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Auditor Report of Vishnu Chemicals Ltd.

Mar 31, 2015

We have audited the acCompanying standalone financial statements of VISHNU CHEMICALS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, 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 Standalone Financial Statements

The Company''s Board of Directors 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 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 efectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s 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 controls 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 efectiveness of such controls.. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis for qualifed opinion

The brought forward reserves are overstated due to capitalisation of interest of ` 312.82 lakhs on Term Loans during the year 2007-08 in contravention of AS-16 issued by the ICAI, which also resulted in overstatement of fxed assets by ` 312.82 lakhs, depreciation for the period by ` 11.13 lakhs and total accumulated depreciation till March 31, 2015 by ` 96.87 lakhs. As a result, the Profit for the year is understated by ` 11.13 lakhs.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the efect of the matter described in the Basis for Qualifed 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 afairs of the Company as at March 31, 2015;

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 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, 2015 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to 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 a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 Flow Statement dealt with by this Report are in agreement with the books of account.

d. Except for the efect of the matter described in the Basis for Qualifed Opinion Paragraph, 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. In our opinion, the matter described in the Basis for Qualifed Opinion paragraph above, does not have any adverse efect on the functioning of the Company.

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

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), 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 27);

ii. In our opinion and as per the information and explanations provides to us, the Company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses, and

iii. As per the information and explanations provides to us, there has been no delay in transferring the amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT:

(Referred to in Paragraph 1 under section ''Report on Other Legal and Regulatory Requirements'' of our report of even date)

1.1. The Company is maintaining proper records showing full particulars including quantitative details and situation of fxed assets.

1.2. All the fxed assets have been physically verifed by the management at reasonable intervals and no material discrepancies were noticed on such verifcation.

2.1. The inventories have been physically verifed at reasonable intervals by the management.

2.2. In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

2.3. In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on such physical verifcation.

3.1 In our opinion and according to the information and explanations given to us, the Company has granted unsecured loan to its wholly owned subsidiary Company covered in the register maintained under section 189 of the Companies Act, 2013.

3.2 As the terms and conditions with regard to repayment of principal or interest are not specified, we are unable to comment on the regularity of receipt of the same.

3.3 As the total amount outstanding at the end of the year ` 73,068 is less than the specified amount of one lakh rupees, comment on the steps taken for recovery of principal/interest is not warranted.

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 the nature of its business for the 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.

5. According to the information and explanations given to us, the Company has not accepted any deposits in terms of directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

6. We have broadly reviewed the books of account maintained by the Company pursuant to sub-section (1) of Section 148 of the Companies Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

7.1 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, as are applicable, with the appropriate authorities. According to the information and explanations given to us, the arrears of outstanding statutory dues as at the last day of the financial year under audit for a period of more than six months from the date they became payable are entry tax of ` 267.92 lakhs pertaining to the financial years 2009-10 to 2012-13.

7.2 According to the information and explanations given to us, the disputed statutory dues that have not been deposited on account of matters pending before the appropriate authorities are as follows:

Nature of Dues Amount Period to which the Forum where the dispute is (rs in amount relates pending lakhs

Central Excise 46.82 1998-1999 CESTAT, Bengaluru

Central Excise 121.28 2006-2007 CESTAT, New Delhi

Sales Tax 5.81 1998-1999 Sales Tax Appellate Tribunal, Hyderabad

Sales Tax 8.96 2008-2010 Addl. Commissioner (Appeal), Sales Tax, Cuttack

Sales Tax 43.08 2008-2009 Commissioner of Commercial Taxes, Raipur, Bhilai

7.3 In our opinion and according to the information and explanations given to us, amounts 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 thereunder have been transferred to such fund within time.

8. The Company has no accumulated losses at the end of the financial year under audit. The Company has not incurred cash losses during the financial year covered by audit and in the immediately preceding financial year.

9. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank.

10. 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.

11. According to the information and explanations given to us, the term loans obtained during the year were applied for the purpose for which the loans were obtained.

12. Based upon the audit procedures performed and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year of our audit.



For C K S ASSOCIATES Chartered Accountants

(F.R.No. 007390S) P. GANAPATI RAO

Place : HYDERABAD Partner Date : May 20, 2015 M.No. 024113


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Vishnu Chemicals 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 fair presentation of the financial statements that 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 brought forward reserves are overstated due to capitalization of interest oft. 312.82 lakhs on Term Loans for the year 2007-08 in contravention of AS - 16 issued by ICAI, which also resulted in overstatement of fixed assets by Rs. 312.82 lakhs, depreciation for the period by Rs. 14.27 and total depreciation reserve till March 31,2013 by Rs. 71.47 lakhs.

