Auditor Report of NCL Industries Ltd.

Mar 31, 2023

NCL INDUSTRIES LIMITED Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of NCL Industries Limited (the “Company”), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of significant accounting policies and other explanatory information (hereinafter referred to as the “standalone financial statements”).

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 (the “Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023 and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (“SA” s) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

S.No.	Key Audit Matter	Auditor''s Response
1	Capital Work-in-progress (CWIP) To establish proper categorisation of items to be capitalised, and appropriate recognition thereof including the consequential derecognition of the carrying amounts in the CWIP to the appropriate heads of account.	Obtained an understanding of the management''s process for recording transactions pertaining to Capital work in progress We have obtained the project wise capital work in progress and reviewed the stage of the completion as on 31 March 2023. We have assessed the compliance of the Company''s accounting policies in respect of property, plant and equipment with applicable accounting standards. We have assessed the design and implementation and tested the operating effectiveness of Company''s internal controls over the approvals, accounting, tracking, and movement of the capital work in progress. Obtained and inspected supporting underlying documentation for the projects completed and capitalised during the correct year to determine whether same is recorded appropriately

		We have assessed the adequacy of the Company''s disclosures for capital work in progress in the financial statements. We have tested manual journal entries posted to Capital work in progress to identify unusual or irregular items
2	Revenue Recognition - discounts and rebates Revenue is measured net of discounts earned by customers on the Company''s sales. Due to the Company''s presence across different marketing regions within the country and the competitive business environment, price discounts vary based on the customer and market it caters to and recognised based on sales made during the year. These discounts are calculated based on the market study reports which reports are collated periodically by the management and are prone to manual interventions. Therefore, there is a risk of revenue being misstated as a result of incorrect computation of discounts and rebates. Given the complexity involved in the assessment of discounts and rebates and their periodic recognition against sales, the same is considered as key audit matter.	Assessed the appropriateness of the Company''s accounting policies relating to price discounts by comparing with applicable accounting standards. Assessed the design and tested the implementation and operating effectiveness of Company''s internal controls over the approvals, calculation, accounting and issuance of credit notes. Obtained and inspected, on a sample basis, supporting documentation for price discounts recorded and credit notes issued during the year as well as credit notes issued after the year end date to determine whether these were recorded appropriately. Compared the historical trend of price discounts to sales made to determine the appropriateness of current year''s discount charge.

Information Other than the Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the standalone financial statements and our auditor''s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

The said other information is expected to be made available to us after the date of this audit report. When we read the other information, when furnished to us, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and the shareholders.

Management''s Responsibilities for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of 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 (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act read with the Rules issued thereunder. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other

irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the year ended 31st March 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

i. The standalone financial statements include the Company''s share of net profit/ (Loss) of Rs. (19.86) Lakhs for the year ended March 31, 2023, as considered in the standalone financial statements, in respect of its said Joint Venture, whose financial statements have not been audited by us. The financial statements and other financial information of the said Joint Venture have not been audited by us or any other auditor and have been furnished to us by the Management. Our opinion, in so far as it relates to amounts and disclosures included in respect of the Joint Venture, is based solely on such unaudited financial statements and other unaudited financial information.

Our opinion on the standalone financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the financial statements and other financial information of the said Joint Venture furnished to us by the Management.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report that:

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

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

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls reference to Standalone Financial Statements.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its Managerial Personnel during the year is in accordance with the provisions of section 197 of the Act.

h) 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone

financial statements.

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses

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

iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The final dividend paid by the Company during the year in respect of the same declared for the previous financial

year 2021-2022 is in accordance with section 123 of the Companies Act 2013 to the extent it applies to payment of dividend.

The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with section 123 of the Companies Act 2013.

As disclosed in note 14.1 to the financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

vi. With respect to maintenance of Books of account using accounting software which has a feature of Audit trail (edit log) facility, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 does not arise for the current year under report, as proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the company only w.e.f. April 1, 2023.

2. As required by the Companies (Auditor''s Report) Order, 2020 (the “Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For M BHASKARA RAO & Co

Chartered Accountants (Firm''s Registration No. 000459S)

D. BAPU RAGHAVENDRA

Partner

Membership No.213274 UDIN: 23213274BGQBSP3322

Hyderabad, May 26, 2023

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Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying financial statements of NCL Industries Limited (“the Company”), which comprise the Ind AS Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of other comprehensive Income, the cash flow statement and the statement of changes in Equity for the year then ended on that date, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and statement of changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, (as amended). This responsibility also includes the 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 the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Ind AS 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 of the Ind AS financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act and other applicable authoritative pronouncements 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 Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company''s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, including other comprehensive Income, its cash flows and the statement of changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended March 2017 and the transition date opening Balance Sheet as at April 1, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2017 and March 31, 2016 prepared in accordance with the Companies (Accounting Standards) Rules 2006 (as amended). The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016, issued by the Central Government of India in term of Sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A, a statement on the matters specified in the paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standard) Rules,

2015, as amended;

e. On the basis of written representations received from the directors as on 31 March, 2018, taken on record by the Board of Directors, none of the directors are disqualified as on 31 March, 2018, from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in “Annexure B” to this report.

