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Auditor Report of Jattashankar Industries Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of JATTASHANKAR INDUSTRIES LIMITED, 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 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 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 the 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 profit and its cash flows for the year ended on that date.

EMPHASIS OF MATTER

We draw attention to Note No.5 to the financial statement that company has made the provision of gratuity an estimated basis instead of on the basis of actuarial valuation, impact of profit is unascertained. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

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

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014,except AS -15 liabilities of gratuity in respect of which is accounted for on estimated basis instead of actuarial basis.

(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

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

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 AUDITORS REPORT

1. a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) The fixed assets of the Company have been physically verified during the year by the management and no material discrepancies between the books records and physical inventory have been noticed. The company has not disposed off any substantial part of fixed assets during the year.

2. In our opinion and according to the information and explanation given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on such physical verification. The procedures followed by the management for physical verification of stock are in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business.

3. The company has not granted any loans,Secured or unsecured to companies, Firms or other Parties Covered in the register maintained under Section 189 Of the Companies Act,2013.

4. In our opinion and according to the information and explanation given to us there is adequate internal control system commensurate with the size of the company and nature of its business with regard to purchases of fixed assets, goods/services and sale of goods/services. During the course of our audit, we have not observed any continuing failure to correct the major weakness in the internal control system.

5. The company has not accepted deposits and accordingly there no requirement to comply with directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

6. The Central government has not prescribed the maintenance of cost records under section 148 (1) of the Companies Act & as informed to us, the same has also not been maintained.

7. a) According to the information and explanation given to us and based on the books and records examined by us the 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 statutory dues, wherever applicable, have been generally deposited regularly during the year with appropriate authorities. There are no outstanding statutory dues as on 31st March, 2015 for a period of more than six months from the date they become payable.

b) According to the information and explanation given to us and based on the books and records examined by us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other statutory dues, wherever applicable.

c) The Company does not have any 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.

8. The company has accumulated loss at the financial year of Rs.3,35,87,390/-(reported figure) and has not incurred cash loss during the financial year and immediately preceding current financial year.

9. As there is no term loan taken from bank or institutions. Hence there is no question arise for default in repayment of such loans.

10. The company has not given guarantee for loans taken by others from Banks or Financial Institutions , the terms and conditions whereof are prejudicial to the interest of the company;

11. The company has not taken any term loan during the year. Hence relevant clause is not applicable to the company.

12. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

For SHANKARLAL JAIN & ASSOCIATES Chartered Accountants Firm Reg. No.109901 W

S.L. AGARWAL Place: Mumbai (PARTNER) Date : 29.05.2015 Membership No. 72184


Mar 31, 2014

We have audited the accompanying financial statements of JATTASHANKAR INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position , financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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.

In our opinion and to the best of our information and according to the explanations given to us, the financial statements , give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of the Statement of 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.

Report on Other Legal and Regulatory Requirements

1. As required by the companies ( Auditor''s Report ) order , 2003 issued by the central government in terms of Section 227 (4A) of the companies 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 explanation which to the best of our knowledge and belief were necessary for the purpose of our Audit;

b) In our opinion , proper books of accounts as required by law have been kept by the company so far as appears from our examination of the books;

c) The Balance Sheet , Statement of Profit and Loss Account & Cash Flow Statement with this report are in agreement with the books of accounts;

d) In our opinion Balance Sheet & Profit and Loss Account & Cash Flow Statement dealt with this report Comply with the Accounting Standards as specified in section 211 (3 C ) of the Companies Act , 1956

e) On the basis of written representations and explanations received from Directors, as on 31.03.2014 and taken on record by the Board of directors, none of the Directors Iis disqualified as on 31.03.14 from being appointed as a director in terms of Clause (g) of Sub Section (1) of Section of 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT

(Referred to its paragraph 1 thereof)

As required by the companies ( Auditors Report) Order ,2003 issued by the company Central Government of India in terms of section 227 (4A) of the companies Act.,1956 On the basis of such checks as we considered appropriate ,we report that :-

1. a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed assets but the same is to be updated.

b) We are informed that fixed assets were not verified by the management during the year. Discrepancy if any , will be determined only after the fixed asset register is updated.

c) The company has not disposed off substantial part of fixed assets during the year to effect to its going concern.

