Auditor Report of BKV Industries Ltd.

Mar 31, 2025

We have audited the accompanying standalone financial statements of BKV Industries Limited (the "Company"), which comprise the
Balance Sheet as at 31- March 2025 and the Statement of Profit and Loss (including the statement Other Comprehensive Income), the
Statement of Changes in Equity and the Statement of Cash Flow for the year then ended, and notes to the standalone financial
statements including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the afore said 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, (Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the
Company as at 31- March 2025 and its profit, total comprehensive profit, the changes in equity and its cash flows for the year ended on
that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under
section 143 (10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibility for
the Audit of the Standalone Financial Statements of our report. We are independent of the Company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our
audit of the standalone financial statements under the provisions of the Act and the Rules made there under, and we have fulfilled our
other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence
obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. Key Audit
Maters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial
statements for the financial year ended 31-March 2025. 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. We have fulfilled the
responsibilities described in the auditors'' responsibilities for the audit of the standalone financial statements section of our report,
including the relation to these matters. Accordingly, our audit included the performance of the procedures designed to respond to
our assessment of the risk of material misstatements of the standalone financial statements. The results of our audit procedures,
including the procedures performed to address the matters below, provide the basis for our audit opinion, on the accompanying
standalone financial statements.

Auditor''s Response to KAMS

Our audit procedures, among others, included the following obtained and evaluated management''s assessment of the Company''s
ability to continue as a going concern for at least twelve months from the balance sheet date.

Reviewed the financial projections viz, the Lease Income receipt, tested the key assumptions and compared them with historical
performance and available external data. Verified financing arrangements including Interest Free Loan(s) being received from the
Managing Director in the past and commitments. Assessed the adequacy of the disclosures made in the financial statements
regarding the going concern basis of accounting. Considered the potential impact of internal and external events (e.g., regulatory
changes, economic environment) on the entity''s ability to continue operations.

Based on our procedures, we found the management''s assessment of going concern to be reasonable. We did not identify any
material uncertainty that may cast significant doubt on the Company''s ability to continue as a going concern, and accordingly, the use
of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

The Company''s Board of Directors is responsible for the other information. The other information comprises the information
included in the Annual Report, but does not included in the standalone financial statements and our auditors report thereon. Our
opinion on the standalone Ind AS financial statements does not cover the other information and does not express any form of
assurance conclusions there on.

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 on the other information that we obtained prior to the date of this Auditors Report 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 Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134 (5) of the Act with respect to the preparation of
these standalone financial statements that give a true and fair view of the financial position, financial performance including
comprehensive income (Profit), changes in equity and cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. Read with the
companies (Indian Accounting Standards) Rules 2015, as amended. 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 judgements 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 and Board of Directors are 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative
but to do so.

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

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

Our objectives are to obtain reasonable assurance about whether the stand alone Ind AS 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 judgement and maintain professional skepticism throughout the
audit.

We also:

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

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

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

• Conclude on the appropriateness of management''s use of the going concern basis of accounting in preparation of Standalone
Financial Statements 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 in adequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.

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

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

• 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 for the financial year ended 31 March 2025 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.

Emphasis of Matter

We draw attention to the following matters in the Notes to the financial Statements:

Note No.26 in the Standalone financial statements which indicates that the company has considerable accumulated losses, though
the company earned marginal net profit during the current year, and as at the Balance Sheet Date. These conditions indicate the
existence of material uncertainty that may cast significant about the company''s ability to continue as a going concern. However, as
the company has consistent lease income and the company is able to meet its financial commitments from time to time and hence,
the accounts have been drawn up on going concern basis.

As more specifically explained in Note: 31(e) to the financial statements, the company has made a detailed assessment of its liquidity
position for the next year and the recoverability and carrying value of its assets comprising property, plant and equipment and other
assets. Based on current indicators of future economic conditions, the company expects to recover the carrying amount of these
assets.

The company will continue to closely monitor any material changes arising of future economic conditions and impact on its business.
Our opinion is not qualified in this matter.

1. Report on Other Legal and Regulatory Requirements

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 A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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(Profit), the 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 afore said standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2025 taken on record by the Board of
Directors, none of the directors are disqualified as on March 31, 2025 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 - B". 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, read with Schedule V to the Act. 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 read with Schedule V 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 Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses
on long- term contracts including derivative contracts.

