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Auditor Report of JBF Industries Ltd.

Mar 31, 2016

to

the members of jbf industries limited

report on the standalone Financial statements

We have audited the accompanying Standalone Financial Statements of JBF Industries Limited ("the Company”), which comprise the Balance sheet as at 31st March, 2016, 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 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 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 (Indian GAAPs), including Accounting Standards prescribed under Section 133 of the Act, as applicable.

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. auditors'' 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 misstatements.

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 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. An audit also includes evaluating the appropriateness of 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, 2016 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the

(i) Note No. 17.1 to the Standalone Financial Statements regarding trade receivables amounting to Rs, 51.52 Crore due from parties in respect of which Company has initiated legal proceedings and a provision of X 31.25 Crore has been considered sufficient by the management.

(ii) Note No. 19.3 to the Standalone Financial Statements regarding Inter-Corporate Deposits and interest accrued and due thereon aggregating to X 96.93 Crore due from certain parties in respect of which the Company has initiated legal proceedings (including winding up petitions against few of them) and has considered the same good for recovery and no provisions for doubtful debts has been considered necessary, by the management, for the reasons stated therein.

The matters described in paragraph (i) & (ii) above have uncertainties related to the outcome of the legal proceedings. Our opinion is not modified in respect of these matters.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order 2016 ("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” hereto, a statement on the matters specified in the 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 prescribed under Section 133 of the Act, as applicable.

e. On the basis of the written representations received from the directors as on 31st March, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "annexure B”.

g. 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 as referred to in Note No. 17.1, 19.3 & 30 to the Standalone Financial Statements;

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

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

(Referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of JBF industries Limited on the accounts for the year ended 31st March, 2016)

i. In respect of its fixed assets:

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

b. As explained to us, the fixed assets have been physically verified by the management in accordance with the programme of verification, which in our opinion is reasonable, considering the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.

c. According to the information and explanations given to us and based on the examination of the registered sale deeds and other relevant records evidencing title provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date, except the following:-

Particulars of land

Gross Block as at 31st

Net Block as at

and building

March, 2016 (^ in Crore)

31st March, 2016 (Rs, in Crore)

Building in Mumbai

0.09

0.07

Land at Silvassa

0.54

0.54

In respect of 9 immovable properties having the aggregate of Rs, 39.56 Crores (Gross Block), the original documents have been deposited with the lenders, we have been produced photocopy of documents for those immovable properties and based on such documents, the title deeds are held in the name of the Company. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the Financial Statements, the lease agreements are in the name of the Company.

ii. As explained to us, inventories have been physically verified during the year by the management except materials in transit and in our opinion the frequency of verification is reasonable. Discrepancies noticed on physical verification of the inventories between the physical inventories and book records were not material, having regard to the size of the operations of the Company.

iii. In respect of loans, secured or unsecured, granted by the Company to companies, firms, Limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. According to the information and explanation given to us:

a. The Company has granted unsecured loans to two such Companies and in our opinion, the rate of interest and other terms and conditions on which the loans had been granted were not, prima facie, prejudicial to the interest of the Company.

b. The terms of repayment of principal amount and payment of interest has been stipulated. The receipts of principal amount wherever due was regular and as per the terms, no interest was due during the year.

c. The above loans were no overdue as on the date of balance sheet.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 & 186 of the Act as applicable, in respect of grant of loans, making investments, security provided and guarantee given.

v. According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. Therefore, the provisions of paragraph 3 (v) of the Order are not applicable to the Company.

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

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

a. The Company has been generally regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of such statutory dues were outstanding as at 31st March,

2016 for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us, the disputed statutory dues aggregating to Rs, 11.02 Crore that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of the statute

Nature of the dues

in re ^ £

Period to which the amount relates

Forum where dispute is pending

Central Excise Act,1944

Excise Duty

0.64*

2005-06

Supreme Court

0.01*

2005-06

Custom Excise & Service Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax

0.00#

2007-08

Income Tax Appellate Tribunal

0.00#

2008-09

Income Tax Appellate Tribunal

0.00#

2008-09

Commissioner Of Income Tax (Appeals)

0.00#

2009-10

Income Tax Appellate Tribunal

0.00#

2009-10

Commissioner Of Income Tax (Appeals)

10.37

2010-11

Income Tax Appellate Tribunal

Total

11.02

(*) Net of Rs, 1.11 Crore deposited under protest.

