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Auditor Report of Jai Balaji Industries Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Jai Balaji Industries Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, 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 Standalone Financial Statements

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 and presentation of these standalone 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

Our responsibility is to express an opinion on these standalone 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.

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 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 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes to the financial statements:-

Note- 31 in the Notes to the financial statements which indicate that the company has been incurring losses and its net worth is fully eroded, however, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said note.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. 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 section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. 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 standalone 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 31st March, 2015 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st 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 Auditor's 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 - Refer Note. 26 & 28 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Auditors' Report

The Annexure referred to in our Independent Auditor's Report to the members of Jai Balaji Industries Limited ('the Company') on the standalone financial statements for the year ended on 31st March 2015. We report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. According to information and explanation given to us, no material discrepancies were noticed on such verification.

ii. (a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(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 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 inventory and no material discrepancies were noticed on physical verification.

iii. The Company has granted unsecured loans to companies covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act').

(a) The receipts of the principal amount and interest has been regular & thus paragraph (iii)(b) of the Order is not applicable to the Company.

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 and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

v. The Company has not accepted any deposits from the public.

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

vii. According to the information and explanations given to us in respect of statutory and other dues:-

(a) The Company has not been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Value Added Tax, duty of Excise , Cess and other statutory dues with the appropriate authorities during the year.

According to the information and explanations given to us, the following undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2015 for a period of more than six months from the date of becoming payable:-

Name of statute Nature of dues Amount Outstanding (Rs. in lacs)

Finance Act, 1994 Service Tax 756.96

Income Tax Act, 1961 TDS 584.43

Income Tax Act 1961 TCS 1.58

Central Excise Act, 1944 Excise Duty 1236.61

Provident Fund Act, Provident Fund 391.32 1952

Employee State Employee state 166.62 Insurance Act, 1948 insurance

P Tax Professional Tax 19.06





Income Tax Act 1961

Name of Statute Period to which Amount paid up amount relates to 4th August, 2015 (Rs.in lacs)

Finance Act, 1994 March '13 to September '14 533.33

Income Tax Act, 1961 March '13 to September '14 322.29

Income Tax Act, 1961 April '13 1.49

Central Excise Act, 1944 May '14 to September '14 1188.11

Provident Fund Act, 1952 Feb '13 to September '14 388.70

Employee State Insurance Feb '13 to September '14 166.62 Act 1948

P Tax March '14 to September '14 17.32

(b) According to the information and explanations given to us, there are no material dues of wealth tax, duty of customs and cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of income tax, sales tax, duty of excise and value added tax have not been deposited by the Company on account of disputes.

Name of the Nature of dues Amount statute (Rs. in lacs)

The Central CENVAT Credit 13,833.11 Excise Act, 1944 disallowed

The West Bengal Pending Forms 3.59 Sales Tax Act, 1994

The West Turnover Enhanced/ 1,578.37 Bengal Value ITC disallowed Added Tax Act, 2003

The Central Pending Forms/ 547.53 Sales Tax Act, 1956 Forms Disallowed

The Income Tax Income Tax matter under 6.85 Act, 1961 Dispute / Appeal

Name of the Statute Period to which Forum where dispute amount relates is pending

The Central Excise Act 2007-08, 2008-09, Central Excise 1944 2009-10, 2010-11, Service Tax 2011-12, 2012-13, Appellate Tribunal/ 2013-14 and 2014-15 Commissioner (Appeals)

The West Bengal Sales 2004-05 West Bengal Tax Act 1994 Appellate and Revision Board

The West Bengal 2005-06, 2006-07, West Bengal Appellate Value Added Tax Act 2007-08, 2008-09, and Revision Board/ 2003 2009-10, 2010-11, Sr. Jt. Commissioner 2011-12 Sales Tax

The Central Sales Tac 2004-05, 2006-07, West Bengal Act 1956 2007-08, 2008-09, Appellate and 2009-10,2010-11, Revision Board/Sr. 2011-12 Jt. Commissioner Sales Tax

The Income Tax Act 1961 A Y 2009-10 DCIT / CIT (A)

(c) The amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time.

viii. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in the current and immediately preceding financial year.

ix. In our opinion and according to information and explanations given by the management, we are of the opinion that the Company has defaulted in the repayment of dues to banks and financial institutions during the year at different maturities as given below.

