Firm Regn. No. 003135S

Desmond J. Rebello

Place : Bangalore Partner

Date : May 16, 2013 Membership No. 015140


Mar 31, 2012

I. We have audited the attached Balance Sheet of Mangalore Chemicals and Fertilizers Limited, Bangalore as at 31st March 2012, the Statement of Profit and Loss and 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.

II. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statements. 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

III. 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 give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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

2. 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;

3. 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;

4. 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;

5. On the basis of written representations received by the company from the directors, as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors are disqualified as at 31st March 2012 from being appointed as a director under section 274(1) (g) of the Companies Act, 1956.

6. Without qualifying our opinion, attention is drawn to Note No 34 regarding the concession from Government of India for Urea being recognized on the basis of estimates and Note No 11 (c) regarding advance towards preference shares of Bangalore Beverages Limited with coupon rate of 0.001% p.a. repayable after 20 years.

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

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

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.

ANNEXURE TO AUDITOR'S REPORT

(REFERRED TO IN PARAGRAPH III 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. The Fixed assets have been physically verified by the management during the course of the year and no material discrepancies were noticed on such physical verification.

c. The company has not disposed off any substantial part of the fixed assets during the year.

ii. a. The inventory has been physically verified during the year by the management. In our opinion the frequency of verification is reasonable.

b. The procedures of verification of inventories followed by the company 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. The company has not taken/granted any loans secured or unsecured from/to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and, therefore the clauses b, c, d, e, f and g of para (iii) of the Companies (Auditors Report) Order 2003 are not applicable.

iv. In our opinion and according to information and explanations given to us, the internal control system for purchase of inventory, fixed assets and for sale of goods is adequate & commensurate with size of the company and present nature of its business. During the course of audit we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. a. According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered. b. According to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under 301 of the Companies Act, 1956 in respect of a party during the year relate to services of a specialized nature and hence no comparative market prices are available to determine whether it has been transacted at prevailing market prices.

vi. In our opinion and according to the information and explanation given to us, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable as the company has not accepted any deposits from the public.

vii. The company has an Internal Audit System and in our opinion, the scope and coverage of internal audit is commensurate with size and nature of company's business.

viii. We have carried out a limited review of the books of account and cost records 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 maintained. We have not however, made a detailed examination of such records with a view to determine whether they are accurate and complete.

ix. a. According to the information and explanation given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investors Education & Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and any other statutory dues with the appropriate authorities. According to information and explanation given to us, there are no undisputed statutory dues outstanding as at 31st March 2012 for a period of more than six months from the date they became payable.

b. According to the information and explanation given to us, there are no amounts in respect of Sales Tax, Income Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty or Cess that have not been deposited on account of any dispute, except for the following case.

Pending Forum in Year to Amount Statutory which Due is which Due Due pending belongs

Income Tax CIT Previous Year Rs.7.93 (Appeals) - III 2008-09 Crores

x. In our opinion, the Company has no accumulated losses at the end of the financial year and has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

xi. In our opinion and according to the information and explanation given to us, the Company has not defaulted in payment of its dues to Banks and Financial Institutions.

xii. The company has not granted any loans and advances on security of shares, debentures and other securities.

xiii. In our opinion, the company is not a Chit Fund, Nidhi or Mutual benefit trust/society.

xiv. The Company is not dealing or trading in shares, securities, debentures and other investments.

xv. According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. Hence, the requirements of this clause are not applicable to the company.

xvi. According to the information and explanation given to us, the Company has Prima facie applied the term loans for the purpose for which it was obtained.

xvii. According to the information and explanation given to us and on an overall examination of the Balance Sheet and the Cash Flow Statement of the Company, we report that prima facie no funds raised on short-term basis have been utilized for any long-term investment purposes.

xviii. According to the information and explanation given to us, 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.

xix. The company has not issued any debentures.

xx. According to the information and explanation given to us, the Company has not raised any money through public issue.

xxi. According to the information and explanations given to us no material frauds on or by the Company has been noticed or reported during the year under report.