(#)Net of Rs, 17.79 Crore adjusted against refund.

viii. Based on our audit procedures and according to the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks and financial institutions. During the year, the Company did not have any loans by way of debentures.

ix. According to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments). The term loans raised during the year have prima facie been applied for the purposes for which they were raised.

x. Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and on the basis of information and explanations given by the management, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations give to us the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, the provisions of paragraph 3 (xii) of the Order are not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Accounting Standards.

xiv. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has made preferential allotment of shares during the year under audit, in respect of which Company has complied with the requirement of section 42 of the Act and amount raised have prima facie been used for the purpose for which the funds were raised.

(Referred to in paragraph 2 (f) under ''Report on Other Legal and Regulatory Requirements'' of our report of even date on the Standalone Financial Statements of JBF industries Limited for the year ended 31st March 2016)

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or directors of its Subsidiary Company or persons connected with them. Therefore, the provisions of paragraph 3 (xv) of the Order are not applicable to the Company.

xvi. In our opinion and according to the information and explanations provided to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

Report on the Internal Financial Controls Over Financial Reporting under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of JBF Industries Limited ("the Company”) as of 31st March, 2016 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (" the Guidance Note) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.

For chaturvedi & Shah

Chartered Accountants

(Firm Registration No. 101720W) R. Koria

Place: Mumbai Partner

Date: 30th May, 2016 Membership No.: 35629


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including Accounting Standards notified under the Companies Act, 1956 ("the Act”) read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

opinion

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

(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 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.

Emphasis of matter

We draw attention in respect of

(i) Note 16.1 on the Financial Statements, regarding trade receivables amounting to Rs. 36.97 Crore due from Customers in respect of which Company has initiated legal proceedings and a provision of Rs.15.25 Crore has been considered sufficient against the same.

(ii) Note 25.1 on the Financial Statements, regarding payment of managerial remuneration, which is subject to the approval of Central Government.

Our opinion is not qualified in respect of above matters.

Report on other legal and regulatory requirements

1. 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 Act, we give in the ANNEXURE hereto, a statement on the matters specified in the paragraphs 4 and 5 of the said 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, 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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 ("the Act”) read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

e) On the basis of the written representations received from the directors as on 31st March, 2014 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act. As regards to a Director nominated by a Financial Institution, he is exempted from the provisions of Section 274 (1) (g) in view of general circular issued by the Department of Company Affaix

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date to the members of JBF industries Limited on the accounts for the year ended 31st March, 2014

(i) In respect of its fixed assets:

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

(b) As explained to us, all the fixed assets have been physically verified by the management in accordance with the programme of verification, which in our opinion is reasonable, considering the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.

(c) In our opinion and according to the information and explanations given to us, the Company has not disposed off substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) In respect of its inventories: -

(a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

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

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

(iii) In respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the Register maintained under

section 301 of the Companies Act, 1956: -

(a) The Company has given loan to one subsidiary Company. In respect of the said loan, the maximum amount outstanding at any time during the year was Rs. 82.36 Crore and the year-end balance is Rs. Nil.

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

(c) During the year, loan given by the Company has been fully recovered from the party.

(d) In respect of the said loan and interest thereon, there is no outstanding amount and therefore the question of overdue amount does not arise.

(e) The Company has not taken any loan during the year from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. Consequently, the requirements of sub clauses (f) and (g) of clause (iii) of paragraph 4 of the said Order are 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, fixed assets and also for the sale of goods. The Company has not sold any services during the year. During the course of audit we have not observed any continuing failure to correct major weaknesses in such internal control system.

