Auditor Report of Jindal Drilling & Industries Ltd.

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Jindal Drilling & Industries Limited (‘the Company’), which comprise the Balance Sheet as at 3I March 20I8, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as ‘standalone Ind AS financial statements’).

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section I 34(5) of the Companies Act, 20I3 (‘the Act’) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section I33 of the Act read with relevant rules issued thereunder

This responsibility also includes the 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 standalone Ind AS 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 Ind AS 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 thereunder

We conducted our audit in accordance with the Standards on Auditing specified under Section I43(I0) 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the Auditors’ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 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 standalone Ind AS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the financial position of the Company as at 3I March, 20I8, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order 20I6 (‘the Order’) issued by the Central Government of India in terms of Section I43(II) of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the Order

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, the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. in our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section I33 of the Act read with relevant rule issued thereunder;

e. on the basis of the written representations received from the directors as on 3I March 20I8 taken on record by the Board of Directors, none of the directors is disqualified as on 3I March 20I8 from being appointed as a director in terms of Section I64 (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’; and

g. with respect to the other matters to be included in the Auditors’ Report in accordance with Rule II of the Companies (Audit and Auditors) Rules, 20I4, 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 standalone Ind AS financial statements. Refer to Note 3I to the standalone Ind AS 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 refer note no. 35 to the financial statement.

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

Annexure - A to the Auditor’s Report

The Annexure referred to in Independent Auditors’ Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31 March 2018, we report that:

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

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

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

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

b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.

(iii) The Company has granted loans to three bodies corporate covered in the register maintained under Section 189 of the Companies Act, 2013 (‘the Act’).

(a) In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the bodies corporate listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.

(b) In the case of the loans granted to the bodies corporate listed in the register maintained under Section 189 of the Act, the borrowers have been regular in the payment of the principal and interest as stipulated.

(c) There are no overdue amounts in respect of the loan granted to a body corporate listed in the register maintained under Section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act, with respect to the loans and investments made.

(v) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable

(vi) The Central Government has not prescribed the maintenance of cost under section 148(1) of the Act, for any services rendered by the Company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including provident fund,ESI, income tax, sales tax, value added tax, goods and service tax with effect from July 1, 2017, duty of customs, service tax, cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of employees’ state insurance and duty of excise. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, ESI, income tax, sales tax, value added tax, good and service tax, duty of customs, service tax, cess and other material statutory dues were in arrears as at 31 March 2018 for a period of more than six months from the date they became payable.

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

Name of the Statute	Nature of dues	Amount Disputed (Rs/Lacs)	Forum where dispute is pending
1. Income Tax Act	Income Tax demand	199.32	ITAT A.Y2008-09 to 2010-11
	Income Tax demand	92.98	ITAT A.Y 2011-12
	Income Tax demand	92.56	ITAT A.Y20I2-I3
	Income Tax demand	103.02	ITAT A.Y 2013-14
	Income Tax demand	24.33	CIT(A) AY 2014-15
2. Customs Duty	Demand	255.03	Mumbai High court year 1989-91

(viii)In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year Accordingly, paragraph 3(ix) of the Order is not applicable.

(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section I97, 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 Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii)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 I77 and I88 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS 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 not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(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 non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi)The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act I934.

Annexure - B to the Auditor’s Report

Report on the Internal Financial Controls 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 ofJindal Drilling & Industries Limited (‘the Company’) as of 3I March 20I8 in conjunction with our audit of the standalone Ind AS 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 issued by the Institute of Chartered Accountants of India (‘ICAI’). 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 the 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, 20I3.

Auditors’ 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 (‘the Guidance Note’) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section I43(I0) of the Companies Act, 20I3, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 auditors’ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 (I) 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 the 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, 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 3I March 20I8, 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 issued by the Institute of Chartered Accountants of India.

For KANODIA SANYAL & ASSOCIATES

Chartered Accountants

FRN: 008396N

Place : New Delhi PALLAV VAISH

Date : 24th May 2018 Partner

Membership no. : 508751

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Mar 31, 2016

Report on the Internal Financial Controls 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 Jindal Drilling & 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 issued by the Institute of Chartered Accountants of India (‘ICAI''). 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.