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

iv. The management of the Company and associates which are companies incorporated in India whose financial statements have
been audited under the Act have represented to us and the other auditors of such associates respectively that, to the best of its
knowledge and belief,

a) No funds 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 and by the associates to or in any other person or entity, including foreign entities
("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether,

directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of any of
such, associates ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;

b) No funds have been received by the Company and respective associates from any person or entity, including foreign entities
("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company and any of such
associates shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries; and

c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances performed by us
nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any
material mis-statement.

v. The company has not declared any final or interim dividend during the year from it''s inception. Hence, the applicability of Section
123 of the Act to the extent it applies to the payment of dividend does not arise. The company do not have any Holding Companies
and it''s subsidiary companies and joint venture companies. No associate companies have declared any interim and final dividend
for the year. Hence, the question of applicability of Sec 123 of the Act, to the extent it applies to declaration of dividend approval of
the members of the respective companies at the respective ensuing Annual General Meeting does not arise.

vi. Based on our examination, which included test checks, the Company has used accounting software systems for maintaining its
books of account for the financial year ended March 31, 2025 which have the feature of recording audit trail (edit log) facility and
the same has operated throughout the year for all relevant transactions recorded in the software systems. Further, during the
course of our audit we did not come across any instance of the audit trail feature being tampered with and the audit trail has been
preserved by the Company as per the statutory requirements for record retention.

For Garlapati & Co,

Chartered Accountants
Firm Regn.No. 000892S

CA Garlapati Satyanarayana

M.No.: 022101
UDIN:25022101BMJLWU7776

Place: Guntur

Date : 28.05.2025

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Mar 31, 2024

BKV Industries Limited,

Report on the Audit of the Standalone Financial Statements.

Opinion

We have audited the accompanying standalone financial statements of BKV Industries Limited (the "Company"), which comprise the Balance Sheet as at 31^st March 2024, and the Statement of Profit and Loss (including the statement Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flow for the year then ended, and notes to the standalone financial statements including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the afore said 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, (Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March 2024, and its profit, total comprehensive profit, the changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under section 143 (10) of the Act (Sas). Our responsibilities under those Standards are further described in the Auditor''s Responsibility for the Audit of the Standalone Financial Statements of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. Key Audit Maters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements for the financial year ended 31^st March 2024. 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. We have fulfilled the responsibilities described in the auditors'' responsibilities for the audit of the standalone financial statements section of our report, including the relation to these matters. Accordingly, our audit included the performance of the procedures designed to respond to our assessment of the risk of material misstatements of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion, on the accompanying standalone financial statements.

Our findings with respect to going concern:

As included in Note No.26 to the Standalone financial statements, the company''s financial statements have been prepared using the going concern basis of accounting. The use of this basis of accounting is appropriate unless management either intend to liquidate the company or to cease operations or has no realistic alternative but to do so.

Management has not identified a material uncertainty that cast significant doubt on the company''s ability to continue as going concern and accordingly none is disclosed in the financial statements.

Auditor''s Response to KAMS

As part of our audit of the standalone financial statements, our Audit procedures consisted of testing the revenue recognised including testing of revenue recognisati''on from lease agreement accessing the revenue recognise with substantive analytical procedures and accessing the Companies commitments.

We concluded to concur with management''s use of going concern basis of accounting in preparation of the Company''s financial statements.

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

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not included in the standalone financial statements and our auditors report thereon. Our opinion on the standalone Ind AS financial statements does not cover the other information and does not express any form of assurance conclusions there on.

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 on the other information that we obtained prior to the date of this Auditors Report 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 Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134 (5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including comprehensive income (Profit), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. Read with the companies (Indian Accounting Standards) Rules 2015, as amended. 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 judgements 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 and Board of Directors are 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 Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

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

Our objectives are to obtain reasonable assurance about whether the stand alone Ind AS 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 judgement and maintain professional skepticism throughout the audit.

We also:

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

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

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

• Conclude on the appropriateness of management''s use of the going concern basis of accounting in preparation of Standalone Financial Statements 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 in adequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

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

• 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 for the financial year ended 31^st March 2024 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.

Emphasis of Mater

We draw attention to the following matters in the Notes to the financial Statements:

Note No.26 in the Standalone financial statements which indicates that the company has considerable accumulated losses, though the company earned marginal net profit during the current year, and as at the Balance Sheet Date. These conditions indicate the existence of material uncertainty that may cast significant about the company''s ability to continue as a going concern. However, as the company has consistent lease income and the company is able to meet its financial commitments from time to time and hence, the accounts have been drawn up on going concern basis.

As more specifically explained in Note: 31(e) to the financial statements, the company has made a detailed assessment of its liquidity position for the next year and the recoverability and carrying value of its assets comprising property, plant and equipment

and other assets. Based on current indicators of future economic conditions, the company expects to recover the carrying amount

of these assets.

The company will continue to closely monitor any material changes arising of future economic conditions and impact on its

business. Our opinion is not qualified in this matter.

1. Report on Other Legal and Regulatory Requirements

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 A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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(Profit), the 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 afore said standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2024 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 - B". 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, read with Schedule V to the Act. 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 read with Schedule V 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 Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on long- term contracts including derivative contracts.