(v) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

(a) To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered in the register have been so entered.

(b) According to the information and explanations given to us, the transactions made during the year in pursuance of such contracts or arrangements exceeding value of Rupees five lacs for each party, have been made at prices which are prima facie reasonable as per the information available with the Company.

(vi) According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of clause (vi) of paragraph 4 of the said Order are not applicable to the Company.

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

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

(ix) (a) According to the records of the Company in respect of statutory and other

dues, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, and Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues as applicable with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the disputed statutory dues aggregating to Rs. 0.65 Crore that have not been deposited on account of matters pending before appropriate authorities are as under:

Name of the statute Nature of the dues Rs. in crores Period to which the amount relates Forum where dispute is pending Central Excise Act,1944 Excise Duty 0.65* 2005-06 Supreme Court 0.00* 2005-06 CESTAT Income Tax Act, 1961 Income Tax 0.00* 2008-09 Commissioner (Appeals) 0.00* 2009-10 ITAT Total 0.65

(*) Net of amount Rs. 9.71 Crore deposited under protest.

(x) The Company does not have accumulated losses at the end of the financial year. It has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

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

(xii) In our opinion and according to the explanations given to us and based on the information available, the Company has maintained adequate documents and records in respect of loans and advances granted by it on the basis of security by way of pledge of shares.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society, therefore, the provisions of clause (xiii) of paragraph 4 of the said Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and others investment. The Company has maintained proper records of transactions and contracts in respect of shares and other securities and timely entries have been made therein. All shares and other investments have been held by the Company in its own name except certain investments which are made through portfolio manager and held by them in a fiduciary capacity on behalf of the Company.

(xv) The Company has given guarantees and letter of credit in connection with the Credit facilities extended by banks to its subsidiary Companies as mentioned in Note 30 (c & d) on financial statements, which according to the information and explanations given to us by the management are not prime facie prejudicial to the interest of the Company.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the term loans raised during the year and those, which were outstanding at the beginning of the year, have prima facie been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March 2014, we are of the opinion that funds raised on short term basis of Rs. 7.72 Crore have been utilized for long term investment.

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

(xix) According to the information and explanations provided to us, securities have been created in respect of secured debentures issued by the Company.

(xx) The Company has not raised any money by way of 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 to us 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 Chaturvedi & Shah Chartered Accountants (Firm Registration No. 101720W)

R. Koria Partner Membership No.: 35629

Place: Mumbai Date: 27th May, 2014


Mar 31, 2012

1. We have audited the attached Balance Sheet of 'JBF INDUSTRIES LIMITED' ("the Company") as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company 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 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 misstatements. 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 ('the Order'), issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, we give in the Annexure hereto, a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

4. Attention is drawn to the Note No. 36.3 on the financial statement, regarding "the non-provision of marked to market losses on derivative contracts amounting to Rs.47.48 Crores as at 31st March, 2012 on account of reasons as explained in the aforesaid note. Had the same been provided the profit after tax for the year ended 31st March, 2012 would have been Rs. 17.12 Crores as against the reported figures of Rs. 48.78 Crores.

Further, Reserve & Surplus, Deferred Tax Liabilities (Net), Other Current Liabilities, Long term loans & Advances and Short term loans & Advances as at 31st March, 2012 would have been Rs. 808.48 Crores, Rs. 105.20 Crores, Rs. 312.78 Crores, Rs. 497.75 Crores and Rs. 365.31 Crores respectively as against the reported figure of Rs. 840.14 Crores, Rs. 120.60 Crores, Rs. 265.30 Crores, Rs. 492.15 Crores and Rs. 370.49 Crores respectively.