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

i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its Ind AS financial statements - Refer Note No. 34;

ii. The Company did not have any long-term contracts including derivative contracts as at March 31, 2018;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.

iv. The reporting on disclosures relating to the Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.

Annexure A to the Independent Auditors’ Report

The Annexure A referred to in our Independent Auditor''s Report to the members of the Company on the Standalone financial statements for the year ended 31 March 2018, we report that:

(i) In respect of its fixed assets:

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

b. As explained to us, the fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such physical verification.

c. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) In respect of Inventories:

a. The Inventory has been physically verified by the management during the year.

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

c. According to the information and explanation given to us, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) The Company has not granted any loans, secured or unsecured, to Companies, firms, Limited Liability partnerships or other parties covered in the register maintained under section 189 of the Act, during the year ended March 31, 2018.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of the grant of loans, making investments, providing guarantees and securities, as applicable

(v) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Act and the Rules framed there under in respect of deposits accepted. We are informed that no order was passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or Tribunal in respect of the aforesaid deposits

(vi) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of the activities carried on by the Company, wherever applicable and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) In respect of statutory dues:

a. According to the information and explanations given to us and on the basis of examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales-Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess, Goods and Service Tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts are payable in respect of Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax or Cess, Entry Tax, Goods And Service Tax and other material statutory dues which were in arrears as at March 31,2018, for a period of more than six months from the date they became payable

b. According to the information given to us and records of the Company examined by us, the particulars of Income Tax, Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty or Cess, Goods and Service Tax as at 31st March 2018 which have not been deposited on account of any disputes pending, are as under:

Name of the statute	Nature of dues	Amount (Rs in Lakhs)	Forum where dispute is pending
A.P. General Sales Tax Act	VAT	4.26	Sales Tax Appellate Tribunal
A.P. General Sales Tax Act	VAT/Penalty	16.88	Sales Tax Appellate Tribunal
A.P. General Sales Tax Act	VAT/Interest/Penalty	37.26	Sales Tax Appellate Deputy Commissioner
Central Excise Department	Excise Duty	163.18	CESTAT
Central Excise Department	Excise Duty	80.85	CESTAT
Central Excise Department	Excise Duty/Penalty	2	CESTAT
Central Excise Department	Excise Duty	63.85	Commissioner of Appeals
A.P. General Sales Tax Act	VAT	8.97	Sales Tax Appellate Tribunal
Central Excise Department	Excise Duty	977.68	CESTAT
Central Excise Department	Excise Duty	13.60	CESTAT
Central Excise Department	Excise Duty	22.46	CESTAT
Central Excise Department	Excise Duty	24.92	CESTAT
Telangana State Tax on Entry of Goods into Local Areas Act, 2001	Entry Tax	1.01	Appellate Joint Commissioner of Sales Tax
Telangana State Tax on Entry of Goods into Local Areas Act, 2001	Entry Tax	15.35	Appellate Joint Commissioner of Sales Tax
Telangana State Tax on Entry of Goods into Local Areas Act, 2001	Entry Tax	2.19	Appellate Joint Commissioner of Sales Tax
Telangana State Tax on Entry of Goods into Local Areas Act, 2001	Entry Tax	78.99	High Court of Judicature at Hyderabad
Telangana State Tax on Entry of Goods into Local Areas Act, 2001	Entry Tax	192.60	High Court of Judicature at Hyderabad
Telangana State Tax on Entry of Goods into Local Areas Act, 2001	Entry Tax	333.29	High Court of Judicature at Hyderabad
Central Excise Department	Excise Duty	6.15	CESTAT
Central Excise & Customs Department	Customs Duty	42.19	Appellate Commissioner of Customs & Central Excise (Appeals)
Central Excise & Customs	Customs Duty	87.79	CESTAT
Department

(viii) According to the information and explanations given to us and on the basis of examination of the records, the Company has not defaulted in the repayment of loans along with interest to any financial institutions, Banks or dues to debenture holders as at the Balance Sheet date.