Banks Particulars of Principal Interest Default (Rs. in lacs) (Rs. in lacs)

Less than 1 Year 6,864.38 5,374.35

More than 1 Year 118.27 1,130.12

Total 6,982.65 6,504.47

Financial Institution Particulars of Principal Interest Default (Rs. in lacs) (Rs. in lacs)

Less than 1 Year 883.29 546.44

More than 1 Year 1421.59 585.44

Total 2304.88 1131.88

x. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantee given by the Company for loans taken by subsidiaries or other companies from banks are not, prima facie, prejudicial to the interests of the Company. Total value of outstanding guarantee amounts to Rs. 5,045.00 lacs.

xi. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were applied by the Company for the purposes for which the loans were obtained.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For, S. K. AGRAWAL & CO. Chartered Accountants Firms Registration No-306033E

(J. K. CHOUDHURY) Place : Kolkata Partner Dated : 5th August, 2015 Membership No: 009367






Mar 31, 2014

We have audited the accompanying financial statements of Jai Balaji Industries Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2014, 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

The company''s 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 notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. 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 of 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 Company''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 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:

i) In the case of the Balance Sheet, of the State of affairs of the Company as at 31st March, 2014

ii) In the case of the Statement of Profit and Loss, of the Loss of the Company for the year ended on that date; and

iii) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the order") issued by the Central Government in terms of Section 227(4A) 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 purposes of our audit.

b) In our opinion, proper books of accounts 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 accounts.

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India.

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

Annexure to the Independent Auditors'' Report

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

i) 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 program of verification, covering all fixed assets over a year of three years, 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. Fixed assets disposed off during the year were not substantial and therefore, do not affect the going concern assumption.

ii) a. The Management has conducted physical verification of inventory at reasonable intervals during the year.

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 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 inventory. The discrepancies noted on physical verification of stocks as compared to book records were not significant and the same has been properly dealt with in the books of accounts.

iii) a. The Company had granted loan to a Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 8,500.00 lacs and the year-end balance in respect of such loan is Rs. 7,000.00 lacs.

b. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

c. The above loan is stated to be re-payable on demand. As informed, the Company has received part repayment of such loan during the year, and thus, there has been no default on the part of such party to whom the money has been lent. The payment of interest has been regular.

d. In view of the loan being repayable on demand, there is no overdue of loan granted to the Company listed in the register maintained under section 301 of the Companies Act, 1956.

e. The Company has taken loans from two companies, covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs. 4017.25 lacs out of which Rs. 3220.00 lacs is interest free.

f. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that some of the items purchased are of a special nature and alternative sources do not exist for obtaining quotations thereof, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or any continuing failure to correct any major weakness in internal control system of the Company in respect of these areas.

v) a. According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangement referred to in section 301 of the Companies Act, 1956, that needed to be entered into the register maintained under section 301 have been so entered.

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

vi) The Company has not accepted any deposits from public as defined under section 58A & 58AA or other relevant provisions of the Companies Act, 1956.

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

viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956, related to the manufacture of its products and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

ix) According to the information and explanations given to us in respect of statutory and other dues:

a. The Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities, except that there have been delays in deposit of dues in certain cases of sales tax, service tax, excise duty, provident fund and employees'' state insurance.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales- tax, wealth-tax, tax deducted at source, service tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year-end, for a year of more than six months from the date they became payable except for provident fund, employees'' state insurance, tax deducted at source and service tax.

c. According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of Nature of Amount Period to Forum where Statute Dues (Rs. in lacs) which the dispute is Amount Relates Pending

Central CENVAT Credit 11,320.16 2005-06, Central Excise Excise Act, Disallowed 2006-07, Service Tax 1944 2007-08 and Appellate 2010-11 Tribunal/ Commissioner (Appeals) The West Pending Forms 3.59 2004-05 West Bengal Bengal Appellate and Value Added Revision Board Tax Act, 2003

The Central Pending Forms/ 3,744.52 2004-05,2005- West Bengal Sales Tax Forms 06, 2006-07, Appellate and Act, 1956 Disallowed 2008-09,2009- Revision Board 10,and 2010-11 /Sr. Joint Commissioner Sales Tax

The West Turnover 10,182.36 2004-05,2005- West Bengal Bengal Enhanced/ITC 06, 2006-07, Appellate and Value disallowed 2008-09,2009- Revision Board Added Tax 10,and 2010-11 /Sr. Joint Act, 2003 Commissioner Sales Tax

The Income Income Tax matter 6.85 A.Y.2009-10 DCIT/CIT (A) Tax under Dispute / Act, 1961 Appeal

x) The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses in current and immediately preceding financial year.