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

iv. The management of the Company and associates which are companies incorporated in India whose financial statements have been audited under the Act have represented to us and the other auditors of such associates respectively that, to the best of its knowledge and belief,

a) No funds 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 and by the associates to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of any of such, associates ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) No funds have been received by the Company and respective associates from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company and any of such associates shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances performed by us nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material mis-statement.

v. The company has not declared any final or interim dividend during the year from it''s inception. Hence, the applicability of Section 123 of the Act to the extent it applies to the payment of dividend does not arise. The company do not have any Holding Companies and it''s subsidiary companies and joint venture companies. No associate companies have declared any interim and final dividend for the year. Hence, the question of applicability of Sec 123 of the Act, to the extent it applies to declaration of dividend approval of the members of the respective companies at the respective ensuing Annual General Meeting does not arise.

vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31, 2024, which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.

For Garlapati & Co,

Chartered Accountants Firm Regn.No. 000892S

CA Garlapati Satyanarayana

M.No.: 022101 UDIN:24022101BKDFCE8057

Place: Guntur Date : 28.05.2024

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Mar 31, 2015

We have audited the accompanying financial statements of BKV INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the 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 matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

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

Opinion

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

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

3 a) Note 36 to the financial statements which, describes the uncertainty related to the outcome of the lawsuit filed relating to the Non- Agricultural Tax appeal by the Govemment/farms.

b) Note 32 in the financial statements which indicates that the Company has accumulated losses and its net worth has been substantially eroded, the Company has incurred a net loss during the current year and a marginal profit due to exceptional items in the previous year(s) and, the Company's current liabilities exceeded its current assets as at the balance sheet date. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. However, as the Company has got consistant operating lease income the accounts have been drawn up on going concern basis.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015, issued by the Central Government of India in term of sub-section (11) of section 143 of the Companies Act,2013, we give in the Annexure a statement on the matters specified in the paragraphs 3 and 4 of the Order, to the extent applicable.

As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the infonnation 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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

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

(e) The going concern matter described in sub-paragraph (b) under the Emphasis of Matters paragraph above, in our opinion, may have an effect on the functioning of the Company.

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

(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 financial statements - Refer Note 26 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, and the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

Annexure to the Auditors' Report

The Annexure referred to in our report to the members of BKV Industries

Limited, ('the Company') for the year Ended on 31st March, 2015. We report

that:

1) In respect of Fixed Assets

a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) We have been informed that all the fixed assets have been physically verified by the management during the year and to the best of our knowledge no serious discrepancies have been noticed on such verification.

2) The company has given its farm on long term lease and carrying on no other operations hence, no inventory is maintained by the company, hence the question of physical verification of inventory in the reasonable intervals does not arise and hence the clause is not applicable.

3) The company has not granted any loans to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013. Accordingly sub-clauses (a) and (b) of this order are not applicable.

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

5) According to the information and explanations given to us the company has not accepted any fixed deposits from the public within the meaning of section 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Further, no Order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal. Hence, the provisions of this are not applicable.

6) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7) a) According to the information and explanations given to us, in our opinion, the company is regular in depositing undisputed statutory dues Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it. According to information and explanations given to us and the opinion sought by the management, the Provident Fund and ESI are not applicable to this company. According to the information and explanations given to us, no undisputed amounts payable in respect of Income-tax, Sales Tax, Wealth Tax, Service Tax, P.F and ESI, Customs Duty, Excise Duty, and Cess were in arrears, as at 31st March, 2015 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, there are no dues of Sales Tax. Income-Tax, Customs Duty, Wealth Tax, Excise, Service Tax Duty which have not been deposited on account of dispute and in the case of levy of Non-Agricultural Lands Assessment under Andhra Pradesh Non-Agricultural Land Assessment Act, the matter is pending before courts and an amount of Rs. 59.07 lakhs is shown under contingent liability.

c) The amounts due to Investor Education & Protection Fund for a period exceeding six months as at 31sl Match, 2015 does not arise as the company has not declared dividends to the shareholders since its inception. Hence, this sub-clause is not applicable.

8) The Company has accumulated losses to the extent of Rs. 342.75 lakhs and the Company reported a cash profit of Rs. 0.69 lakhs during the financial year 2014-15 and made a cash profit of Rs. 1.76 lakhs during the financial year 2013-14.

9) The company has no loans from banks or financial institutions nor issued debentures during the year, hence in our opinion and according to the information and explanations given to us, this clause is not applicable to the company.

10) In our opinion and according to the explanations given to us, the company has not given any guarantees for loans taken by others from bank and financial institutions. Hence, this clause is not applicable to the company.

11) In our opinion and according to information and explanations given to us, the company has not raised any term loans during the year. Hence, this clause is not applicable to the company.

12) Based on the audit procedures performed for the purposes of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Garlapati & Co, Chartered Accountants Firm Regn. No. 000892S

Place: Guntur. Date : 29th May, 2015 G. Satyanarayana Partner M.No:022101

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Mar 31, 2014

We have audited the accompanying financial statements of M/s. BKV Industries Limited, ''and reduced'' (the company), which comprise the Balance Sheet as at March 31, 2014, the statement of Profit and Loss and Cash Flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements'' Responsibility for the Financial Statements:

The Company''s 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 flow of the Company in accordance with the Accounting Standards notified under the Companies Act., 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

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

An audit involves performing procedures to obtain evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment'', including the assessment of the risk of material misstatements 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 circumstance, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion:

As shrimp farm has given for operating lease, the company has not carried out the operations on its own after giving farm lease. However, the accounts are prepared on going concern basis in view of the lease income from operating lease and the company propose to undertake operations after expiry of operating lease.