(ix) In our opinion and according to the information and explanations given to us, the Company did not raise any money by way of public issue (including debt instruments). Accordingly, paragraph 3 (ix) of the Order is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no material fraud on or by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year, that causes the financial statements to be materially misstated.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are

in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Accounting Standards.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has made private placement of 85,00,000 Equity Shares of Rs. 10/- each at premium of Rs. 227.50/- each through Qualified Institutional Placement (QIP) during the year and the requirement of Section 42 of the Companies Act, 2013, as applicable, has been complied with and the monies so raised were used for the purposes for which they were raised

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into noncash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

Annexure - B to the Auditors’ Report

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

We have audited the internal financial controls over financial reporting of NCL Industries Limited (“the Company”) as of 31 March, 2018 in conjunction with our audit of the Standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

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

Auditors’ Responsibility

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For VENUGOPAL & CHENOY,

CHARTERED ACCOUNTANTS,

FRN: 004671S

(P.V.SRI HARI)

Hyderabad Partner

Date: 30.05.2018 Membership No.021961

---

Mar 31, 2017

Report on the Standalone Financial Statements

We have audited the accompanying financial statements of NCL Industries Limited (“the Company”), which comprise the Balance Sheet as at March 31,2017, and the Statement of Profit and Loss for the year then ended on that date, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

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

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company’s Directors, as well as evaluating the overall presentation of the financial statements.

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

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 the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2017;

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order,2016 , issued by the Central Government of India in term of sub-section (11) of section 143 of the Companies Act,2013, we give in the Annexure A, a statement on the matters specified in the paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

c. The Balance Sheet and 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 31 March, 2017, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2017, from being appointed as a director in terms of Section 164(2) of the Act.

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

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

i. There are no pending litigations for the company that will impact the financial position of the company;

ii. There are no 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.

iv. The Company has provided requisite disclosures in the standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management.

Annexure A to the Independent Auditors’ Report

The Annexure A referred to in our Independent Auditor’s Report to the members of the Company on the Standalone financial statements for the year ended 31 March 2017, we report that:

(i) In respect of its fixed assets:

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

b. As explained to us, the fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such physical verification.

c. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) In respect of Inventories:

a. The Inventory has been physically verified by the management during the year.

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

c. According to the information and explanation given to us, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) The Company has granted Inter Corporate Deposit to companies covered in the register maintained under section 189 of the Companies Act, 2013.

a. In our opinion, the terms and conditions on which the Inter Corporate Deposit has been granted to the party listed in the register maintained under section 189 of the Act are not prejudicial to the interest of the Company.

b. The payment of principal and the interest, wherever applicable, are regular.

c. There are no overdue amounts in respect of the Inter Corporate Deposits granted to the party listed in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans, investments, guarantees and securities.

(v) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder in respect of deposits accepted. We are informed that no order was passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or Tribunal

(vi) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of the activities carried on by the Company, wherever applicable and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) In respect of statutory dues:

a. According to the information and explanations given to us and on the basis of examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts are payable in respect of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax or cess and other material statutory dues which were in arrears as at March 31,2017, for a period of more than six months from the date they became payable

b. According to the information given to us and records of the Company examined by us, the particulars of Income Tax, Sales Tax, Value added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty or Cess as at 31st March 2017 which have not been deposited on account of any disputes pending, are as under:

Name of the statute	Nature of dues	Amount (Rs in Lakhs)	Forum where dispute is pending
A.P. General Sales Tax Act	Tax on cost recovery from usage of HSD oil on Hired tippers	4.26	Sales Tax Appellate Tribunal
A.P. General Sales Tax Act	Penalty on delayed payment	16.88	Sales Tax Appellate Tribunal
A.P. General Sales Tax Act	Penalty on delayed payment	37.26	Sales Tax Appellate Tribunal
Central Excise Department	Denying benefit of Cenvat Credit	163.18	CESTAT
Central Excise Department	Denying benefit of Cenvat Credit	80.85	CESTAT
Central Excise Department	Denying benefit of Cenvat Credit	2	CESTAT
Central Excise Department	Denying benefit of Cenvat Credit	63.85	Commissioner of Appeals
Central Excise Department	Denying benefit of Cenvat Credit	11.55	CESTAT
Central Excise Department	Denying benefit of Cenvat Credit	977.68	CESTAT
Central Excise Department	Miscellaneous issues	6.15	CESTAT
Customs Department	Demand due to wrong classification of imported coal	42.19	Appellate Commissioner of Customs & Central Excise (Appeals)
Customs Department	Demand due to wrong classification of imported coal	87.79	CESTAT

(viii) According to the information and explanations given to us and on the basis of examination of the records, the company has not defaulted in the repayment of loans along with interest to the Banks.

(ix) In our opinion and according to the information and explanations given to us, the Company did not raise any money by way of public issue. Accordingly, paragraph 3(ix) of the Order is not applicable.

