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Auditor Report of Premier Explosives Ltd.

Mar 31, 2023

INDEPENDENT AUDITOR''S REPORT

To The Members of Premier Explosives Limited

Report on the Audit of the Standalone Financial Statements

We have audited the accompanying standalone financial statements
of
Premier Explosives Limited ("the Company"), which comprise
the Balance Sheet as at March 31,2023, and 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 then
ended, and a summary of significant accounting policies and other
explanatory information (hereafter 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, the changes in equity and its cash flows for the year ended
on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing
(SAs) specified under section 143(10) of the Act. Our responsibilities
under those Standards are further described in the Auditor''s
Responsibility 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 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.


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, Corporate
Governance and Shareholder''s Information, but does not
include the consolidated financial statements, standalone
financial statements and our auditor''s report thereon. These
reports comprising other information are expected to be made
available to us after the date of this auditor''s report.

• Our opinion on the standalone financial statements does not
cover the other information and will 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.

• When we read the Management Discussion and Analysis, Board''s
Report including Annexures to Board''s Report, Corporate
Governance and Shareholder''s Information, if we conclude that
there is a material misstatement therein, we are required to
communicate the matter to those charged with governance as
required under SA 720 ''The Auditor''s responsibilities Relating to
Other Information''.

Management''s Responsibility for the Standalone Financial
Statements

The Company''s Board of Directors is responsible for the matters
stated in section 134(5) of the 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, cash flows and changes in equity of
the Company in accordance with the Ind AS and other accounting
principles generally accepted in India. 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 statement
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, Board of Directors 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 are also responsible for overseeing the
Company''s financial reporting process.

Auditor''s Responsibility 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 skepticism 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.

Materiality is the magnitude of misstatements in the standalone
financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable
user of the standalone financial statements may be influenced. We
consider quantitative materiality and qualitative factors in (i) planning

the scope of our audit work and in evaluating the results of our work;
and (ii) to evaluate the effect of any identified misstatements in the
standalone financial statements.

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 of the current period 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.

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 over financial reporting of the Company and
the operating effectiveness of such controls, refer to our
separate Report in "Annexure A". Our report expresses
Unmodified opinion on the operating effectiveness of
the Company''s internal financial controls over financial
reporting.

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 directors
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
litigation on its financial position as stated in
note no 34 to the Standalone Ind AS Financial
Statements.

ii. The Company has made provision, as required
under the applicable law or accounting standards,
for material foreseeable losses, if any, on long-term
contracts, the company doesn''t have 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. (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 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 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. As stated in Note 46 to the standalone Ind AS
financial statements

a) The dividend declared or paid during the
year by the Company is in compliance with
Section 123 of the Act.

b) The company has not issued any interim
dividend during the year.

c) 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 amount of dividend proposed is in
accordance with section 123 of the Act, as
applicable.

vi. As proviso to rule 3(1) of the Companies (Accounts)

Rules, 2014 is applicable for the company only
w.e.f. April 1, 2023, reporting under this clause is
not applicable.

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 MAJETI & CO

Chartered Accountants
Firm''s Registration No: 015975S

Kowshik Anna

Partner

Membership No: 244172
UDIN No: 23244172BGQKYK2637

Place: Hyderabad
Date: May 16, 2023


Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of PREMIER EXPLOSIVES LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

In conducting 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 thereunder and the Order issued under section 143(11) of the Act.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone 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 standalone 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 Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018, and its profit, total comprehensive income/ loss, its cash flows and the changes in equity for the year ended on that date.

Other Matters

a) The comparative financial information of the Company for the year ended 31st March 2017 and the transition date opening balance sheet as at 1st April 2016 included in these standalone Ind AS financial statements, are based on the statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31st March 2017 and 31st March 2016 dated May 27, 2017 and May 24, 2016 respectively expressed an unmodified opinion on those standalone financial statements, and have been restated to comply with Ind AS. Adjustments made to the previously issued said financial information prepared in accordance with the Companies (Accounting Standards) Rules, 2006 to comply with Ind AS have been audited by us.

Our opinion on the standalone Ind AS financial statements is not modified in respect of this matter.

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, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors of the Company as on 31st March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st 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 A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

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, 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 Ind AS financial statements; (Refer Note No.35 to the Standalone Ind AS Financial Statements).

