Auditor Report of Lords Chemicals Ltd.

Mar 31, 2011

We have audited the attached Balance Sheet of LORDS CHEMICALS LIMITED as at 31st March, 2011 and the related Profit & Loss Account and 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.

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

As required by the Companies (Auditors' Report) Order, 2003, as amended, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks of the books and records as we considered necessary and appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

Further we report that:

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

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

3. The Balance Sheet, Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account as submitted to us;

4. In our opinion, the said Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 except the policy of the Company to recognize Gratuity on cash basis which is not in accordance with provisions of Accounting Standard-15 (Employee Benefits), issued by the Institute of Chartered Accountants of India, resulting in non measuring of the obligation and the expense in the financial statement.

5. 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 directors is disqualified as on 31st March, 2011 from being appointed as director in terms of clause (g) of sub section(1) of section 274 of Companies Act, 1956.

6. Subject to above in point no. 4 in our opinion and to the best of our information and according to the explanations given to us, the said statement of account read with Notes on accounts appearing on schedule U, give the information required by the Companies Act, 1956 in the manner so required, gives a true and fair view in conformity with the accounting principles generally accepted in India

i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2011 and

ii) in the case of the Profit & Loss Account, of the profit for the year ended on that date.

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

The Annexure referred to in the auditors' report to the members of Lords chemicals limited for the year ended March 31, 2011. We report that:

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets. As explained to us, some of the fixed assets have been physically verified by the management based on a phased programme of verification adopted by the company. In our opinion, the frequency of verification is reasonable. To the best of our knowledge, no material discrepancies have been noticed on such verification. The Company has not disposed of any substantial part of its fixed asset during the year.

2. As informed to us, physical verification has been conducted at reasonable intervals in respect of stocks. The discrepancies noticed on such physical verification between physical stock and book records were not significant and the same has been properly dealt with in the books of account.

3. a) As informed to us, the Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clauses (iii) (a) to (d) of the order are not applicable.

b) As informed to us the Company has taken loan, secured or unsecured, from one other company covered in the register maintained under Section 301 of the companies Act, 1956. The maximum amount involved during the year was Rs. 1069.20 Lacs and the yearend balance of loan taken from such company was Rs. NIL. In our opinion the rate of interest and other terms and conditions on which loan have been taken from such other company listed in the register maintained under sec. 301 are not, prime facie, prejudicial to the interest of the company.

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

5. Based on the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 have been so entered. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contacts or arrangements entered in the registers maintained under sec 301 and exceeding the value of five lacs rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to the explanation given to us, the company has not accepted any deposits from the public.

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

8. As per information by the management, no cost records have been prescribed under section 209(1) (d) of the companies Act, 1956 in respect of products manufactured by the company.

9. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees state insurance, Income Tax, Sales tax, Wealth tax, Service tax, Excise duty, Customs duty, Cess and any other statutory dues applicable to it. According to the information and explanations given, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty were outstanding, as at 31.03.2011 for the period of more than six months from the date they became payable.

According to the records of the company the disputed statutory dues on account of Sales tax, Excise Duty and cess that have not been deposited on account of matters pending before appropriate authorities are as follows:

Name of the Nature of Amount Period to Forum where dispute is pending Statute dues involved which the (Rs) amount relates

The Central Excise Central 9,03,120/- 2006-07 Central Excise & service Act, 1944 Excise Appellate Tribunal.

W.B. Sales Tax Act, Sales Tax 9,85,224/- 2003-04

1994 to Appellate & Provisional Board 2004-05

The VAT Act,2003 Value Added 2,17,459/- 2006-07 Appellate & Provisional Board Tax

The Central Sales Central Sales 8,83,415/- 2003-04

Tax Act, 1956 Tax and Appellate & Provisional Board 2004-05

The Central Sales Central Sales

Tax Act, 1956 Tax 2,09,149/- 2006-07 Appellate & Provisional Board

10. The company has not accumulated losses and has not incurred any cash losses during the financial year covered by audit or in the immediately preceding financial year.

11. Based on our audit and according to information and explanation given to us we are of the opinion the company has not defaulted in repayment of dues to banks as at the balance sheet date.

12. As informed and explained to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares during the year, so the requirement of maintenance of adequate documents and records is not applicable.

13. In our opinion and to the best of our information and according to the explanations given to us, the company is not a chit fund / nidhi / mutual benefit fund / societies.

14. As per records of the company and information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments during the year.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by its associates from bank or financial institutions.

16. The company has not obtained any term loan during the year.

17. In our opinion, and on the basis of our examination and according to the information and explanations given to us, the Company has not used the funds borrowed on short-term basis during the year for long-term investment.

18. The company has not made any preferential allotment of share to parties/companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company has not issued any debentures during the year.

20. The company has not raised any money through public issue during the year.

21. Based upon the information and explanations furnished by the management, which have been relied upon by us, there were no frauds on or by the company noticed or reported during the course of our audit.

For P. D. RUNGTA & CO.

Chartered Accountants

(Registration No. 001150C)



(CA. AMIT KUMAR)

Place : Kolkata Partner

Date : 11th June, 2012 Membership No - 067184

---

Mar 31, 2010

We have audited the attached Balance Sheet of LORDS CHEMICALS LIMITED as at 31st March 2010 and the related Profit & Loss Account and 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 statments based on our audit.