5. Further to our comments in the annexure referred to in paragraph 3 above and subject to our comment in paragraph 4 above, we report that:

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

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

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

d. In our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956;

e. On the basis of the written representations received from the directors as on 31st March, 2012 and taken on records by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. As regards to a Director nominated by a Financial Institutions, he is exempted from the provisions of Section 274 (1) (g) in view of general circular issued by the Department of Company Affairs.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies and notes thereon, in particular Note No. 26.1 on the financial statements, regarding the payment of managerial remuneration which is subject to the approval of Central Government, 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:-

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

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

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

(Referred to in paragraph 3 of our report of even date to the members of JBF Industries Limited on the accounts for the year ended 31st March, 2012)

(i) In respect of its fixed assets:

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

(b) As explained to us, all the fixed assets have been physically verified by the management in accordance with the programme of verification, which in our opinion is reasonable, considering the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.

(c) In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposal of fixed assets during the year and the going concern status of the Company is not affected.

(ii) In respect of its inventories: -

(a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

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

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

(iii) In respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956: -

(a) The Company has given loans to two subsidiary Companies. In respect of the said loans, the maximum amount outstanding at any time during the year was Rs. 113.27 Crores and the year-end balance is Rs. 98.85 Crores.

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

(c) As per the terms of the loans, neither the interest nor the principal amounts are due for recovery.

(d) The said loans, are either not due for repayment or repayable on demand and therefore the question of overdue amounts does not arise.

(e) The Company has not taken any loan during the year from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. Consequently, the requirements of sub clauses (f) and (g) of clause (iii) of paragraph 4 of the said Order are not applicable.

(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, fixed assets and also for the sale of goods. The Company has not sold any services during the year. During the course of audit we have not observed any continuing failure to correct major weaknesses in such internal control system.

(v) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

(a) To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered in the register have been so entered.

(b) According to the information and explanations given to us, the transactions made during the year in pursuance of such contracts or arrangements exceeding value of Rupees five lacs for each party, have been made at prices which are prima facie reasonable as per the information available with the Company.

(vi) According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of clause (vi) of paragraph 4 of the said Order are not applicable to the Company.

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

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

(ix) (a) According to the records of the Company in respect of statutory and other dues, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, and Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and any other material statutory dues as applicable with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the disputed statutory dues aggregating to Rs. 1.85 Crores that have not been deposited on account of matters pending before appropriate authorities, are as under:

Name of the statute Nature of Rs. in Period to which Forum where dispute the dues Crores the amount is pending relates

Central Excise Act,1944 Excise Duty 0.00* 2005-06 Supreme Court

0.16* 2004-05 CESTAT

0.00* 2005-06 CESTAT

Service Tax Act,1994 Service Tax 1.44 2010-11 CESTAT

Income Tax Act, 1961 Income Tax 0.20 2005-06 Commissioner (Appeals)

0.03 2006-07 Commissioner (Appeals)

0.01 2007-08 Commissioner (Appeals)

0.01 2008-09 Commissioner (Appeals)

Total 1.85

(*) Net of amount Rs. 1.13 Crores deposited under protest.

(x) The Company does not have accumulated losses at the end of the financial year. It has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and accordingly to the information and explanations given to us by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xii) In our opinion and according to the explanations given to us and based on the information available, the Company has maintained adequate documents and records in respect of loans and advances granted by it on the basis of security by way of pledge of shares.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society, hence the provisions of clause (xiii) of paragraph 4 of the said Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and others investment. The Company has maintained proper records of transactions and contracts in respect of shares and other securities and timely entries have been made therein. All shares and other investments have been held by the Company in its own name except certain investments which are made through portfolio manager and held by them in a fiduciary capacity on behalf of the Company.

(xv) The Company has given guarantees and letter of credit in connection with the Credit facilities extended by banks to its wholly owned subsidiary Company as mentioned in Note No. 30 (d) on the financial statements, which according to the information and explanations given to us by the management, are not prime facie prejudicial to the interest of the Company.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the term loans raised during the year and those, which were outstanding at the beginning of the year, were prima facie been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short term basis that have been utilized for long term investment.

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

(xix) According to the information and explanations provided to us, securities have been created in respect of secured debentures issued by the Company.