Auditors'' 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 (the “Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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, 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 on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For G.SANYAL & CO.

Chartered Accountants

Firm’s Registration Number: 30II43E

(C. SANYAL)

Place : Gurgaon Partner

Dated : 26th May, 2016 Membership Number: 054022

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Mar 31, 2015

1) We have audited the accompanying financial statements of Jindal Drilling & Industries Limited ("the Company"), which comprises the Balance Sheet as at March 31,2015, 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

2) The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation and presentation of these 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 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; selec- tion 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 are 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

3) Our responsibility is to express an opinion on these 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 thereunder. 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.

4) 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 consid- ers 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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

7) As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order to the extent applicable.

8) As required by section 143(3) of the Act, we further 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 applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014;

e. On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015, 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 as referred to in note 26.l(2)(ii),(iii),(iv) & 26.9 (v) to the financial statements.

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any and as required on long term forward contracts refer note 26.3 to the financial statements.

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

(Annexure referred to in our Independent Auditors' Report to the members of the Company on the financial statement for the year ended 31st March, 2015)

(i) Having regard to the nature of the Company's business/activities etc., clauses (v)Regarding acceptance of deposits from public, (vi) regarding maintenance of Cost records (viii) regarding accumulated losses and cash losses and (xi)regarding utilization of Term loans availed, of Companies (Auditor's Report) Order, 2015 are not applicable to the Company. In respect of other clauses, We report as under:

(ii) In respect of its Fixed Assets:

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

b) As explained to us, fixed assets have been physically verified by the management in accordance with a regular programme of verification which, in our opinion provides for physical verification of all the fixed assets at reasonable intervals.

c) According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(iii) In respect of its inventories:

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

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management 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 inventories and no material discrepancies were noticed on physical verification.

(iv) According to the information and explanations given to us, the Company has granted unsecured loans to three Bodies Corporate only covered in the register maintained under Section 189 of the Companies Act, 2013. Parties are regular in payment of interest and principal which are repayable on demand. There is no overdue amount in respect of the above loans.

(v) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weakness has been noticed in the internal control system.

(vi) a) According to the information and explanations given to us and based on the records of the Company examined by us, the company is regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Customs Duty, Value added tax and other material statutory dues, as applicable, with the appropriate authorities in India;

b) According to the information and explanations given to us, details of dues of Income Tax, Service Tax & Customs duty which have not been deposited as on 31st March 2015 on account of any dispute are as under:

Name of the Statute Nature of dues Forum where dispute is pending

Customs Act, 1962 Customs Duty Mumbai High Court

Service Tax Act, 1994 Service Tax CESTAT

Income Tax Act, 1962 Income Tax Dues ITAT CIT (A)

Name of the Statute Related Financial Year Amount Rs.in Lacs

Customs Act, 1962 1989-91 195.02*

Service Tax Act, 1994 2007-08 603.94

Income Tax Act, 1962 2008-09 to 2010-11 199.32

2011-12 1641.12

*Net of deposits Rs. 60 lacs

c) There has not been any delay during the year under review any transfer of sums to the Investor education and protection fund in accordance with the relevant provisions of the Companies Act 1956 (1 of 1956) and rules made there under.

(vii) According to the information and explanations given to us and as per the books of account examined by us, the company has not defaulted in repayment of dues to banks. The company does not have any borrowings from any financial institution nor the Company has issued any debentures during the financial year.

(viii) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions during the year.

(ix) During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

For G.SANYAL & CO.

Chartered Accountants Firm's Registration Number: 301143E

(C. SANYAL)

Place : New Delhi Partner

Dated : 26th May, 2015 Membership Number: 054022

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Mar 31, 2014

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

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

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 auditors consider 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 effectiveness of Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, and to the best of our information and according to the explanations given to us, the accompanying 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, 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, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act (hereinafter referred to as the "Order"), we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under Companies Act 1956'' ("the Act") read with General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act 2013 and;

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

ANNEXURETO THE INDEPENDENTAUDITORS'' REPORT (Annexure referred to in our report of even date to the members of Jindal Drilling & Industries Ltd.)