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 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) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 Act;

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 Act. .

ANNEXURE TO THE AUDITORS'' REPORT

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

b) All the fixed assets have been physically verified by the management at intervals which, in our opinion, are reasonable, having regard to the size of the Company and the nature of its assets. No serious discrepancies were noticed on such verification.

c) No substantial part of fixed assets has been disposed off during the current year, which has a bearing on the assumption of 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) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks 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. No material discrepancies were noticed on verification between the physical stocks and the book records.

3. a) As the company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the matters to be reported under Paragraphs 4 (iii) (b),(c) and (d) are not applicable.

b) The Company has taken interest-free unsecured loans from two parties covered in the register maintained under Section 301 of the Companies Act, 1956, with a maximum outstanding of Rs.668.50 lakhs during the year and an amount of Rs.495.49 lakhs outstanding as on March 31, 2013.

c) The terms and conditions on which loans have been taken by the Company are not prejudicial to the interests of the company.

d) As no terms of repayment have been specified, we are unable to comment whether the payment of principal is regular in respect of loans taken by the Company.

4. 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 purchase of inventory, fixed assets and with regard to 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.

5. a) According to the information and explanations given to us, we are of the opinion that the particulars of arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section.

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

6. The Company has not accepted any deposits from the public to which the directives issued by Reserve Bank of India and the provisions of Sections 58A, 58 AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under apply.

7. In our opinion, the Company has an internal audit system, which is commensurate with the size and nature of the business.

8. We have broadly viewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. a) The Company is generally regular in depositing the undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, wealth-tax, service tax, customs duty, excise duty, cess and other statutory dues as are applicable with the appropriate authorities. According to the information given to us, the undisputed amounts payable in respect of provident fund, employees'' state insurance, income tax, sales tax, wealth-tax, service tax, customs duty, excise duty and cess which were outstanding, as at March 31, 2013, for a period of more than six months from the date they became payable are as detailed below.

Nature of dues Amount Period to Due Date Date of (Rs..in lakhs) which the payment amount relates

Entry Tax 1.81 2006-07 2006-07 Not paid

Entry Tax 67.58 2008-09 2008-09 Not paid

Entry Tax 70.24 2009-10 2009-10 Not paid

Entry Tax 85.06 2010-11 2010-11 Not paid

Entry Tax 74.86 2011-12 2011-12 Not paid

Entry Tax 7.91 April 2012 to June 2012 2012-13 Not paid

Sales Tax 43.06 2008-09 2008-09 Not paid

Works Contact Tax 12.19 2008-09 2008-09 Not paid

Works Contact Tax 1.76 2009-10 2009-10 Not paid

Works Contact Tax 1.43 2010-11 2010-11 Not paid

Works Contact Tax 0.23 2011-12 2011-12 Not paid

Works Contact Tax 1.08 2012-13 2012-13 Not paid

Income Tax 5.77 2001-02 2001-02 Not paid

Income Tax 253.11 2011-12 2011-12 Not paid

Professional Tax 0.23 Aug -12 Sep - 12 Not paid

b) According to information and explanations provided to us and the records of the company the disputed statutory dues that have not been deposited on account of matters pending before the appropriate authorities are as follows:

Nature of dues Amount Period to which the Forum where dispute is pending (Rs..in lakhs) amount relates

Sales Tax 1.23 2006-2007 Appellate Deputy Commissioner of Commercial Tax, Durg

Entry Tax 1.63 2006-2007 Appellate Deputy Commissioner of Commercial Tax, Durg

Central Excise 46.82 1998-1999 CESTAT, Bangalore

Sales Tax 5.81 1998-1999 Sales Tax Appellate Tribunal, Hyderabad

Central Excise 30.92 2008-2009 The Assistant Registrar, Office of the customs Excise and Service Tax Appellate Tribunal, New Delhi

Sales Tax 8.96 2008-2010 Addl. Commissioner (Appeal), Sales Tax, Cuttack

10. The Company does not have any accumulated losses as on March 31, 2013. The Company has not incurred any cash loss either during the current year or in the immediately preceding financial year.

