Auditor Report of National Oxygen Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of NATIONAL OXYGEN LIMITED as at 31st March 2015, which comprise the Balance Sheet as at 31st March 2015 and the Statement of Profit and Loss, the Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory information.

2. 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.

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 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 opinion on the standalone financial statements.

4. 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 Companies Act 2013, in the manner so required and give a true and fair view in conformity with the accounting principles generally st accepted in India of the state of affairs of the Company as at 31 March, 2015 , and its Loss and its cash flows for the year ended on that date.

5. Report on Other Legal and Regulatory Requirements :

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 Companies Act, 2013 we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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.

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 ;

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.

(b) 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.

(c) There are no observations or comments on financial transactions or matters which , in our opinion, may have any adverse effect on the functioning of the Company

(d) 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.

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. 33 to the financial statements;

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

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

i) a) The Company has maintained proper records showing full particulars including quantitative details and situation of its Fixed Assets.

b) The Fixed Assets of the Company have been physically verified by the management, wherever possible, at the close of the year as confirmed by the management. As informed to us, no material discrepancy has come to notice on such physical verification;

ii) a) The management has conducted Physical verification of Inventories, wherever possible, at all its locations at reasonable intervals during the year

b) The procedures of physical verification of stock followed by the Management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business ;

c) The company is maintaining proper records of inventory. As far as we can ascertain and according to the information and the explanations given to us, the discrepancies noticed between the physical stocks and book stocks were not material and the same have been properly dealt with in the books of account.

iii) As per the information and explanations provided to us, the company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act 2013 and hence the requirements of sub clauses (a) and (b) of clause (iii) of the Order are not applicable.

iv) On the basis of checks carried out during the course of audit and as per explanations given to us, in our opinion, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of Inventory and Fixed Assets and for the sale of goods and services. During the course of our Audit, no major weakness or continuing failure to correct any major weakness has been noticed in the internal control system in respect of these areas;

v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits to which the directives of the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under apply;

vi) The Company has made and maintained proper Cost records pursuant to the rules made by the Central Government for the maintenance of cost records under section 148 (1) of the Companies Act, 2013 in respect of the products manufactured by it, but no detailed examination of such records have been carried out by us.

vii) a) The company has been generally 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 material statutory dues with the appropriate authorities. Further, according to the information and explanations given to us and the books and records examined by us, there was no undisputed amount outstanding as on 31st March 2015 in respect of the above statutory dues for a period of more than six months from the date they became payable;

b) According to the records of the company, the dues outstanding (net of Advances) in respect of Income tax ,Sales Tax, Wealth Tax, Service Ta x , Duty of Customs, Duty of Excise, Value added st tax, or Cess on account of any dispute as on 31 March 2015 , are as follows :

Name of the Nature of Dues Amount Period to Forum where Statute Rs in Lacs which the dispute amount relates pending

Central Excise duty demanded on the facility 1.06 Sept'2000 to CESTAT, Excise Act, charges being charged Aug'2001 Southern 1944 Bench

Central Departmental appeal against the 4.91 Sept'2000 to CESTAT, Excise Act, partial favorable order passed by Aug'2001 Southern 1944 Commissioner (Appeals) for Excise Bench duty demanded on the rental / facility charges being charged

Central Departmental appeal against the 13.11 Aug'2002 to CESTAT, Excise Act, favorable order passed by june'2004 Southern 1944 Commissioner (Appeals) for Excise Bench duty demanded on the rental / facility charges being charged

Central Canvas credit availed on Cryogenic 5.23 Mar'2005 to CESTAT, Excise Act, Tank being disputed Nov'2005 Southern 1944 Bench

Central Departmental appeal against the 5.71 2000-01 Madras High Excise Act, favorable order passed by CESTAT Court 1944 in respect of 8% duty demanded on supply to ISRO under Nil rate of duty while availing Canvas Credit

Central Excise duty demanded on the 0.20 Sept'2006 to CESTAT, Excise Act, Cylinder Repair charges Mar'2007 Southern 1944 being charged Bench

Central Excise duty demanded on the 1.67 May'2006 to CESTAT, Excise Act, Cylinder Holding / facility charges Aug'2006 Southern 1944 being charged Bench

Central Excise duty demanded on the 4.09 2002-03 to CESTAT, Excise Act, Cylinder Repair charges being 2004-05 Southern 1944 charged Bench

Central Excise duty demanded on the 0.81 Nov'2005 to CESTAT, Excise Act, Cylinder Repair charges being Aug'2006 Southern 1944 charged Bench