I. Having regard to the nature of the company''s business/activities etc, clauses (vi) regarding acceptance of deposits from public (viii) regarding maintenance of cost records, (x) regarding accumulated losses and cash losses, (xii) regarding granting of loans and advances on the basis of securities by way of pledge of shares, debentures and other securities, (xiii) regarding chit fund, nidhi/mutual benefit fund/ societies, (xiv) regarding dealing or trading in shares, securities, debentures and other investments, (xvi) regarding utilization of Term loans obtained, (xix) regarding creation of security for debentures issued and (xx) regarding end use of money raised by public issues, of Companies (Auditors Report) Order, 2003 are not applicable to the company. In respect of other clauses, we report as under:

II. In respect of its Fixed Assets

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

(b) The fixed assets were physically verified during the year by the management in accordance with a regular programmme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year, were not substantial.

III. In respect of its Inventories:

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

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management 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 inventories and no material discrepancies noticed on physical verification.

IV. a. According to the information and explanations given to us, the company has granted unsecured loans to two companies only covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year end, balance of such loans including loan given earlier to one company aggregated to R 15667 lacs and R 7535 lacs respectively. Other than above, the company has not granted any loan secured or unsecured, to companies, firms, or parties covered in the register maintained under 301 of Companies Act 1956.

b. In our opinion, the rate of interest and other terms and conditions on which the loans have been granted to the body corporate listed in the register maintained under 301 of Companies Act 1956, are not prima facie prejudicial to the interest of the company.

c. The receipts of the principal amount and interest thereon are as per stipulation and there are no overdue amounts.

d. The company has not taken any loans during the year from companies, firms or other parties covered in the register maintained under 301 of Companies Act 1956. Consequently, clause (iii)(f) & (iii)(g) of Paragraph 4 of the Order are not applicable.

V. In our opinion and according to the information and explanations given to us, there is an adequate internal control systems/procedures commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

VI. In respect of the 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 by the management, the transactions that needed to be entered in the register maintained under section 301 of the Act have been so entered.

b. As per the audit procedures applied by us and as per the information and explanations given to us, with respect to the transactions as entered in the register maintained under section 301 of the Companies Act 1956 and exceeding the value of R Five Lacs in respect of each party, during the financial year, have been made at a price which appear reasonable as per information available with the company.

VII. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants have been commensurate with the size of the company and nature of its business.

VIII. According to the information and explanations given to us in respect of Statutory and other dues:

(a) The company has been regular in depositing the undisputed dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales Tax, Wealth-tax, Custom Duty, Service Tax, Cess and other material statutory dues applicable to it with the appropriate authorities during the year.

(b) There were no undisputed amount in respect of Income Tax, Wealth tax, Customs duty, Service tax, Cess and other material statutory dues in arrears as at 31st March 2014 for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, details of dues of income tax, Sales tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited as on 31st March, 2014 on account of any dispute are given below:

Forum where

Name of the Statute Nature of Dues dispute is pending

Custom Act 1962 Custom Duty Mumbai High Court

Income Tax Act Demand for CIT (A) Income Tax

Service tax Act, 1994 Service Tax CESTAT

Name of the Statute Related Amount Financial Year (R in Lacs)

Custom Act 1962 1989-91 195.03*

Income Tax Act 2007-08 316.27

2008-09 870.54

2009-10 4069.12

Service tax Act, 1994 2007-08 603.94

*Net of deposits R 60 Lacs

IX. According to the information and explanations given to us and as per the books of accounts examined by us, the company has not defaulted in the repayment of dues to the financial institutions / banks. The Company does not have any borrowings from any financial institution nor has it issued any debentures as at the balance sheet date.