(xx) The Company has not raised any money by way of 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 to us 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 CHATURVEDI & SHAH

Chartered Accountants

(Registration No.: 101720W)

R. KORIA

Partner

Membership No. 35629

Place: Mumbai

Dated: 29th May, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of'JBF INDUSTRIES LIMITED' ("the Company") as at 31 st March 2011, the Profit and Loss Account and also the Cash Flow Statement of the Company 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 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 misstatements. 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 ('the Order'), issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, we give in the Annexure hereto, a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

4. Attention is drawn to the:

Note No.25(c) of the Schedule "P" regarding "the non-provision of marked to market losses of derivative contracts amounting to Rs. 144,63 Crores as on 31st March 2011 on account of reasons as explained in the aforesaid note. Had the same been provided the profit after tax for the year ended 31st March 2011 and Reserves as at 31st March 2011 would have been Rs. 33.72 Crores and f. 758.37 Crores respectively as against the reported figures of 7 131.42 Crores and Rs. 856.07 Crores respectively

5. Further to our comments in the annexure referred to in paragraph 3 above and subject to our comment in paragraph 4 above, we report that:

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

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

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account:

d) In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956:

e) On the basis of the written representations received from the directors as on 31st March, 2011 and taken on records by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub- section (1) of Section 274 of the Companies Act 1956. As regards to the Directors nominated by Financial Institution, they are exempted from the provisions of Section 274 (1) (g) in view of general circular issued by the Department of Company Affairs.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

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

(ii) In the case of Profit and Loss Account, of the profit of the Company for the year ended on that date: and

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

ANNEXURE TO AUDITOR'S REPORT (Referred to in paragraph 3 of our report of even date to the members of JBF Industries Limited on the accounts for the year ended 31 st March, 2011)

(i) In respect of its fixed assets:

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

(b) As explained to us, all the fixed assets have been physically verified by the management in accordance with the programme of verification, which in our opinion is reasonable, considering the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.

(c) In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposal of fixed assets during the year and the going concern status of the Company is not affected.

(ii) In respect of its inventories:-

(a) As explained to us, inventory has been physically verified during the year by the management at reasonable intervals.

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

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

(iii) In respect of loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956: -

(a) The Company has given loans to two subsidiaries. In respect of the said loans, the maximum amount outstanding at any time during the year was f. 238.02 crores and the year-end balance is 7 38.99 Crores

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

(c) As per the terms of the loans, neither the interest nor the principal amounts are due for recovery,

(d) In respect of the said loans, the same are not due for repayment and therefore the question of overdue amounts does not arise.

(e) The Company has not taken any loan during the year from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. Consequently, the requirements of sub clauses (f) and (g) of clause (iii) of paragraph 4 of the said Order are not applicable.

(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, fixed assets and also for the sale of goods. The Company has not sold any services during the year. During the course of audit we have not observed any continuing failure to correct major weaknesses in such internal control system.

(v) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

(a) To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered in the register have been so entered.

(b) According to the information and explanations given to us, the transactions made during the year in pursuance of such contracts or arrangements exceeding value of Rupees five lacs for each party, have been made at prices which are prima facie reasonable as per information available with the Company.

(vi> According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of clause (vi) of paragraph 4 of the said Order are not applicable to the Company.

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

(viii) We have been informed by the management that the Central Government has prescribed the maintenance of Cost Records pursuant to clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of its manufacturing activities. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate and complete.

(ix) (a) According to the records of the Company in respect of statutory and other dues, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, and Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and any other material statutory dues as applicable with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at 31 st March, 2011 for a period of more than six months from the date they became payable.