Service Tax Service Tax demanded on the Lease 11.32 2002-03 & CESTAT, charge income received 2003-04 Southern Bench

Service Tax Service Tax demanded on the Lease 6.95 2004-05 & CESTAT, charge income received 2005-06 Southern Bench Customs Differential Customs Duty on Import of 88.23 1994-95 CESTAT, Act, 1961 Second hand Plant (including Interest & Southern Penalty) Bench

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 so transferred to such fund within time.

viii) The Company has accumulated losses of Rs.1302.75 Lacs and has incurred cash loss of Rs.676.97 Lacs in the current financial year and Rs.374.68 Lacs in the immediately preceding financial year;

ix) Based on our audit procedures, and as per the information and explanations given to us by the management, though there have been delays in repayment of dues during the year, as at the year end the company has not defaulted in repayment of dues to financial institutions or banks or debenture holders;

x) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

xi) The existing term loans as well as the term loans raised during the year have been utilized for the purpose for which the Term Loan were raised .

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

For SINGHI & CO.,

Chartered Accountants

Firm Regn No. 302049E

Sd/-

(SUDESH CHORARIA)

Place: Chennai Partner

Date : 29th May 2015. Membership No. 204936

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Mar 31, 2014

We have audited the attached financial statements of NATIONAL OXYGEN LIMITED as at 31st March 2014, which comprise the Balance Sheet as at 31st March 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, and a summary of 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 the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor''s Responsibility :

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with 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 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 entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

4. Opinion

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

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

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

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

5. Report on Other Legal and Regulatory Requirements :

As required by the Companies (Auditor''s Report) Order 2003 (as amended) 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 paragraph 4 & 5 of the said Order.

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

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

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

c) The Balance Sheet, 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 dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956;

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

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT (Referred to in our Report of even date on the Accounts of NATIONAL OXYGEN LIMITED as at and for the year ended 31st March 2014)

i) a) The Company has maintained proper records to show full particulars including quantitative details and situation of its Fixed Assets.

b) The Fixed Assets of the Company have been physically verified by the management, wherever possible, at the close of the year as confirmed by the management. As informed to us, no material discrepancy has come to notice on such physical verification.

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

ii) a) The management has conducted Physical verification of Inventories at all its locations at reasonable intervals during the year ;

b) The procedures of physical verification of stock followed by the Management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business ;

c) The company is maintaining proper records of inventory. As far as we can ascertain and according to the information and the explanations given to us, the discrepancies noticed between the physical stocks and book stocks were not material and the same have been properly dealt with in the books of account.

III) a) As per the information & explanations provided to us, the company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

b) The company has taken unsecured loan from a company listed in the register maintained under section 301 of the Companies Act 1956 . The maximum amount outstanding during the year was Rs. 4,89,00,388 and the balance outstanding as on 31st March 2014 was Rs. 4,89,00,388;

c) The rate of interest and other terms and conditions in respect of the unsecured loans taken by the company, are prima facie not prejudicial to the interest of the company.

d) There is no specific stipulations regarding the repayment of the loan and interest amount in respect of the unsecured loans taken. However, as per the information & explanations provided to us, the repayment of the loan and interest amount has been made promptly, as and when demanded.

iv) On the basis of checks carried out during the course of audit and as per explanations given to us, in our opinion, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of Inventory and Fixed Assets and for the sale of goods and services. During the course of our Audit, no major weakness has been noticed in the internal controls in these respects.

v) a) As per the information & explanations given to us, particulars of transactions that have been undertaken during the year in pursuance of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

b) In our opinion, and according to the information and explanations given to us, and as confirmed by the Company, all the transactions with each of such parties during the financial year have been entered into at prices which are reasonable having regard to the prevailing market prices at the relevant time;

vi) The company has not accepted any deposits from the public during the year, to which the provisions of Section 58-A , 58-AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under apply;

vii) The company has a separate Internal Audit System . In our opinion, the Internal Audit system is commensurate with the size and nature of its business;

viii) The Company has maintained proper Cost records as prescribed by the Central Government under Section 209 (1)(d) of the Companies Act 1956 for the products manufactured by it, but no detailed examination of such records have been carried out by us.

ix) a) The company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, cess and other material statutory dues with the appropriate authorities;

ix) b) According to the information and explanations given to us and the books and records examined by us, there was no undisputed amount outstanding as on 31st March'' 2014 in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, cess and other statutory dues for a period of more than six months from the date they became payable;

c) According to the records of the company and as per the information and explanations provided to us, the dues outstanding (net of Advances) in respect of Sales Tax, Income tax, Customs Duty, Wealth Tax,Service Tax, Excise Duty, Cess etc.,on account of any dispute, are given below :