2. a) Inventories have been physically verified during the year by the management at reasonable intervals.

b) The procedure followed by the management for physical verification of stock is in our opinion reasonable and adequate in relation to the size of the company and the nature of its business.

c) In our opinion and according to information and explanation given to us ,the company has maintained proper records of its inventories & discrepancies were noticed on verification between the physical stock and book stock were not material & have been properly dealts with in the books of account.

3. a) The company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act 1956. Hence relevant Provisions are not applicable to the Company .

b) The Company has taken interest free unsecured loan from a company (strategic promoter).Balance outstanding of Rs. 340.00 lacs at the end of the year. In our opinion the terms and conditions of the said loan are not prejudicial to the interest of the Company.

c) Company is regular in repayment of principal and interest as stipulated .

4. In our opinion and according to the information and explanation given to us ,there are adequate internal control procedures commensurate with the size of the company and the nature of its business ,for the purchase & sale of inventories, fixed assets and with regards to sale of goods and services .During the course of our audit ,We have not observed any continuing to correct the major weakness in internal controls .

5. a) There are transactions in the company that need to be entered in the register in pursuance of Section 301 of the Companies Act 1956 ,were duly entered .

b) In our opinion and according to the information and explanation given to us,the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of companies Act 1956 and aggregating during the year to 5,00,000/- or more in respect of each party ,have been made at prices seems reasonable as prevailing market prices for such goods ,materials or the price at which transactions for similar goods ,materials or services have been made with the other parties are not comparable not having similar goods or services.

6. In our opinion and according to information and explanation given to us ,the company has not accepted any deposits from public ,hence provisions of Section 58A & 58 AA of the Companies Act 1956 are not applicable.

7. The company has no Internal Audit System during the year.

8. We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209 (1) of the companies Act 1956 & are of the opinion that prima facie the prescribed accounts and records have been made maintained by the company . However, We have not made detailed examination of records so as to ascertain whether they are accurate and complete.

9. The company is regular in depositing statutory dues including Provident fund ,Investor Education & Protection Fund ,Employees State Insurance ,Income Tax, Wealth Tax ,Sales Tax ,Customs duty and Excise duty, Service Tax , Cess and other materials statutory dues wherever applicable with appropriate authorities . We are informed that no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March 2014for the period of more than six months from the date they became payable.

10 The company has accumulated loss at the financial year of Rs. 6,12,39,692/- (reported figure) and it has incurred no cash loss in the financial year & immediately preceding current financial year .

11. In our opinion and according to information and explanation given to us, company has not defaulted in repayment of dues to financial institution & others .

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

13. In our opinion the company is not a chit / nidhi / mutual fund/society. Therefore the provision of Clause 4 (Xiii) of the companies (Auditors Report) orders 2003 are not applicable to the company.

14. In our opinion the company is not dealing or trading in any shares ,securities ,debentures & others investments Accordingly the provision of Clause 4 (Xiii) of the companies ( Auditors Report) order 2003 are not applicable to the company.

15. The company has not given guarantee for loans taken by others from Banks or Financial Institutions.

16. The company has not taken any term loan during the year.Hence relevant clause is not applicable to the company.

17. According to information and explanation given to us and an overall examination of Balance Sheet of the company, we report that no funds raised during the year, on short term basis have been used for long term investments.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies Act, 1956.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by way of Public issue during the year.

21. According to information and explanations given to us, no frauds on or by the company has been noticed or reported during the course of our audit.

For SHANKARLAL JAIN & ASSOCIATES CHARTERED ACCOUNTANTS (Firm Reg. No. 109901W) sd/- PLACE: MUMBAI S.L.AGRAWAL DATE: 30/05/2014 (PARTNER) Membership No. 72184


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Jattashankar Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position , financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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.