Subject to above, in our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(a) in the case of the Balance sheet, of the state of affairs of the company as at 31st March, 2014;

(b) in the case of Statement of Profit & Loss, of the loss of the Company for the year ended on that date;

and

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

Report of 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 Section 227(4A) 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:

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

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

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

(iv) In our opinion, the Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement comply with the Accounting Standards notified under the Act read with General Circular 15/2013 dated 13th September, 2013 of Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

(v) On the basis of written representations received from the directors, as on March 31, 2014 taken on record by the Board of Directors, none of the director is disqualified as on March 31, 2014 from being appointed as a director in terms of Section 274(1) (g) of the Act.

ANNEXURE TO THE AUDITOR''S REPORT

Annexure to the auditor''s report of M/s. BKV Industries Limited, ''and reduced'' for the year ending 31st March, 2014 referred to paragraph (3) there of:

1) In respect of Fixed Assets

a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) We have been informed that all the fixed assets have been physically verified by the management during the year and to the best of our knowledge no serious discrepancies have been noticed on such verification.

c) During the year, the company has disposed off the unutilized assets as company was given on lease, however in view of lease income from farm property and operations will be undertaken after expiry of operating lease, the going concern concept is not affected.

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 procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanations given to us the company has maintained proper records of inventories and there was no material discrepancies noticed on physical verification as compared to the book records.

3) a) The company has not granted any loans to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly sub-clauses (b), (c) and (d) of this order are not applicable.

e) The company has taken interest free unsecured loan from a director and the maximum amount involved during the year was Rs. 22.85 lakhs and the year end balance taken from the director was Rs. 10.90 lakhs.

f) In our opinion and according to the information and explanations given to us, loans taken from the individual, firms, companies and other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prejudicial to the interest of the company.

g) Unsecured loans taken from the parties are payable on demand. During the year certain payments are made on demand , hence the question of irregularity does not arise.

h) There is no overdue amount of loans taken from the companies, firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956.

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 it''s business with regard to the purchases of inventory and fixed assets and for the sale of goods. During the course of audit, we have not observed any major weakness in internal control systems.

5) The company has not entered into contracts or arrangements referred to in section 301 of the Act. Accordingly, the provisions of clause 4(v) of the Order are not applicable.

6) According to the information and explanations given to us the company has not accepted any fixed deposits from the public within the meaning of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence, the provisions of clause 4 (vi) are not applicable.

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

8) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9) a) According to the information and explanations given to us, in our opinion, the company is regular in depositing undisputed statutory dues including Investor Education & Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it. According to information and explanations given to us and the opinion sought by the management, the Provident Fund and ESI are not applicable to this company.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Investor Education & Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, P.F and ESI, Customs Duty, Excise Duty, and Cess were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable. The amounts due to Investor Education & Protection Fund for a period exceeding six months as at 31st Match, 2014 does not arise as the company has not declared dividends to the shareholders since its inception.

c) According to the information and explanations given to us, there are no dues of Sales Tax. Income-Tax, Customs Duty, Wealth Tax, Excise Duty which have not been deposited on account of dispute and in the case of levy of Non-Agricultural Lands Assessment under Andhra Pradesh Non-Agricultural Land Assessment Act, the matter is pending before courts and an amount of Rs. 56.36 lakhs is shown under contingent liability.

10) The Company has accumulated losses to the extent of Rs.342.18 lakhs and the Company reported a cash profit of Rs. 1.76 lakhs during the financial year 2013-14 and made a cash profit of Rs.93.47 lakhs during the financial year 2012-13.

11) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders during the financial year under consideration.

12) In our opinion and according to the explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order 2003 are not applicable to the company.

14) The company has not dealt or traded in shares, securities, debentures or other investments during the year.

15) In our opinion and according to the explanations given to us, the company has not given any guarantees for loans taken by others from bank and financial institutions.

16) In our opinion and according to information and explanations given to us, the company has not raised any term loans during the year.

17) According to the information and explanations given to us, and on an overall examination of the balance sheet of the company, we are of the opinion that no funds raised on short term basis have been used for long term investment.

18) During the year the company has not issued any preferential shares, hence the clause (XVIII) is not applicable to the company.

19) According to the information and explanations given to us, during the year covered by our audit report, the company has not issued any debentures.

20) The company has not raised any monies by way of public issue during the year.

21) Based on the audit procedures performed for the purposes of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

for GARLAPATI & Co, Firm Regn. No. 000892S Chartered Accountants

Place: Guntur GARLAPATI SATYANARAYANA Date : 24.05.2014 Partner, M.No. 22101

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Mar 31, 2013

Report on the Financial Statements:

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

Managements Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements and give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with accounting principles generally accepted in India including the Accounting Standards referred in Section 211(3)© of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, 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 misstatements.

