Southern Fuel Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2014

We have audited the accompanying financial statements of SOUTHERN FUEL LIMITED, situated in No. 108/2, Saravanampatti Road, Vellakinar, Coimbatore 641 029, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash flow statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ('the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control 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

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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.

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 control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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:

a. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;

b. In the case of the Profit and Loss Account, of the LOSS for the year ended on that date

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

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 21 (A) (1b) in the financial statements regarding the presentation of financial statements on the principles applicable to a going concern, despite the company having accumulated losses of Rs. 5.17 cores, which has fully eroded the net worth of the company as on 31.03.2014.

Reports on other Legal and Regulatory Requirement

1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. 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;

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 Balance Sheet, Statement of Profit and Loss and cash flow statement , comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE INDEPENDENTAUDITOR'S REPORT

i) In respect of its fixed assets:

(a) The company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets.

(b) As explained to us, the Fixed Assets of the company have been physically verified by the Management at reasonable intervals and no material discrepancies have been noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

ii) In respect of its inventories:

(a) As explained to us, inventories have been 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 are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

iii) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. Consequently, the provisions of clauses iii(b), iii(c) and iii(d) of the Companies (Auditors Report) (Amendment) Order 2003, are not applicable to the Company.

iv) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken any loans during the year from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the Company.

v) In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & Fixed Assets and payment for expenses and for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weakness in the internal controls has been noticed.

vi) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) As per information's and explanations given to us and in our opinion, the transaction entered into by the company with parties covered under section 301 of the Companies Act does not exceed Rupees Five Lakhs in a financial year. Therefore requirement of reasonableness of transactions does not arise.

vii) The Company has not accepted any deposits from the Public covered under section 58A and 58AA of the Companies Act, 1956.

viii) As per information and explanations given by the management, the company does not have an Internal Audit system. However, the Company has adequate internal control system commensurate with its size and the nature of its business.

ix) The maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 has not been prescribed to the class of industry the company belongs.

x) (a) According to the records of the company, undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty to the extent applicable have been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st March, 2014 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no amount payable in respect of Income tax Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes.

Name of the Nature of Amount Rs. Period Forum Where Dispute is Statute Dues pending

TNST Act Sales Tax 56.09 lakhs 1998-1999,Commissioner (CT) Govt 1999-2000 of Tamilnadu

xi) The Company has accumulated Loss of Rs. 519.24 lakhs for the year ended 31st March 2014 and it has inurred cash losses both during the current financial year and in the mmediately preceeding financial year.

xii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution or bank.

xiii) According to the information and explanations given to us, the Company has not granted any Loans and Advances on the basis of security by way of pledge of shares, debenture and other securities.

xiv) The company is not a chit fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the provision of this clause of the Comapanies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company.

xv) According to the information and explanations given to us, the Company is not trading in Shares, Mutual Funds & Other Investments.

xvi) According to information and explanations given to us, the company has not given any guarantee for loans taken by others from Banks and Financial Institutions during the Year.

xvii) Based on the information and explanations given to us and on an overall examination of the Balance sheet of the Company as at 31st March 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

xviii) Based on the information and explanations given to us and on an overall examination of the Balance sheet of the Company as at 31st March 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

xix) Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

xx) The Company has no outstanding debentures during the period under audit.

xxi) The Company has not raised any money by public issue during the year.

xxii) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the year, nor have we been informed of such case by the management.

PLACE : COIMBATORE For RAJAN SANKAR & Co. DATE: 30.05.2014 Chartered Accountants

N. RAVI SANKAR PARTNER MNO: 023548 FRNo: 003430S

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Mar 31, 2013

We have audited the accompanying Financial Statements of SOUTHERN FUEL LIMITED, No.187, Mettupalayam Road, Kavundampalayam, Coimbatore 641 030, which comprise the Balance Sheet as at 31st March 2013 and the Statement of Profit and Loss and the 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:

Management is responsible for the preparation of these Financial Statements that give a true and fair view of the financial position, financial performance of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control 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:

Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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 control relevant to the Company's preparation and fair presentation of the Financial Statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management as well as evaluating the overall presentation on the financial statements.

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

Opinion:

In our opinion and to the best of our information, and according to the explanation given to us the Financial Statements 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 subject to:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2013 and

(b) In the case of the Statement of Profit and Loss Account, of the LOSS for the year ended on that date.