In our opinion and to the best of our information and according to the explanations given to us, the financial statements , subject to Note No. 23(a) regarding Non Provision of Gratuity liability and Note No. 23(b) regarding provision of Leave encashment instead of cash basis due to which profit is understated by Rs. 50,000/- , 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 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.

Report on Other Legal and Regulatory Requirements

1. As required by the companies ( Auditor''s Report ) order , 2003 issued by the central government in terms of Section 227 ( 4A) of the companies 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 explanation which to the best of our knowledge and belief were necessary for the purpose of our Audit;

b) In our opinion , proper books of accounts as required by law have been kept by the company so far as appears from our examination of the books;

c) The Balance Sheet , Statement of Profit and Loss Account & Cash Flow Statement with this report are in agreement with the books of accounts;

d) In our opinion Balance Sheet & Profit and Loss Account & Cash Flow Statement dealt with this report Comply with the Accounting Standards as specified in section 211 ( 3 C ) of the Companies Act , 1956 except Accounting Standards 15 in respect of gratuity liability as referred in Note No. 23(1)

e) On the basis of written representations and explanations received from Directors, as on 31.03.2013 and taken on record by the Board of directors, none of the Directors Is disqualified as on 31.03.13 from being appointed as a director in terms of Clause (g) of Sub Section (1) of Section of 274 of the Companies Act, 1956.

(Referred to its paragraph 1 thereof)

As required by the companies ( Auditors Report) Order ,2003 issued by the company Central Government of India in terms of section 227 (4A) of the companies Act.,1956 On the basis of such checks as we considered appropriate ,we report that :-

1. a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed assets but the same is to be updated.

b) We are informed that fixed assets were not verified by the management during the year. Discrepancy if any , will be determined only after the fixed asset register is updated.

c) The company has not disposed off substantial part of fixed assets during the year to effect to its going concern.

2.a) Inventories have been physically verified during the year by the management at reasonable intervals.

b) The procedure followed by the management for physical verification of stock is in our opinion reasonable and adequate in relation to the size of the company and the nature of its business.

c) In our opinion and according to information and explanation given to us ,the company has maintained proper records of its inventories & discrepancies were noticed on verification between the physical stock and book stock were not material & have been properly dealt with in the books of account.

3. a) The company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act 1956. Hence relevant Provisions are not applicable to the Company .

b) The Company has taken interest free unsecured loan from a company (strategic promoter).Balance outstanding of Rs. 439.00 lacs at the end of the year. In our opinion the terms and conditions of the said loan are not prejudicial to the interest of the Company.

c) Company is regular in repayment of principal and interest as stipulated .

3. In our opinion and according to the information and explanation given to us ,there are adequate internal control procedures commensurate with the size of the company and the nature of its business ,for the purchase & sale of inventories fixed assets and with regards to sale of goods and services .During the course of our audit ,We have not observed any continuing to correct the major weakness in internal controls .

5.a) There are transactions in the company that need to be entered in the register in pursuance of Section 301 of the Companies Act 1956 ,were duly entered .

b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of companies Act 1956 and aggregating during the year to 5,00,000/- or more in respect of each party ,have been made at prices seems reasonable as prevailing market prices for such goods ,materials or the price at which transactions for similar goods ,materials or services have been made with the other parties are not comparable not having similar goods or services.

6. In our opinion and according to information and explanation given to us ,the company has not accepted any deposits from public ,hence provisions of Section 58A & 58 AA of the Companies Act 1956 are not applicable.

7. The company has no Internal Audit System during the year.

8. We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209 (1) of the companies Act 1956 & area of the opinion that prima facie the prescribed accounts and records have been made maintained by the company .However, We have not made detailed examination of records so as to ascertain whether they are accurate and complete.

