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Auditor Report of Refex Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Refex Industries Limited ("the Company"), which comprise the Balance Sheet as at 31st March. 2015. the Statement of Profit and Loss for the year and Cash Row Statement for the year ending 31st March. 2015, 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 matters stated in section 134(5) of the Companies Act. 2013 ("the Act") with respect to preparation and presentation 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 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 accuracy and completeness of 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.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and Rules made there under.

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

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

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

Basis for Qualified Opinion;

The Company is not providing for liability for gratuity as per actuarial valuation, which is not in accordance of the Accounting Standard on Provision for Gratuity (AS-15) (Refer Note 2(i) in Notes forming part of Financial Statements) issued by The Institute of Chartered Accountants of India and the impact of which is unascertainable.

Emphasis of Matter:

The Company has revised its Policy of providing Depreciation in accordance with the Companies Act, 2013 and the resulting impact has been explained vide Explanation to Note 27 to the Annual Report.

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 accompanying 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 Generally Accepted Accounting Principles in India of the state of affairs of the Company as at 31 March 2015 and its Loss and its Cash Flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

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

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

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

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

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

d. in our opinion, except for the effects of the matter described in the Basis for Qualified opinion paragraph, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act;

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

f. with respect to the other matters to be included in the 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. According to the information and explanations given to us. there were no pending litigations which would impact the financial position of the Company.

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

iii. There were no amounts required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditors' Report:

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

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

b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) During the year, the Company has not disposed off a substantial part of fixed assets that would affect it as a going concern.

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

b) The procedure of physical verification of inventories followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business.

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

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

(ii) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken loans from companies, firms or other parties listed in the register maintained under Section 189 of the Companies Act, 2013. The maximum amount involved during the year was Rs. 1,49,33,038/- (Rs. 6,03,93,875/-) /- and the year-end balance was Rs. 9,05,99,894 /- (Rs. 11,19,74.627/-).

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

5. The Company has not accepted any deposits from public.

6. We have reviewed the rules prescribed by the Central Government for maintenance of Cost records under Section 148 (1) of the Companies Act, 2013 and according to the information and explanations given to us, we are of the opinion that prima facie the said records are not applicable for the financial year under review.

7. a) The Company is regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, custom duty, excise duty. VAT, cess and other statutory dues applicable to it with appropriate authorities and that there are no outstanding dues as on the last day of the financial year for a period of more than six months from the date they became payable except in the following cases.

S. No. Particulars Amount Details

1. Income tax Rs.26,24,382/- Due to Income tax Dept for the A.Y. 2008-09

b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, service tax, customs duty, excise duty, VAT and cess were in arrears, as at 31st March 2015 However, the following disputed amounts of Income tax are presently under Appeal with various Appellate Authorities as on 31st March 2015.

S. No. Particulars Amount Details

1. A.Y.2009-10 1,70,61,280/- Under Appeal with the Hon'ble Income Tax Appellate Tribunal, Chennai

2. A.Y.2009-10 99,50,990/- Under Appeal with the Hon'ble Commissioner of Income Tax (Appeals), Chennai

3. A.Y.2011-12 5,81,45,540/- Under Appeal with the Hon'ble Commissioner of Income Tax (Appeals), Chennai

c) According to the information and explanations given to us, there are no amounts required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Act.

8. The Company has not incurred accumulated losses at the end of financial year Including cash losses and also in the immediately preceding financial year.

9. The Company has no outstanding dues to Banks. The Company is repaying loans taken from financial institutions, and there are no outstanding towards the loans during the year.

10. According to the information and explanations given to us, the Company has given Corporate Guarantee Rs.40.48 crores for loans taken by Group Company from banks or financial institutions.

11. According to the information and explanation given to us. the Company has no term loans outstanding during the year with Banks.

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

For Bhandari & Keswanl

Chartered Accountants

FRN.000433S

Place: Chennai

Date : 29.05.2015 P. BHANDARI

Partner

M. No. 17411


Mar 31, 2014

We have audited the accompanying financial statements of Refex Industries 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 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.

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 audit opinion.

BASIS FOR QUALIFIED OPINION

The Company is not providing for liability for gratuity as per actuarial valuation, which is in contravention of Accounting Standard on Provision for Gratuity (AS-15) (Refer Note 2(i) in Notes forming part of Financial Statements) issued by The Institute of Chartered Accountants of India and the impact of which is unascertainable.

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 Profit and Loss Account, of the Profit for the year ended on that date; and

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

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, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 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.

Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

THE ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF REFEX INDUSTRIES LIMITED (FORMERLY REFEX REFRIGERANTS LTD) ON THE ACCOUNTS OF THE COMPANY FOR THE YEAR ENDED 31ST MARCH, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

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

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

(c) In our opinion and according to the information and explanations given to us, fixed assets being Factory land and building directly impacting the business of the Company has been disposed off during the year but however, to the best of our information and opinion the said sale does not affect the going concern assumption.

2. (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken interest free unsecured loans from two (two) Body corporates and one (two) Directors listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.6,03,93,875/- (Rs.1,34,27,632/-) and the year end balance was Rs. 11,19,74,627/- (Rs.9,07,07,510/-). The principal amounts are repayable on demand and there is no repayment schedule. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given by the company, are not prima facie prejudicial to the interest of the company. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(b) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company had neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arise.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. We have broadly reviewed the Books of Account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, in respect of Refrigerant Gases and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. (a) According to the records of the company, undisputed statutory dues Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 for a period of more than six months from the date they became payable except in the following cases. Sl. Particulars Amount Details No

1. VAT payment Rs. 30,62,640/- Due to Maharashtra Sales Tax Dept

2. Income Tax Rs. 26,24,382/- Due to Income tax Dept for the A.Yr.2008-09

(b) According to the information and explanations given to us, there is no amounts payable in respect of wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes. However, the following disputed amounts of Income Tax are presently under Appeal with various Appellate Authorities as on 31st March, 2014:

Sl. Particulars Amount Details No 1. A.Y.2009-10 Rs. 1,70,61,280/- Under Appeal with the Hon''ble Income Tax Appellate Tribunal, Chennai

2. A.Y.2009-10 Rs. 99,50,990/- Under Appeal with the Hon''ble Commissioner of Income Tax (Appeals), Chennai

3. A.Y.2011-12 Rs. 5,81,45,540/- Under Appeal with the Hon''ble Commissioner of Income Tax (Appeals), Chennai

10. The Company has accumulated losses of Rs.14,10,39,225/-

(Rs.42,74,55,692/-) and has incurred a cash loss of Rs.Nil during the financial year covered by our audit and Rs.12,49,92,125/- in the immediately preceding financial year. The accumulated losses exceed 50% of its net worth as at 31.03.2014.

11. Based on our audit procedures and on the information and explanations given by the management, we report that the Company has settled the dues of State Bank of India by disposing off its Factory Land and Buildings during the year under review.

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, except for long term investments in unlisted securities, the Company is not trading in Shares, Mutual funds & other Investments. Proper records & timely entries have been maintained in respect of long term investments.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period under audit.

The Company has not raised any money by public issue during the year.

20. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

Place : Chennai For Bhandari & Keswani Date : 30.05.2014 Chartered Accountants FRN.000433S P Bhandari Partner Membership No.17411


Mar 31, 2012

1. We have audited the attached Balance Sheet of REFEX REFRIGERANTS LIMITED as at March 31, 2012, 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 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 (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of subsection (4A) of Section 227 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 in paragraph 3 above, we report that:

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

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

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are substantially in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes thereon more particularly note no 3 given the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Re: Refex Refrigerants Limited

Referred to in paragraph 3 of our report of even date

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

(b) The fixed assets have been physically verified by the management during the year which in our opinion is reasonable, having regard to the size of the Company and the nature of its business. No material discrepancies have been noticed on such verification.

(c) During the year, the Company has not disposed off a major part of the plant and machinery. According to the information and explanations given to us, we are of the opinion that the sale of the small portion of plant and machinery has not affected the going concern status of the Company.

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

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

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

(iii) (a) During the year under review, the Company has not granted any loans to the parties covered in the register maintained under Section 301 of the Companies Act.

(b) The Company has taken interest free unsecured loans from two Body Corporates and three Directors covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.3,42,04,256/- (Rs.5,46,66,755/-) and the year- end balance was Rs.7,35,11,070/- (.4,72,64,608/-) The principal amounts are repayable on demand and there is no repayment schedule. In our opinion and according to the information and explanations given to us , the rate of interest and other terms and conditions of the loans given by the Company, are not prima facie prejudicial to the interest of the Company.

Apart from the above the Company had neither granted nor taken loans, secured or unsecured to or from Companies, Firms and other parties covered in the register maintained under Section 301 of the Companies Act.