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31st March 2018.

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

2. As required by the Companies (Auditor’s Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (“the Order”), 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 B’ a statement on the matters specified in paragraphs 3 and 4 of the Order.

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting 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 PREMIER EXPLOSIVES LIMITED (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS (retain as applicable) 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”. 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.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting of the Company 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”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 judgement, 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, to the best of our information and according to the explanations given to us 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 March 31, 2018, based on “the criteria for internal financial control over financial reporting 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”.

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

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

(b) The fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotation basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such 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. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts.

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. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

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 Companies Act, 2013 in respect of the investments made by it. The Company has not granted any loans or provided any guarantees or security to the parties covered under Section 185 and 186.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, Goods and Service tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of service-tax, duty of customs, duty of excise, which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, value added tax as at March 31, 2018 which have not been deposited on account of a dispute, are as follows:

Amount (Rs. in lakhs)

Period to

Name of the

Nature of

which the

Forum where

Statute

dues

amount

relates

dispute is pending

Honourable High

Central

Sales

151.31

2007-08

Court of Andhra

Sales Tax

Tax

Pradesh and Telangana

Tamil Nadu Value

Value Added

424.52

2009-10 to

Honourable High Court of Judicature at Madras

Added Tax

Tax

2015-16

Act, 2006

The Deputy

Income

Income

tax

Commissioner

Tax Act,

36.74

2013-14

of Income Tax,

1961

Circle-16(2),

Hyderabad

Asst.

Telangana Value

Value Added Tax

11.83

2015-16 and 2016-17

Commissioner (CT), Audit,

Added Tax Act, 2005

Begumpet Division, Hyderabad

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our 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 us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. 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. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as under Indian Accounting Standard (IND AS) 24, Related Party Disclosures specified under Section 133 of the Act.

xiv. The Company has made a preferential allotment and private placement of shares during the year under review, in compliance with the requirements of Section 42 of the Act. The amounts raised have been used for the purpose for which funds were raised except as described below:

Equity

Purpose for which funds raised

Total Amount Raised

Amount utilized for the purpose of its raise

Un-utilized balance as at Balance sheet date

QIP and

Business Expansion

Preferential

& Working capital

7,273.26

4,462.04

2,811.22

issue

utilisation

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

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

For MAJETI & CO

Chartered Accountants

Firm’s Registration Number: 015975S

Kiran Kumar Majeti

Partner

Membership Number: 220354

Place: Hyderabad

Date: May 23, 2018


Mar 31, 2015

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

Management's responsibility for the financial statements

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

Auditor's responsibility

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

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

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

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

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

Opinion

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

Emphasis of mater

We draw attention to Note No. 29.2.8 to the fnancial statements. As referred to in this note, the managerial remuneration paid to the Chairman and Managing Director for the year ended 31st March, 2015 is in excess of the limits laid down under Section 197 read with Schedule V of the Act by Rs. 40.91 Lakhs. In this regard we have been informed by the Management of the Company that they are in the process of seeking approval from the Central Government in respect of the above said amount.

Our opinion is not modified in respect of this mater.

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-sexton (11) of Section 143 of the Act, we give in the Annexure a statement on the maters specified in 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 explanatons which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

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

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note No.29.2.4 to the financial statements;

ii. The Company did not have any long-term contracts with material foreseeable losses and did not have any long-term derivate contracts as at 31st March, 2015;

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 31st March, 2015.

Annexure to Independent Auditor's Report

Referred to in Paragraph 1 under the heading of 'Report on Other Legal and Regulatory Requirements' of our report of even date

1 (a) The company has maintained proper records showing full particulars including quantitative details except situation of Fixed Assets.

(b) The fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotator basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were notched on such verification.

2 (a) The inventories of the company have been physically verified at frequent intervals during the year by the Management except stocks lying with outside warehouses which have been verified with reference to certificates and other relevant documents where available.

(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 has maintained proper records of inventories and the discrepancies notched on physical verification of stocks as compared to book records, which in our opinion were not material, have been properly dealt with in the books of account.

3 The Company has not granted any loans, secured or unsecured, to Companies, forms or other parts listed in the register maintained under sexton 189 of the Companies Act, 2013 ("the Act"). Therefore, the provisions of Clause 3(iii), (iii)(a) and (iii)(b) of the said Order are not applicable to the Company.