9. The company is regular in depositing statutory dues including Provident fund ,Investor Education & Protection Fund ,Employees State Insurance ,Income Tax, Wealth Tax ,Sales Tax ,Customs duty and Excise duty, Service Tax , Cess and other materials statutory dues wherever applicable with appropriate authorities . We are informed that no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March 2013 for the period of more than six months from the date they became payable.

10 The company has accumulated loss at the financial year of Rs. 8,71,49,715/- ( reported figure ) and it has incurred no cash loss in the financial year & immediately preceding current financial year .

11. In our opinion and according to information and explanation given to us, company has not defaulted in repayment of dues to financial institution & others .

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

13. In our opinion the company is not a chit / nidhi / mutual fund/society. Therefore the provision of Clause 4 (Xiii) of the companies (Auditors Report) orders 2003 are not applicable to the company.

14. In our opinion the company is not dealing or trading in any shares ,securities ,debentures & others investments .Accordingly the provision of Clause 4 (Xiii) of the companies ( Auditors Report) order 2003 are not applicable to the company.

15. The company has not given guarantee for loans taken by others from Banks or Financial Institutions.

16. The company has not taken any term loan during the year. Hence relevant clause is not applicable to the company.

17. According to information and explanation given to us and an overall examination of Balance Sheet of the company, we report that no funds raised during the year, on short term basis have been used for long term investments.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies Act, 1956.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by way of Public issue during the year.

21. According to information and explanations given to us, no frauds on or by the company has been noticed or reported during the course of our audit.

For SHANKARLAL JAIN & SSOCIATES

CHARTERED ACCOUNTANTS

(Firm Reg. No. 109901W)

sd/-

PLACE: MUMBAI S.L.AGRAWAL

DATE: 03/09/2013 (PARTNER)

Membership No. 72184


Mar 31, 2012

We have audited the attached Balance Sheet of M/s. Jattashankar Industries Limited (Formerly Known as Jatta Industries Limited.) as at 31st March 2012, & also the Profit & 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 Managements .Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan & 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.

1. As required by the companies ( Auditor's Report ) order, 2003 issued by the central government in terms of Section 227 ( 4A) of the companies Act, 1956

2. We enclose in the annexure, a statement on the matters specified in Paragraphs 4 and 5 of the said order.

3. Further to our comments in the annexure referred to the above, we report that

a) We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our Audit;

b) In our opinion, proper books of accounts as required by law have been kept by the company so far as appears from our examination of the books;

c) The Balance Sheet, Profit and Loss Account & Cash Flow Statement with this report are in agreement with the books of accounts;

d) In our opinion Balance Sheet & Profit and Loss Account & Cash Flow Statement dealt with this report Comply with the Accounting Standards as specified in section 211 ( 3 C ) of the Companies Act, 1956 except Accounting Standards 15 in respect of gratuity liability and Leave encashment as referred in Note No. 5 .

e) On the basis of written representations and explanations received from Directors, as on 31.03.2012 and taken on record by the Board of directors, we report that none of the Directors On the basis of the written representation received from all of them are disqualified as on 31.03.12 from being appointed as a director in terms of Clause (g) of Sub Section (1) of Section of 274 of the Companies Act, 1956.

4. In our opinion and to the best of our information and according to the explanations given to us, the accounts subject to Note No.5 regarding non provision of gratuity & Leave Encashment liability amount is unascertained, due to this, Profit is overstated to that extent, and read together with the significant accounting policies and other notes of NOTE-1, give the information required by the Companies Act, 1956 in the manner so required by the Companies Act, 1956 in the manner so required give a true & fair view ;

(i) In the case of Balance Sheet of the state of affairs of the company as at 31st March, 2012

And

(ii) In the case of Profit and Loss Account of the PROFIT for the year ended on that date.

And

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

ANNEXURE TO THE AUDITORS REPORT (Referred to its paragraph 1 thereof)

As required by the companies (Auditors Report) Order, 2003 issued by the company Central Government of India in terms of section 227 (4A) of the companies Act., 1956 On the basis of such checks as we considered appropriate, we report that :-

1. a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed assets but the same is to be updated.

b) We are informed that fixed assets were not verified by the management during the year. Discrepancy if any, will be determined only after the fixed asset register is updated.

c) The company has not disposed off substantial part of fixed assets during the year to effect to its going concern.