xi) Based on our audit procedures and as per the information and explanation given by the management, we are of the opinion that the Company has defaulted in repayment of dues to banks during the year at different maturities as given below:

Default in Number Principal Interest of quarterly (Rs. in lacs) (Rs. in lacs) installment

1 220.64 -

2 332.98 -

3 61.11 -

Total 614.72 5,566.40

Based on our audit procedures and as per the information and explanation given by the management, we are of the opinion that the Company has defaulted in repayment of dues to financial institutions during the year at different maturities as given below:

Default in Number Principal Interest of quarterly (Rs. in lacs) (Rs. in lacs) installment

1 1,508.30 -

Total 1,508.30 693.57

The Company has no outstanding dues in respect of debentures.

xii) According to the information and explanations given to us, the Company has not granted loans and advances on the 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.

xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by its wholly owned subsidiary/others from banks; the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

xvii) According to information and explanation given to us and on an overall examination of Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long-term investment.

xviii) The Company has made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 as per the terms of the CDR scheme. The price at which shares have been issued are not prejudicial to the interest of the company.

xix) The Company did not have outstanding debentures during the year.

xx) The Company has not raised any money through public issue during the year.

xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the period.

For, S. K. AGRAWAL & COMPANY Chartered Accountants Registration No: 306033E

J. K. CHOUDHURY Partner Membership No: 009367

Kolkata Dated : 29th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Jai Balaji Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss for the period 1st July, 2012 to 31st March, 2013 and Cash Flow Statement for the period 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 and cash flows of the Company in accordance with the Accounting Principles generally accepted in India including Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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.

Auditors'' 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. 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 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:

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

b) In the case of the Statement of Profit and Loss, of the loss for the period ended on that date.

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

Report on Other Legal and Regulatory Requirements

1. 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 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 and 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 Balance Sheet and Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. On the basis of written representa- tions received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 Independent Auditors'' Report

(REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING OF "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available informations.

(b) All fixed assets have not been physically verified by the management during the period but there is a regular programme of verification in a phased manner to cover all the items of fixed assets over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) There was no disposal of substantial part of fixed assets during the period.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the period, except for bulk raw materials which has been physically verified by an independent chartered engineer whose report has been relied upon by us.

(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) (a) The Company had granted loan to a Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the period was Rs. 8,500.00 lacs and the period-end balance in respect of such loan is Rs. 8,500.00 lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

(c) The above loan is stated to be re-payable on demand. As informed, the Company has not demanded repayment of any such loan during the year, and thus, there has been no default on the part of such party to whom the money has been lent. The payment of interest has been regular.

(d) In view of the loan being repayable on demand, there is no overdue of loan granted to the Company listed in the register maintained under section 301 of the Companies Act, 1956.

(e) According to the information and explanation given to us, the Company has not taken any loans, from companies, covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses (f) and (g) of Para 4(iii) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that some of the items purchased are of a special nature and alternative sources do not exist for obtaining quotations thereof, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.

During the course of our audit, we have not observed any major weakness or any continuing failure to correct any major weakness in internal control system of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, that need to be entered into the register maintained under section 301 have been so entered.

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

(vi) The Company has not accepted any deposits from the public within the meaning of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956.

(vii) The Company has an effective internal audit system commensurate with the nature and size of the Company.

(viii) 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, related to the manufacture of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities, except that there have been delays in deposit of dues in certain cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales- tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the period-end, for a period of more than six months from the date they became payable.

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

Name of the Nature of dues Amount statute (Rs. in lacs)

Central CENVAT Credit 2,321.89 Excise Act, Disallowed 1944

Central Differential 1,139.26 Excise Act, Duty 1944

The West Pending Forms 3.59 Bengal Value Added Tax Act, 2003

The Central Pending Forms/ 688.59 Sales Tax Forms Act, 1956 Disallowed

The West Turnover 6,048.40 Bengal Value Enhanced/ITC Added Tax Act, 2003 disallowed

Name Period to Forum where which the dispute is amount relates pending

Central 2005-06, Central Excise 2006-07 and Service Tax 2007-08 Appellate Tribunal/ Commissioner (Appeals)

Central 2005-06, Central Excise 2006-07, Service Tax 2007-08 and 2010-11 Appellate Tribunal/ Commissioner (Appeals)

Central 2004-05 West Bengal Appellate and Revision Board

Central 2004-05, 2005-06 West Bengal 2006-07, 2007-08 Appellate and and 2008-09 Revision Board/ Sr. Joint Commissioner Sales Tax

Central 2005-06, West Bengal 2006-07, 2007-08 Appellate and and 2008-09 Revision Board/Sr. Joint Commissioner Sales Tax

(x) The accumulated losses of the Company at the end of the financial period are less than fifty percent of its net worth. The Company has incurred cash losses in current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution and bank read with the fact that the term loans have been rescheduled as per the corporate debt restructuring scheme approved during the year as stated in Note No. 30. Further the Company did not have any outstanding debentures during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the 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.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by its wholly owned subsidiary / others from banks; the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have outstanding debentures during the period.