(x) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has made private placement of Secured Redeemable Non-Convertible Debentures during the year and the monies so raised were used for the purposes for which they were raised.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into noncash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For VENUGOPAL & CHENOY,

CHARTERED ACCOUNTANTS,

FRN: 004671S

(P.V.SRI HARI)

Hyderabad Partner

Date: 27.05.2017 Membership No.021961

---

Mar 31, 2015

We have audited the accompanying financial statements of NCL INDUSTRIES LIMITED (herein referred to as "the Company"), which comprise the Balance Sheet as at March 31, 2015, Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto and a summary of the Significant Accounting Policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013, ( the Act ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility 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 other irregularities; the selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and the design, implementation and maintenance of 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, which have been used for the purpose of preparation of the financial statements by the company, as aforesaid.

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 standards and the auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder.

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 disclosures in the financial statements. The procedures selected depend on the auditor's judgement, 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 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 whether the Company has an adequate internal financial controls system over financial reporting in place and operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Board of Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub- section (11) of Section 143 of the Act, , we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section143 (3) of the Act, we report to the extent applicable, 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 of the aforesaid financial statements.

(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.

(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 relevant books of account maintained for the purpose of preparation of the financial statements.

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

(e) On the basis of the written representations received from the directors of the Company as on March 31, 2015, taken on record by the Board of Directors of the Company, none of the directors of the companies are disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164 (2) of the Act.

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

i. There were no pending litigations which would impact the financial position in the financial statements

ii. The Company did not have any material foreseeable losses on long-term contracts including derivative contracts.

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

Annexure to the Independent Auditors' Report

With respect to the Annexure referred to in our Independent Auditor's Report to the members of the Company on the financial statements for the year ended March 31, 2015, we report that:

i) a) The Company is generally maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The Company has a regular programme of physical verification of its fixed assets by which a substantial portion of the fixed assets are physically verified by the management during the year. In our opinion the periodicity of the physical verification is reasonable having regard to the size of the company and the nature of its assets. In accordance with this programme, substantial portion of the fixed assets were verified during the year and no material discrepancies have been noticed on such verification.

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

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

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

iii) a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.( The Act ).

b) The Company has taken Inter Corporate Deposits aggregating to Rs. 90 lakhs from the companies covered under the register maintained under section 189 of The Act and repaid Rs. 257.50 lakhs during the year. The rate of interest and other terms and conditions are prima facie not prejudicial to the interests of the company.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of their business with regard to purchase of inventories, fixed assets and sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

v) The Company has accepted deposits from the public and the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 of the Act and the rules framed there under have been complied with. Balances are maintained in bank accounts, free of lien or charge, prima facie sufficient according to the information and explanations given to us, for payment of interest and refund of deposits falling due. There is no default in repayment of matured deposits or payment of interest due. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or Tribunal regarding the deposits.

vi) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of the activities carried on by the Company, wherever applicable and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

vii) a) According to the information and explanations given to us and on the basis of examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of 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 have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts are payable in respect of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax or cess and other material statutory dues which were in arrears as at March 31, 2015, for a period of more than six months from the date they became payable.

b) As at March 31, 2015, there have been no disputed dues, which have not been deposited with the respective authorities in respect of Income tax, Wealth-tax, Service tax, duty of customs, duty of excise, value added tax and Cess, except the following:

Name of the Nature of dues Forum Amount statute/Authority (Rs. In Lakhs)

Sales Tax Act (APGST and VAT) Sales Tax Tribunal 32.06 Deputy Commissioner 85.82

Central Excise Disputed Tribunal 778.79 Excise Duty HighCourt 29.22

Miscellaneous 6.15

Customs Duty Disputed Tribunal 87.79 Customs Duty CEC 42.19

Nala Tax Non High Court,AP 43.56 Agricultural Taxon mining area

Permit Fee to Disputed High Court, 255.04 Forest Permit AP Department Fee

c) The company has transferred the amount required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made thereunder has been transferred to such fund within time.

viii) The Company has no accumulated losses and has not incurred cash losses in the financial year covered by our audit but has incurred cash losses in the immediately preceding financial year.

ix) The Company has not defaulted in repayment of dues to any financial institutions or banks as at the balance sheet date in view of the reschedulement of the principal and interest under the Corporate Debt Restructuring sanctioned by the Banks.

x) According to the information and explanations given to us, the Company, has not given any guarantee for loans taken by others from banks or financial institutions. Consequently, the clause 3 (x) of the order is not applicable to the Company.

xi) According to the information and explanations given to us, the term loans have been applied for the purposes for which they have been obtained.

xii) 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 VENUGOPAL & CHENOY, Chartered Accountants, FRN: 004671S

( P.V.SRI HARI )

Place: Hyderabad Partner

Date : 30-05-2015 Membership No.21961

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Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub section (3C) of section 211 of Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements, together with the Accounting Policies and Notes to Accounts, 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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

ANNEXURE TO INDEPENDENT AUDITOR''S REPORT

Re: N C L INDUSTRIES LIMITED

[Referred to in our report of even date]

(I) in respect of Fixed Assets:

(a) The company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) A substantial portion of the fixed assets of the Company has been physically verified by the management during the year and no material discrepancies between the book record and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, fixed assets disposed off by the Company during the year were not substantial and therefore do not effect the going concern status of the Company.

