Rhodia Specialty Chemicals India Ltd Merged Auditor Reports

TO THE MEMBERS OF RHODIA SPECIALTY CHEMICALS INDIA LIMITED

Report on the Financial Statements

1. We have audited the accompanying financial statements of Rhodia Specialty Chemicals India Limited ("the Company"), which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

2. The Company’s Board of Directors is 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 the 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; and 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.

4. 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 thereunder.

5. 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the 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 the internal financial control relevant to the Company’s preparation and fair presentation 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 operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

7. 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 31 March, 2015, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor’s Report)Order, 2015 ("the Order")issued by the Central Government in terms of Section 143(11)of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

9. As required by Section 143(3)of the Act, we 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 purposes of our audit;

(b)in our opinion, proper books of account as required by law have been kept by the Company 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 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 Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)Rules, 2014;

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements in accordance with the generally accepted accounting practice – Also refer Note 27 to the financial statements.;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

	For Deloitte Haskins & Sells
	Chartered Accountants
	(Firm’s Regn. No. 117364W)
	Ketan Vora
	Partner
Mumbai, August 26, 2015	Membership Number: 100459

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 8 under "Report on Other Legal and Regulatory Requirements" section of our report of even date to the Members of Rhodia Specialty Chemicals India Limited on the financial statements for the year ended 31 March, 2015)

1. In respect of its fixed assets:

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

(b)Some of the fixed assets were physically verified during the year by the Management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

2. In respect of its inventories:

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

(b)In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

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

3. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is generally an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

5. According to the information and explanations given to us, the Company has not accepted any deposit during the year.

6. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit)Rules, 2014 as amended prescribed by the Central Government under sub section (1)of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7. According to the information and explanations given to us, in respect of statutory dues:

(a)The Company has generally been regular in depositing undisputed statutory dues, including provident fund, employees’ state insurance, income-tax, sales- tax, wealth tax, service tax, value added tax, custom duty, excise duty, cess and any other material statutory dues applicable to it with the appropriate authorities.

(b)There were no undisputed amounts payable in respect of provident fund, employees’ state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and other material statutory dues in arrears, as at 31 March, 2015 for a period of more than six months from the date they became payable.

(c)There are no dues of income tax, sales tax, wealth tax, service tax, custom duty, excise duty, value added tax and cess which have not been deposited as on 31 March , 2015 on account of disputes except as given below:

Name of Statute	Nature of Dues	Forum where Dispute is Pending	Period to which the Amount	Amount Involved
				(Rs. in Lacs)
The Income- Tax Act, 1961	Income Tax	Commissioner of Income Tax (Appeals)	2008-2009	102.19
The Central Excise Act, 1944	Excise Duty	Central Excise and Service Tax Appellate Tribunal	1996-2006	101.23
		Commissioner of Central Excise	1999-2012	22.41
		Additional Commissioner of Central Excise	2000-2006	37.61
		Assistant Commissioner of Central Excise	2000-2002	26.40
The Custom Act, 1962	Customs Duty	Commissioner of Customs (Appeals)	2004-2010	203.17
		Assistant Commissioner of Customs	2008-2010	19.84
The Finance Act, 1994	Service tax	Central Excise and Service Tax Appellate Tribunal	2005-2008	1.24
		Additional Commissioner of Central Excise	2012-2013	9.31
		Assistant Commissioner of Central Excise	2012-2013	1.16
		Assistant Commissioner of Central Excise	2013-2014	5.66
Madhya Pradesh Sales Tax 1994	Sales tax	Deputy Commissioner of Sales Tax (Appeals)	1998-1999	0.91

(d)There are no amounts that are due to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956)and the Rules made thereunder.

8. The Company does not have any accumulated losses at the end of the financial year and the Company has incurred cash losses during the financial year covered by our audit. There were no cash losses incurred in the immediately preceding financial year.

9. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks. There are no dues to financial institution and the Company has not issued any debentures.

10. According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions. 11. According to the information and explanations given to us, the Company did not avail any term loan during the year.

12. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

	For Deloitte Haskins & Sells
	Chartered Accountants (Firm’s
	Regn. No. 117364W)
	Ketan Vora
	Partner
Mumbai, August 26, 2015	Membership Number: 100459