To the Members of Balaji Amines Limited

Solapur.

1. We have audited the attached Balance Sheet of Balaji Amines Limited, as at
March 31, 2011, the Profit and Loss account and also the Cash Flow statement for the year
ended on that date annexed thereto. These financial statements are the responsibility of
the Company’s Management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the
Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1956,
we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of
the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 appears from our examination of those books

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

(iv) In our opinion, the Balance Sheet, the Profit and Loss account and the 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 March
31, 2011 and taken on record by the Board of Directors, we report that none of the
Directors is disqualified as on March 31, 2011 from being appointed as a director in terms
of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March
31, 2011;

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

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


For V. Sridhar & Co.,

Chartered Accountants

FRN No. 006206S

Vemulapati Sridhar

Proprietor

Membership No. 202337

Secunderabad, April 28, 2011


Annexure to Auditors’ Report

Referred to in paragraph 3 of our report of even date.

(i) a. The company is maintaining proper records showing full particulars including
quantitative particulars and situation of fixed assets.

b. The fixed assets of the company have been has physically verified by the management,
at reasonable intervals during the year and according to information and explanations
given to us no material discrepancies were noticed on such verification.

c. The Company has not disposed off substantial part of fixed assets during the year.

(ii) a. The inventory has been physically verified by the management during the year at
reasonable intervals.

b. The procedures of physical verification of inventory followed by the management are
reasonable and adequate in relation to the size of the company and nature of its business.

c. The Company is maintaining proper records of inventory and according to information
and explanations given to us no material discrepancies have been noticed on such physical
verification.

(iii) The company has neither granted nor taken any loans secured or unsecured to/from
companies, firms or other parties covered in the register maintained under section 301 of
the Companies Act, 1956.

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

(v) a. According to the information and explanations given to us we are of the opinion
that the transactions that need to be entered into the register maintained under section
301 of the Companies Act, 1956 have been so entered.

b. We are of the opinion that each of these transactions have been made at prices which
are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from public.

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

(viii) The Central Government has not prescribed maintenance of cost records to the
company.

(ix) a. 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, Customs
Duty, Excise Duty, Cess and other material statutory dues applicable to it. No undisputed
amounts in respect of these statutory payments were in arrear as on March 31, 2011 for a
period of more than six months from the date they became payable.

b. The company is in appeal before the Commissioner of Income Tax (Appeals) in respect
of disputed tax for the Assessment Years 2007-08 and 2008-09. The amount of tax demand
disputed for these two years is Rs. 2.28 Crores as against which the company has paid
Rs.0.96 Crores.

(x) The company does not have any accumulated losses.

(xi) The company has not defaulted in repayment of dues to financial institution or
banks. The Company has not issued debentures.

(xii) The Company has not granted any loans and advances on the basis of security by
way of pledge of shares, debentures or other such securities.

(xiii) The Company is not a chit fund or a nidhi /mutual fund / society.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other
investments.

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

(xvi) The term loans have been applied for the purpose for which they have been
obtained.

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

(xix) The company has not issued any debentures.

(xx) The company has not raised any monies from public issues in the year under review.

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


For V. Sridhar & Co.

Chartered Accountants

FRN 006206S


Vemulapati Sridhar

Proprietor

Membership No. 202337

Secunderabad, April 28, 2011