2.a) Inventories have been physically verified during the year by the management at reasonable intervals.

b) The procedure followed by the management for physical verification of stock is in our opinion reasonable and adequate in relation to the size of the company and the nature of its business.

c) In our opinion and according to information and explanation given to us, the company has maintained proper records of its inventories & discrepancies were noticed on verification between the physical stock and book stock were not material & have been properly dealts with in the books of account.

3. a) The company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act 1956. Hence relevant Provisions are not applicable to the Company . b) The Company has taken interest free unsecured loan from a company (strategic promoter). Balance outstanding of Rs. 426.19 lacs at the end of the year. In our opinion the terms and conditions of the said loan are not prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase & sale of inventories, fixed assets and with regards to sale of goods and services .During the course of our audit, We have not observed any continuing to correct the major weakness in internal controls .

5.a) There are transactions in the company that need to be entered in the register in pursuance of Section 301 of the Companies Act 1956, were duly entered .However there transactions are subject to compliance of section 300 of the Act.

b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of companies Act 1956 and aggregating during the year to 5,00,000/- or more in respect of each party, have been made at prices seems reasonable as prevailing market prices for such goods, materials or the price at which transactions for similar goods, materials or services have been made with the other parties are not comparable not having similar goods or services.

6. In our opinion and according to information and explanation given to us, the company has not accepted any deposits from public, hence provisions of Section 58A & 58 AA of the Companies Act 1956 are not applicable.

7. The company has no Internal Audit System during the year.

8. We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209 (1) of the companies Act 1956 & are of the opinion that prima facie the prescribed accounts and records have been made maintained by the company .However, We have not made detailed examination of records so as to ascertain whether they are accurate and complete.

9.a) The company is regular in depositing statutory dues including Provident fund, Investor Education & Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Sales Tax, Customs duty and Excise duty, Service Tax, Cess and other materials statutory dues wherever applicable with appropriate authorities . We are informed that no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March 2012 for the period of more than six months from the date they became payable.

b) The disputed statutory dues in respect of excise demand pending before appropriate higher authorities details as under :-

Name of the Nature of dues Amount Period to which Statue amounts relates

Central Excise Differential Duty 11,11,073/- F.Y.2002-03 Act 1944 of poy purchased DRI. under EOU

Name of the Forum where the Statue dispute is pending

Central Excise Act Add.Comm.Customs 1944

10. The company has accumulated loss at the financial year of Rs. 9,91,35,495/- ( reported figure ) and it has incurred no cash loss in the financial year & immediately preceding current financial year . .

11. In our opinion and according to information and explanation given to us, company has not defaulted in repayment of dues to financial institution & others due to One Time settlement .

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

13. In our opinion the company is not a chit/nidhi/mutual fund/society. Therefore the provision of Clause 4 (Xiii) of the companies (Auditors Report) orders 2003 are not applicable to the company.

14. In our opinion the company is not dealing or trading in any shares, securities, debentures & others investments .Accordingly the provision of Clause 4 (Xiii) of the companies ( Auditors Report) order 2003 are not applicable to the company.

15. The company has not given guarantee for loans taken by others from Banks or Financial Institutions.

16. The company has not taken any term loan during the year

17. According to information and explanation given to us and an overall examination of Balance Sheet of the company, we report that no funds raised during the year, on short term basis have been used for long term investments.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies Act, 1956.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by way of Public issue during the year.

21. According to information and explanations given to us, no frauds on or by the company has been noticed or reported during the course of our audit.



For SHANKARLAL JAIN & ASSOCIATES CHARTERED ACCOUNTANTS (Firm Reg. No. 109901W)

SD/- S. L. AGRAWAL (PARTNER) Membership No. 72184

PLACE : MUMBAI DATE : 03.09.2012


Mar 31, 2010

We have audited the attached Balance Sheet of M/s. Jattashankar Industries Limited (Formerly Known as Jatta Industries Limited.) as at 31st March 2010, & also the Profit & 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 Managements .Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan & 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.