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

Central Excise duty demanded on the facility 1.06 Excise Act, charges being charged 1944

Central Departmental appeal against the 4.91 Excise Act, partial favourable order passed by 1944 Commissioner (Appeals) for Excise duty demanded on the rental / facility charges being charged

Central Departmental appeal against the 13.11 Excise Act favourable order passed by 1944 Commissioner (Appeals) for Excise duty demanded on the rental / facility charges being charged Central Cenvat credit availed on Cryogenic 5.23 Excise Act, Tank being disputed 1944

Central Departmental appeal against the Excise Act, favourable order passed by CESTAT 1944 in respect of 8% duty demanded on supply to ISRO under Nil rate of duty while availing Cenvat Credit

Central Excise duty demanded on the 0.20 Cylinder Repair charges being 1944 charged

Central Excise duty demanded on the 1.67 Excise Act, Cylinder Holding / facility charges 1944 being charged

Central Excise duty demanded on the 4.09 Excise Act, Cylinder Repair charges being 1944 charged

Name of the Statue Period to Forum where which the dispute amount relates pending

Central Excise Act, 1944 Sept''2000 to CESTAT, Aug''2001 Southern Bench

Central Excise Act, 1944 Sept''2000 to CESTAT, Aug''2001 Southern Bench

Central Excise Act, 1944 Aug''2002 to CESTAT, june''2004 Southern Bench

Central Excise Act, 1944 Mar''2005 to CESTAT, Nov''2005 Southern Bench

Central Excise Act, 1944 2000-01 Madras High Court

Central Excise Act, 1944 Sept''2006 to CESTAT, Mar''2007 Southern Bench

Central Excise Act, 1944 May''2006 to CESTAT, Aug''2006 Southern Bench

Central Excise Act, 1944 2002-03 to CESTAT, 2004-05 Southern Bench

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

Central Excise duty demanded on the 0.81 Excise Act, Cylinder Repair charges being 1944 charged

Service Tax demanded on the Lease 11.32 Service Tax charge income received

Service Tax demanded on the Lease6.95 Service Tax charge income received

Customs Act Differential Customs Duty on Import 88.23 of Second hand Plant (including 1961 Interest & Penalty)

Name of the Statue Period to Forum where which the dispute amount relates pending

Central Excise Act, 1944 Nov''2005 to CESTAT, Aug''2006 Southern Bench

Service Tax 2002-03 & CESTAT, 2003-04 Southern Bench

Service Tax 2004-05 & CESTAT 2005-06 Southern Bench

Customs Act, 1961 1994-95 CESTAT, Southern Bench

x) The Company has accumulated losses of Rs.219.74 Lacs, and has incurred cash loss of Rs.374.68 Lacs in the current financial year. However, no cash loss was incurred in the immediately preceding financial year.

xi) Based on our audit procedures, and as per the information and explanations given to us by the management, the company has not defaulted in repayment of dues to financial institutions and banks;

xii) According to the information and explanations given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities;

xiii) The provisions of any special statute applicable to chit fund, nidhi or mutual benefit fund / societies are not applicable to the company;

xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments, and hence, the requirements of Para 4 (xiv) of the above Order are not applicable to the company;

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions;

xvi) The term loan raised during the year as well as the existing term loan has been utilized for the purpose for which it was availed;

xvii) According to the information and explanations given to us, in our opinion, short term funds have not been used for long term purposes.

xviii) During the year, the company has not made any preferential allotment of shares.

xix) The company does not have any outstanding debentures during the year.

xx) The company has not raised any money by way of public issue during the year;

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

For SINGHI & CO., Chartered Accountants (SUDESH CHORARIA)

Partner

Membership No. 204936

Place : Chennai, FR No. 302049E

Date : 22nd May 2014.

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Mar 31, 2012

We have audited the attached Balance Sheet of NATIONAL OXYGEN LIMITED as at 31st March 2012, and the Profit & 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.

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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order 2003 (as amended) issued by the Central Government 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 & 5 of the said order.

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 purposes of our audit;.

2. In our opinion, the company has kept proper books of Accounts as required by law 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 the report are in agreement with the books of account;

4. In our opinion, the Balance Sheet, Profit & 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 the 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 directors are 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.