(c ) In the case of Cash Flow statement of the Cash Flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 21 (A) (1b) in the financial statements, regarding the presentation of financial statements on the principles applicable to a going concern, despite the company having accumulated losses of Rs. 4.84 cores, which has fully eroded the net worth of the company as on 31.03.2013.

Report on Other Legal and Regulatory Requirements:

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

As required by section 227(3) of the Act, we report that:

a) We have 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 appears from our examination of those books.

c) The Balance Sheet and Statement of Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Statement of Profit and Loss Account and cash flow statement comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representation received from the Directors, as on 31st March, 2013 and taken on record by the Board of Directors we report that none of the directors is disqualified as on 31st March, 2013 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE INDEPENDENTAUDITOR'S REPORT

i) In respect of its fixed assets:

(a) The company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets.

(b) As explained to us, the Fixed Assets of the company have been physically verified by the Management at reasonable intervals and no material discrepancies have been noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

ii) In respect of its inventories:

(a) As explained to us, inventories have been 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 are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

iii) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. Consequently, the provisions of clauses iii(b), iii(c) and iii(d) of the Companies (Auditors Report) (Amendment) Order 2003, are not applicable to the Company.

iv) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken any loans during the year from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the Company.

v) In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & Fixed Assets and payment for expenses and for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weakness in the internal controls has been noticed.

vi) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) As per information's and explanations given to us and in our opinion, the transaction entered into by the company with parties covered under section 301 of the Companies Act does not exceed Rupees Five Lakhs in a financial year. Therefore requirement of reasonableness of transactions does not arise.

vii) The Company has not accepted any deposits from the Public covered under section 58A and 58AA of the Companies Act, 1956.

viii) As per information and explanations given by the management, the company does not have an Internal Audit system. However, the Company has adequate internal control system commensurate with its size and the nature of its business.

ix) The maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 has not been prescribed to the class of industry the company belongs.

x) (a) According to the records of the company, undisputed statutory dues including Provident Fund, Employees' State Insurance, income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty to the extent applicable have been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st March, 2013 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no amount payable in respect of Income tax Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes.

Name of the Nature of Amount Rs. Period Forum Where Dispute is Statute Dues pending

TNST Act Sales Tax 56.09 lakhs 1998-1999, Commissioner (CT) Govt 1999-2000 of Tamilnadu

xi) The Company has accumulated Loss of Rs. 484.20 lakhs for the year ended 31st March 2013 and it has inurred cash losses both during the current financial year and in the mmediately preceeding financial year.

xii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution or bank.

xiii) According to the information and explanations given to us, the Company has not granted any Loans and Advances on the basis of security by way of pledge of shares, debenture and other securities.

xiv) The company is not a chit fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, the provision of this clause of the Comapanies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company.

xv) According to the information and explanations given to us, the Company is not trading in Shares, Mutual Funds & Other Investments.

xvi) According to information and explanations given to us, the company has not given any guarantee for loans taken by others from Banks and Financial Institutions during the Year.

xvii) Based on the information and explanations given to us and on an overall examination of the Balance sheet of the Company as at 31st March 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

xviii) Based on the information and explanations given to us and on an overall examination of the Balance sheet of the Company as at 31st March 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

xix) Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

xx) The Company has no outstanding debentures during the period under audit.

xxi) The Company has not raised any money by public issue during the year.

xxii) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the year, nor have we been informed of such case by the management.

PLACE : COIMBATORE For RAJAN SANKAR & Co. DATE: 03.05.2013 Chartered Accountants

N. RAVISANKAR PARTNER MNO: 023548 FRNo: 003430S

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Mar 31, 2012

We have audited the attached Balance Sheet of M/s SOUTHERN FUEL LIMITED as at 31st March 2012 and also the Statement of Profit and Loss Account 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those 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.