(ii) In respect of Inventories:

(a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) According to the information and explanation given to us, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book record were not material.

(iii) According to the information and explanations given to us-

(a) the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The company has taken Inter Corporate Deposits aggregating to Rs.1284.99 lakhs from companies covered under Section 301 of the Companies Act, 1956, and repaid Rs. 702.97 lakhs during the year. The rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the company.

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

(v) According to the information and explanations given to us

(a) the particulars of contracts or arrangements referred in section 301 of Companies Act,1956, have been entered in the register required to be maintained under that section ; and

(b) the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has accepted deposits from public and directives issued by the Reserve Bank of India and the provisions of section 58A,58AA, and other relevant provisions of the Companies Act,1956 and the rules framed there under, where applicable, have been generally complied with. Balances are maintained in bank accounts, free from charge or lien, prima facie sufficient, according to the information and explanations given to us, for payment of interest and refund of deposits falling due. There is no default in repayment of matured deposits or payment of interest due. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal regarding the Deposits.

(vii) The company has an internal audit system commensurate with the size of the Company and nature of its business.

(viii) We have broadly reviewed the cost records maintained by the

Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) In respect of Statutory Dues:

(a) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to information and explanation given to us, no undisputed amounts payable in Sales tax, Wealth tax, Service tax, Custom duty, Excise duty were in arrears, as at March 31,2014, for a period of more than six months from the date they became payable.

Name of the Statute/ Authority Nature of dues which relates Forum Amount (Rs. In Lakhs)

Sales Tax Act Sales Tax Tribunal 32.06 (APGST & VAT) Dy. Commissioner 85.82 Central Disputed Tribunal 801.55 Excise Excise Duty High Court 29.22 CEC 25.56 Customs Disputed Tribunal CEC 87.79 Duty Customs Duty 42.19 Nala Tax Non- High Court, 43.56 Agriculture AP Tax on Mining Area Service Disputed CEC 2.17 Tax Service Tax Permit Fee to Forest Department Disputed Permit fee High Court 200.09

(c) According to the information and explanations given to us, there are dues of Sales Tax, Central Excise Duty, Customs Duty, Nala Tax, Service Tax , Permit Fee to Forest Department which are not deposited on account of dispute which are as follows:

(x) In our opinion, the company has no accumulated losses as at March 31,2014, and it has incurred cash losses in the financial year ended on that date but has not incurred cash losses in the immediately preceding financial year.

(xi) The company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date in view of the reschedulement of the principal and interest under the Corporate Debt Restructuring Scheme sanctioned by the Banks. There are no Debenture holders as at the Balance Sheet date.

(xii) In our opinion and according to the information and explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause xiv of Paragraph 4 of the Companies

(Auditor''s Report) Order, 2003, 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 banks or financial institutions during the year.

(xvi) According to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

(xvii) According to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment, and vice versa.

(xviii)According to the information and explanation given to us, the company has not made any preferential allotment of equity shares during the year.

(xix) According to the information and explanation given to us, the company has not issued any debentures during the year. Therefore, the provisions of clause xix of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xx) According to the information and explanation given to us, the company has not raised any money by way of public issue during the year. Accordingly, the provisions of clause xx of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xxi) 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 VENUGOPAL & CHENOY, Chartered Accountants

(P.V. SRI HARI) Partner Membership No. 21961 FRN No: 004671S Place: Hyderabad Date: 30-05-2014

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Mar 31, 2013

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub section (3C) of section 211 of Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, 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 controls relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

our opinion and to the best of our information and according the explanations given to us, the financial statements, gether with the Accounting Policies and Notes to Accounts, ive the information required by the Act in the manner so quired and give a true and fair view in conformity with the ccounting principles generally accepted in India:

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

b) in the case of the Statement of Profit and Loss, of the 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. eport on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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 subsection (3C) of section 211 of the Companies Act, 1956;

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

ANNEXURE TO AUDITOR''S REPORT

Re: NCL INDUSTRIES LIMITED [Referred to in our report of even date] (i) In respect of Fixed Assets:

(a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) A substantial portion of the fixed assets of the Company has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, fixed assets disposed off by the company during the year were not substantial and therefore do not effect the going concern status of the company.

(ii) In respect of Inventories:

(a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) According to the information and explanation given to us, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) According to the information and explanations given to us-(a) the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The company has taken Inter Corporate Deposits aggregating to Rs.725 lakhs from NCL Altek & Seccolor Limited and repaid Rs.390 lakhs during the year. The rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the company.