11. According to the information and explanations given to us, the Company has defaulted in repayment of dues to financial institution/bank, to the extent of Interest of Rs. 185.99 lakhs and Principal amount of Rs. 986.28 lakhs which were partly paid subsequent to the due dates.

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

13. In our opinion the Company is not a nidhi/mutual benefit fund/society and as such, the matters to be reported under sub-clauses (a) to (d), of Second Part of paragraph 4(xiii) are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us the Company has not given guarantee for loans taken by others.

16. In our opinion and based on the information and explanations given to us, the term loans were applied for the purpose for which they were obtained.

17. Based on 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 investment.

18. 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. The Company has not issued any debentures during the year under review.

20. The Company has not raised any money through public issue during the year under review.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For C K S ASSOCIATES

Chartered Accountants

FRN 007390S



Sd/-

V. SRI NATH

Partner

HYDERABAD M. No. 021185

May 30, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of VISHNU CHEMICALS LIMITED as at March 31, 2012, the Statement of Profit and Loss and also Cash Flow statement of the Company for the period 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 test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003(as amended) issued by the Company Law Board in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, wherever applicable.

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

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representations received from the directors as on March 31, 2012, and taken on record by the Board of Directors, 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, subject to

i) the brought forward reserves being overstated as a result of Capitalisation of Interest of Rs. 312.82 lakhs on Term Loans for the period 2007-2008 in contravention of AS16 issued by ICAI and also a resultant overstatement of Fixed Assets by Rs. 312.82 lakhs, depreciation for the period by A 14.27 and total depreciation reserve till March 31,2012 by Rs. 57.20 lakhs. the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

ii. in the case of the Statement of Profit and Loss, of the Profit of the Company for the period ended on that date.

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

ANNEXURE TO THE AUDITORS' REPORT

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

b) All the fixed assets have been physically verified by the management at intervals which, in our opinion, are reasonable, having regard to the size of the Company and the nature of its assets. No serious discrepancies were noticed on such verification.

c) No substantial part of fixed assets has been disposed off during the current period, which has a bearing on the assumption of going concern.

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

b) In our Opinion and according to the information and explanations given to us, the procedures of physical verification of stocks 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. No material discrepancies were noticed on verification between the physical stocks and the book records.

3. a) As the company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, the matters to be reported under Paragraphs 4 (iii) (b),(c) and (d) are not applicable.

b) The Company has taken interest-free unsecured loans from two parties covered in the register maintained under Section 301 of the Companies Act, 1956, with a maximum outstanding of Rs. 456.48 lakhs during the period and an amount of Rs. 454.48 lakhs outstanding as on March 31, 2012.

c) The terms and conditions on which loans have been taken by the Company are not prejudicial to the interests of the company.

d) As no terms of repayment have been specified, we are unable to comment whether the payment of principal is regular in respect of loans taken by the Company.

4. 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 purchase of inventory, fixed assets and with regard to 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.

5. a) According to the information and explanations given to us, we are of the opinion that the particulars or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

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

6. According to the information and explanations provided to us, we are of the opinion that the Company has not accepted any deposits from the public and as such the directives issued by the Reserve Bank of India and the provisions of Section 58A and Section 58AA or any other relevant provisions of the Act and Rules framed there under are not applicable.

7. In our opinion, the Company has an internal audit system, the scope of which, in our opinion to be commensurate with the size and nature of the business.

8. In our opinion and as per the information and explanations provided to us regarding the products manufactured by the company and the relevant orders, the maintenance of cost records has not been prescribed for the company by the Central Government under Section 209(1)(d) of the Companies Act, 1956

9. a) The Company is generally regular in depositing the undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth-tax, service tax, customs duty, excise duty, cess and other statutory dues as are applicable with the appropriate authorities. According to the information given to us the undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, sales tax, wealth-tax, service tax, customs duty, excise duty and cess were outstanding, as at March 31, 2012, for a period of more than six months from the date they became payable as detailed below.