As required by the Companies (Auditor''s Report) Order, 2003, issued by the central government of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanation given to us, we set out in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

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 our knowledge 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 the Company so far as appears from our examination of those books;

iii. The Balance Sheet, statement of Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet, statement of Profit and Loss Account and 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. Based on the representations made by all the directors of the company as on 31st March 2012 and taken on record by the Board of Directors, of the company and in accordance with the information and explanations as made available, the Directors of the company do not prima facie have any disqualification as referred to in clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

In our opinion and to the best of information and according to the explanations given to us, the said accounts, read together with the Significant Accounting Policies and other notes thereon, 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 31st March 2012

b) In the case of the statement of Profit and loss account, of the LOSS for the year ended on that date; and

c) In the case of Cash Flow statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO AUDITOR''S REPORT

Referred to in paragraph 2 of our report of even date on the Accounts of M/s SOUTHERN FUELS LIMITED, for the ended 31st March 2012

(i). (a) The company has maintained proper records showing full particulars, Including quantitative details and situation of Fixed Assets.

(b) All the Fixed Assets of the company have been physically verified by the Management during the year. According to the information furnished to us, discrepancies noticed between book records and physical inventory were not material and have been properly dealt with in the books of account.

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been disposed off by the company during the year.

2) a) The Management has conducted physical verification of inventories at reasonable intervals.

b) In our opinion, the procedures of the physical verification of stock followed by the management are reasonable and adequate in relation to size of the company and the nature of its business

c) The company is maintaining proper records of inventories. The Discrepancies noticed on verification between physical stock and the book records were not material in relation to the operation of the company and the same have been properly dealt with in the books of account.

3) a) As informed the company has not granted any loans secured or unsecured to companies, firms or parties covered in the register maintained under section 301 of the companies Act, 1956.

b) The company has not taken loans / deposits from a company covered in the register maintained under section 301 of the companies Act, 1956, during the year under audit.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of goods and fixed assets and for the sale of goods.

5) In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the companies Act 1956, to the best of our knowledge and belief and according to the information and explanations given to us.

a) The particulars of contracts or arrangement referred to section 301 that needed to be entered in to the register maintained under the said section have been so entered.

b) In our opinion and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6) According to the information and explanations given to us during the year the Company has not accepted deposits from public. The company has complied with the directives issued by Reserve Bank of India and the provisions of 58A, 58AA of the Companies Act 1956 and companies (Acceptance of Deposits) Rules, 1975 or any other relevant provisions of the act..

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

8) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies ( Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9) According to the records of the company, and the information and explanation given to us:

a) The company was generally regular in depositing undisputed statutory dues including Provident Fund and Employees State Insurance, Income Tax, Sales Tax, Wealth Tax dues with the appropriate authorities and there were no arrears outstanding for a period of more that 6 months as at 31st March 2011

b)According to the information and explanations given to us, and the records examined by us the following are the particulars of dues of income tax, custom duty wealth tax or excise duty, which have not been deposited on account of any dispute:-

10) In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. Further the company has incurred cash losses during the financial year covered by our audit.

11) In our opinion and according to the information and explanations given to us company has not defaulted in the payment of dues to financial institutions and Banks.

12) According to the information and explanations given to us, and the records examined by us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion and according to the information and explanations given to us, the nature of the activities of the company does not attract any special statute applicable to chit / mutual benefit fund / societies.

14) In our opinion and According to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments.

15) According to the information and explanations given to us and the records examined by us, the company has not given any guarantee for loans taken by others from Bank of Financial Institutions.

16) As informed to us, the company has not obtained any term loan during the year and hence this clause is not applicable to the company.

17) On the basis of overall examination of the balance sheet of the company and the information and explanation given to us, we report that the company funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18) During the year the company has not issued or made preferential allotment of shares.

19) During the year the company has not issued any debenture.

20) According to the information and explanations given to us and the records examined by us, the company has not raised money by public issues during the year.

21) During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

PLACE: COIMBATORE For RAJANSANKAR & CO,

DATE : 03/09/2012 Chartered Accountants

-sd-

N. RAVISANKAR

PARTNER

M.No.023548

FR No:003430S

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Mar 31, 2011

We have audited the attached Balance Sheet of m/s SOUTHERN FUELS LIMITEDas at 31st March 2011 and also the Profit and Loss Account for the year 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 staements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the aduit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit include 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 provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003, issued by the central government of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanation given to us, we set out in the annexure a statment on the matters specified in paragraph 4 and 5 of the said order.