1. As required by the companies ( Auditor's Report ) order , 2003 issued by the central government in terms of Section 227 ( 4A) of the companies Act , 1956

2. We enclose in the annexure, a statement on the matters specified in Paragraphs 4 and 5 of the said order.

3. Further to our comments in the annexure referred to the above , we report that

a) We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our Audit;

b) In our opinion , proper books of accounts as required by law have been kept by the company so far as appears from our examination of the books;

c) The Balance Sheet , Profit and Loss Account & Cash Flow Statement with this report are in agreement with the books of accounts;

d) In our opinion Balance Sheet & Profit and Loss Account & Cash Flow Statement dealt with this report Comply with the Accounting Standards as specified in section 211 ( 3 C ) of the Companies Act , 1956 except Accounting Standards 15 in respect of gratuity liability and Leave encashment as referred in Note No. 5 .

e) On the basis of written representations and explanations received from Directors, as on 31.03.2010 and taken on record by the Board of directors, we report that none of the Directors On the basis of the written representation received from all of them are disqualified as on 31.03.10 from being appointed as a director in terms of Clause (g) of Sub Section (1) of Section of 274 of the Companies Act, 1956.

4. In our opinion and to the best of our information and according to the explanations given to us , the accounts subject to Note No.4 regarding sundry balances of debtors ,creditors and loan & advances are subject to confirmation and reconciliation , Note No.5 regarding non provision of gratuity & Leave Encashment liability amount is unascertained , Note No.9 regarding land purchased from the Directors for which agreement is yet to be executed , Note No.14 certain discarded assets sold of Rs.1,49,39,413/- in earlier years subject to approval of Financial Institutions , Note No.16 non provision of interest on secured loan for the year of Rs.8,85,66,848/- and accumulated interest of Rs.53,25,15,426/-(up to previous year ) due to this loss is understated to that extent , Note No. 17 regarding Assignment deed yet to be registered and read together with the significant accounting policies and other notes of Schedule "M" accounts , give the information required by the Companies Act,1956 in the manner so required.

We further report that without considering item mentioned for Note No.4 & Note No.5 effect of which can not be determined ,had the observation made by us in Para 3 above been considered the loss for the year would have been Rs.8,38,29,007/- ( as against report the figure of Profit of Rs.47,37,841/-) and accumulated loss ( including loss of earlier year Un provided for Rs.53,25,15,426/-) would have been Rs.87,41,62,853/-( as against reported figure Rs.25,30,80,579/-).

Due to increase in loss for the year after considering the observations as referred in Para 3 above , Earning Per Share basic & diluted as reported in Note No.18 in Schedule "M" would be (Rs.19.11)as against reported of Rs.1.08 The information required by the Companies Act , 1956 in the manner so required give a true & fair view ;

( i ) In the case of Balance Sheet of the state of affairs of the company as at 31st March , 2010

And

(ii ) In the case of Profit and Loss Account of the PROFIT for the year ended on that date.

And

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to its paragraph 1 thereof)

As required by the companies ( Auditors Report) Order ,2003 issued by the company Central Government of India in terms of section 227 (4A) of the companies Act.,1956 On the basis of such checks as we considered appropriate ,we report that :- 1. a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed assets but the same is to be updated.

b) We are informed that fixed assets were not verified by the management during the year. Discrepancy if any , will be determined only after the fixed asset register is updated.

c) The company has not disposed off substantial part of fixed assets during the year to effect to its going concern.

2.a) Inventories have been physically verified during the year by the management at reasonable intervals.

b) The procedure followed by the management for physical verification of stock is in our opinion reasonable and adequate in relation to the size of the company and the nature of its business.

c) In our opinion and according to information and explanation given to us ,the company has maintained proper records of its inventories & discrepancies were noticed on verification between the physical stock and book stock were not material & have been properly deals with in the books of account.