6. In our opinion, and to the best of our information and according to the explanations given to us, the said Financial Statements, read together 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:

i. In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

ii In the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date, and '

iii In the case of the Cash Flow Statement of the Cash flows of the Company for the year ended on that

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in our Report of even date on the Accounts of NATIONAL OXYGEN LIMITED as at and for the year ended 31st March 2012)

i) a The Company has maintained proper records to show full particulars including quantitative details and situation of its Fixed Assets.. ,

b) The Fixed Assets of the Company have been physically verified' by the ' management, wherever possible, at the close of the year as confirmed by the management. As informed to us, no material discrepancy has come to notice on such physical verification.

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

ii) a) The management has conducted Physical verification of Inventories at all its locations at reasonable intervals during the year;

b) The procedures of physical verification of stock followed by the Management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business ;

c) The company is maintaining proper records of inventory. As far as we can ascertain and according to the information and the explanations given to us, the discrepancies noticed between the physical stocks and book stocks were not material and the same have been properly dealt with in the books of account.

iii) a) As per the information & explanations provided to us, the company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. .

b) As per the information & explanations provided to us, the company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 ofthe Companies Act, 1956.

iv) On the basis of checks carried out during the course of audit and as per explanations given to us, in our opinion, there are adequate internal control procedures commensurate with the size ofthe Company and the nature of its business for the purchase of Inventory and Fixed Assets and for the sale of goods and services. During the course of our Audit, no major weakness has been noticed in the internal controls in these respects. .

v) a) As per the information & explanations given to us, particulars of transactions that' have been undertaken during the year in pursuance of contracts or arrangements that need to be entered into the register maintained under section 301 ofthe Companies Act, 1956, have been so entered.

b) In our opinion, and according to the information and explanations given to us, and as confirmed by the Company, all the transactions with each of such parties during the financial year have been entered into at prices which are reasonable having regard to the prevailing market prices at the relevant time;

vi) The company has not accepted any deposits from the public during the year, to which the provisions of Section 58-A, 58-AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under apply;

vii) The company has introduced a separate Internal Audit System during the year. In our opinion, the Internal Audit system is commensurate with the size and nature of its business;

viii) The Company has maintained proper Cost records as prescribed by the Central Government under Section 209 (1)(d) ofthe Companies Act 1956 for the products manufactured by it, but no detailed examination of such records have been carried out by us.

ix) a) The company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, cess and other material statutory dues with the appropriate authorities;

ix) b) According to the information and explanations given to us and the books and records examined by us, there was no undisputed amount outstanding as on 31st March' 2012 in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, cess and other statutory dues for a period of more than six months from the date they became payable; .

ix) c) According to the records of the company and as per the information and explanations provided to us, the dues outstanding (net of Advances) in respect of Sales Tax, Income tax, Customs Duty, Wealth Tax,Service Tax, Excise Duty, Cess etc. on account of any dispute, are given below:

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

Central Excise duty demanded on the facility 1.06 Sept'2000to CESTAT, Excise Act, charges being charged Aug'2001 Southern 1944 Bench

Central Departmental appeal against the 4.91 Sept 2000 to CESTAT, Excise Act, partial favourable order passed by Aug 2001 Southern 1944 Commissioner (Appeals) for Excise Bench duty demanded on the rental/facility charges being charged

Central Departmental appeal against the 1311 Aug 2002to CESTAT, Excise Act favourable order passed by june2004 Souther 1944 Commissioner (Appeals) for Excise Bench duty demanded on the rental / facility charges being charged

Central Cenvat credit availed on Cryogenic 5 98 Mar 2005 to CESTAT, Excise Act, Tank being disputed Nov 2005 Southern 1944 Bench

Central Departmental appeal against the 5.71 2000-01 Madras High Excise Act, favourable order passed by CESTAT Court 1944 in respect of 8% duty demanded on supply to ISRO under Nil rate of duty while availing Cenvat Credit .