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

5 The Company has not accepted any deposits from the public during the year. The Company has complied with the provisions of Sub-section (1) of Section 74 of the Act with regard to repayment of deposits accepted before commencement of the Act. We are informed that, no order 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.

6 We 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 Sub-section (1) of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained and are being made up. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7 (a) According to the records of the Company and as per the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it with appropriate authorizes and in respect of these statutory dues, there are no outstanding dues as on 31st March, 2015 which are outstanding for a period of more than six months from the date they became payable.

(b) According to the records of the Company and as per the information and explanations given to us, there are no dues of income tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess which has not been deposited on account of dispute as on 31st March, 2015, except central sales tax the details of which are as given below:

Name Nature Year to Amount Forum where of the of the which it Rs. dispute is Statute dues relates pending Central Sales 2007-08 1,51,30,507/- Honorable Sales Tax High Court Tax of Andhra Pradesh

(c) The amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time.

8 The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

9 According to the records of the Company, during the year the Company has not defaulted in repayment of dues to financial institutions or bank. There was no amount raised by the Company through the issue of Debentures.

10 In our opinion, and 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. Accordingly, the provisions of Clause 3(x) of the Order are not applicable to the Company.

11 In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

12 During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted practices in India and according to the information and explanations given to us we have neither come across any instance of fraud on or by the Company, notched or reported during the year nor have we been informed of such case by the management.

For P V R K NAGESWARA RAO & CO.

Chartered Accountants

Firm's Registrations Number: 002283S



N. ANKA RAO

HYDERABAD Partner

20.05.2015 Membership Number: 23939


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

Basis for Qualified Opinion

The managerial remuneration paid to the Whole Time Directors as detailed in Note no 30.2.7 is in excess of the limits laid down under Section 198 and 309 read with Schedule XIII of the Companies Act, 1956 by Rs.95.47 Lakhs and is subject to the approval of Central Government for which necessary applications have already been made by the Company.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

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 notified under 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 is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to Independent Auditor''s Report Referred to in Paragraph 1 under the heading of ''Report on Other Legal and Regulatory Requirements'' of our report of even date

1(a) The company has maintained proper records showing full particulars including quantitative details except situation of Fixed Assets.

(b) As explained to us, the fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotation basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such verification.

(c) The Company has not disposed off substantial part of fixed assets during the year, which affect the going concern assumption.

2 a) As explained to us, the stock of stores, spare parts, raw materials and finished goods of the company have been physically verified at frequent intervals during the year by the Management except stocks lying with outside warehouses which have been verified with reference to certificates and other relevant documents where available.

(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 has maintained proper records of inventories and the discrepancies noticed on physical verification of stocks as compared to book records, which in our opinion were not material, have been properly dealt with in the books of account.

3 (a) The Company had granted rent deposit to a company listed in the register maintained under section 301 of the Companies Act, 1956. The balance as on 31st March, 2014 and the maximum amount involved during the year were Rs. Nil/- and Rs. 5,61,968/- respectively.

(b) The Company has taken unsecured loans from fourteen parties listed in the register maintained under section 301 of the Companies Act, 1956. The balance as on 31st March, 2014 and the maximum amount involved during the year were Rs. 3,46,96,000/- and Rs. 4,70,72,000/- respectively.

(c) In our opinion the rate of interest and other terms and conditions of unsecured loans taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interests of the company.

(d) The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

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

5 (a) According to the information and explanations given to us and as confirmed by the company secretary of the Company, we are of the opinion that the contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of each party have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6 According to the information and explanations given to us, the Company has generally complied with the directives issued by the Reserve Bank of India and provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under where applicable. We are informed that, no order 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.

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

8 We have broadly reviewed the books of account maintained by the company 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 maintained and are being made up. We 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 records of the Company and as per the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs duty, Excise Duty, Cess and other material statutory dues applicable to it with appropriate authorities and in respect of these statutory dues, there are no outstanding dues as on 31.03.2014 which are outstanding for a period of more than six months from the date they became payable.

