1.  We have audited the attached Balance sheet of Navin Fluorine
 International Limited as at 31st March, 2011, the Profit and Loss
 account and also the Cash-flow Statement 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.
 
 2.  We conducted our audit in accordance with the 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.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 (CARO),
 issued by the Central Government in terms of section 227 (4A) of the
 Companies Act, 1956, we give in the Annexure 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 report as follows:
 
 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, 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, Profit and Loss account and
 Cash-flow statement dealt with by this report are in compliance with
 the Accounting Standards referred to in Section 211 (3C) of the
 Companies Act, 1956;
 
 v. in our opinion, and to the best of our information, and according to
 the explanations given 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 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, 2011;
 
 b) in the case of the Profit and Loss account, of the profit for the
 year ended on that date and
 
 c) in the case of the Cash-flow statement, of the cash-flows for the
 year ended on that date.
 
 vi. On the basis of written representations received from the
 directors, as on 31st March, 2011 and taken on record by the Board of
 Directors, none of the directors is disqualified as on 31st March, 2011
 from being appointed as a director in terms of Section 274 (1) (g) of
 the Companies Act, 1956.
 
 Annexure to the Auditors report Re: Navin Fluorine International
 Limited (referred to in paragraph 3 of our report of even date)
 
 1.  Having regard to the nature of the Companys business / activities
 / results, clauses (vi), (x), (xii), (xiii), (xiv), (xv), (xviii) and
 (xx) of paragraph 4 of CARO are not applicable to the Company for the
 year.
 
 2.  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) The fixed assets were physically verified during the year by the
 management in accordance with a regular 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.
 
 c) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of fixed assets of the Company and
 such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 3.  In respect of its Inventory :
 
 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 inventories
 and no material discrepancies were noticed on physical verification.
 
 4.  The Company has neither granted nor taken any loans, secured or
 unsecured to / from companies, firms or other parties listed in the
 Register maintained under section 301 of the Companies Act, 1956.
 
 5.  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 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 weakness in
 such internal control system.
 
 6.  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 arrangements referred to Section 301
 that needed to be 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 lacs in respect
 of any party, the transactions have been made at prices which are prima
 facie reasonable having regard to the prevailing market prices at the
 relevant time.
 
 7.  In our opinion, the internal audit functions carried out during the
 year by firm of Chartered Accountants appointed by the Management have
 been commensurate with the size of the Company and the nature of its
 business.
 
 8.  We have broadly reviewed the books of account maintained by the
 Company pursuant to the Rules made by the Central Government for the
 maintenance of cost records under section 209(1)(d) of the Companies
 Act, 1956, and we are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained except that the
 prescribed cost statements are in the process of being compiled for the
 year. We have, however, not made a detailed examination of the records
 with a view to determining whether they are accurate or complete. To
 the best of our knowledge and according to the information and
 explanations given to us, the Central Government has not prescribed the
 maintenance of cost records for any other product of the Company.
 
 9.  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, Investor Education and
 Protection Fund, Employees State Insurance, Income-tax, Sales-tax,
 Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other
 material 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 31st March, 2011 for a period of more than six
 months from the date they became payable.
 
 c) Details of dues in respect of income-tax, excise duty, customs duty,
 wealth-tax, sales-tax, service tax and cess which have not been
 deposited as on 31st March, 2011 on account of disputes are given below
 :
 
 Statute                  Nature of Dues        Forum where Dispute
                                                 is pending
 
 Income Tax Act, 1961        Income Tax        ITAT, Mumbai
 
 Income Tax Act, 1961        Income Tax       CIT, Appeals, VII,Mumbai
 
 Income Tax Act, 1961        Income Tax       CIT, Appeals, VII,Mumbai
 
 Income Tax Act, 1961        Income Tax       CIT, Appeals, VII,Mumbai
 
 Income Tax Act, 1961        Income Tax       CIT, Appeals, VII,Mumbai
 
 Central Excise Act          Excise Duty      High Court
 
 Central Excise Act          Excise Duty      Commissioner of Central 
                                              Excise
 