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

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

a) in the case of the Balance sheet, of the state of affairs of the company as at 31 March, 2013;

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

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date. Report of 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 Section 227(4A) 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 :

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

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appear from our examination of those books;

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

(iv) In our opinion, the Balance Sheet & Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Act.

(v) On the basis of written representations received from the directors, as on 31 March, 2013 and taken on record by the Board of Directors, we report that none of the director is disqualified as on 31 March, 2013 from being appointed as a director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO THE AUDITOR''S REPORT

Annexure to the auditor''s report of BKV Industries Limited, ''and reduced'' for the year ending 31 March, 2013 referred to paragraph (3) there of:

1) In respect of Fixes Assets

a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) We have been informed that all the fixed assets have been physically verified by the management during the year and to the best of our knowledge no serious discrepancies have been noticed on such verification.

c) During the year, the company has disposed off the Hatchery property in as is where is condition, however in view of farm property and other operations of the company, the going concern concept is not effected.

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 procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanations given to us the company has maintained proper records of inventories and there was no material discrepancies noticed on physical verification as compared to the book records.

3) a) The company has not granted any loans to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly sub-clauses (b), (c) and (d) of this order are not applicable.

e) The company has taken interest free unsecured loan from a director and a company in which directors are interested and the maximum amount involved during the year was Rs. 54.11 lakhs and the year end balance taken from the director and the Company was Rs. 11.45 lakhs.

f) In our opinion and according to the information and explanations given to us, loans taken from the individual, firms, companies and other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prejudicial to the interest of the company.

g) Unsecured loans taken from the parties are payable on demand. During the year certain payments are made on demand from the parties, hence the question of irregularities does not arise.

h) There is no overdue amount of loans taken from the companies, firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956

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 it''s business with regard to the purchases of inventory and fixed assets and for the sale of goods. During the course of audit, we have not observed any major weakness in internal control systems.

5) The company has not entered into contracts or arrangements referred to in section 301 of the Act. Accordingly, the provisions of clause 4(v) of the Order are not applicable.

6) According to the information and explanations given to us the company has not accepted any fixed deposits from the public with in the meaning of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence, the provisions of clause 4 (vi) are not applicable.

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

8) We have broadly reviewed the Cost Records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 Prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9) a) According to the information and explanations given to us, in our opinion, the company is regular in depositing undisputed statutory dues including Investor Education & Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it. According to information and explanations given to us and the opinion sought by the management, the Provident Fund and ESI are not applicable to this company.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Investor Education & Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, P.F and ESI, Customs Duty, Excise Duty, and Cess were in arrears, as at 31 March, 2013 for a period of more than six months from the date they became payable. The amounts due to Investor Education & Protection Fund for a period exceeding six months as at 31 Match, 2013 does not arise as the company has not declared dividends to the shareholders since its inception.

c) According to the information and explanations given to us, there are no dues of Sales Tax. Income-Tax, Customs Duty, Wealth Tax, Excise Duty which have not been deposited on account of dispute and in the case of levy of Non-Agricultural Lands Assessment under Andhra Pradesh Non-Agricultural Land Assessment Act, the matter is pending before courts and an amount of Rs. 53.65 lakhs is shown under contingent liability.

10) The company has accumulated losses to the extent of Rs. 341.22 lakhs and the company reported cash profit of Rs. 93.47 lakhs during the financial year 2012-2013 and made a cash profit of Rs. 13.19 lakhs during the financial year 2011-2012.

11) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders during the financial year under consideration.

12) In our opinion and according to the explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order 2003 are not applicable to the company.

14) The company has not dealt or traded in shares, securities, debentures or other investments during the year.

15) In our opinion and according to the explanations given to us, the company has not given any guarantees for loans taken by others from bank and financial institutions.

16) In our opinion and according to information and explanations given to us, the company has not raised any term loans during the year.

17) According to the information and explanations given to us, and on an overall examination of the balance sheet of the company, we are of the opinion that no funds raised on short term basis have been used for long term investment.

18) During the year the company has not issued any preferential shares, hence the clause (XVIII) is not applicable to the company.

19) According to the information and explanations given to us, during the year covered by our audit report, the company has not issued any debentures.

20) The company has not raised any monies by way of public issue during the year.

21) Based on the audit procedures performed for the purposes of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.



For Garlapati & Co, Firm Regn. No. 000892S Chartered Accountants

Place : Guntur Date: 29th May, 2013

G.Satyanarayana Partner, M.No. 22101

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Mar 31, 2012

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

02) We conducted our audit in accordance with the 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 from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the financial principles used and significant estimates made by management, as well as evaluating the over all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

03) As required by the Companies (Auditor's Report) Order, 2003, and as amended by the Companies (Auditors Report) (Amendment) Order 2004 (together the 'order') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex here to a statement on matters specified in paragraphs 4 and 5 of the said order.

