Coromandel International Ltd

COROMANDEL INTERNATIONAL LIMITED

1. We have audited the attached Balance Sheet of COROMANDEL INTERNATIONAL LIMITED("the Company") as at 31 March 2012, the Statement of Profit and Loss andthe Cash Flow Statement of the Company for the year ended on that date, both annexedthereto. These financial statements are the responsibility of the Company's Management.Our responsibility is to express an opinion on these financial statements based on ouraudit.

2. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts and thedisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and the significant estimates made by the Management, as well asevaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by theCentral Government in terms of Section 227(4A) of the Companies Act, 1956, we give in theAnnexure 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 reportthat:

a. we have obtained all the information and explanations which to the best of ourknowledge 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 theCompany 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 Statementdealt with by this report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, the Statement of Profit and Loss and the CashFlow Statement dealt with by this report are in compliance with the Accounting Standardsreferred to in Section 211(3C) of the Companies Act, 1956; e. in our opinion and to thebest of our information and according to the explanations given to us, the said accountsgive the information required by the Companies Act, 1956 in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31March 2012;

(ii) in the case of the Statement of Profit and Loss, of the profit of the Company forthe year ended on that date and

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

5. On the basis of the written representations received from the directors as on 31March 2012 taken on record by the Board of Directors, none of the directors isdisqualified as on 31 March 2012 from being appointed as a director in terms of Section274(1)(g) of the Companies Act, 1956.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Registration No. 008072S)

(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company's business/ activities/result, clauses(x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which, in our opinion, provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us, no material discrepancies were noticed on suchverification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute asubstantial part of the fixed assets of the Company and such disposal has, in our opinion,not affected the going concern status of the Company.

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by theManagement at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) In our opinion and according to the information and explanations given to us, theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.

(iv) In respect of loans, secured or unsecured, granted by the Company to companies,firms or other parties covered in the Register under Section 301 of the Companies Act,1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs 4950 Lakhs to three parties during theyear. All the loans granted were repaid before the year end and the maximum amountinvolved during the year was Rs 4950 Lakhs (number of parties three).

(b) The rate of interest and other terms and conditions of such loans are, in ouropinion, prima facie not prejudicial to the interests of the Company.

(c) The receipts of principal amounts and interest have been as per stipulations.

(d) There are no outstanding as at year end.

According to the information and explanations given to us, the Company has not takenany loans, secured or unsecured from companies, firms or other parties listed in theregister maintained under Section 301 of the Companies Act, 1956 and accordingly clauses 4(iii)(f) and (g) of CARO are not applicable.

(v) In our opinion and according to the information and explanations given to us, thereis an adequate internal control system commensurate with the size of the Company and thenature of its business with regard to purchases of inventory and fixed assets and the saleof goods and services. During the course of our audit, we have not observed any majorweakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained inpursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge andbelief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed tobe entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs 5 lakhs (other than the loansmentioned in paragraph (iv) above) in respect of any party, the transactions have beenmade at prices which are prima facie reasonable having regard to the prevailing marketprices at the relevant time.

(vii) According to the information and explanations given to us, the Company has notaccepted any deposit from the public during the year. In respect of unclaimed deposits,the Company has complied with the provisions of Sections 58A & 58AA or any otherrelevant provisions of the Companies Act, 1956. (viii) In our opinion, the Company has anadequate internal audit system commensurate with the size and the nature of its business.

(ix) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records underSection 209(1) (d) of the Companies Act, 1956 in respect of fertilisers and insecticidesand are of the opinion that prima facie the prescribed accounts and records have been madeand maintained. We have, however, not made a detailed examination of the records with aview to determining whether they are accurate or complete. To the best of our knowledgeand according to the information and explanations given to us, the Central Government hasnot prescribed the maintenance of cost records for any other product of the Company.

(x) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed dues, includingProvident Fund, Investor Education and Protection Fund, Employees' State Insurance,Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and othermaterial statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax,Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31March, 2012 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,Excise Duty and Cess which have not been deposited as on 31 March, 2012 on account ofdisputes are given below:

(xi) In our opinion and according to the information and explanations given to us,having regard to the rollover of buyer's credit by the banks, the Company has notdefaulted in the repayment of dues to banks and financial institutions. The Company hasnot issued any debentures.

(xii) In our opinion and according to the information and explanations given to us, theterms and conditions of the guarantees given by the Company for loans taken by others frombanks and financial institutions are not prima facie prejudicial to the interests of theCompany.

(xiii) In our opinion and according to the information and explanations given to us,the term loans have been applied for the purposes for which they were obtained, other thantemporary deployment pending application.

(xiv) In our opinion and according to the information and explanations given to us andon an overall examination of the

Balance Sheet, we report that funds raised on short-term basis have not been usedduring the year for long- term investment.

(xv) To the best of our knowledge and according to the information and explanationsgiven to us, no fraud by the Company and no material fraud on the Company has been noticedor reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Registration No. 008072S)