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Auditor Report of Vishnu Chemicals Ltd.

Mar 31, 2022

REPORT ON THE AUDIT OF THE STANDALONE FINANCIALSTATEMENTS

Opinion

We have audited the accompanying standalone financial statements of Vishnu Chemicals Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the company as at March 31, 2022, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

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

Key Audit Matters

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

Aspects determined as KAM1. Trade receivables:

Trade receivables comprise almost half of the current assets and also form a sizeable component of the total assets of the company. Management''s judgement in assessing their recoverability and estimating possible provision for any credit loss would involve consideration of facts from a multidimensional perspective like, among others, contractual terms, credit history of the customers, past payment patterns, any identifiable rejection possibilities and the like.

Audit Measures adopted to validate KAM included the following:

â¢ Assessing the appropriateness in validation of certain overdue receivables basis the past payment history, current transactional issues and long-term binding contracts in place and correspondence with the customers.

â¢ Testing the operational efficacy of relevant controls with respect to recognition and realizability of receivables and their application on a consistent basis.

â¢ Undertook a substantive testing to ascertain any inconsistent realization patterns that would give raise to any impairment provisioning;

Basis the above stated measures, no significant exceptions were noted in valuation of trade receivables requiring any provision.

2. Contingent liabilities and disputed liabilities:

The provisioning for contingent and disputed liabilities involves significant judgment to determine the possible outcome and their treatment in the books of accounts. These judgments could eventually lead to making an appropriate disclosure or might even require some provisioning to be made in the financial statements depending on whether an obligation requiring outflow of resources would arise in future or not.

As part of audit procedures, we sought the source documents as well as the correspondence and other material pertaining to each issue. We reviewed to validate the appropriateness of the management''s judgment in arriving at a decision of disclosure / provision and see if they are adequate and comprehensive to the extent possible.

Emphasis of Matter

The preference shareholders of the company, who are also the promoters, have given an undertaking foregoing 6% of the eligible 7% dividend amounting to '' 459.83 Lakhs, receivable by them for the financial year 2021-22 as mentioned in Note 43 of Notes to Accounts.

Our Opinion is not modified in respect of this matter.

Information other than the Standalone Financial Statements and Auditor''s Report thereon:

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

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

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

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

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

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

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

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

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

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

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

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

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2022 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

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

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

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

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

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

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

vi. a. The management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entities, including foreign entities ("Intermediaries"), with the

understanding whether recorded in writing or not that the intermediary shall whether directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of ultimate beneficiaries.

b. The management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the company from any person(s) or entities including foreign entities ("Funding Parties") with the understanding that such company shall whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or provide guarantee, security or the like on behalf of the Ultimate beneficiaries.

c. Based on the audit procedures performed, we report that nothing has come to our

notice that has caused us to believe that the representations given under sub-clause (i) and (ii) by the management contain any material mis- statement.

v. In our opinion Company has complied with section 123 of the Companies Act, 2013 with respect to dividend declared/paid during the year.

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

For Jampani & Associates

Chartered Accountants (Firm''s Registration No. 016581S)

sd/-

Trinadha Rao Marisetty

Partner

Place: Hyderabad (Membership No. 207990)

Date: 16th May, 2022 UDIN: 22207990AJSABQ7898

Mar 31, 2019

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Vishnu Chemicals Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

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

Key Audit Matters

1. Recoverability of Export Incentives:

Based on the incentives allowable under the Foreign Trade Policy (FTP) 2015-2020, the company claimed export benefits under the MEIS and FMS Schemes. The company recognizes these as receivable in the year the right to receive is established on completion of export of goods.

The amount receivable by the company on account of these incentives was Rs. 1217.53 as at 31 March 2018 with a further addition of Rs. 573.73 lakhs during the financial year 2018-19. While an amount of Rs. 907.64 lakhs was received during the year, the company determined that an amount of Rs. 201.47 lakhs, pertaining to previous years, will not be realized and has written off the same.