04) Further to our comments in the Annexure referred to above, we report that:

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

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appear from our examination of those books;

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

(iv) In our opinion, the Balance Sheet & Statement of Profit & 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;

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

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together, with the Significant Accounting Policies and notes there on give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

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

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

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

Annexure to the auditor's report of BKV Industries Limited, 'and reduced' for the year ending 31st March, 2012 referred to paragraph (3) there of:

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

b) We have been informed that all the fixed,assets have been physically verified by the management during the year and to the best of our knowledge no serious discrepancies have been noticed on such verification.

c) During the year, the company has received an advance for sale of the Hatchery property in 'as is where is condition' however in view of farm property given on lease, the going concern concept is not affected.

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 explanation given to us the procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us the company has maintained proper records of inventories and there was no material discrepancies noticed on physical verification as compared to the book records.

3) a) The company has not granted any loans to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly sub-clauses (b), (c) and (d) of this order are not applicable.

e) The company has taken interest free unsecured loan from a director and a company in which directors are interested and the maximum amount involved during the year was Rs. 1,61.61 lakhs and the year end balance taken from the director and the Company was Rs. 54.11 lakhs.

f) In our opinion and according to the information and explanations given to us, loans taken from the individual, firms, companies and other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prejudicial to the interest of the company.

g) Unsecured loans taken from the two parties are payable on demand. Since no demand for payment is received during the year, irregularity of payment does not arise.

h) There is no overdue amount of loans taken from the companies, firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956

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 it's business with regard to the purchases of inventory and fixed assets and for the sale of goods. During the course of audit, we have not observed any major weakness in internal control systems.

5) The company has not entered into contracts or arrangements referred to in section 301 of the Act. Accordingly, the provisions of clause 4(v) of the Order are not applicable.

6) According to the information and explanations given to us the company has not accepted any fixed deposits from the public with in the meaning of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, hence the provisions of clause 4 (vi) are not applicable.

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

8) Maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 has not been prescribed in respect of this company.

9) a) According to the information and explanations given to us, in our opinion, the company is regular in depositing undisputed statutory dues including Investor Education & Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it. According to information and explanations given to us and the opinion sought by the management, the Provident Fund Act is not applicable to this company.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Investor Education & Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and Cess were in arrears, as at 31st March, 2012 for a period of more than six months from the date they became payable. The amounts due to Investor Education & Protection Fund for a period exceeding six months as at 31st Match, 2012 does not arise as the company has not declared dividends to the shareholders since its inception.

c) According to the information and explanations given to us, there are no dues of Sales Tax, Income-Tax, Customs Duty, Wealth Tax, Excise Duty which have not been deposited on account of dispute and in the case of levy of Non-Agricultural Lands Assessment under Andhra Pradesh Non-Agricultural Land Assessment Act, the matter is pending at courts and an amount of Rs. 50.94 lakhs is shown under contingent liability.

10) The company was incorporated during the financial year 1993-94 and the net worth of the company is totally eroded. The company has reported a cash profit of Rs. 6.90 lakhs during the financial years 2010-11 and made a cash profit of 13.19 lakhs during the financial year 2011-12.

11) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders during the financial year under consideration.

12) In our opinion and according to the explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order 2003 are not applicable to the company.

14) The company has not dealt or traded in shares, securities, debentures or other investments during the year.

15) In our opinion and according to the explanations given to us, the company has not given any guarantees for loans taken by others from bank and financial institutions.

16) In our opinion and according to information and explanations given to us, the company has not raised, any term loans during the year.

17) According to the information and explanations given to us, and on an overall examination of the balance sheet of the company, we are of the opinion that no funds raised on short term basis have been used for long tern investment.

18) During the year the company has not issued any preferential shares, hence the clause (XVIII) is not applicable to the company.

19) According to the information and explanations given to us, during the year covered by our audit report, the company has not issued any debentures.

20) The company has not raised any monies by way of public issue during the year.

21) Based on the audit procedures performed for the purposes of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.



For Garlapati & Co, Chartered Accountants (Firm -Regn.No. 000892S)

G. Satyanarayana Partner - Membership No. 22101

Place : Guntur Date : 04-08-2012

---

Mar 31, 2011

01) We have audited the attached Balance Sheet of BKV Industries Ltd as at 31st March, 2011, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

02) We conducted our audit in accordance with the 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 from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the financial principles used and significant estimates made by management, as well as evaluating the over all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

03) As required by the Companies (Auditor's Report) Order, 2003, and as amended by the Companies (Auditors Report) (Amendment) Order 2004 (together the 'order') issued by the Central Government of India in terms of sub-section (4A) of Section 227of the Companies Act, 1956, we annex here to a statement on matters specified in paragraphs 4 and 5 of the said order.