3. The company has not granted or 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.

4. In our opinion and according to the information and explanation given to us ,there are adequate internal control procedures commensurate with the size of the company and the nature of its business ,for the purchase & sale of inventories ,fixed assets and with regards to sale of goods and services .During the course of our audit ,We have not observed any continuing to correct the major weakness in internal controls .

5.a) There are transactions in the company that need to be entered in the register in pursuance of Section 301 of the Companies Act 1956 ,were duly entered .However there transactions are subject to compliance of section 300 of the Act. b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of companies Act 1956 and aggregating during the year to 5,00,000/- or more in respect of each party ,have been made at prices seems reasonable as prevailing market prices for such goods ,materials or the price at which transactions for similar goods ,materials or services have been made with the other parties are not comparable not having similar goods or services.

6. In our opinion and according to information and explanation given to us ,the company has not accepted any deposits from public ,hence provisions of Section 58A & 58 AA of the Companies Act 1956 are not applicable.

7. The company has no Internal Audit System during the year.

8. We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209 (1) of the companies Act 1956 & are of the opinion that prima facie the prescribed accounts and records have been made maintained by the company .However, We have not made detailed examination of records so as to ascertain whether they are accurate and complete.

9.a) The company is regular in depositing statutory dues including Provident fund ,Investor Education & Protection Fund ,Employees State Insurance ,Income Tax, Wealth Tax ,Sales Tax ,Customs duty and Excise duty, Service Tax , Cess and other materials statutory dues wherever applicable with appropriate authorities . We are informed that no undisputed amounts payable in respect of aforesaid dues were outstanding as at 31st March 2010 for the period of more than six months from the date they became payable.

b) The disputed statutory dues in respect of excise demand ,Income Tax Liability pending before appropriate higher authorities details as under :-

Name of the Nature of dues Amount Period to which Forum where Statue amounts relates the dispute is pending

Central Excise Differential Duty of 11,11,073/- F.Y.2002-03 Add.Comm. Act 1944 poy purchased custom ms under EOU DRI.

Central Excise Excise duty on 17,33,150/- F.Y.2004-05 Deputy Act 1944 stocks of yarns Commissioner lost in floods

Income Tax Act Disallowance 1,54,16,891/- F.Y.2000-01 Income Tax 1961 of Sundry Bal. Appellate w/off Tribunal

10. The company has accumulated loss at the financial year of Rs. 25,30,80,579/- ( reported figure ) and it has incurred no cash loss in the financial year & immediately preceding current financial year However as per our main report accumulated loss would be Rs. 87,41,62,853/- .

11. In our opinion and according to information and explanation given to us and with reference to Schedule "C" the company has defaulted in repayment of dues of Rs.81,13,62,300/- (including interest un-provided of Rs.62,10,82,274/- ) to financial institution & others.

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

13. In our opinion the company is not a chit / nidhi / mutual fund/society. Therefore the provision of Clause 4 (Xiii) of the companies (Auditors Report) orders 2003 are not applicable to the company.

14. In our opinion the company is not dealing or trading in any shares ,securities ,debentures & others investments .Accordingly the provision of Clause 4 (Xiii) of the companies ( Auditors Report) order 2003 are not applicable to the company.

15. The company has not given guarantee for loans taken by others from Banks or Financial Institutions.

16. The company has not taken any term loan during the year

17. According to information and explanation given to us and an overall examination of Balance Sheet of the company, we report that no funds raised during the year, on short term basis have been used for long term investments.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies Act, 1956.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by way of Public issue during the year.

21. According to information and explanations given to us, no frauds on or by the company has been noticed or reported during the course of our audit.

For SHANKARLAL JAIN & SSOCIATES

CHARTERED ACCOUNTANTS

(Firm Reg. No.109901W)

SD/-

PLACE : MUMBAI S.L.AGRAWAL

DATE : 06.09.2010 (PARTNER)

 
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