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

(v) According to the information and explanations given to us,

(a) the particulars of contracts or arrangements referred in section 301 of Companies Act,1956, have been entered in the register required to be maintained under that section ; and

(b) the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has accepted deposits from public and directives issued by the Reserve Bank of India and the provisions of section 58A,58AA, and other relevant provisions of the Companies Act,1956 and the rules framed there under, where applicable, have been generally complied with. Balances are maintained in bank accounts, free from charge or lien, prima facie sufficient, according to the information and explanations given to us, for payment of interest and refund of deposits falling due. There is no default in repayment of matured deposits or payment of interest due. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal regarding the Deposits.

(vii)The company has an internal audit system commensurate with the size of the Company and nature of its business.

(viii)We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete..

(ix) In respect of Statutory Dues:

(a) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

(b) According to information and explanation given to us, no undisputed amounts payable in Sales tax, Wealth tax, Service tax, Custom duty, Excise duty were in arrears, as at March 31, 2013 for a period of more than six months from the date they became payable.

x) In our opinion, the company has no accumulated losses as at March 31,2013, and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) The company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date. However an amount of Rs.1,042.08 lakhs towards principal and Rs.146.45 lakhs towards interest pertaining to the month of March, 2013 are due as on the date of Balance Sheet. There are no Debenture holders as at the Balance Sheet date.

(xii) In our opinion and according to the information and explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause

xiv of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xv) According to the information and explanations given to us, the company has not given any guarantees for loans taken by others from banks or financial institutions during the year.

(xvi) According to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

(xvii) According to the information and explanations given to us , there are no funds raised on a short-term basis, which have been used for long-term investment, and vice versa.

(xviii) According to the information and explanation given to us, the company has not made any preferential allotment of equity shares during the year.

(xix) According to the information and explanation given to us, the company has not issued any debentures during the year. Therefore, the provisions of clause xix of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xx) According to the information and explanation given to us, the company has not raised any money by way of public issue during the year. Accordingly, the provisions of clause xx of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xxi) 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 VENUGOPAL & CHENOY

Chartered Accountants, FRN: 004671S

P. V. SRI HARI

Place: Hyderabad Partner

Date : 30-05-2013 Membership No. 21961

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Mar 31, 2012

1. I have audited the attached Balance Sheet of NCL Industries Limited, as at 31st March 2012, and the related 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. My responsibility is to express an opinion on these financial statements based on my audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (the 'Order') issued by Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, I give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to my comments in the Annexure referred to in paragraph 3 above, I report that:

(a) I have obtained all the information and explanations, which to the best of my knowledge and belief necessary for the purposes of my audit;

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

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

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

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

(f) In my opinion and to the best of my information and according to the explanations given to me, they said financial statements together with the notes thereon and attached thereto, give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

- in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

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

- 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 3 of the Auditor's Report to the members of NCL Industries Limited on the financial statements for the year ended 31st March, 2012]

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

(b) A substantial portion of the fixed assets of the Company has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In my opinion, the frequency of verification is reasonable.

(c) In my opinion and according to the information and explanations given to me, fixed assets disposed off by the Company during the year were not substantial and therefore do not affect the going concern assumption.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In my opinion, the frequency of verification is reasonable.

(b) In my opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of my examination of the inventory records, in my opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. According to the information and explanations given to

(a) the company has not granted any loans, secured or unsecured , to companies, firms or other parties covered under the section 301 of the Act.

(b) the company has taken Inter Corporate Deposits aggregating to Rs.1450 lakhs and repaid Rs. 825 lakhs during the year. The rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the company. The repayments are regular.

4. In my opinion and according to the information and explanations given to me, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of inventory, fixed assets and for sale of goods. Further, on the basis of my examination of the books and records of the Company, and according to the information and explanations given to me, I have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. In my opinion and according to the information and explanations given to me-

(a) the particulars of contracts or arrangement referred in section 301 of Companies Act, 1956 have been entered in the register required to be maintained under that section; and

(b) the transactions made in pursuance of such contracts or arrangement have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from public and directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA, and other relevant provisions of the Companies Act, 1956 and the rules framed there under, where applicable, have been generally complied with. Balances maintained in bank accounts, free from charge or lien, prima facie sufficient, according to the information and explanations given to me, for payment of interest and refund of deposits falling due. There is no default in repayment of matured deposits or payment of interest due. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal regarding the Deposits.