04) Further to our comments in the annexure referred to above, we report that:

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

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appear from our examination of those books;

(iii) The said Balance Sheet, Profit & Loss Account and Cash Flow Statements dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet & Profit & 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;

(v) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the director is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes there on give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

a) in the case of the Balance sheet, of the state of affairs of the company as at 31st March, 2011;

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

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

Annexure to the auditor's report of BKV Industries Limited for the year ending 31st March, 2011 referred to paragraph (3) there of:

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

b) We have been informed that all the fixed assets have been physically verified by the management during the year and to the best of our knowledge no serious discrepancies have been noticed on such verification.

c) During the year, the company has not disposed off any substantial part of fixed assets.

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 explanation given to us the procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us the company has maintained proper records of inventories and there was no material discrepancies noticed on physical verification as compared to the book records.

3) a) The company has not granted any loans to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly sub-clauses (b), (c) and (d) of this order are not applicable.

e) The company has taken interest free unsecured loan from a director and a company in which directors are insterested and the maximum amount involved during the year was Rs.171.61 lakhs and the year end balance taken from the director and the Company was Rs. 161.61 lakhs.

f) In our opinion and according to the information and explanations given to us, loans taken from the individual, firms, companies and other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prejudicial to the interest of the company.

g) Unsecured loans taken from the two parties are not payable during the year under consideration since these are payable on demand. Hence stipulation regarding regularity in payment does not arise.

h) There is no overdue amount of loans taken from the companies, firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956

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 it's business with regard to the purchases of inventory and fixed assets and for the sale of goods. During the course of audit, we have not observed any major weakness in internal control systems.

5) The company has not entered into contracts or arrangements referred to in section 301 of the Act. Accordingly, the provisions of clause 4(v) of the Order are not applicable.

6) According to the information and explanations given to us the company has not accepted any fixed deposits from the public with in the meaning of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

8) Maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 has not been prescribed in respect of this company.

9) a) According to the information and explanations given to us, in our opinion, the company is regular in depositing undisputed statutory dues including Investor Education & Protection Fund, Income-tax, Sales Tax Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory due applicable to it. According to information and explanations given to us and the opinion sought by the management, the Provident Fund Act is not applicable to this company.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Investor Education & Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and Cess were in arrears, as at 31st March, 2011 for a period of more than six months from the date they became payable. The amounts due to Investor Education & Protection Fund for a period exceeding six months as at 31st Match, 2011 does not arise as the company has not declared dividends to the shareholders since its inception.

c) According to the information and explanations given to us, there are no dues of Sales Tax. Income-Tax, Customs Duty, Wealth Tax, Excise Duty which have not been deposited on account of dispute and in the case of levy of Non-Agricultural Lands Assessment under Andhra Pradesh Non-Agricultural Land Assessment Act, the matter is pending at courts and an amount of Rs. 48.23 lakhs is shown under contingent liability.

10) The company was incorporated during the financial year 1993-94 and the net worth of the company is eroded. The company has reported a cash loss of Rs.7.56 lakhs during the financial years 2009 -'10 and made a cash profit of Rs. 6.90 lakhs during the financial year 2010 -'11. .

11) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders during the financial year under consideration.

12) In our opinion and according to the explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order 2003 are not applicable to the company.

14) The company has not dealt or traded in shares, securities, debentures or other investments during the year.

15) In our opinion and according to the explanations given to us, the company has not given any guarantees for loans taken by others from bank and financial institutions.

16) In our opinion and according to information and explanations given to us, the company has not raised any term loans during the year.

17) According to the information and explanations given to us, and on an overall examination of the balance sheet of the company, we are of the opinion that no funds raised on short term basis have been used for long tern investment.

18) During the year the company has not issued any preferential shares, hence the clause (XVIII) is not applicable to the company.

19) According to the information and explanations given to us, during the year covered by our audit report, the company has not issued any debentures.

20) The company has not raised any monies by way of public issue during the year.

21) Based on the audit procedures performed for the purposes of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Garlapati & Co,

Firm Regn. No. 000892S

Chartered Accountants

Place : Guntur

Date : 13/08/2011 G.Satyanarayana Partner, M.No. 22101

---

Mar 31, 2010

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

02) We conducted our audit in accordance with the 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 from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the financial principles used and significant estimates made by management, as well as evaluating the over all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

03) As required by the Companies (Auditors Report) Order, 2003 as amended by the companies (Auditors Report) (Amendment) order, 2004 (together the ‘order) issued by the Central Government of India in terms of sub- section (4A) of Section 227of the Companies Act, 1956, we annex here to a statement on matters specified in paragraphs 4 and 5 of the said order.

04) Further to our comments in the annexure referred to above, we report that:

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

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

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

(iv) In our opinion, the Balance Sheet & Profit & 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.

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

Due to notice received from the State Government for not to undertake operations in prawn farming in Coastal Regulatory Zone pronounced by Supreme Court, no operations were carried out in farm and the seed production was also stopped in the hatchery due to paucity of working capital. However accounts are prepared on a going concern basis for the year ended 31st March, 2010 in view of culture in ponds situated at Hatchery site.