Central Excise duty demanded on the 0 20 Sept 2006to CESTAT, Excise Act Cylinder Repair charges being Mar 2007 Southern 1944 charged Bench

Central Excise duty demanded on the 1.67 May 2006to CESTAT, Excise Act, Cylinder Holding /facility charges Aug 2006 Southern 1944 being charged Bench

Central Excise duty demanded on the 4.09 2002-03 to CESTAT, Excise Act, Cylinder Repair charges being 2004-05 Southern 1944 charged Bench Central Excise duty demanded on the 0.81 Nov'2005 to CESTAT, Excise Act, Cylinder Repair charges being Aug 2006 Southern 1944 charged . Bench

Service Tax demanded on the Lease 11.32 2002-03 & CESTAT, Service Tax charge income received 2003-04 Southern Bench

Service Tax demanded on the Lease 6.95 2004-05 & - CESTAT, Service Tax charge income received 2005-06 Southern Bench

Customs Act Differential Customs Duty on Import 88.23 1994-95 CESTAT, 1961 of Second hand Plant ( including Southern Interest & Penalty) Bench

Employees ESI being demanded for the period 0.72 1983-84 to Principal State 1984 to 1989 1988-89 Labour Court Insurance Act

x) The Company has no accumulated losses and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

xi) Based on our audit procedures, and as per the information and explanations given to us by the management, the company has not defaulted in repayment of dues to financial institutions and banks;

xii) According to the information and explanations given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities;

xiii) The provisions of any special statute applicable to chit fund, nidhi or mutual benefit fund / societies are not applicable to the company;

xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments, and hence, the requirements of Para 4 (xiv) of the above Order are not applicable to the company; .

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions;

xvi) The term loan raised during the year as well as the existing term loan has been utilized for the purpose for which it was a vailed;

xvii) According to the information and explanations given to us, in our opinion, short term funds have not been used for long term purposes. ,

xviii) During the year, the company has not made any preferential allotment of shares. .

xix) The company does not have any outstanding debentures during the year.

xx) The company has not raised any money by way of public issue during the year;

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

For SINGHI & CO., Chartered Accountants (SUDESH CHORARIA) Partner

Place : Chennai, Membership No. 204936

Date : 30.05.2012. FR No. 302049E

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Mar 31, 2010

I We have audited the attached Balance Sheet of NATIONAL OXYGEN LIMITED as at 31st March 2010, and the Profit & Loss Account and Cash Flow Statement for the year ended on that date, annexed thereto, which are the revised statements of the original Balance Sheet, Profit & Loss Account and Cash Flow Statement covered by our Audit report dated 28th May 2010. 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. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

III We have considered the earlier Audit report dated 28lh May 2010 on the original accounts and have examined the changes made therein which is as under:

Reference is invited to Note No, 2 of Schedule 12, wherein the Board of Directors have recommended a Dividend of 10% fortheF.Y. 2009-10 which has been incorporated in the revised accounts together with the Dividend tax thereon amounting to Rs. 36.34 Lacs.

IV. As required by the Companies (Auditors Report) Order 2003 (as amended) issued by the Central Government in terms of sub section (4A) of Section 227 of the CompaniesAct 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 & 5 of the said order.

V. Further to our comments in the Annexure referred to in paragraph IV above, and subject to our comments in paragraph III above, wereportthat:

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

2 In our opinion, the company has kept proper books of Accounts as required by law 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 the report are in agreement with the books of account;

4 In our opinion, the Balance Sheet, Profit & 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 the written representations received from the directors as on 31s1 March 2010 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31s1 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.

6 In our opinion, and to the best of our information and according to the explanations given to us, the said Accounts, read together 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 :

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

ii) In the case of the Profit & Loss Account of the Loss of the Company for the year ended on that date and

iii)ln the case of the Cash Flow Statement of the Cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in our Report of even date on the Revised Accounts of NATIONAL OXYGEN LIMITED as at and for the year ended 31st March 2010)

i) a) The Company has maintained proper records to show full particulars including quantitative details and situation of its Fixed Assets.

b) The Fixed Assets of the Company have been physically verified by the management, wherever possible, at the close of the year as confirmed by the management. As informed to us, no material discrepancy has come to notice on such physical verification.

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

ii) a) The management has conducted Physical verification of Inventories at all its locations at reasonable intervals during the year;

b) The procedures of physical verification of stock followed by the Management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business;

c) The company is maintaining proper records of inventory. As far as we can ascertain and according to the information and the explanations given to us, the discrepancies noticed between the physical stocks and book stocks were not material and the same have been properly dealt with in the books of account.

iii) a) As per the information & explanations provided to us, the company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

b) As per the information & explanations provided to us, the company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

iv) On the basis of checks carried out during the course of audit and as per explanations given to us, in our opinion, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of Inventory and Fixed Assets and for the sale of goods and services. During the course of our Audit, no major weakness has been noticed in the internal controls in these respects.