(xx) The Company has not raised any money through public issue during the period.

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

For U. Narain & Co. For Rashmi & Co.

Chartered Accountants Chartered Accountants

Firm Regn. No. 000935C Firm Regn. No. 309122E

CA R. R. Modi CA Sandeep Agarwal

Partner Partner

Membership No. : 053118 Membership No. : 065643

27, Brabourne Road,

"Narayani Building" 213, Todi Chambers

5th Floor, Room No.503 2, Lal Bazaar Chambers

Phone: 033 – 3053 3386 (5 lines) Phone: 033 – 2230 2329

Email: unaraincokol@gmail.com Email: rashmico@icai.org

Dated: 15th May, 2013 Dated: 15th May, 2013


Jun 30, 2012

1. We have audited the attached Balance Sheet of Jai Balaji Industries Limited ('the Company') as at June 30, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement for the period ended on that date (01.04.2011 to 30.06.2012) 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.

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 the 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 (Auditor's Report) Order, 2003 (as amended) (the order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose 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 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 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 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. On the basis of the written representations received from the directors, as on June 30, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on June 30, 2012 from being appointed as a director in terms of 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 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 Balance Sheet, of the state of affairs of the Company as at June 30, 2012;

b) in the case of Statement of Profit and Loss, of the loss for the period ended on that date; and

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

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

(b) All fixed assets have not been physically verified by the management during the period but there is a regular programme of verification in a phased manner to cover all the items of fixed assets over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) There was no disposal of substantial part of fixed assets during the period.

(ii) (a) The Management has conducted physical verification of inventory at reasonable intervals during the period, except for bulk raw materials which has been physically verified by an independent chartered engineer whose report has been relied upon by us.

(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) (a) The Company had granted loan to a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the period was Rs. 12,088.17 lacs and the period-end balance in respect of such loan is Rs. 8,499.63 lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

(c) The above loan is stated to be re-payable on demand. We are informed that, the Company has received back the amount of loan to the extent demanded by it and there has been no default on the part of such party to whom the money has been lent. The payment of interest has been regular.

(d) As the party has repaid the amount of loan whenever demanded, therefore there is no overdue amount for the above loan granted to a Company listed in the register maintained under Section 301 of the Companies Act, 1956.

(e) According to the information and explanation given to us, the Company has not taken any loans, from companies, covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that some of the items purchased are of a special nature and alternative sources do not exist for obtaining quotations thereof, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or any continuing failure to correct any major weakness in internal control system of the

Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, that need to be entered into the register maintained under Section 301 have been so entered.

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

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956.

(vii)The Company has an internal audit system the scope and coverage of which has increased during the period as compared to previous year. However, in our opinion the same has to be enlarged further to commensurate with the size and nature of its business.

(viii)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, related to the manufacture of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities, except that there have been delays in deposit of dues in certain cases of sales tax, excise duty, provident fund and employees' state insurance.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the period-end, for a period of more than six months from the date they became payable.

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



Name of the Nature of dues Amount Period to Forum where statute (Rs.in lacs) which the dispute is amount relates pending

Central CENVAT Credit 2,321.89 2005-06, Central Excise Excise Act, Disallowed 2006-07 and Service Tax 1944 2007-08 Appellate Tribunal/ Commissioner (Appeals)

Central Differential 1,139.26 2005-06, Central Excise Excise Act, Duty 2006-07, 2007-08 Service Tax 1944 and 2010-11 Appellate Tribunal/ Commissioner (Appeals)

The West Pending Forms 3.59 2004-05 West Bengal Bengal Value Appellate and Added Tax Act, 2003 Revision Board

The Central Pending Forms/ 749.95 2004-05, 2005-06 West Bengal Sales Tax Forms Disallowed 2006-07, 2007-08 Appellate and Act, 1956 and 2008-09 Revision Board/ Sr. Joint Commissioner Sales Tax

The West Turnover 10,799.05 2005-06, West Bengal Bengal Value Enhanced/ITC 2006-07, 2007-08 Appellate and Added Tax Act, 2003 Disallowed and 2008-09 Revision Board/Sr. Joint Commissioner Sales Tax



(x) The accumulated losses of the company at the end of the financial period are not less than fifty percent of its net worth. The Company has incurred cash losses in this financial period but not in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has defaulted in repayment of dues to banks during the year as given below.