(b) According to the records of the Company and as per the information and explanations given to us, there are no dues of Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which has not been deposited on account of dispute as on 31.03.2014, except Central Sales Tax the details of which are as given below:

Name of the Statute : Central Sales Tax Nature of the dues : Sales Tax Year to which it relates : 2007-08 Amount Rs. : 1,51,30,507/- Forum where dispute : Honourable High Court of is pending Andhra Pradesh

10 As per the information and explanations given to us and on an overall examination of the financial statements of the company for the current and immediately preceding financial year, we report that the Company does not have any accumulated losses at the end of the current financial year nor incurred cash losses in the current and immediately preceding financial year.

11 During the year the Company has not defaulted in repayment of dues to financial institutions, bank and debenture holders.

12 As per the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities to anybody during the year.

13 In our opinion, as the Company is not a chit fund or a nidhi or mutual benefit fund or society, the provisions of Clause 4 (xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company for this year.

14 According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15 In our opinion, the terms and conditions on which the company has given guarantees for the loans taken by others from banks or financial institutions are not prejudicial to the interests of the Company.

16 In our opinion, the term loans have been applied for the purpose for which they were raised.

17 As per the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the funds raised on short term basis have not been used for long term investments.

18 The Company has made preferential allotment of shares to four parties covered in the Register maintained under section 301 of the Act during the year. In our opinion and according to the information and explanations given to us, the price at which shares have been issued is not prejudicial to the interests of the company.

19 As per the information and explanations given to us, the Company has not issued any debentures during the year, which requires the creation of security or charge.

20 During the year the Company has not made any public issues for which the management has to disclose the end use of money raised through that public issue.

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

For P V R K Nageswara Rao & Co.,

Chartered Accountants Firm''s Registration Number: 002283S

N. Anka Rao

Hyderabad Partner

24.05.2014 Membership Number: 23939


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

The managerial remuneration paid to Chairman and Managing Director as detailed in Note no 30.2.7 is in excess of the limits laid down under Section 198 and 309 read with Schedule XIII of the Companies Act, 1956 by Rs 51.29 lakhs and is subject to the approval of Central Government.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Emphasis of Matter

We draw the attention of the members to Note no.30.2.17 regarding non disclosure of company''s share of assets, liabilities, income and expenses in the Joint ventures in view of non availability of audited / unaudited accounts of Joint ventures. Our opinion is not qualified in respect of this matter.

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 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, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to Independent Auditor''s Report Referred to in Paragraph 1 under the heading of ''Report on Other Legal and Regulatory Requirements'' of our report of even date

1 (a) The company has maintained proper records showing full particulars including quantitative details except situation of Fixed Assets.

(b) As explained to us, the fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotation basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such verification.

(c) The company has not disposed off substantial part of fixed assets during the year, which affect the going concern assumption.

2 (a) As explained to us, the stock of stores, spare parts, raw materials and finished goods of the company have been physically verified at frequent intervals during the year by the management except stocks lying with outside warehouses which have been verified with reference to certificates and other relevant documents where available.

(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 has maintained proper records of inventories and the discrepancies noticed on physical verification of stocks as compared to book records, which in our opinion were not material, have been properly dealt with in the books of account.

3 (a) The Company had granted unsecured loans to associate company and rent deposit to a company listed in the register maintained under section 301 of the Companies Act, 1956. The balance as on 31st March, 2013 and the maximum amount involved during the year were Rs. 5,23,976/- and Rs. 4,13,21,375/- respectively.

(b) In our opinion the terms and conditions of unsecured loans and advances given to the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interests of the company.

(c) The company is regular in receipt of principal amounts as stipulated and re-stipulated and has been regular in receipt of interest.

(d) The company has taken unsecured loans from thirteen parties listed in the register maintained under section 301 of the Companies Act, 1956. The balance as on 31st March, 2013 and the maximum amount involved during the year were Rs. 3,09,63,000/- and Rs. 3,24,63,000/- respectively.

(e) In our opinion the rate of interest and other terms and conditions of unsecured loans taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interests of the company.

(f) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

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

5 (a) According to the information and explanations given to us and as confirmed by the company secretary of the Company, we are of the opinion that the contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of each party have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6 According to the information and explanations given to us, the Company has generally complied with the directives issued by the Reserve Bank of India and provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under where applicable. We are informed that, no order 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.

7 In our opinion and according to the explanations given to us, the company has an internal audit system commensurate with the size and nature of its business.