7. In my opinion, the Company has adequate internal audit system commensurate to the size and operations of the company.

8. I have broadly reviewed the books of account maintained by the Company in respect of products, where pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

I have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. [a] According to the information and explanations given

to me and the records of the Company examined by me, in my opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales- tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

[b] The disputed statutory dues not deposited on account of matters pending before appropriate authorities are as under:

SI. Name of the Nature of Forum Amount No. statute Dues where (Rs.ln Pending Lakhs)

1. Sales Tax Act Sales Tax Tribunal 9.81 (APGST & VAT)

Appellate Deputy Commissioner 14.91

High Court 21.14

2. Central Excise Disputed Excise Tribunal 744.50

Dues High Court 29.22

CEC 156.58

3. Nala Tax Non-Agriculture High Court

Tax on Mining Area A.P. 43.56

4. Service Tax Disputed Ser vice Tax CEC 2.17

5. Permit Fee Disputed permit High Court 105.39 to Forest permit fee Department

10. The Company has no accumulated losses as at March 31, 2012 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date. There are no debenture holders as at the balance sheet date

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

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company as it is not in such business.

14. The Company is not a dealer or trader in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of the Order are not applicable.

15. According to the information and explanations given to me, no guarantee is given by the Company, for loans taken by others from banks or financial institutions during the year.

16. According to the information and explanations given to me, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanations given to me, there are no funds raised on a short-term basis, which have been used for long-term investment, and vice versa.

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

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

20. The company has not made any public issue during the year.

21. During the course of my examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to me,

I have neither come across any instance of fraud on or by the Company, nor have I been informed of such case by the management, during the year.

P V RATNAM

Hyderabad Chartered Accountant

Dated: 30.05.2012 Membership No. 9281

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Mar 31, 2011

1. I have audited the attached Balance Sheet of NCL Industries Limited, as at 31st March 2011, and the related 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. My responsibility is to express an opinion on these financial statements based on my audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (the 'Order') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 I give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to my comments in the Annexure referred to in paragraph 3 above, I report that:

(a) I have obtained all the information and explanations, which to the best of my knowledge and belief, necessary for the purposes of my audit;

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

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

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

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

(f) In my opinion and to the best of my information and according to the explanations given to me, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

- in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

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

- 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 3 of the Auditor's Report to the members of NCL Industries Limited on the financial statements for the year ended 31st March, 2011]

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

(b) A substantial portion of the fixed assets of the Company has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In my opinion, the frequency of verification is reasonable.

(c) In my opinion and according to the information and explanations given to us, fixed assets disposed off by the Company during the year were not substantial and therefore do not effect the going concern assumption.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In my opinion, the frequency of verification is reasonable.

(b) In my opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of my examination of the inventory records, in my opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. According to the information and explanations given to me- (a) the company has not granted any loans, secured or unsecured , to companies, firms or other parties covered under the section 301 of the Act. (b) the company has taken Inter Corporate Deposits aggregating to Rs.1055 lakhs from NCL Alltek & Seccolor Ltd and repaid the entire amount during the year. The rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the company. The repayments are regular.

4. In my opinion and according to the information and explanations given to me, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of my examination of the books and records of the Company, and according to the information and explanations given to me, I have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. In my opinion and according to the information and explanations given to me- (a) the particulars of contracts or arrangement referred

in section 301 of Act have been entered in the register required to be maintained under that section; and (b) the transactions made in pursuance of such contracts or arrangement has been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from public and directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA, relevant provisions of the Act and the rules framed there under, where applicable, have been complied with. According to the information and explanations given to me, sufficient balances are maintained in collection accounts, free from charge or lien, for payment of interest and refund of deposits falling due. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal regarding the Deposits

7. In my opinion, the Company has adequate internal audit system commensurate to the size and operations of the company.

8. I have broadly reviewed the books of account maintained by the Company in respect of products, where pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. I have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. [a] According to the information and explanations given to me and the records of the Company examined by me, in my opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income- tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. [b] The disputed statutory dues not deposited on account of matters pending before appropriate authorities are as under:

SI. Name of the Nature of Forum Amount No. statute Dues where (Rs.In Pending Lakhs)

1. Sales Tax Act Sales Tax Tribunal 25.15 (APGST & VAT)

ACCT (Appeals) 14.43 DCCT (Appeals) 23.83

2. Central Excise Disputed Tribunal 279.52

Excise High Court 29.22 Dues CEC 83.83

3. Nala Tax Non-Agriculture High Court Tax on Mining A.P. 43.56 Area

4. Service Tax Disputed Service CEC 44.06 Tax

10. The Company has no accumulated losses as at March 31, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date. There are no debenture holders as at the balance sheet date

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

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company as it is not in such business.

14. The Company is not a dealer or trader in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of the Order are not applicable.

15. According to the information and explanations given to me, no guarantee is given by the Company, for loans taken by others from banks or financial institutions during the year.