Period of delay Principal Interest (Rs.in lacs) (Rs.in lacs)

Up to 30 days 4,911.54 1,212.88

31-90 days 3,088.05 2,273.85

90 days and above 8,717.42 1,979.36



Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has defaulted in repayment of dues to financial institutions during the year as given below:

Period of delay Principal Interest (Rs.in lacs) (Rs.in lacs)

Up to 30 days 220.00 39.93

31-90 days 166.67 80.55

90 days and above 386.67 122.86

The Company has no outstanding dues in respect of debentures.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the 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.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by its wholly owned Subsidiary from banks, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have outstanding debentures during the period.

(xx) The Company has not raised any money through public issue during the period.

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



For U. Narain & Co. For Rashmi & Co.

Chartered Accountant Chartered Accountants

Firm Regn. No. 000935C Firm Regn. No. 309122E

CA R. R. Modi CA Sandeep Agarwal

Partner Partner

Membership No. : 053118 Membership No. : 065643

Place : Kolkata Place : Kolkata

Date : October 04, 2012 Date : October 04, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of Jai Balaji Industries Limited ('the Company') as at March 31, 2011 and also the Profit and Loss Account and the Cash Flow Statement 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.

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 the 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 (Auditor's Report) Order, 2003 (as amended) (the order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose 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 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, 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 comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of the written representations received from the directors, as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of 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 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

b) in the case of Profit and Loss Account, of the 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 the Auditors' Report

(REFERRED TO IN OUR REPORT OF EVEN DATE TO THE MEMBERS OF JAI BALAJI INDUSTRIES LTD AS AT AND FOR THE YEAR ENDED 31ST MARCH, 2011)

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

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification in a phased manner to cover all the items of fixed assets over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

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

(ii) (a) The Management has conducted physical verification of inventory at reasonable intervals during the year, except for bulk raw materials which has been physically verified by an independent chartered engineer whose report has been relied upon by us.

(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) (a) The Company in an earlier year had granted loan to a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 6,407.16 lacs and the year-end balance in respect of such loan is Rs. 3,500 lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

(c) The above loan is stated to be re-payable on demand. We are informed that the Company has received back the amount of loan to the extent demanded by it and there has been no default on the part of such party to whom the money has been lent. The payment of interest has been regular.

(d) As the party has repaid the amount of loan whenever demanded, therefore there is no overdue amount for the above loan granted to a Company listed in the register maintained under Section 301 of the Companies Act, 1956.

(e) According to the information and explanation given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that some of the items purchased are of a special nature and alternative sources do not exist for obtaining quotations thereof, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or any continuing failure to correct any major weakness in internal control system of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, that need to be entered into the register maintained under Section 301 have been so entered.

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

(vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956.

(vii)The Company has an internal audit system, the scope and coverage of which, has improved as compared to previous year. However, in our opinion the same requires to be enlarged to be commensurate with the size and nature of its business.

(viii)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, related to the manufacture of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities, except that there have been slight delays in deposit of dues in certain cases of sales tax, provident fund and employees' state insurance.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441 A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year-end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, weatth- tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows :

Name of the Nature of dues Amount Period to Forum where statute (Rs. in lacs) which the dispute is amount relates pending

Central CENVAT Credit 2,565.03 2005-06, Central Excise Excise Act, disallowed 2006-07 and Service Tax 1944 2007-08 Appellate Tribunal/ Commissioner (Appeals)

Central CENVAT on 44.07 2006-07 Commissioner Excise Act, Service Tax (Appeals) 1944 disallowed

The West Pending Forms 3.59 2004-05 West Bengal Bengal Value Appellate and Added Tax Act, 2003 Revision Board

The Central Pending Forms 8.37 2004-05 West Bengal Sales Tax Appellate and Act, 1956 Revision Board

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has delayed in repayment of dues to banks during the year as given below.

Period of delay Rs. in lacs

Up to 30 days 44

31-90 days 588

90 days and above 15

The Company has not defaulted in repayment of dues to a financial institution and has no outstanding dues in respect of debentures.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans and advances on the 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.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by its wholly owned Subsidiary from banks, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have outstanding debentures during the year.