This has been considered as a Key Audit matter given the involvement of management judgement and estimate and any variation having an impact on the revenue.

As part of audit procedures, we obtained all the data regarding filing of claims, their acceptance by the concerned authorities after validating the data filed, scrutinized the issues leading to write off of earlier claims and made an assessment regarding the eventual realisability of the present claims that are pending.

2. Evaluation of Disputed tax liabilities:

The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. As per the company''s assessment based on the legal opinion received, it has a good chance of getting the demands set aside.

We obtained and reviewed details of completed tax assessments and demands for the year ended March 31, 2019 from management. We made an independent assessment to evaluate whether any change was required to management''s position on these disputed tax demands and assess if any provisioning is required.

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

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

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s Responsibility for the Standalone Financial Statements

Those Board of Directors are responsible for overseeing the Company''s financial reporting process.

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

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

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

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 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 the requirements of section 197(16) of the Act, as amended:

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

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company, and its subsidiary company incorporated in India.

2. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

ANNEXURE "A" TO THE INDEPENDENT AUDITOR''S REPORT

(Referred to in paragraph 1(f) under ''Report on Other Legal and Regulatory Requirements'' section of our report to the Members of Vishnu Chemicals Limited of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of VISHNU CHEMCALS LIMITED ("the Company") as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditor''s Responsibility

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Company.

Meaning of Internal Financial Controls Over Financial Reporting

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

Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

ANNEXURE "" TO THE INDEPENDENT AUDITOR''S REPORT

(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' section of our report to the Members of Vishnu Chemicals Limited of even date)

i. In respect of the Company''s fixed assets:

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

(b) The Company has a program of verification to cover all the items of fixed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us, the records examined by us and based on the examination of the conveyance deeds / registered sale deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date.

ii. According to the information and explanations given to us, the inventories have been physically verified at reasonable intervals by the management and no material discrepancies were noticed on such verification.

iii. According the information and explanations given to us, the Company has granted interest free unsecured loan to its wholly owned subsidiary, covered in the register maintained under section 189 of the Companies Act, 2013. The total loan amount granted in the earlier years and the actual balance outstanding at the end of the year is Rs. 989 lakhs (with an amortised value of Rs. 722.22 lakhs). According to the information and explanations the terms and conditions of the grant of the loan are not prima facie prejudicial to the interests of the company. However as no specific terms and conditions with regard to the repayment have been specified, we are not able to comment on the compliance with schedule of repayment and overdue amount.

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

v. According to the information and explanations provided to us, the Company has not accepted deposits in terms of the directives issued by Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under and therefore, the provisions of the clause 3 (v) of the Order are not applicable to the Company.

vi. We have broadly reviewed the cost records maintained by the company pursuant to sub-section (1) of section 148 of the Act and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

vii. According to the information and explanations given to us, in respect of statutory dues:

a. The company has generally been Irregular in Depositing Undisputed Statutory Dues, including Provident Fund, Employees State Insurance, Income Tax, Goods and Service Tax, Customs Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

b. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Goods and Service Tax, Customs Duty, Cess and other material statutory dues in arrears as at March 31, 2019 for a period of more than six months from the date they became payable except Rs. 1279.19 lakhs payable towards Income Tax and interest thereon under the Income Tax Act, 1961 for the periods AY 2014-15 to AY 2018-19 which are yet to be paid.

c. Details of dues of Income Tax, Sales Tax, Service Tax, Excise Duty, and Value Added Tax which have not been deposited as at March 31, 2019 on account of dispute are given below:

Nature of the statute	Nature of dues	Forum where dispute is pending	Period to which the amount relates	Amount in lakhs
Income Tax Act, 1961	Income tax	CPC	AY 2015-16	59.61
Income Tax Act, 1961	Income tax	Assessing Officer	AY 2013-14	27.77
Income Tax Act, 1961	Income tax	Assessing Officer	AY 2006-07	46.62
Income Tax Act, 1961	Income tax	CIT (Appeals)	AY 2011-12	163.28 (Rs. 41.98 lakhs deposited)
Central Excise Act,1944	Excise Duty	CESTAT	1998-99	53.82 (Rs. 7.00 lakhs deposited)

Nature of the statute	Nature of dues	Forum where dispute is pending	Period to which the amount relates	Amount in lakhs
Sales Tax Act	Interest on Sales tax	Commissioner	1998-99	7.75 (Rs. 7.75 lakhs deposited)
Sales Tax Act	Sales tax	High Court	2008-09	124.36 (Rs. 124.36 lakhs deposited)
Sales Tax Act	Entry Tax	Appellate Commissioner	2014-15 to 2017-18	55.40 (Rs. 6.92 lakhs deposited)
Finance Act, 1994	Service Tax	CESTAT	2006-2007 to 201011	418.68 Stay granted
Finance Act, 1994	Service Tax	CESTAT	2011-12	233.94

viii. According to the information and explanations provided to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or banks.

ix. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause 3 (ix) of the Order is not applicable to the Company.

x. To the best of our knowledge and according to the information and explanations given to us and based on the audit procedures performed by us, no fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

xiv. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures and hence reporting under clause 3 (xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

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

For Jampani & Associates

Chartered Accountants

(F.R.No. 016581S)

Sd/-

J. Ram Sesh Choudary

Hyderabad Partner

06 May 2019 M.No. 202150

Mar 31, 2018

Report on the Standalone IND AS Financial Statements

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

Management''s Responsibility for the Standalone IND AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect to preparation of these standalone IND AS financial statements that give a true and fair view of the state of affairs (financial position, profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (IND AS) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone IND AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone IND AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone IND AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company''s preparation of the standalone IND AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 standalone IND AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone IND AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the IND AS:

a) of the state of affairs (financial position) of the Company as at March 31, 2018;

b) of the profit for the year (financial performance including other comprehensive income); and

c) of the cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 issued by the Central Government in terms of section 143(11) 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 - 1 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, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

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

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

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

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

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

ii. 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;

iii. During the year under review, there are no amounts that are required to be transferred to the Investor Education and Protection Fund by the Company;

ANNEXURE - 1 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 According to the information and explanations given to us, the Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

1.2 All the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

1.3 All the title deeds of the immovable properties are held in the name of the Company.

2. According to the information and explanations given to us, the inventories have been physically verified at reasonable intervals by the management and no material discrepancies were noticed on such verification.

3. In our opinion and according to the information and explanations given to us during the earlier years, the Company has granted interest-free unsecured loans to its wholly owned subsidiary companies covered in the register maintained under Section 189 of the Companies Act, 2013. The total loan amount granted and the actual balance outstanding at the end of the year is Rs. 999.51 lakhs (with a value at amortised cost of Rs.669.29 lakhs). According to the information and explanations given to us, the terms and conditions of the grant of such loans are not prima facie prejudicial to the interest of the Company. As no specific terms and conditions with regard to repayment have been specified, we are not able to comment on the repayment and overdue amount.

4. In our opinion and according to the information and explanations given to us, in respect of loans and investments, the provisions of Section 185 and 186 of the Companies Act, 2013 have been complied with except for the granting of interest free loan/advance of Rs.999.51 lakhs(with a value at amortised cost of Rs.669.29 lakhs) to its wholly owned subsidiaries.

5. According to the information and explanations given to us, the Company has not accepted any deposits in terms of the directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.

6. We have broadly reviewed the cost records maintained by the Company pursuant sub-section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

7.1 According to the information and explanations given to us, the company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues, as are applicable, with the appropriate authorities.

According to the information and explanations given to us, there are no 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, except interest on income tax of Rs.379.69 lakhs pertaining to financial year 2015-16.