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 our knowledge and belief were necessary for the purposes of our audit;

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

iii. The Balance Sheet and Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet and Profit and Loss Account and cash flow statements 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. Based on the represenations made by all the directors of the company as on 31st March 2011 and taken on record by the Board of Directors, of the company and in accordance with information and explanations as made available, the Directors of the company do not prima facie have any disqualification as referred to in clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

In our opinion and to the best of information and accordingh to the explanations given to us, the said accounts, read together with the Significant Accounting Policies and other notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with Accounting Principles generlly accepted in India;

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

b) In the case of the Profit and loss account PROFIT for the year ended on that date; and

c) In the case of Cash Flow statement, of the Cash Flows for the Year ended on that date.

ANNEXURE TO AUDITOR'S REPORT

Referred to in paragraph 2 of our report of even date on the Accounmts of M/s SOUTHERN FUELS LIMITED, for the ended 31st March 2011

1) (a) The company has maintained proper records showing full particulars, Including quantitative details and situation of Fixed Assets.

(b) The Fixed Assets of the company have been physically verified by the Management during the year. According to the information furnished to us, discrepancies noticed between book records and physical inventory were not material and have been properly dealt with in the books of account.

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been disposed off by the company during the year.

2) (a) The Management has conducted physical verification of inventories at reasonable intervals.

(b) In our opinion, the procedures of the physical verification of stock followed by the management are reasonable and adequate in relation to size of the company and the nature of its business.

(c) The company is maintaining proper records of inventories. The Discrepancies noticed on verification between physical stock and the book records were not material in relation to the operation of the company and the same have been properly dealt with in the books of account.

3) (a) The company has not granted any loans secured or unsecured to companies, firms or parties covered in the register maintained under section 301 of the companies Act, 1956.

(b) The company has not taken loans / deposits from a company covered in the register maintained under section 301 of the companies Act, 1956, during the year under audit.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of he company and the nature of its business for the purchase of goods and fixed assets and for the sale of goods.

5) In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the companies Act 1956, to the best of our knowledge and belief and according to the information and explanations given to us.

(a) The particulars of contracts or arrangement referred to section 301 that needed to be entered in to the register maintained under the said section have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6) According to the information and explanations given to us the Company has not accepted any deposits within the meaning of section 58A and 58AA of the companies Act, 1956.

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

8) The company's Management informed us that the central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the companies Act, 1956, for any products of the company.

9) According to the records of the company, and the information and explanation given to us:

a) The company was generally regular in depositing undisputed statutory dues including Provident Fund and Employees State Insurance, Income Tax, Sales Tax, Wealth Tax dues with the appropriate authorities and there were no arrears outstanding for a period of more that 6 months as at 31st March 2011

b) According to the information and explanations given to us, and the records examined by us the following are the particulars of dues of income tax, custom duty wealth tax or excise duty, which have not been deposited on account of any dispute:-

Name of Nature of Amount Rs. Period Forum Where Dispute the Statute Dues is pending

TNST Act Sales Tax 56.09 lakhs 1998-1999 Commissioner (CT) 1999-2000 Govt. of Tamilnadu

10) In our opinion and according to the information and explanations given to us company has not defaulted in the payment of dues to financial institutions and Banks.

11) According to the information and explanations given to us, and the records examined by us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12) In our opinion and according to the information and explanations given to us, the nature of the activities of the company does not attract any special statute applicable to chit / mutual benefit fund / societies.

13) In our opinion and According to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments.

14) According to the information and explanations given to us and the records examined by us, the company has not given any guarantee for loans taken by others from Bank of Financial Institutions.

15) As informed to us, the company has not obtained any term loan during the year and hence this clause is not applicable to the company.

16) On the basis of overall examination of the balance sheet of the company and the information and explanation given to us, we report that the company funds raised on short term basis have, prima facie, not been used during the year for long term investment.

17) During the year the company has not issued or made preferential allotment of shares.

18) During the year the company has not issued any debenture.

19) According to the information and explanations given to us and the records examined by us, the company has not raised money by public issues during the year.

20) During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

PLACE: COIMBATORE For RAJAN SANKAR & CO., DATE: 22.06.2011 Chartered Accountsnts

(Sd.) N. RAVISANKAR PARTNER Membership No. 023548 FR No : 003430S

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Mar 31, 2010

We have audited the attached Balance Sheet of M/s SOUTHERN FUEL LIMITED as at 31st March 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those 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.