For K.P. RAO & COMPANY

Chartered Accountants

Firm Regn. No. 003135S

(K. SURYA PRAKASH)

Place : Mumbai Partner

Date : August 10, 2012 Membership No. 018857


Mar 31, 2011

We have audited the attached Balance Sheet of Mangalore Chemicals and Fertilizers Limited, Bangalore as at 31st March 2011, the Profit and Loss Account and 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.

II. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statements. 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.

II. 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 give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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

2. 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;

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

4. 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;

5. On the basis of written representations received by the company from the directors, as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the directors are disqualified as at 31st March 2011 from being appointed as a director under section 274(1) (g) of the Company's Act, 1956.

6. Without qualifying our opinion, attention is drawn to note No 8 of Schedule 3B (Notes to Accounts), regarding the Concession for Urea and Phosphatic Fertilizers being recognized on the basis of estimates.

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

a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2011; and

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 the Cash Flow Statement, of the cash fows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT (REFERRED TO IN PARAGRAPH III OF OUR REPORT OF EVEN DATE)

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

b. The Fixed assets have been physically verified by the management during the course of the year and no material discrepancies were noticed on such physical verification.

c. The company has not disposed off any substantial part of the fixed assets during the year.

ii. a. The inventory has been physically verified during the year by the management. In our opinion the frequency of verification is reasonable.

b. The procedures of verification of inventories followed by the company 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. The company has not taken/granted any loans secured or unsecured from/to companies, frms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and, therefore the clauses b, c, d, e, f and g of para (iii) of the Companies (Auditors Report) Order 2003 are not applicable.

iv. In our opinion and according to information and explanations given to us, the internal control system for purchase of inventory, fixed assets and for sale of goods is adequate & commensurate with size of the company and present nature of its business. During the course of audit we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. a. According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered. b. According to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under 301 of the Companies Act, 1956 in respect of a party during the year relate to services of a specialized nature and hence no comparative market prices are available to determine whether it has been transacted at prevailing market prices.

vi. In our opinion and according to the information and explanation given to us, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable as the company has not accepted any deposits from the public.

vii. The company has an Internal Audit System and in our opinion, the scope and coverage of internal audit is commensurate with size and nature of company's business.

viii. We have carried out a limited review of the books of account and cost records 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 maintained. We have not however, made a detailed examination of such records with a view to determine whether they are accurate and complete.

ix. a. According to the information and explanation given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investors Education & Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and any other statutory dues with the appropriate authorities. According to information and explanation given to us, there are no undisputed statutory dues outstanding as at 31st March 2011 for a period of more than six months from the date they became payable. b. According to the information and explanation given to us, there are no amounts in respect of Sales Tax, Income Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty or Cess that have not been deposited on account of any dispute.

x. In our opinion, the Company has no accumulated losses at the end of the financial year and has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

xi. In our opinion and according to the information and explanation given to us, the Company has not defaulted in payment of its dues to Banks and Financial Institutions.

xii. The company has not granted any loans and advances on security of shares, debentures and other securities.

xiii. In our opinion, the company is not a Chit Fund, Nidhi or Mutual benefit trust/society

xiv. The Company is not dealing or trading in shares, securities, debentures and other investments.

xv. According to the information and explanation given to us, the Company has not given any corporate guarantee for loans taken by others from banks or financial institutions. Hence the requirements of clause (xv) of the companies Auditor Report,2003 are not applicable to the company.

xvi. According to the information and explanation given to us, the Company has applied the term loan for the purpose for which it was obtained.

xvii. According to the information and explanation given to us and on an overall examination of the Balance Sheet and the Cash Flow Statement of the Company, we report that prima facie no funds raised on short-term basis have been utilized for any long-term investment purposes.

xviii.According to the information and explanation given to us, 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.

xix. The company has not issued any debentures.

xx. According to the information and explanation given to us, the Company has not raised any money through public issue.

xxi. According to the information and explanations given to us no material frauds on or by the Company has been noticed or reported during the year under report.