X. According to the information and explanations given to us, no guarantees provided by the company are outstanding as on 31/03/2014.

XI. According to the information and explanations given to us, on an overall basis, no funds raised by the Company on short-term basis, has been used for long-term investments.

XII. According to the information and explanations given to us, during the year, the company has made preferential allotment of shares to seven parties covered in the register maintained under section 301 of the Companies Act, 1956 at prices which are not prejudicial to the interest of the Company.

XIII. According to the information and explanations given to us, and on the basis of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India, we have not come across any such instance of fraud on or by the company, noticed and reported during the year.

For G. SANYAL & CO.

CHARTERED ACCOUNTANTS

FRN 301143E (PARMOD KUMAR GUPTA)

Place: Gurgaon PARTNER

Dated: 24th May, 2014 Membership No. 015912

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Jindal Drilling & Industries Limited(‘the Company''), which comprise the Balance Sheet as at 31st March 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year ended, and Notes on Financial Statements comprising of 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 controls 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 the 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 reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

b) In the case of the Statement of Profit and Loss, 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 (‘the Order'') as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

ANNEXURE TO THE AUDITORS REPORT

i. Having regard to the nature of the company''s business/activities etc., clauses (vi) regarding acceptance of deposits from public, (viii) regarding maintenance of cost records, (x) regarding accumulated losses and cash losses, (xii) regarding granting of loans and advances on the basis of securities by way of pledge of shares, debentures and other securities, (xiii) regarding chit fund, nidhi/mutual benefit fund/societies, (xiv) regarding dealing or trading in shares, securities, debentures and other investments, (xvi) regarding utilization of Term loans obtained, (xix) regarding creation of security for debentures issued and (xx) regarding end use of money raised by public issues, of Companies (Auditors Report) Order, 2003 are not applicable to the Company. In respect of other clauses, we report as under:

ii. In respect of its Fixed Assets:

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

b. The fixed assets were physically verified during the year by the management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. The Company has not disposed of substantial part of fixed assets during the year. iii. In respect of its Inventories:

a. As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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

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

iv. a. According to the information and explanations given to us, the company has granted unsecured loans to two companies only covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year end, balance of such loans including loan given earlier to one company aggregated to Rs. 14942.14 lac and Rs.14001.23 lac respectively. Other than above, the company has not granted any loans, secured or unsecured, to companies, firms, or parties covered in the register maintained under section 301 of the Companies Act 1956.

b. In our opinion the rate of interest and other terms and conditions, on which the loans have been granted to the body corporate listed in the register maintained Under section 301 of the Companies Act 1956 are not, prime facie, prejudicial to the interest of the company.

c. The receipts of the principal amount and interest thereon is as per stipulation and there are no overdue amounts.

d. The company has not taken any loans during the year from companies, firms or other parties covered in the register maintained Under section 301 of the Companies Act'' 1956. Consequently, clause (iii)(f) & (iii)(g) of Paragraph.4 of the Order are not applicable.

v. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

vi. 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 into the register have been so entered.

b. in our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts/arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of five lacs in respect of each party during the year have been made at prices which appear reasonable as per information available with the company.

vii. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants have been commen- surate with the size of the company and the nature of its business.

viii. According to the information and explanations given to us in respect of Statutory and other dues:

1. The company has been regular in depositing undisputed dues, including Provident fund, Investor education and protection fund, Employees state insurance, Income tax, Wealth tax, Customs duty, Service tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

2. There were no undisputed amount payable in respect of Income tax, Wealth tax, Customs duty, Service tax, Cess and other material statutory dues in arrears as at 31st march, 2013 for a period of more than six months from the date they became payable.

ix. In our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues to banks. The Company does not have any borrowings from any financial institution nor has it issued any debentures as at the balance sheet date.

x. According to the information and explanations given to us, the company has given guarantees amounting to $ 22.5 million (equivalent to Rs. 12217.5 lac ) to an Axis Bank, Singapore branch as a collateral security for providing loan to its one Joint Venture Companies (refer to note 26.1(2)(i) ) and the terms & conditions thereof are not prejudicial to the interest of the Company.

xi. According to the information and explanations given to us, on an overall basis, no funds raised on short term basis, been used during the year for long term investment.

xii. During the year, the Company has made preferential allotment of shares to three companies covered in the Register maintained under section 301 of the Companies Act'' 1956 at prices which are not prejudicial to the interest of the Company.

xiii. According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For G.SANYAL & CO.