Further, since the Central Government has till date-not prescribed the amount of cess payable under section 441A 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, the disputed statutory dues aggregating to Rs. 9.06 Crores , that have not been deposited on account of matters pending before appropriate authorities, are as under:

Name of the statute Nature of Rs.in Period to which Forum where the dues Crores the amount dispute is relates pending

Central Excise Excise Duty 0.00* 2005-06 Supreme Act,1944 Court

0.16* 2004-05 CESTAT

0.00* 2005-06 Commissioner (Appeals)

Service Tax Act, 1994 Service Tax 1.45 2006-08 CESTAT

0.02 2005-08 Commissioner (Appeals)

0.02 2006-07 Commissioner (Appeals)

Income Tax Act, 1961 Income Tax 0.57 2004-05 Commissioner (Appeals)

Income Tax Act, 1961 Income Tax 6.84 2007-08 Commissioner (Appeals)

Total 9.06

(*) Net of amount Rs. 1.10 Crores deposited under protest

(x) The Company does not have accumulated losses at the end of the financial year. It has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and accordingly to the information and explanations given to us by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xii) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company 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, hence the provisions of clause (xiii) of paragraph 4 of the said Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of transactions and contracts in respect of dealing in shares and other securities and timely entries have been made therein. All shares and other investments have been held by the Company in its own name except certain investments which are made through portfolio manager and held by them in a fiduciary capacity on behalf of the Company.

(xv) The Company has given guarantees and letter of credit in connection with the Credit facilities extended by banks to its subsidiary Company as mentioned in note 3 (b) (ii) and (iii) of Schedule R The Guarantees and letter of credit outstanding as at year end are for wholly owned subsidiary Companies, which according to the information and explanations given to us by the management, are not prime facie prejudicial to the interest of the Company.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the term loans raised during the year and those, which were outstanding at the beginning of the year, were prima facie been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short term basis that have been utilized for long term investment.

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

(xix) Securities/Charges have been created in respect of secured debentures issued by the Company.

(xx) The Company has not raised any money by way of 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 to us 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 CHATURVEDI & SHAH

Chartered Accountants (Registration No.: I01720W)

R. KORIA

Partner

Membership No. 35629

Place: Mumbai Dated: 26th May 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of JBF INDUSTRIES LIMITED ("the Company") as at 31st March 2010, the Profit and Loss Account and also the Cash Flow Statement of the Company 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 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 misstatements. 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 (the Order), issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, we give in the Annexure hereto, a statement onthe matters specified in the paragraphs 4 and 5 of the said Order.

4. Attention is drawn to the:

Note No. 27 (c) of the Schedule "P" regarding "the non-provision of marked to market losses of derivative contracts amounting to Rs.63.37 Crores as on 31st March 2010 on account of reasons as explained in ¦ the aforesaid note. Had the same been provided the profit after tax for the year ended 31st March 2010 and Reserves as at 31st March 2010 would have been Rs. 87.17 Crores and Rs. 630.84 Crores respectively as against the reported figures of Rs. 129.00 Crores & Rs. 672.67 Crores respectively

5. Further to our comments in the annexure referred to in paragraph 3 above and subject to our comment in paragraph 4 above, we report that:

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

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

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account:

d) In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956:

e) On the basis of the written representations received from the directors as on 31 st March, 2010 and taken on records by the Board of Directors, we report that none of the directors is disqualified as on 31 st March, 2010 from being appointed as a director in terms of clause (g) of sub- section (1) of Section 274 of the Companies Act 1956. As regards to the Directors nominated by Financial Institution, they are exempted from the provisions of Section 274 (1) (g) in view of general circular issued by the Department of Company Affairs.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010:

(ii) In the case of Profit and Loss Account, of the profit of the Company for the year ended on that date: and

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

ANNEXURE TO AUDITORS REPORT (Referred to in paragraph 3 of our report of even date to the members of JBF Industries Limited on the accounts for the year ended 31st March, 2010)

(i) In respect of its fixed assets:

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

(b) As explained to us, all the fixed assets have been physically verified by the management in accordance with the programme of verification, which in our opinion is reasonable, considering the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification as compared with the available records.

(c) In our opinion and according to the information & explanations given to us, the Company has not made any substantia! disposal of fixed assets during the year and the going concern status of the Company is not affected.