As required by the Companies (Auditors Report) Order, 2003, issued by the central government of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanation given to us, we set out in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

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 our knowledge 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 the Company so far as appears from our examination of those books;

iii. The Balance Sheet and Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet and Profit and Loss Account and 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. Based on the representations made by all the directors of the company as on 31st March 2010, and taken on record by the Board of Directors, of the company and in accordance with the information and explanations as made available, the Directors of the company do not prima facie have any disqualification as referred to in clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

In our opinion and to the best of information and according to the explanations given to us, the said accounts, read together with the Significant Accounting Policies and other notes thereon, 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 31st March 2010

b) In the case of the Profit and loss account PROFIT for the year ended on that date; and

c) In the case of Cash Flow statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

Referred to in paragraph 2 of our report of even date on the Accounts of M/s SOUTHERN FUEL LIMITED, for the Year ended 31" March 2010

1) (a) The company has maintained proper records showing full particulars, Including quantitative details and situation of Fixed Assets.

(b) The Fixed Assets of the company have been physically verified by the Management during the year. According to the information furnished to us, discrepancies noticed between book records and physical inventory were not material and have been properly dealt with in the books of account.

(c) In our opinion and according to the information and explanations given to us, substantial part of fixed assets has not been disposed off by the company during the year.

2) a) The Management has conducted physical verification of inventories at reasonable intervals.

b) In our opinion, the procedures of the physical verification of stock followed by the management are reasonable and adequate in relation to size of the company and the nature of its business

c) The company is maintaining proper records of inventories. The Discrepancies noticed on verification between physical stock and the book records were not material in relation to the operation of the company and the same have been properly dealt with in the books of account.

3) a) The company has not granted any loans secured or unsecured to companies, firms or parties covered in the register maintained under section 301 of the companies Act, 1956.

b) The company has not taken loans / deposits from a company covered in the register maintained under section 301 of the companies Act, 1956, during the year under audit.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of goods and fixed assets and for the sale of goods.

5) In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the companies Act 1956, to the best of our knowledge and belief and according to the information and explanations given to us.

a) The particulars of contracts or arrangement referred to section 301 that needed to be entered in to the register maintained under the said section have been so entered.

b) In our opinion and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6) According to the information and explanations given to us the Company has not accepted any deposits within the meaning of section 58A and 58AA of the companies Act, 1956.

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

8) The companys Management informed us that the central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the companies Act, 1956, for any products of the company.

9) According to the records of the company, and the information and explanation given to us:

a) The company was generally regular in depositing undisputed statutory dues including Provident Fund and Employees State Insurance, Income Tax, Sales Tax, Wealth Tax dues with the appropriate authorities and there were no arrears outstanding for a period of more that 6 months as at 31st March 2010.

b) According to the information and explanations given to us, and the records examined by us the following are the particulars of dues of income tax, custom duty wealth tax or excise duty, which have not been deposited on account of any dispute:-

Name of the Statute Nature of Dues Amount Rs. Period

TNGST Act Sales Tax 56.09 lakhs 1998-1999,

1999-2000

Name of the Statute Forum Where Dispute is Pending

TNGST Act Commissioner(CT) Govt of Tamilnadu



10) In our opinion and according to the information and explanations given to us company has not defaulted in the payment of dues to financial institutions and Banks.

11) According to the information and explanations given to us, and the records examined by us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12) In our opinion and according to the information and explanations given to us, the nature of the activities of the company does not attract any special statute applicable to chit / mutual benefit fund / societies.

13) In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments.

14) According to the information and explanations given to us and the records examined by us, the company has not given any guarantee for loans taken by others from Bank of Financial Institutions.

15) As informed to us, the company has not obtained any term loan during the year and hence this clause is not applicable to the company.

16) On the basis overall examination of the balance sheet of the company and the information and explanation given to us, we report that the company funds raised on short term basis have, prima facie, not been used during the year for long term investment.

17) During the year the company has not issued or made preferential allotment of shares.

18) During the year the company has not issued any debenture.

19) According to the information and explanations given to us and the records examined by us, the company has not raised money by public issues during the year.

20) During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For Rajan Sankar & Co.,

Chartered Accountants

(Sd.)

N. Ravisankar

Place : Coimbatore Partner

Date : 31.05.2010 Membership No. 23548