v) a) As per the information & explanations given to us, particulars of transactions that have been undertaken during the year in pursuance of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

b) In our opinion, and according to the information and explanations given to us, and as confirmed by the Company, all the transactions with each of such parties during the financial year have been entered into at prices which are reasonable having regard to the prevailing market prices at the relevant time;

vi) The company has not accepted any deposits from the public during the year, to which the provisions of Section 58-A, 58-AAor any other relevant provisions of the Companies Act, 1956 and the rules framed there under apply;

vii) The company has no separate Internal Audit System. However, in our opinion, the existing Internal control procedures are commensurate with the size and nature of its business;

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

ix) a) The company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, cess and other material statutory dues with the appropriate authorities;

ix) b) According to the information and explanations given to us and the books and records examined by us, there was no undisputed amount outstanding as on 31st March 2010 in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service tax, Custom Duty, Excise Duty, cess and other statutory dues for a period of more than six months from the date they became payable;

c) According to the records of the company and as per the information and explanations provided to us, the dues outstanding (net of Advances) in respect of Sales Tax, Income tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty, Cess etc.,on account of any dispute, are given below:

Name of the Forum where Amount Peroid to Nature of Dues which the dispute Statute (Rs. in Lacs) amount relates pending

Central Excise duty demanded on the 1.06 Sept2000 to CESTAT, Excise Act, facility charges being charged Aug2001 Southern 1944 Bench

Central Excise duty demanded on the 42.47 July2000 to CESTAT, Excise Act, Freight charges being charged Aug2001 Southern 1944 Bench

Central Departmental appeal against 4.91 Sept2000 to CESTAT Excise Act, the Partial favourable order Aug2001 Southern 1944 passed by Commissioner (Appeals) for Excise duty Bench demanded on the rental / facility charges being charged

Central Departmental appeal against 13.11 Aug2002 to CESTAT, Excise Act, the favourable order passed by June2004 Southern 1944 Commissioner (Appeals) for Bench Excise duty demanded on the rental / facility charges being charged

Central Cenvat credit availed on 6.48 Mar2005 to CESTAT, Excise Act, Cryogenic Tank being disputed Nov2005 Southern 1944 Bench

Central Departmental appeal against 5.71 2000-01 Madras High Excise Act, the favourable order passed by Court 1944 CESTAT in respect of 8% duty demanded on supply to ISRO under Nil rate of duty while availing Cenvat Credit

Central Excise Excise duty demanded on the 0.20 Sept2006 to CESTAT Excise Act, Cylinder Repair charges being Mar2007 Southern 1944 charged Bench

Central Excise Excise demanded on the 1.67 May2006 to Commissioner Act, 1944 Cylinder Holding / facility (APPaals) being charged

Central Excise Excise duty demanded on the 4,09 2002-03 to CESTAT,

Act 1944 Cylinder Repair charges being 2004-05 Southern charged Bench

Central Excise duty demanded on the 0.81 Nov2005 to CESTAT, Excise Act, Cylinder Repair charges being Aug2006 Southern 1944 charged Bench

Service Tax Service Tax demanded on the 11.32 2002-03 & CESTAT, Lease charge income received 2003-04 Southern Bench

Service Tax Service Tax demanded on the 6.95 2004-05 & Commissioner Lease charge income received 2005-06 (Appeals)

Customs Act, Differential Customs Duty on 88.23 1994-95 CESTAT, 1961 Import of Second hand Plant Southern (including Interest & Penalty) Bench

Employees ESI being demanded for the 0.72 1983-84 to Principal State period 1984 to 1989 1988-89 Labour Court Insurance Act



x) The Company has no accumulated losses and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

xi) Based on our audit procedures, and as per the information and explanations given to us by the management, the company has not defaulted in repayment of dues to financial institutions and banks;

xii) According to the information and explanations given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities;

xiii) The provisions of any special statute applicable to chit fund, nidhi or mutual benefit fund / societies are not applicable to the company;

xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments, and hence, the requirements of Para 4(xiv) of the above Order are not applicable to the company;

xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions;

xvi) The term loan raised during the year as well as the existing term loan has been utilized for the purpose for which it was availed;

xvii) According to the information and explanations given to us, in our opinion, short term funds have not been used for long term purposes.

xviii) During the year, the company has not made any preferential allotment of shares.

xix) The company does not have any outstanding debentures during the year.

xx) The company has not raised any money by way of public issue during the year;

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

For SINGHI & CO.,

Place : Chennai, Chartered Accountants

Date : 30.07.2010. (SUDESH CHORARIA)

Partner

Membership No. 204936

F R NO.302049E