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Auditor Report of NCL Industries Ltd.

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




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


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


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


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

 
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