(ii) In respect of its inventories: -

(a) As explained to us, inventory has been physically verified during the year by the management at reasonable intervals.

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

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

(iii) In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956, according to the information and explanations given to us: -

(a) The Company has granted a loan to a subsidiary Company. At the year- end, the outstanding balance of such loan was Rs. 4.42 Crores and the maximum amount involved during the year was Rs. 4.86 Crores.

(b) In our opinion, the rate of interest and other terms & conditions of such loan is, prima facie not prejudicial to the interests of the Company.

(c ) The loan given were not due for repayment at year end.

(d) The loan given were not due for repayment, therefore the question of overdue amounts does not arise.

(e) 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., hence the provisions of sub clauses (f) and (g) of clause (iii) of paragraph 4 of the said Order are 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, fixed assets and also for the sale of goods. The Company has not sold any services during the year. During the course of audit we have not observed any continuing failure to correct major weaknesses in such internal control system.

(v) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

(a) To the best of our knowledge & belief and according to the information and explanations given to us, transactions that needed to be entered in the register have been so entered.

(b) According to the information and explanations given to us, the transactions made during the year in pursuance of such contracts or arrangements exceeding value of Rupees five lacs for each party, have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public and hence directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956 and ruled framed there under are not applicable for the year under audit.

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

(viii) We have been informed by the management that the Central Government has prescribed the maintenance of Cost Records pursuant to clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of its manufacturing activities. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate and complete.

(ix) According to the records of the Company in respect of statutory and other dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education & Protection Fund, and Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and any other material statutory dues as applicable with the appropriate authorities during the year.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A 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 the aforesaid statutory dues were outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, the disputed statutory dues aggregating to Rs. 3.89 crores , that have not been deposited on account of matters pending before appropriate authorities, are as under:

Name of the Nature of Amount Period to which Forum where

statute the dues (Rs. In the amount dispute is

Crores) relates pending

Central Excise Excise Duty 1.30* 2005-06 CESTAT

Act, 1944

0.16* 2000-01 CESTAT

Service Tax 1.45 2006-08 CESTAT

0.02 2005-08 Commissioner

(Appeals)

Service Tax Service Tax 0.02 2006-07 Commissioner

Act, 1994 (Appeals)

Income Tax Act, Income Tax 0.94 2004-05 Commissioner

1961 (Appeals)

Total 3.89

(*) Net of amount Rs. 0.30 Crores deposited under protest

(x) The Company does not have accumulated losses at the end of the financial year. It has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and accordingly to the information and explanations given to us by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xii) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company 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, hence the provisions clause (xiii) of paragraph 4 of the said Order are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of transactions and contracts in respect of dealing in shares and other securities and timely entries have been made therein. All shares and other investments have been held by the Company in its own name except certain investments which are made through portfolio manager and held by them in a fiduciary capacity on behalf of the Company.

(xv) The Company has given guarantees and letter of credit in connection with the Credit facilities extended by banks to its subsidiary Company as mentioned in note 3(b>(II) & (III) of Schedule R The Guarantees and letter of credit outstanding as at year end are for subsidiary Company, which according to the information and explanations given to us by the management, are prime facie not prejudicial to the interest of the Company.

(xvi) To the best of our knowledge & belief and according to the information & explanations given to us, the term loans raised during the year and those, which were outstanding at the beginning of the year, were prima facie been applied for the purposes for which they were raised.

(xvii)On the basis of review of utilization of funds, which is based on overall examination of the Balance Sheet of the Company as at 31st March 2010 related information as made available to us and as represented to us .by the management, we are of the opinion that the funds raised on short term basis have not prima facie been, utilized for long term investment during the year.

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

(xix)The Company has created securities/charges in respect of secured debentures issued during the year.

(xx) The Company has not raised any money by way of 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 to us 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 CHATURVEDI & SHAH

(Registration No.: 101720W)

Chartered Accountants



R. KORIA

Partner

Membership No. 35629

Place: Mumbai

Dated: 26th May, 2010

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