With out qualifying our opinion, we draw your attention to note No. "Q" in Schedule No.13 after implementation of the Scheme of Arrangement for reorganization of capital under Sections 391 to 394 read with Sections 78, 100 to 104 of the Companies Act, 1956, the capital reduction of Rs. 5,65,14,600 was deducted from the accumulated losses in the Profit & Loss account, Secured Loans of Rs. 3,03,50,000/- were converted in to share capital of Rs. 91,69,184 (Face value of Re.1/- each) and share premium of Rs. 2,11,80,815/- as per the “Discovered New Share Issue Price".

Subject to the above, the said accounts in our opinion and to the best of our information and according to the explanations given to us, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

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

b) in the case of Profit & Loss account of the loss for the year ended on that date

and

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Annexure to the auditors report of BKV Industries Limited for the year ending 31st March, 2010 referred to paragraph (3) there of:

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

b) We have been informed that all the fixed assets have been physically verified by the management during the year and to the best of our knowledge no serious discrepancies have been noticed on such verification.

c) During the year, the company has not disposed off any substantial part of fixed assets.

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 explanation given to us the procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us the company has maintained proper records of inventories and there were no material discrepancies noticed on physical verification as compared to the book records.

3) a) The company has not granted any loans to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly sub-clauses (b), (c) and (d) of this order are not applicable.

b) The company has taken interest free unsecured loans from four parties (including three directors who had paid the dues as guarantors to the Vysya Bank Ltd) by operation of law as per the register maintained under section 301 of the Companies Act, 1956 and the maximum amount involved during the year was Rs. 474.31 lakhs (previous year 470.51 lakhs) and the year end balance of loans taken from such parties was Rs. 169.61 lakhs. (previous year 470.51 lakhs)

c) In our opinion and according to the explanation given to us, loans taken from the individuals, firms, companies and other parties listed in the register maintained under section 301 of the Comapnies Act, 1956 are not prejudicial to the interest of the company.

d) Un secured loans taken from two parties are not payble during the year under consideration since these are payable on demand. Hence stipulation regarding regularity in payment does not arise. The Secured loans taken from Directors of Rs. 3,03,50,000/- were converted in to share capital of Rs. 91,69,184 (face value of Re. 1/- each per share) and share premium of Rs. 2,11,80,815 (share premium of Rs. 2.31 per share) as per the "Discovered New Share Issue Price" of the Scheme of Arrangement regarding reorganization of share capital approved by the Honble High Court of Andhra Pradesh.

e) These is no overdue amount of loans taken from the companies, firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956.

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 the purchase of inventory, fixed assets and of the sale of goods and services. During the course of audit, we have not observed any major weakness in internal controls.

5) The company has not entered into contracts or arrangements referred to in section 301 of the Act. Accordingly, the provisions of clause 4(v) of the Order are not applicable.

6) According to the information and explanations given to us the company has not accepted any fixed deposits from the public with in the meaning of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

8) Maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 has not been prescribed in respect of this company.

9) a) According to the information and explanations given to us, in our opinion, the company is regular in depositing undisputed statutory dues including Investor Education & Protection Fund, income tax, wealth tax, customs duty, excise duty, cess and other material statutory dues applicable to it. According to information and explanation and the opinion sought by the management, the Provident Fund Act is not applicable to this company.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2010 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, there are no dues of sales tax. Income tax, customs duty, wealth tax, excise duty which have not been deposited on account of dispute and in the case of levy of Non-Agricultural Lands Assessment under Andhra Pradesh Non-Agricultural Land Assessment Act, the matter is pending at High court and an amount of Rs. 45.52 lakhs is shown under contingent liability.

10) The company was incorporated during the financial year 1993-94 and the net worth of the company is eroded. The company has reported a cash profit of Rs. 169.85 lakhs during the financial years 2008-09 and made a cash loss of Rs. 7.56 lakhs during the financial year 2009-10. .

11) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders during the financial year under consideration.

12) In our opinion and according to the explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order 2003 are not applicable to the company.

14) The company has not dealt or traded in shares, securities, debentures or other investments during the year.

15) In our opinion and according to the explanations given to us, the company has not given any guarantees for loans taken by others from bank and financial institutions.

16) In our opinion and according to information and explanations given to us, the company has not raised any term loans during the year.

17) According to the information and explanations given to us, and on an overall examination of the balance sheet of the company, we are of the opinion that no funds raised on short term basis have been used for long tern investment.

18) According to the information and explanations given to us, the company has made 91, 69,184 preferential allotment of Equity shares to parties and companies in the register maintained under section 301 of the Act during the year as per the High Court order dated 13/ 02 /2009 as part of the Scheme of Arrangement sanctioned.

19) According to the information and explanations given to us, during the year covered by our audit report, the company has not issued any debentures.

20) The company has not raised any money by way of public issue during the year.

21) Based on the audit procedures performed for the purposes of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Garlapati & Co,

Firm Regn. No. 000892S

Chartered Accountants

Place : Guntur G.Satyanarayana

Date: 30-08-2010 Partner, M.No. 22101