Aditya Birla Chemicals India Ltd Merged Auditor Reports

To the Members of

ADITYA BIRLA CHEMICALS (INDIA) LIMITED

Report on the Financial Statements

1 We have audited the accompanying financial statements of ADITYA BIRLA CHEMICALS (INDIA) LIMITED("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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

Management’s Responsibility for the Financial Statements

2 The management and Board of Directors of the Company are 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 Companies (Accounts) Rules, 2014. 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 judgments and estimates that are reasonable and prudent; 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

3 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 there under. 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

4 An audit involves performing procedures to obtain audit evidence about the amounts and 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 controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s management and Board of Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

6. 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, its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

7 As required by the Companies (Auditor’s Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

8 As required by section 143(3) of the Act, we further 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 purpose of our audit;

b. 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;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

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

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

f. In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements. Refer Note B-36 of the financial statements

(ii) The Company assesses periodically the foreseeable losses on all its long term contracts. As at end of the year under report there were no such foreseeable losses. The company did not have any derivative contracts as at the date of Balance Sheet

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

	For Khimji Kunverji & Co
	Chartered Accountants
	Firm Registration No 105146W
Place: Mumbai	Hasmukh B Dedhia
Date: May 13, 2015	(Partner) F-033494

Annexure referred to in paragraph 7 Our Report of even date to the members of ADITYA BIRLA CHEMICALS (INDIA) LIMITED on the accounts of the company for the year ended 31st March, 2015

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

(i) (a) The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) As explained to us, fixed assets have been physically verified by the management at periodic intervals which in our opinion is reasonable having regard to the size of the company and the nature of its assets. As informed to us no material discrepancies were noticed on such verification;

(ii) (a) The physical verification of inventories has been conducted at periodic intervals by the management;

(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 the nature of its business;

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification

(iii) The company has not granted any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 189 of the Act. Hence the requirement of clause (iii)(a) and (iii)(b) of paragraph 3 of the Order are not applicable to it

(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, for the purchase of inventories, fixed assets and for the sales of goods/services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weakness in the internal control system pertaining to these areas has been noticed or reported

(v) The Company has not accepted any deposits from the public. Hence clause (v) of paragraph 3 of the Order is not applicable to it

(vi) We have broadly reviewed the accounts and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act and are of the opinion that, prima facie, the prescribed accounts and records have been maintained

(vii) (a) According to the information and explanations given to us and based on the records of the company examined by us, the company is regular in depositing with the appropriate authorities the undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Value Added Tax, Duty of Custom, Duty of Excise, Cess and other statutory dues as applicable to the Company;

(b) According to the information and explanations given to us and based on the records of the company examined by us, the following dues of Income Tax, Wealth Tax, Service Tax,Value Added Tax, Sales Tax, Duty of Customs,Duty of Excise, Cess which have not been deposited on account of disputes:

Name of the Statute	Nature of dues	Period	Amount (Rs in Lac)	Forum where dispute is pending
Income Tax Act 1961	Income Tax and Interest	AY 2007-08 , AY 2008-09, AY 2010-11	696.12	CIT (Appeals) and Petition u/s 154
		AY 2002-03 AY 2006-07 & AY 2009-10	8.44	CIT (Appeals)
Sales Tax / Trade Tax	Sales Tax	AY 2010-11	7.03	Office of the Additional Commissioner(A), Mirzapur
		FY 2009-10, FY 2010-11	40.61	The Joint Commissioner of Commercial Taxes (Appeal), Ranchi
UP Tax on Entry of Goods into Local Area Tax, 2007	Entry Tax	FY 2006-07 to FY 2011-12	212.75	Supreme court Delhi
Central Excise Act 1944	Cenvat and Penalty	FY 2000-01 to 2006-07, FY 2008-09 to FY 2012-13	869.23	CESTAT, New Delhi
		(FY 1998-1999, 1996-2000, 2007-2008)	8.13	CESTAT High Court
		FY 2004-2008	525.70	CESTAT, Kolkata
		FY 2006-07	12.78	AC, Central Excise, Mirzapur
Sec 94 of Finance act 1994	Service Tax and Penalty	FY 2005-06 & FY 11-12	159.11	CESTAT, New Delhi
		FY 2006-2007	25.11	CESTAT, New Delhi
		FY 2005-07	105.02	CESTAT, Kolkata

(c) The Company has transferred the required sums to the Investor Education and Protection Fund during the year within time as prescribed by the relevant provisions of the Companies Act, 1956 and rules made there under

(viii) The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial year

(ix) Based on our audit procedures and as per the information and explanations given, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank

(x) In our opinion, and according to the information and explanations given to us, the company has given guarantee to a bank favoring its overseas subsidiary which has not yet availed credit facilities against the said guarantee; in our opinion, terms of such guarantee are not, prima facie, prejudicial to the interest of the company

(xi) Based on information and explanations given to us, the term loans were applied by the Company during the year for the purposes for which the loans were obtained

(xii) During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management of the Company

	For Khimji Kunverji & Co
	Chartered Accountants
	Firm Registration No 105146W
Place: Mumbai	Hasmukh B Dedhia
Date: May 13, 2015	(Partner) F-033494