8 We have broadly reviewed the books of account maintained by the company 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 maintained and are being made up. We 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 records of the company and as per the information and explanations given to us, the company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs duty, Excise Duty, Cess and other material statutory dues applicable to it with appropriate authorities and in respect of these statutory dues, there are no outstanding dues as on 31.03.2013 which are outstanding for a period of more than six months from the date they became payable. (b) According to the records of the company and as per the information and explanations given to us, there are no dues of Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of dispute as on 31.03.2013, except Central Sales Tax and Income Tax, the details of which are as given below:

Name of the Nature of the dues Year Amount Forum where Statute to which it Rs. dispute is pending relates

1. Central Sales Tax Sales Tax 2007-08 1,51,30,507/- Honourable High Court of Andhra Pradesh

2. Income tax Income tax and interest 2009-10 4,68,717/- Commissioner of Income Tax Appeals-V, Hyderabad

10 As per the information and explanations given to us and on an overall examination of the financial statements of the company for the current and immediately preceding financial year, we report that the company does not have any accumulated losses at the end of the current financial year nor incurred cash losses in the current and immediately preceding financial year.

11 During the year the company has not defaulted in repayment of dues to financial institutions, bank and debenture holders.

12 As per the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities to anybody during the year.

13 In our opinion, as the company is not a chit fund or a nidhi or mutual benefit fund or society, the provisions of clause 4 (xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the company for this year.

14 According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

15 In our opinion, the terms and conditions on which the company has given guarantees for the loans taken by others from banks or financial institutions are not prejudicial to the interests of the company.

16 In our opinion, the term loans have been applied for the purpose for which they were raised.

17 As per the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the funds raised on short term basis have not been used for long term investments.

18 As per the information and explanations given to us, during the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 As per the information and explanations given to us, the company has not issued any debentures during the year, which requires the creation of security or charge.

20 During the year the company has not made any public issues for which the management has to disclose the end use of money raised through that public issue.

21 During the course of our examination of the books and records of the company carried out in accordance with the generally accepted practices in India and according to the information and explanations given to us we have neither come across any instance of fraud on or by the company, noticed or reported during the year nor have we been informed of such case by the management.

For P. V. R. K. Nageswara Rao & Co.,

Chartered Accountants

Firm''s Registration Number: 002283S

P. V. R. K. Nageswara Rao

Hyderabad Partner

29.05.2013 Membership Number: 18840


Mar 31, 2012

1. We have audited the attached Balance Sheet of Premier Explosives Limited as at 31st March, 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred in section 211 (3C) of the Companies Act, 1956 to the extent applicable except in respect of the following:

We draw the attention of the members to note no. 31.2.16 of Notes on accounts regarding nondisclosure of company's share of assets, liabilities, income and expenses in the Joint ventures in view of non-availability of audited / unaudited accounts of Joint ventures.

v) On the basis of the written representations received from the directors, as on 31.03.2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 st March, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

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

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

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

Annexure referred to in Paragraph 3 of Auditors' Report of even date on the accounts of Premier Explosives Limited for the year ended 31st March 2012

1. (a) The company has maintained proper records showing full particulars including quantitative details except situation of fixed assets.

(b) As explained to us, the fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotation basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such verification. As regards capital works in-progress, the same will be verified by the management on completion of assets.

(c) The company has not disposed off substantial part of fixed assets during the year, which affect the going concern assumption.

2. (a) As explained to us, the stock of stores, spare parts, raw materials and finished goods of the company have been physically verified at frequent intervals during the year by the management except stocks lying with outside warehouses which have been verified with reference to certificates and other relevant documents where available.

(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 has maintained proper records of inventories and the discrepancies noticed on physical verification of stocks as compared to book records, which in our opinion were not material, have been properly dealt with in the books of account.

3. (a) The company had granted unsecured loans to associate company and rent deposit to a company, listed in the register maintained under section 301 of the Companies Act, 1956. The balance as on 31st March, 2012 and the maximum amount involved during the year were Rs. 3,57,88,632/- and Rs.3,88,66,784/- respectively.

(b) In our opinion the terms and conditions of unsecured loans and advances given to the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interests of the company.

(c) The company is regular in receipt of principal amounts as stipulated and re-stipulated and has been regular in receipt of interest.

(d) The company has taken unsecured loans from eight parties listed in the register maintained under section 301 of the Companies Act, 1956. The balance as on 31st March, 2012 and the maximum amount involved during the year were Rs. 1,96,51,000/- and Rs. 2,52,51,000/- respectively.

