Uniphos Enterprises Ltd

To

The Members of Uniphos Enterprises Limited

1. We have audited the attached Balance Sheet of Uniphos Enterprises Limited (the Company ) as at March 31, 2012 and also the statement of profit and loss and the cashflow statement for the year ended on that date annexed thereto. These financial statementsare the responsibility of the Company s management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted inIndia. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

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

4. 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 ourknowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

iii. The balance sheet, statement of profit and loss and cash flow statement dealt withby this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, statement of profit and loss and cash flowstatement dealt with by this report comply with the accounting standards referred to insub-section (3C) of section 211 of the Companies Act, 1956.

v. On the basis of the written representations received from the directors, as on March31, 2012, and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on March 31, 2012 from being appointed as a director in termsof 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 explanationsgiven 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 accountingprinciples generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March31, 2012;

b) in the case of the statement of profit and loss, of the profit for the year ended onthat date; and

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

Re: Uniphos Enterprises Limited ( the Company )

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

(b) Fixed assets have been physically verified by the management during the year and nomaterial discrepancies were identified on such verification.

(c) There was no disposal of a substantial part of fixed asset during the year.

(ii) The Company did not have any inventory during the year. Accordingly, provision ofclauses 4(ii)(a), 4(ii)(b) and 4(ii)(c) of the companies (Auditors Report) order, 2003 arenot applicable to the Company.

(iii) (a) According to the information and explanations given to us, the Company hasnot granted any loans, secured or unsecured to companies, firms or other parties coveredin the register maintained under section 301 of the Companies Act, 1956. Accordingly, theprovisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company andhence not commented upon.

(e) The Company had taken loan from a company covered in the register maintained undersection 301 of the Companies Act, 1956. The maximum amount involved during the year andthe year-end balance of loan taken from such party was Rs. 7,400 lacs.

(f) In our opinion and according to the information and explanations given to us, therate of interest and other terms and conditions for such loan is not prima facieprejudicial to the interest of the Company.

(g) In respect of loan taken, repayment of the principal amount is as stipulated andpayment of interest has been regular.

(iv) 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 andthe nature of its business, for the purchase of inventory and for the sale of goods. Thereis no purchase of fixed assets during the year. During the course of our audit, we havenot observed any major weakness or continuing failure to correct any major weakness ininternal control system of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, weare of the opinion that the particulars of contracts or arrangements referred to insection 301 of the Act that need to be entered into the register maintained under section301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of such contracts or arrangements and exceeding the valueof Rupees five lakhs have been entered into during the financial year at prices which arereasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public.

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

(viii) To the best of our knowledge and as explained, the Central Government has notprescribed the maintenance of cost records under clause (d) of sub-section (1) of section209 of the Companies Act,1956, for the products of the Company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including investor education and protection fund, income-tax, sales-tax,wealth-tax, service tax, customs duty, cess and other material statutory dues applicableto it. As informed, provident fund, employees state insurance and excise duty are notapplicable to the Company.

(b) According to the information and explanations given to us, no undisputed amountspayable in respect of investor education and protection fund, income-tax, wealth-tax,service tax, sales-tax, customs duty, cess and other undisputed statutory dues wereoutstanding, at the year end, for a period of more than six months from the date theybecame payable.

(c) According to the records of the Company, the dues outstanding of income tax, salestax, wealth-tax, service tax, customs duty, excise duty and cess on account of anydispute, are as follows:

(x) The Company has no accumulated losses at the end of the financial year. The Companyhas not incurred cash loss during the year. In the immediately preceding financialyear, the Company had incurred cash loss.

(xi) Based on our audit procedures and as per the information and explanations given bythe management, we are of the opinion that the Company has not defaulted in repayment ofdues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on thedocuments and records produced to us, the Company has not granted loans and advances onthe basis of security by way of pledge of shares, debentures and other securities.

(xiii) 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 Order are not applicable tothe Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities,debentures and other investments.

Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor s Report) Order,2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has notgiven any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company, we report that funds amounting to Rs.655.07 lacs raised on short term basis in the form of short term loan has been used forlong-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties orcompanies covered in the register maintained under section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year. (xx) TheCompany has not raised any money through public issue during the year.

(xxi) Based on the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given bythe management, we report that no fraud on or by the Company has been noticed or reportedduring the year.