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 appropriate authorities are as follows: application of the funds so raised, in our view, is not applicable for the year under review.

Nature of dues

Rs. in lakhs

Period to which the amount relates

Forum where the dispute is pending

Central

Excise

46.82

1998-99

CESTAT,

Bengaluru

8. According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institutions or banks.

9. According to the information and explanations given to us, during the year under review, the Company has not raised any money by way of initial public offer or further public offer. According to the information given to us, during the year, the Company has received the disbursement of unsecured term loan of '' 300.00 lakhs from a bank towards working capital requirements and the same was applied for the purpose for which it was received.

10. According to the information and explanations given to us and based upon the audit procedures performed by us, no fraud by the Company or on the Company committed by its officers or employees has been noticed or reported during the year.

11. According to the information and explanations given to us, the managerial remuneration paid or provided during the year is in compliance with the provisions of Section 197 read with Schedule V of the Companies Act, 2013.

12. As the Company is not a Nidhi Company in terms of the provisions of the Companies Act, 2013 read with Nidhi Rules, 2014, the matters to be reported under clause (xii) are not applicable.

13. According to the information and explanations given to us, in our opinion, with respect to the transactions with related parties, the Company has complied with the provisions of Section 177 and 188 of the Companies Act. 2013, wherever applicable. In our opinion, the details as required by the applicable accounting standards have been disclosed in the financial statements for the year under review.

14. According to the information and explanations given to us, during the year under review, the Company has issued new preference shares in lieu of the redemption of existing preference shares and accumulated dividend thereon to the same shareholders. As the Company, has not raised any funds by such issue, reporting requirement on compliance with Section 42 of the Companies Act, 2013 and purpose of application of the funds so raised, in our view, is not applicable for the year under review.

15. According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him and hence, reporting requirement on compliance with the provisions of Section 192 of the Companies Act, 2013 is not applicable.

16. According to the information and explanations given to us and in our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

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

We have audited the internal financial controls over financial reporting of VISHNU CHEMICALS LIMITED ("the Company") as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit.

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and

3) Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Opinion

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

For Jampani & Associates

Chartered Accountants

(F.R.No. 016581S)

Sd/-

J. Ram Sesh Choudary

Hyderabad Partner

May 30, 2018 M.No. 202150

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, 2011

1. We have audited the attached Balance Sheet VISHNU CHEMICALS LIMITED as at March 31, 2011, 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 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, 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, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 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 year 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 year by Rs.14.27 and total depreciation reserve till March 31, 2011 by Rs. 42.93 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, 2011, and

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

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) 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) 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.471.23 lakhs during the year and an amount of Rs.456.48 lakhs outstanding as on March 31, 2011.

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, commensurate with the size and nature of the business but the scope may be expanded to cover the increase in operations.

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 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, 2011, 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 which the payment lakhs) 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 17.28 April 10 July 2010 Not paid Ã June 10

Sales Tax 12.45 2007-08 2007-08 Not paid

Sales Tax 43.06 2008-09 2008-09 Not paid

Works Contact 13.97 2008-09 2008-09 Not paid Tax

Works Contact 2.29 2009-10 2009-10 Not paid Tax

Works Contact 0.20 April 10- September Not paid Tax August 10 2010

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 dues (Rs.in the which pending 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 46.82 1998-1999 CESTAT, Bangalore Excise

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

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

Sales Tax 1414.69 2008-2010 Addl. Commissioner (Appeal), Sales Tax, Cuttack

10. The Company does not have any accumulated losses as on March 31, 2011. 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 year which were paid subsequent to due dates an amount of Interest of Rs.280.09 lakhs and Principal amount of Rs.633.73 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.

For C K S ASSOCIATES Chartered Accountants FRN 007390S

Sd/- J. RAM SESH CHOUDARY Partner (Membership No. 202150)

No.87, Road No.3, Gagan Mahal Colony

HYDERABAD May 30,2011

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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