Nature of dues Amount Period to Due Date Date of (Rs.in Lakhs) which the payment amount relates

Entry Tax 1.81 2006-07 2006-07 Not paid

Entry Tax 67.56 2008-09 2008-09 Not paid

Entry Tax 70.23 2009-10 2009-10 Not paid

Entry Tax 85.10 2010-11 2010-11 Not paid

Entry Tax 25.34 April 11 - June 11 July 2011 Not paid

Sales Tax 43.06 2008-09 2008-09 Not paid

Works Contact Tax 12.19 2008-09 2008-09 Not paid

Works Contact Tax 1.76 2009-10 2009-10 Not paid

Works Contact Tax 1.43 2010-11 2010-11 Not paid

b) According to information and explanations provided to us and the records of the company the disputed statutory dues that have not been deposited on account of matters pending before the appropriate authorities are as follows:

Nature of dues Amount Period to which the Forum where dispute is pending (Rs.in lakhs) amount relates

Sales Tax 1.23 2006-2007 Appellate Deputy Commissioner Of Commercial Tax, Durg

Entry Tax 1.63 2006-2007 Appellate Deputy Commissioner Of Commercial Tax, Durg

Central Excise 46.82 1998-1999 CESTAT, Bangalore

Sales Tax 5.81 1998-1999 Sales Tax Appellate Tribunal, Hyderabad

Central Excise 30.92 2008-2009 The Assistant Registrar, Office of the customs Excise and Service Tax Appellate Tribunal, New Delhi

Sales Tax 23.31 2008-2010 Addl. Commissioner (Appeal), Sales Tax, Cuttack

10. The Company does not have any accumulated losses as on March 31, 2012. The Company has not incurred any cash loss either during the current year or in the immediately preceding financial year.

11. According to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution or bank, except the interest and principal fallen due during the period which were paid subsequent to due dates an amount of Interest of Rs. 149.75 lakhs and Principal amount of Rs. 528.69 lakhs.

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

13. In our opinion the Company is not a nidhi/mutual benefit fund/society and as such, the matters to be reported under sub-clauses (a) to (d), Second Part of paragraph 4(xiii) are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us the Company has not given guarantee for loans taken by others.

16. In our opinion and based on the information and explanations given to us, the term loans were applied for the purpose for which they were obtained.

17. Based on 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 investment.

18. 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. The Company has not issued any debentures.

20. The Company has not raised any money through public issue.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

HYDERABAD For C K S ASSOCIATES

May 30,2012 Chartered Accountants

FRN 007390S

Sd/-

V. SRI NATH

Partner

(Membership No. 021185)


Mar 31, 2010

1. We have audited the attached Balance Sheet VISHNU CHEMICALS LIMITED as at March 31, 2010, the Profit and Loss account and also Cash Flow statement of the Company 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 test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Company Law Board in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, wherever applicable.

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

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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, 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 comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representations received from the directors as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 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, subject to the brought forward reserves being overstated by Rs.312.82 lakhs due to capitalization of term loan interest during 2007-08, in contravention of AS16 issued by The Institute of Chartered Accountants of India and Correspondingly fixed Assets of the Company being overstated by the same amount. Consequently, the deprecation for the year is overstated by Rs.14.27 lakhs and the total overstatement of depreciation till March 31, 2010 is Rs.28.66 lakhs.

the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. in the case of the Balance Sheet of the state of affairs of the Company as at March 31, 2010, ii. in the case of the Profit and Loss account, of the Profit of the Company for the year ended on that date and iii. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.



ANNEXURE TO THE AUDITORS REPORT



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

b) As per the information and explanations provided to us, the fixed assets have been physically verified by the management at intervals which, in our opinion, are reasonable, having regard to the size of the Company and the nature of its assets. No serious discrepancies were noticed on such verification

c) No substantial part of fixed assets has been disposed off during the current year, which has a bearing on the assumption of 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 procedures of physical verification of stocks 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. No material discrepancies were noticed on verification between the physical stocks and the book records.

3. a. As the company has not granted any loans, secured or unsecured, to companies, firms or other parties

listed in the register maintained under Section 301 of the Companies Act, 1956, the matters to be reported under Paragraphs 4 (iii) (b),(c) and (d) are not applicable.

b. The Company has taken interest-free unsecured loans from three parties covered in the register maintained under Section 301 of the Companies Act, 1956, with a maximum outstanding of Rs.883.00 lakhs during the year and an amount of Rs.133.25 lakh outstanding as on March 31, 2010

c. The terms and conditions on which loans have been taken by the Company are not prejudicial to the interests of the company.

d. As no terms of repayment have been specified, we are unable to comment whether the payment of principal is regular in respect of loans taken by the Company.