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

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions 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 Company has not entered into transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value rupees five lakhs in respect of any party during the year.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted Deposits from the Public within the meaning of Sections 58A and 58AA of the Act and the rules framed thereunder during the year.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the Books of Account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of Cost records under Section 209 (1) (d) of the Companies Act, in respect of Refrigerant Gases and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

(ix) (a) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed amounts relating to Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Cess and other material Statutory dues as applicable with the appropriate authorities and no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Cess and other material Statutory dues were in arrears as at 31st March 2012 for a period of more than six months from the date they became payable except in the following cases:

SI. No Particulars Amount Details

1. Employee State Insurance 30.411 Due for 2 months

2. Provident Fund 70,927 Due for 2 months

3. Tax Deducted at Source 11,17,731 Due for 6 months

4. Tax Deducted at Source 68,185 Interest due on delayed payment

5. Annual Listing fees 1,77,698 Due to BSE, CDSL, NSDL and NSE

6. VAT payment 95,23,410 Due to Mumbai S.Tax Dept (b) According to the information and explanations given to us, there are no dues of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Cess and other material Statutory dues which have not been deposited on account of any dispute.

(x) In our opinion, the Company does not have accumulated losses at the end of the financial year. The Company has incurred cash losses during the financial year but not in the immediately preceding financial year.

(xi) In our opinion, the Company has defaulted in repayment of dues to a bank. The period and the amount of default is as under:

Particulars Period of default Rs. Period of default Rs.

Loans Repayable As at 31st March 2012 As at 31st March 2011

On demand from Bank 1 Month 191,801,051 - -

Term Loans from Bank

Principal 5 Months 30,00,000 - -

Interest 5 Months 28,08,464 - -

(xii) We are of the opinion that the Company has not granted any loans on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

(xv) According to the information and explanations given to us the Company has not given any guarantee for loans taken by others from banks or financial institutions.

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

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short- term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

(xviii) According to the information and explanations given to us the Company during the year has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures.

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

PLACE: Chennai For BHANDARI & KESWANI

DATE : 29.05.2012 Chartered Accountants

FRN.000433S

P. Bhandari

Partner

Membership No. 17411


Jun 30, 2010

1. We have audited the attached Balance Sheet of REFEX REFRIGERANTS LIMITED as at June 30, 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 subsection (4A) of Section 227 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 in paragraph 3 above, we report that:

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

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

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 except with AS-21, relating to preparation of Consolidated financial Statement, in respect of its Overseas Subsidiary Companies as mentioned in Note 2 (ii) of Schedule-17.

e) On the basis of written representations received from the Directors as on 30th June 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 30th June 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes thereon given more particularly note no 2 tt 1 ic) trie information required by the Companies /«:.t, 1956. in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i)in the case of the Balance Sheet, of the state of affairs of the Company as at 30th June 2010

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

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

Re: Refex Refrigerants Limited

Referred to in paragraph 3 of our report of even date

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

(b) The fixed assets have been physically verified by the management during the year which in our opinion is reasonable, having regard to the size of the Company and the nature of its business. No material discrepancies have been noticed on such verification.

(c) During the year, the Company has not disposed off a major part of the plant and machinery. According to the information and explanations given to us, we are of the opinion that the sale of the small portion of plant and machinery has not affected the going concern status of the Company.

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

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

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

(iii) (a) During the year under review, the Company has not granted any loans to the parties covered in the register maintained under Section 301 of the Companies Act.

(b) The Company has taken interest free loans from 3 parties amounting to Rs.7, 50, 15, 595/- (Rs.8,32,25,000) from the parties covered in the register maintained under Section 301 of the Companies Act and no interest has been paid on such loans.

(c) There is no stipulation with respect to repayment of principal and interest in (a) and (b) above.

Apart from the above the Company had neither granted nor taken loans, secured or unsecured to or from Companies, Firms and other parties covered in the register maintained under Section 301 of the Companies Act.

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

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions 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 Company has not entered into transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value rupees five lakhs in respect of any party during the year.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted Deposits from the Public within the meaning of Sections 58Aand 58AAof the Act and the rules framed thereunder during the year.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We report that no cost records under 209 (1) (d) of the Companies Act, 1956 have been prescribed for the Company.

(ix) (a) The Company has been generally regular in depositing undisputed amounts relating to Provident Fund, Employees State Insurance,

Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Cess and other material Statutory dues as applicable with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Cess and other material Statutory dues were in arrears as at 30th June 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Cess and other material Statutory dues which have not been deposited on account of any dispute.

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or banks.

(xii) We are of the opinion that the Company has not granted any loans on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, th= Company is not a chit fund or a nidhi/mutual bemrit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

(xv) According to the information and explanations given to us the Company has given guarantee for loans taken by two subsidiary Companies incorporated outside tndia to banks and the terms and conditions are not prejudicial to the interests of the Company.

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

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short- term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent Working Capital.

(xviii) According to the information and explanations given to us the Company during the period has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures.

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

PLACE: Chennai For BHANDARI & KESWANI

DATE: 28.08.2010 Chartered Accountants

P. Bhandari

Partner

 
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