(e) In our opinion the rate of interest and other terms and conditions of unsecured loans taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interests of the company.

(f) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

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

5. (a) According to the information and explanations given to us and as confirmed by the President (Finance) and Company Secretary of the company, we are of the opinion that the contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of each party have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the company has generally complied with the directives issued by the Reserve Bank of India and provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under where applicable. We are informed that, no order 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.

7. In our opinion and according to the explanations given to us, the company has an internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account maintained by the company 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 maintained and are being made up. We 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 records of the company and as per the information and explanations given to us, the company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs duty, Excise Duty, Cess and other material statutory dues applicable to it with appropriate authorities and in respect of these statutory dues, there are no outstanding dues as on 31.03.2012 which are outstanding for a period of more than six months from the date they became payable.

(b) According to the records of the company and as per the information and explanations given to us, there are no dues of Customs Duty, Income Tax, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of dispute as on 31.03.2012, except Central Sales Tax, the details of which are as given below:

Name of the Statute : Central Sales Tax

Nature of the dues : Tax payable on completion of assessment

Year to which it relates : 2007-08

Amount : Rs.1,51,30,507/-

Forum where dispute is : Honourable pending High Court of

Andhra Pradesh

10. As per the information and explanations given to us and on an overall examination of the financial statements of the company for the current and immediately preceding financial year, we report that the company does not have any accumulated losses at the end of the current financial year nor incurred cash losses in the current and immediately preceding financial year.

11. During the year the company has not defaulted in repayment of dues to financial institutions, bank and debenture holders.

12. As per the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities to anybody during the year.

13. In our opinion, as the company is not a chit fund or a nidhi or mutual benefit fund or society, the provisions of clause 4 (xiii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the company for this year.

14. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

15. In our opinion, the terms and conditions on which the company has given guarantees for the loans taken by others from banks or financial institutions are not prejudicial to the interests of the company.

16. In our opinion, as the company has not taken any term loans, the provision of clause of (xvi) of the Companies (Auditors' Report) Order, 2003 are not applicable to the company for this year.

17. As per the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the funds raised on short term basis have not been used for long term investments.

18. As per the information and explanations given to us, during the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. As per the information and explanations given to us, the company has not issued any debentures during the year, which requires the creation of security or charge.

20. During the year the company has not made any public issues for which the management has to disclose the end use of money raised through that public issue.

21 During the course of our examination of the books and records of the company carried out in accordance with the generally accepted practices in India and according to the information and explanations given to us we have neither come across an instance of fraud on or by the company, noticed or reported during the year nor have we been informed of such case by the management.

For P. V. R. K. Nageswara Rao & Co.,

Chartered Accountants

Firm's Registration Number: 002283S

P. V. R. K. Nageswara Rao

Hyderabad Partner

23.05.2012 Membership No. 18840


Mar 31, 2010

1. We have audited the attached Balance Sheet of Premier Explosives Limited as at 31st March, 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

ii) In our opinion, proper books of account as required by Law have been kept by the Company so far as appears from our examination of these books.

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

iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt

with by this report comply with the Accounting Standards referred in Section 211 (3C) of the Companies Act, 1956 to the extent applicable except in respect of the following:

We draw the attention of the members to note 19 of Notes to Accounts vide Schedule 26 regarding non disclosure of Companys share of Assets, Liabilities, Income and Expenses in the Joint ventures in view of non availability of audited/unaudited accounts of Joint ventures.

v) On the basis of the written representations received from the directors, as on 31.03.2010, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31 st March, 2010 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

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

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

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

Annexure referred to in Paragraph 3 of Auditors Report of even date on the accounts of Premier Explosives Limited for the year ended 31st March 2010

1 (a) The company has maintained proper records showing

full particulars including quantitative details except situation of fixed assets.

(b) As explained to us, the fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotation basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such verification. As regards capital works in-progress, the same will be verified by the management on completion of assets.

(c) The Company has not disposed off substantial part of fixed assets during the year, which affect the going concern assumption.

2 a) As explained to us, the stock of stores, spare parts,

raw materials and finished goods of the company have been physically verified at frequent intervals during the year by the Management except stocks lying with outside warehouses which have been verified with reference to certificates and other relevant documents where available.