Chartered Accountants

Firm''s Registration Number: 301143E

(C. SANYAL)

Place : Gurgaon Partner

Dated: 24th May, 2013 Membership Number: 054022

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Mar 31, 2012

1. We have audited the attached Balance Sheet of JINDAL DRILLING & INDUSTRIES LIMITED as at 31st March, 2012, the statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4and 5 of the said Order.

Without qualifying our opinion, we draw attention to Note 26.9(iv) of the financial statements. The Company has given interest free loan of Rs. 15 crore to Jindal Drilling & Industries Limited Employees Welfare Trust during the year.

4. Further to our comments in the annexure referred to in paragraph 3 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 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 dealt with by this report are in compliance with the mandatory Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the Directors as on March 31,2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act 1956;

f. In our opinion and to the best of our information and according to the explanations given to us, they said account together with notes thereon and attached thereto, give the information required by the Companies Act, 1956, in the manner so required, and give a true and Fairview, 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 at31st March,2012;

(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.

(Referred to in paragraph 3 of our report of even date)

i. Having regard to the nature of the Company's business/activities etc, clauses (vi) regarding acceptance of deposits from public, (viii) regarding maintenance of cost records, (x) regarding accumulated losses and cash losses, (xii) regarding granting of loans and advances on the basis of securities by way of pledge of shares, debentures and other securities, (xiii) regarding chit fund, nidhi/mutual benefit fund/societies, (xiv) regarding dealing or trading in shares, securities, debentures and other investments, (xviii) regarding preferential allotment of shares, (xix) regarding creation of security for debentures issued and (xx) regarding end use of money raised by public issues, of Companies (Auditors Report) Order, 2003 are not applicable to the Company. In respect of other clauses, we report as under:

ii. In respect of its Fixed Assets:

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

b. The fixed assets were physically verified during the year by the management in accordance with a regular programme of verification which, in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. The Company has not disposed of substantial part offered assets during the year.

iii. In respect of its Inventories:

a. As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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

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

iv. a. According to the information and explanations given to us, the Company has granted unsecured loans to one Company covered in the register maintained under Section 301 of the Companies Act, 1956. In respect of the said loans, the maximum amount outstanding at any time during the year was Rs. 9708.93 lacs and the yearend balance is Rs. 6010.17 lacs. The terms &conditions of the loans are prima facie not prejudicial to the interest of the Company.

b. The receipts of the principal amount and interest thereon is as per stipulation and there are no overdue amounts.

c. 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 clause (iii)(f) and (iii)(g) of paragraph 4 of the Order are not applicable.

v. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

vi. 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 into the register have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts/arrangements entered in the register maintained under Section 301 of the Companies Act, 1956and exceeding the value of Rs. 5 lacs in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

vii. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants have been commensurate with the size of the Company and the nature obits business.

viii. According to the information and explanations given to us in respect of Statutory and other dues:

1. The Company has been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Customs Duty, Service Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

2. There were no undisputed amount payable in respect of Income Tax, Wealth Tax, Customs Duty, Service Tax, Cess and other material statutory dues in arrears as at 31st March, 2012 for a period of more than six months from the date they became payable.