For K.P.RAO & COMPANY

Chartered Accountants

Firm Regn. No. 003135S

(K. VISWANATH)

Place : New Delhi Partner

Date : August 2, 2011 Membership No. 22812


Mar 31, 2010

I. We have audited the attached Balance Sheet of Mangalore Chemicals and Fertilizers Limited, Bangalore as at 31st March 2010, the Profit and Loss Account and 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.

II. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statements. 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.

III. 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 give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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

2. 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;

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

4. 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.

5. On the basis of written representations received by the company from the directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the directors are disqualified as at 31st March 2010 from being appointed as a director under section 274(1) (g) of the Companys Act, 1956.

6. Without qualifying our opinion, attention is drawn to Note 8 of Schedule 3B (Notes to Accounts), regarding the Concession for Urea and Phosphatic Fertilizers being recognized on the basis of estimates.

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

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 the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT (REFERRED TO IN PARAGRAPH III 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. The Fixed assets have been physically verified by the management during the course of the year and no material discrepancies were noticed on such physical verification.

c. The company has not disposed off any substantial part of the fixed assets during the year.

ii. a. The inventory has been physically verified during the year by the management. In our opinion the frequency of verification is reasonable.

b. The procedures of verification of inventories followed by the company 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. The company has not taken/granted any loans secured or unsecured from/to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and, therefore the clauses b, c, d, e, f and g of para (iii) of the Companies (Auditors Report) Order 2003 are not applicable.

iv. In our opinion and according to information and explanations given to us, the internal control system for purchase of inventory, fixed assets and for sale of goods is adequate & commensurate with size of the company and present nature of its business. During the course of audit we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. a. According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. According to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 in respect of a party during the year relate to services of a specialized nature and hence no comparative market prices are available to determine whether it has been transacted at prevailing market prices.

vi. In our opinion and according to the information and explanation given to us, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable as the company has not accepted any deposits from the public.

vii. The company has an Internal Audit System and in our opinion, the scope and coverage of internal audit is commensurate with size and nature of companys business.

viii. We have carried out a limited review of the books of account and cost records 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 maintained. We have not however, made a detailed examination of such records with a view to determine whether they are accurate and complete.

ix. a. According to the information and explanation given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investors Education & Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and any other statutory dues with the appropriate authorities. According to information and explanation given to us, there are no undisputed statutory dues outstanding as at 31st March 2010 for a period of more than six months from the date they became payable.

b. According to the information and explanation given to us, there are no amounts in respect of Sales Tax, Income Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty or Cess that have not been deposited on account of any dispute.

x. In our opinion, the Company has no accumulated losses at the end of the financial year and has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

xi. In our opinion and according to the information and explanation given to us, the Company has not defaulted in payment of its dues to Banks and Financial Institutions.

xii. The company has not granted any loans and advances on security of shares, debentures and other securities.

xiii. In our opinion, the company is not a Chit Fund, Nidhi or Mutual benefit trust/society.

xiv. The Company is not dealing or trading in shares, securities, debentures and other investments.

xv. According to the information and explanation given to us, the Company has given a corporate guarantee for loans taken by MCF International Limited, (a wholly owned subsidiary) from banks or financial institutions and the terms and conditions thereof are not prejudicial to the interest of the company.

xvi. According to the information and explanation given to us, the Company has applied the term loan for the purpose for which it was obtained.

xvii. According to the information and explanation given to us and on an overall examination of the Balance Sheet and the Cash Flow Statement of the Company, we report that prima facie no funds raised on short-term basis have been utilized for any long-term investment purposes.

xviii. According to the information and explanation given to us, 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.

xix. The company has not issued any debentures.

xx. According to the information and explanation given to us, the Company has not raised any money through public issue.

xxi. According to the information and explanations given to us, no material frauds on or by the Company has been noticed or reported during the year under report.

For K. P. RAO & COMPANY

Chartered Accountants

Firm Regn. No: -003135S

(K. VISWANATH)

Place : Bangalore Partner

Date : July 21, 2010 Membership No.: 22812



 
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