 Central Excise Act          Excise Duty      Assistant Commissioner 
                                              of Central Excise
 
 Central Excise Act          Excise Duty      Commissioner of Central 
                                              Excise
 
 Central Excise Act          Excise Duty      Commissioner of Central
                                              Excise
 
 M.P. Sales Tax Act          Sales Tax        Deputy Commissioner
 
 The West Bengal Value      Value Added Tax   Deputy Commissioner Appeals
 Added Tax Act
 
 M.P. Commercial Tax         Commercial Tax   Assistant Commissioner of
 Act 1994                                     Commercial Taxes
 
 U.P. VAT Act               Value Added Tax  Sales Tax Appelate Tribunal
 
 The West Bengal Value      Value Added Tax   Appelate Board
 Added Tax Act
 
 M.P. Sales Tax Act      C.S.T. & Entry Tax   Appelate Board
 
 M.P. Sales Tax Act                C.S.T. &   Department of Industries
                             Commercial Tax   M.P. Government
 
 M.P. Commercial Tax Act     Commercial Tax   Madhya Pradesh High Court
 
 U.P. VAT Act               Value Added Tax   Allahabad High Court
 
 The West Bengal Value      Value Added Tax   Senior Joint Commissioner
 Added Tax Act
 
 The West Bengal Value      Value Added Tax   Appellate Revisional Board
 Added Tax Act
 
 
 Statue                Period to which the         Amount involved
                         amount relates            (Rs. in lacs)
 
 Income Tax Act, 1961     2005-06                       0.37
 
 Income Tax Act, 1961     2005-06                      98.74
 
 Income Tax Act, 1961     2006 - 07                   226.33
 
 Income Tax Act, 1961     2007 - 08                    78.47
 
 Income Tax Act, 1961     2008 - 09                    15.96
 
 Central Excise Act       1993-94 to 2005-06           90.33
 
 Central Excise Act       2005 – 06 & 2006 - 07         0.17
 
 Central Excise Act       1994 – 95 & 1997 - 98         0.98
 
 Central Excise Act       2007-08                      36.25
 
 Central Excise Act       2008-09                      30.68
 
 M.P. Sales Tax Act       2006 – 07                    47.97
 
 The West Bengal Value
 Added Tax Act            2000 – 01 to 2004 - 05       13.96
 
 M.P. Commercial Tax
 Act 1994                 1992 – 93, 1994 – 95          8.30
                          to 1996 – 97
 
 U.P. VAT Act             2001 - 02                     1.68
 
 The West Bengal Value
 Added Tax Act            1999 – 00                     2.06
 
 M.P. Sales Tax Act       1996 – 97 & 2005 – 06        18.52
 
 M.P. Sales Tax Act       1997 – 98                    12.42
 
 M.P. Commercial Tax Act  1990 – 91 to 1995 – 96       28.51
 
 U.P. VAT Act             1998 – 99 to 2001 – 02       72.02
 
 The West Bengal Value
 Added Tax Act            2005 – 06                     2.69
 
 The West Bengal Value
 Added Tax Act            1994 – 95                     1.08
 
 10.  In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues to
 banks, financial institutions and debenture holders.
 
 11.  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 than temporary deployment pending
 application.
 
 12.  In our opinion and according to the information and explanations
 given to us, and on an overall examination of the Balance sheet of the
 Company, we report that funds raised on short-term basis have not been
 used during the year for long-term investment.
 
 13.  According to the information and explanations given to us and the
 records examined by us, securities/ charges have been created in
 respect of the debentures issued.
 
 14. To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud by the Company and
 no fraud on the Company was noticed or reported during the year.
 
                                    For Deloitte Haskins & Sells,
 
                                           Chartered Accountants
 
                                      (Registration No. 117364W)
 
                                                     R. Salivati
 
                                                         Partner
 Mumbai, dated, 29th April, 2011          (Membership No. 34004)