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 of material misstatement. An audit includes examining, on a test basts, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signficant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 20Q3t (Card) as amended, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1966, and on the basis of such checks of the books and records as we considered necessary and appropriate and according to the information and explanations given to us during the course of the audit we enclose in the Annexure, a statement on the matters special in paragraphs 4 and 5 ot the said order, We report that;

1. We have obtained ail the information and explanations, which to the best of ou r knowledge and belief were necessary for the purposes of our audit;

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

3. The Balance Sheet, Profit and Loss Account and cash flow statement dealt with by this report are i n agreement with the books of account as submitted to us;

4. In our opinion , the said Balance Sheet, Profit and Loss Account and cash flow statement comply with the accounting standards referred to in sub-section (3C)) of section 211 of the Companies Act 1956,

5. 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 directors is disqualified as on 31 st March, 2010 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act. 1956.

6. fn our opinion and to the best of our information and according to the explanations given to us, the said statement of account read with Notes on accounts appearing on schedule U, give the information required by the Companies Act. 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :-

(i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2010 and

(ii) in the case of the Profit & Loss Account, of the profit for the year ended on that date.

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



ANNEXURE TO THE AUDITORS REPORT

The Annexure referred to in the auditors report to the members of Lords Chemicals Limited for the y&i ended March 31 d 2010, We report that:

1. The Company has maintained proper records showing full particulars, including quantitative detaff1 and situation of the fixed assets. As explained to us, some of the fixed assets have been physically verified by the management based on a phased programme of verification adopted by the company, In our opinion, the frequency of verification is reasonable. To the best of our knowfedge1 no material discrepancies have been noticed on such verification. The Company has not disposed of any substantial part of its fixed asset during the year.

2. As informed to us, physical verification has been conducted at reasonable intervals in respect of stocks. The discrepancies noticed on such physical verification between physical stock and book records were not significant and the same has been properly deaEt with in the books of account.

3. a) As informed to us, the Company has not granted any loan, secured or unsecuredh to companies, firms or other parties covered in the register maintained under section 301 of the Companies

- Act, 1956. Therefore, the provisions of clauses (iii) (a) to (d) of the order are not applicable.

b) As informed to us the Company has taken loanH secured or unsecured, f rem one other company covered in the register maintained under Section 301 of the companies Act, 1956. The maximum amount involved during the year was Rs. 1,493,00 Lacs and the year end balance of Joan taken from such company was Rs. 192.85 Lacs, In our opinion the rate of interest and other terms and conditions on which loan have been taken from such other company listed in the register maintained under sec, 301 are not, prime facie, prejudicial to the interest of the company.

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

5. Based on the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section SOT have been so entered. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under sec 301 and exceeding the value of five lacs rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the reievant time.

6. In our opinion and according to the explanation given to us, the company has not accepted any deposits from the public*

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

8. As per information by the management, no cost records have been prescribed under section 209(1 )(d) of the companies Act, 1956 in respect of products manufactured by the company.

9. According to the records of the company, the company is regular in deposing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees state insurance, Income tax, Sales tax. Wealth tax, Service tax, Excise duty, Customs duty, Cess and any other statutory dues applicable to it, According to the information and explanations given, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty were outstanding, as at 31.03-2010 for the period of more than six months from the date they became payabJe,

According to the records of the company the disputed statutory dues on account of Sales Tax. Excise Duty and Cess that have not been deposited on account of matters pending before appropriate authorities are as follows:

Amount Period to Name of the Nature of involved which the Forum where Dispute is Statute Dues involved amount pending relates

The Central Excise Central 9,03,092.00 2006-07 Central Excise & service Act, 1944 Excise Appellate Tribunal.

W.B. Sales Tax Act, Sales 7.56,642.00 2003-04 Appellate & Revisional Board. to 2004-05

The VAT Act, 2003 Value 2,17,459.00 2006-07 Assistant Commissioner of Added Tax CornmericaJ Taxes, Kolkata

The Central Sales Tax Centraf 8,83,415.00 2003-04 Appellate & Revisional Board,

Act. 1956 Sales Tax 2006-07



The Central Sales Tax Central 2,09,149.00 2006-07 Assistant Commissioner of Act, 1956 Sales Tax Commerical Taxes, Kolkata.

10. The com pary has not accumulated losses and has not I ncu rred any cash los ses during the fin a ncial year covered by audit or in the immediately preceding financial year.

11. Based on our audit and according to i nformation and explanations given to us we are of (he opinion, " the company has not defaulted in repayment of dues to banks as at the balance sheet date.

12. As informed and explained to us, the company has not granted any loans and advances on the | basis of security by way of pledge of shares during the year, so the requirement of maintenance of adequate documents and records is not applicable.

13. In our opinion and to the best of our information and according to the explanations given to us. the company is not a chit fund / nidhi / mutual benefit fund / societies.

14. As per records of the company and information and explanations given to ush the company is not dealing or trading in shares, securities, debentures and other investments during the year.

15. According to the information and explanation given to us. the company has not given any guarantee for loans taken by its associates from bank or financial institutions.

16. The company has not obtained any term loan during the year.

17. In our opi nioa and on the bas is of our exam ination and according to the information and explanatio ns given to us, the Company has not used the funds borrowed on short-term basis during the year for long-term investment.

18. The company has not made any preferential allotment of share to parties / companies covered in the register maintained under section 301 of the Companies Act, 1956-

19. The company has not issued any debentures during the yean

20. The company has not raised any money through public issue during the year.

21. Based upon the information and explanations furnished by the management, which have been relied upon by us, there were no frauds on or by the company noticed or reported during the course of our audit.

For BLA & Associates

Chartered A ccountents

(Registration No. 325665E)



(CA. Ashok Kumar Agarwal)

Partner

Kolkata, Dated ; August 13,2010 Membership No. 062170