(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 has maintained proper records of inventories and the discrepancies noticed on physical verification of stocks as compared to book records, which in our opinion were not material, have been properly dealt with in the books of account.

3 (a) The Company had granted unsecured loans of Rs.

7,00,33,973/- to two Joint Ventures, Rs. 1,00,00,000/ - to associate company and rent deposit of Rs. 33,34,605/- to a company listed in the register maintained under section 301 of the Companies Act, 1956 during earlier years. The balance as on 31st March, 2010 and the maximum amount involved during the year were Rs. 8,47,83,640/- and Rs. 8,33,68,578/- respectively.

(b) During the year, full provision has been made in the accounts for amounts due from Joint Ventures amounting to Rs. 7,00,33,973/- which are considered doubtful of recovery as explained in note no. 6 of Schedule 26. Under the circumstances, we are unable to express an opinion. In our opinion the terms and conditions of unsecured loans given to other parties listed in the Register maintained under section 301

of the Companies Act, 1956 are not prima facie prejudicial to the interests of the company.

(c) The company is regular in receipt of principal amounts as stipulated and restipulated and has been regular in receipt of interest in respect to loans granted to associate company.

(d) The Company has taken unsecured loans aggregating to Rs.1,90,57,000/- from nine parties listed in the register maintained under section 301 of the Companies Act, 1956. The balance as on 31st March, 2010 and the maximum amount involved during the year were Rs. 1,60,13,000/- and Rs. 1,78,49,000/- respectively.

(e) In our opinion the rate of interest and other terms and conditions of unsecured loans taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interests of the company.

(f) The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

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

5. (a) According to the information and explanations given

to us and as confirmed by the Vice President (Finance) and Company Secretary of the Company, we are of the opinion that the contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs.5,00,000/- in respect of each party have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has generally complied with the directives issued by the Reserve Bank of India and provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under where applicable. We are informed that, no order 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.

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

8 We have broadly reviewed the books of account maintained by the company 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 maintained and are being made up. We 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 records of the Company and as per the information and explanations given to us, the Company is

generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs duty, Excise Duty, Cess and other material statutory dues applicable to it with appropriate authorities and in respect of these statutory dues, there are no outstanding dues as on 31.03.2010 which are outstanding for a period of more than six months from the date they became payable.

(b) According to the records of the Company and as per the information and explanations given to us, there are no dues of Customs Duty, Income Tax, Wealth Tax, Service Tax, Excise Duty and Cess which has not been deposited on account of dispute as on 31.3.2010, except Central Sales Tax, the details of which are as given below:

Name of the Nature of the dues Year to which Amount Forum where dispute Statute it relates Rs. is pending Central Sales Tax payable on Tax completion 2007-08 1,51,30,507/- Honourable High Court of of assessment Andhra Pradesh

10 As per the information and explanations given to us and on an overall examination of the financial statements of the company for the current and immediately preceding financial year, we report that the Company does not have any accumulated losses at the end of the current financial year nor incurred cash losses in the current and immediately preceding financial year.

11 During the year the Company has not defaulted in repayment of dues to financial institutions, bank and debenture holders.

12 As per the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities to any body during the year.

13 In our opinion, as the Company is not a chit fund or a nidhi or mutual benefit fund or society, the provisions of Clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company for this year.

14 According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15 In our opinion, the terms and conditions on which the company has given guarantees for the loans taken by others from banks or financial institutions are not prejudicial to the interests of the Company.

16 According to records of the Company the term loans raised during the year have been applied for the purposes for which they were raised.

17 As per the information and explanations given to us and on an overall examination of the balance sheet of the

company, we report that the funds raised on short term basis have not been used for long term investments.

18 As per the information and explanations given to us, during the year the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19 As per the information and explanations given to us, the Company has not issued any debentures during the year, which requires the creation of security or charge.

20 During the year the Company has not made any public issues for which the management has to disclose the end use of money raised through that public issue.

21 During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted practices in India and according to the information and explanations given to us we have neither come across an instance of fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by the management.



For P V R K Nageswara Rao & CO., Chartered Accountants Firms Registration Number: 002283S P V R K NAGESWARA RAO Partner Membership No. 18840 Place : HYDERABAD Date : 15.05.2010

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