4. 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 purchase of inventory, fixed assets and with regard to 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.

5. a) According to the information and explanations given to us, we are of the opinion that the particulars or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

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 have been made at prices which are reasonable having regard to the prevailing market prices at that relevant time.

6. According to the information and explanations provided to us, the Company is in the process of complying with the directives issued by the Reserve Bank of India and the provisions of Section 58A and Section 58AA of the Companies Act, 1956 and Rules framed there under.

7. In our opinion, the Company has an internal audit system, commensurate with the size and nature of the business.

8. We have broadly reviewed the books of accounts maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the records with a view to determine whether they are accurate.

9. a) The Company is generally regular in depositing the undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth-tax, service tax, customs duty, excise duty, cess and other statutory dues as are applicable with the appropriate authorities. According to the information given to us no undisputed amounts payable in respect of provident fund, employees state insurance, income tax, sales tax, wealth-tax, service tax, customs duty, excise duty and cess were outstanding, as at March 31, 2010, for a period of more than six months from the date they became payable as detailed below:

Nature of dues Amount Period to Due Date Date of (in lakhs) which the Payment amount relates

Entry Tax 24.28 2006 - 2007 2006-07 Not Paid

Entry Tax 67.58 2007 - 2008 2007-08 Not Paid

Entry Tax 15.15 2009 - 2010 2009-10 Not Paid

Sales Tax 12.45 2007 - 2008 2007-08 Not Paid

Sales Tax 43.02 2008 - 2009 2008-09 Not Paid

Works Contract Tax 13.97 2008 - 2009 2008-09 Not Paid

Works Contract Tax 1.72 2009 - 2010 2009-10 Not Paid

Tax Collected at Source 0.12 2009 - 2010 2009-10 Not Paid



b) According to information and explanations provided to us and the records of the company the disputed statutory dues that have not been deposited on account of matters pending before the appropriate authorities are as follows:

Nature of Amount Period to Forum where dispute is which the dues (Rs.in lakhs) amount relates pending

Sales Tax 15.42 1999-2000 The Registrar, Board of Revenue, Bilaspur

Sales Tax 2.13 2001-2002 Dy. Commissioner (Appeals), Commercial Taxes, Durg, M.P

Sales Tax 6.10 2002-2003 The Registrar, Board of Revenue, Bilaspur

VAT (In put 6.61 2005-2006 The A P Sales Tax Appellate Tax Credit) Tribunal(STAT), Hyderabad.

Central Excise 46.82 1998-1999 CESTAT, Bangalore

Sales Tax 5.81 1998-1999 The A P Sales Tax Appellate Tribunal(STAT), Hyderabad.

Sales Tax 1.91 2005-2006 AppellateDeputy Commissioner Of Commercial Tax, Durg Central Excise 1.85 2008-2009 The Assistant Registrar, Office of the Customs Excise and Service Tax Appellate Tribunal, New Delhi

Central Excise 0.05 2008-2009 The Additional Commissioner, Office of the Commissioner customs, Raipur.

Central Excise 30.92 2008-2009 The Assistant Registrar, Office of the customs Excise and Service Tax Appellate Tribunal,New Delhi

Income Tax 3.83 2003-2004 The Commissioner (Appeals) Hyderabad

Income Tax 16.85 2007-2008 The Commissioner (Appeals) Hyderabad

10. The Company does not have any accumulated losses as on March 31, 2010. The Company has not incurred any cash loss either during the current year or in the immediately preceding financial year.

11. According to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution or bank, except interest and principal fallen due during the year Rs.170.75 lakhs and Rs.533.05 lakhs respectively.

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

13. In our opinion the Company is not a nidhi/mutual benefit fund/society and as such, the matters to be reported under sub-clauses (a) to (d), Second Part of paragraph 4(xiii) are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company does not deal or trade in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us the Company has not given guarantee for loans taken by others.

16. In our opinion and based on the information and explanations given to us, the term loans were applied for the purpose for which they were obtained.

17. Based on 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 investment.

18. 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. The Company has not issued any debentures.

20. The Company has not raised any money through public issue.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

HYDERABAD For C K S ASSOCIATES

May 29, 2010 Chartered Accountants

(Firm Regn.No.0073905)

Sd/-

J. RAM SESH CHOUDARY

Partner

(Membership No. 202150)

 
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