(xx) The Company has not raised any money through public issue during the year.

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

For S. R. Batliboi & Co.

Firm Regn. No. 301003E

Chartered Accountants

per Sanjoy K. Gupta

Place : Kolkata Partner

Date : May 27, 2011 Membership No. : 54968


Mar 31, 2010

1. We have audited the attached Balance Sheet of Jai Balaji Industries Limited (the Company) as at March 31, 2010 and also the Profit and Loss Account and 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 the 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 (as amended) (the order) issued by the Central Government of India in terms of sub-section (4A) of Section

227 of the Companies Act, 1956, we enclose 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 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, 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 comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. On the basis of the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of 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 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

b) in the case of Profit and Loss Account, of the 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 the Auditors Report (REFERRED TO IN OUR REPORT OF EVEN DATE TO THE MEMBERS OF JAI BALAJI INDUSTRIES LTD AS AT AND FOR THE YEAR ENDED 31ST MARCH, 2010)

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

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification in a phased manner to cover all the items of fixed assets over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed and based on the procedures performed by us, no material discrepancies were noticed on such verification of fixed assets during the year.

(c) There was no substantial disposal of fixed assets during the year.

(ii)(a) The Management has conducted physical verification of inventory at reasonable intervals during the year.

(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 carried out at the end of the year.

(iii) (a) The Company in an earlier year had granted loan to a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 8,500 lacs and the year-end balance in respect of such loan is Rs. 5,600 lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms

and conditions for such loan are not prima facie prejudicial to the interest of the Company.

(c) The above loan is re-payable on demand. As informed, the Company has received back the amount of loan to the extent demanded by it and there has been no default on the part of the party to whom the money has been lent. The payment of interest has been regular.

(d) As the party has repaid the amount of loan whenever demanded therefore there is no overdue amount for the above loan granted to the Company listed in the register maintained under Section 301 of the Companies Act, 1956.

(e) As informed and based on the procedure performed by us the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses (f) and (g) of Para (iii) of the order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that some of the items purchased are of a special nature and alternative sources do not exist for obtaining quotations thereof, it appears that there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of

contracts or arrangements referred to in Section 301 of the Companies Act, 1956, that need to be entered into the register maintained under Section 301 have been so entered.

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

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

(vii)The Company has an internal audit system, the scope and coverage of which, in our opinion requires to be enlarged to be commensurate with the size and nature of its business.

(viii)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 are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Compay is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it, though there have been delays in deposit of dues in certain cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax,

sales -tax, wealth-tax, service tax, customs duty, exise duty, cess and other undisputed statutory dues were outstanding, at the year-end for a period of more than six months from the date they became payable.

(c) According to the records of the

Company, the dues outstanding of income-tax, Sales-tax, wealth- tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows :

Name of the Nature of dues Amount Period to Forum where statute (Rs. in lacs) which the dispute is amount relates pending

Central CENVAT Credit 1,566.15 2005-06, Central Excis Excise Act, disallowed 2006-07 and Service Tax 1944 2007-08 Appellate Tribunal/ Commissioner (Appeals)

Central CENVAT on 44.07 2006-07 Commissioner Excise Act, Service Tax (Appeals) 1944 disallowed

The West Tax Liability on 9,024.81 2003-04 West Bengal Bengal Value account of 2004-05 and Appellate and Added Tax Enhanced 2005-06 Revision Boar Act, 2003 Turnover, Input Credit Sr. Jt. Commis sioner disallowed, Pending Form (Appeals), Sales Tax

The Central Tax Liability on 566.54 2003-04 West Bengal Sales Tax account of 2004-05 and Appellate and Act, 1956 Enhanced 2005-06 Revision Board/ Turnover, Sr. Jt. Commis sioner Pending Forms (Appeals, Sales Tax)

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

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

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the 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.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4

(xiv) of the Order are not applicable.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by its wholly owned Subsidiary from a bank and to Ministry of Coal, Government of India on behalf of two Joint Venture Companies, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company had Zero Coupon Compulsorily Convertible Debentures (unsecured) outstanding during the year, on which no security or charge was required to be created. These debentures were converted during the year into equity shares of the Company.

(xx) The Company has not raised any money through public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.



For S. R. Batliboi & Co. Firm Regn. No. 301003E Chartered Accountants

per R K Agrawal Place : Kolkata Partner Date : May 26, 2010 Membership No. : 16667

 
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