16. According to the information and explanations given to me, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanations given to me, there are no funds raised on a short-term basis, which have been used for long-term investment, and vice versa.

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

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

20. The company has not made any public issue during the year.

21. During the course of my examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to me, I have neither come across any instance of fraud on or by the Company, nor have I been informed of such case by the management, during the year.

P.V.RATNAM

Place : Hyderabad Chartered Accountant

Dated : 30.05.2011 Membership No. : 9281

---

Mar 31, 2010

1. I have audited the attached Balance Sheet of NCL Industries Limited, as at 31st March 2010, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. My responsibility is to express an opinion on these financial statements based on my audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 I give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to my comments in the Annexure referred to in paragraph 3 above, I report that:

(a) I have obtained all the information and explanations, which to the best of my knowledge and belief, necessary for the purposes of my audit;

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

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

(d) In my opinion, the Balance Sheet,"Profit and Loss Account arid 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 written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on that date from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In my opinion and to the best of my information and according to the explanations given to me, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

- in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

- in the case of the Profit and Loss Account, of the profit for the year ended on that date; and •i 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 3 of the Auditors Report the members of NCL Industries Limited on the financial statements for the year ended 31s" March, 2010]

1. (a) The Company has maintained adequate records

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

(b) A substantial portion of the fixed assets of the Company has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In my opinion, the frequency of verification is reasonable.

(c) In my opinion and according to the information and explanations given to us, fixed assets disposed off by the Company during the year were not substantial and therefore do not effect the going concern assumption.

2. (a) The inventory (excluding stocks with third parties)

has been physically verified by the management during the year, in respect of inventory lying with third parties, these have substantially been confirmed by them. In my opinion, the frequency of verification is reasonable.

(b) In my opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of my examination of the inventory records, in my opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. According to the information and explanations given to me-

(a) the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered under the section 301 of the Act.

(b) the company has taken Inter Corporate Deposits aggregating 53 Rs.500 lakhs including Rs.250 lakhs outstanding at the end of last year from NCL Alltek & Seccolor Ltd and repaid the entire amount during the year. The rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the company. The repayments are regular.

4. In my opinion and according to the information and explanations given to me, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of my examination of the books and records of the Company, and according to the information and explanations given to me, I have neither come across nor have been informed of any continuingi failure to correct major weaknesses in the aforesaid internal control procedures.

5. In my opinion and according to the information and explanations given to me-

(a) the particulars of contracts or arrangement referred in section 301 of the Act have been entered in the register required to be maintained under that section; and

(b) the transactions made in pursuance of such contracts or arrangement has been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In my opinion and according to the information and explanations given to me, the Company has* complied with the directives issued by the Reserve Bank of India and provisions of Sections 58A , 58AA or any other relevant provisions of the Act and the rules framed there under, where applicable, in the case of deposits accepted from the public. According to the information and explanations given to us, no Order under the aforesaid Sections has- been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal on the Company.

7. In my opinion, the Company has adequate internal audit system commensurate to the size and operations? of the company.

8. I have broadly reviewed the books of account maintained by the Company in respect of products, where pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. I have not, however, made a detailed examination ol the records with a view to determine whether they are accurate or complete.

9. [a] According to the information and explanations given

to me and the records of the Company examined by me, in my opinion, the Company is generally regular in depositing the undisputed statutory duos including provident fund, investor education and protection fund, employees state insurance, income- tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues; as applicable with the appropriate authorities. [b] Trie ciisputed statutory dues not Juposited on account of matters pending before appropriate authorities are as under



SI. Name of the Nature of Forum Amount

No. statute Dues where (Rs. Pending In Lakhs)

1. Sales Tax Act Sales Tax Tribunal 21.57 (APGST & VAT) High Court 27.12

2. Central Excise Disputed Excise Tribunal 274.52

dues High Court 29.22

CEC 84.84

3. Nala Tax Non-Agriculture High 43.56

Tax on Court Mining of A.P. Area

10. The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company as it is not in such business.

14. The Company is not a dealer or trader in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of the Order are not applicable.

15. According to the information and explanations given to me, no guarantee is given by the Company, for loans taken by others from banks or financial institutions during the year.

16. According to the information and explanations given to me, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanations given to me, there are no funds raised on a short-term basis, which have been used for long-term investment, and vice versa.

18. The Company has made preferential allotment of 33,33,400 share warrants (Convertible on or before 16-09-09) to Companies covered under section 301. Out of this 11,17,652 warrants are converted into Equity shares and allotted during the year.

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

20. The company has not made any public issue during the year.

21. During the course of my examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to me, I have neither come across any instance of fraud on or by the Company, nor have I been informed of such case by the management, during the year.

P.V.RATNAM

Place : Hyderabad Chartered Accountant

Dated : May 30,2010 Membership No.: 9231