3. The following disputed statutory liabilities have not been deposited in viewof pending appeals:

Statute Nature Forum Amount involved Related (Rs. in lacs) Financial Year

Customs Act,1962 Custom Duty Mumbai High Court 195.03* 1989-91

Income Tax Act,1961 Income tax CIT(A) 316.28 2007-08

Finance Act,1994 Service tax CESTAT 603.94 2007-08

*net of deposit of Rs. 60 lacs

ix. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not issued any debentures.

x. According to the information and explanations given to us, the Company has given guarantees amounting to $42.00 million (equivalent toRs. 21365.4 lacs) to an overseas banks a collateral security for providing loan to its two Joint Venture Companies (refer to note 26.1(2)(i)) and the terms & conditions whereof are not prejudicial to the interest of the Company.

xi. The Company has not obtained any fresh term loan during the year.

xii. According to the information and explanations given to us, on an overall basis, no funds raised on short term basis, been used during the year for long term investment.

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

For G.SANYAL & CO.

Chartered Accountants

FRN.301143E

(C.SANYAL)

Place : Gurgaon Partner

Date: 8thAugust,2012 (Membership No.054022)

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Mar 31, 2011

1. We have audited the attached Balance Sheet of JINDAL DRILLING AND INDUSTRIES LIMITED, as at 31 st March, 2011, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for ouropinion.

3. As required by the Companies (Auditors' Report) Order, 2003 {as amended by the Companies (Auditors' Report) (Amendment) Order, 2004} {hereinafter referred to as 'Order'} issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

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

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

(v) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record 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;

(vi) Without qualifying our opinion, we draw attention to:

a) note number B4(ii) of schedule number 18 of notes to accounts regarding outstanding dues of Rs.6586 lacs withheld by ONGC which has been considered good by the management based on the legal opinion obtained.

b) note number B5(i) of schedule number 18B of notes to accounts regarding loan of Rs. 1087 lacs to one party which is subject to confirmation.

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS' REPORT

(As referred to in paragraph '3' of our report to the members of JINDAL DRILLING AND INDUSTRIES LIMITED on the accounts as at & for the year ended 31 st March 2011)

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

b) In our opinion, certain fixed assets of the Company have been physically verified by the management according to a phased programme designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the company and the nature of fixed assets. No material discrepancies were noticed on such verification as compared to the books of account.

c) Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption.

2. (a) The inventory has been physicallyverified bythe management during theyear.lnouropinion,thefrequencyofverification is reasonable.

b) 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, the Company is maintaining proper records of inventory. As far as we could ascertain and according to the information and explanations given to us, no material discrepancies were noticed between the physical stock and the book records.

3. (a) As per the information and explanations given to us, the Company has granted unsecured loan to one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 8930.34 lacs and the year-end balance of loans granted to such parties was Rs. 8930.34 lacs.

b) In our opinion, the rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the company.

c) The receipts of the principal amount and interest thereon is as stipulated.

d) There is no overdue amount in respect of loan granted to such parties.

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. Accordingly clauses 4(iii) (f) and (g) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us, there exists adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system of the Company.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) As far as we could ascertain on the basis of our selective checking and according to the information and explanations given to us, the transactions made in pursuance of aforesaid contracts or arrangements including those exceeding the aggregate amount of rupees five lacs in respect of each party made during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public and consequently the directives issued by the Reserve Bank of India and the provisions of section 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable to the Company.

7. According to the information and explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business.

8. According to information and explanations given to us, the Central Government has not prescribed maintenance of cost records under clause(d) of subsection (1)of section 209 ofthe Companies Act, 1956.

9. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it. However an amount of Rs. 38,316 relating to Employees' State Insurance in respect of Gurgaon Office has not been deposited due to non allotment of Employees' State Insurance Sub-Code number by ESIC authorities.

(b) According to the information and explanations given to us and on the basis of our examination ofthe books of accounts, no undisputed amounts payable in respect of IncomeTax, Wealth Tax, Sales Tax, Custom Duty, Excise Duty and Cess were in arrears at the year-end for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and the records ofthe Company examined by us, there are no dues of Sales Tax, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute except the following in respect of Custom Duty, IncomeTax and Service Tax along with the forum where the dispute is pending:

Name of Nature of Amount Financial Forum where Statute Dues (Rs. in lacs) Year to which dispute pending amount relates

Customs Act, 1964 Custom Duty 195.03* 1989-91 Custom Department including penalty

Income Tax Act, 1961 IncomeTax 391.51 2006-07 Commissioner of IncomeTax (Appeals)

Finance Act, 1994 Service Tax 603.94 2007-08 CESTAT

*net of deposit of Rs. 60 lacs

10. The Company does not have any accumulated losses. The Company has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank. The Company has not issued any debentures during the year.

12. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi/ mutual benefit fund/society. Hence, the provisions of clause 4(xiii) ofthe Order are not applicable to the Company.

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

15. The Company has provided corporate guarantee amounting to US$ 42.50 million (equivalent to Rs. 18946.50 lacs) to Axis Bank Limited, Singapore Branch as a collateral security for providing financial assistance to its two Joint Venture Companies, Discovery Drilling Pte. Ltd., Singapore (DDPL) & Virtue Drilling Pte. Ltd., Singapore (VDPL). Further, the Company has pledged its 100% investment in the DDPL and VDPL to the lenders ofthe respective Joint Venture Companies. The terms and conditions ofthe aforesaid arrangements are not, prima facie, prejudicial to the interest ofthe Company.

16. On the basis of records made available and according to information and explanations given to us, the Company has applied its term loans for the purposes for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination ofthe Balance Sheet ofthe Company, we report that no funds raised on short term basis have been used for long term investment.

18. According to the information and explanations given to us, 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. Since the Company has not raised any money during the year by way of public issue, the provisions of clause 4(xx) of the Order are not applicable to the Company.

21. Based upon the audit procedure performed for the purpose of reporting the true and fair view of the financial statements and on the basis of the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

ForS.S.KOTHARIMEHTA&CO.

Chartered Accountants

Firm's Regn. No. 000756N

K.K.TULSHAN

Place: Gurgaon Partner

Date : 3rd August, 20011 Membership No. 085033

---

Mar 31, 2010

1. We have audited the attached Balance sheet of JINDAL DRILLING AND INDUSTRIES LIMITED as at 31st March 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 {as amended by the Companies (Auditors Report) (Amendment) Order, 2004} {hereinafter referred to as Order} issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

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

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

(v) On the basis of written representations received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st 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;

(vi) Without qualifying our opinion, we draw attention to note number 4(ii) of schedule number 18B of notes to accounts regarding outstanding dues of Rs.6633 lacs withheld by ONGC which has been considered good by the management based on the legal opinion obtained.

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

(b) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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



ANNEXURE TO THE AUDITORS REPORT



(As referred in paragraph 3 of our report to the members of JINDAL DRILLING AND INDUSTRIES LIMITED on the accounts for the year ended 31st March 2010)

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

(b) In our opinion, certain fixed assets of the Company have been physically verified by the management according to a phased programme designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the company and the nature of fixed assets. No material discrepancies were noticed on such verification as compared to the books of account.

(c) Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption.

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

(b) 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, the company is maintaining proper records of inventory. As far as we could ascertain and according to the information and explanations given to us, no material discrepancies were noticed between the physical stock and the book records.

(iii) (a) As per the information & explanations given to us, the company has granted unsecured loan to one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 7498.16 lacs and the year-end balance of loans granted to such parties was Rs.7498.16 lacs.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the company.

(c) The receipts of the principal amount are regular as stipulated. The parties are regular in payment of interest, as stipulated;

(d) There is no overdue amount in respect of loan granted to such parties.

(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. Accordingly, clauses 4(iii) (f) & (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there exists adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system of the company.

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

(b) As far as we could ascertain on the basis of our selective checking and according to the information and explanations given to us, the transactions made in pursuance of aforesaid contracts or arrangements including those exceeding the aggregate amount of rupees five lakhs in respect of each party made during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Sections 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable to the company.

(vii) According to the information and explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) According to information and explanations given to us, the Central Government has not prescribed maintenance of cost records under clause (d) of sub section (1) of section 209 of the Companies Act, 1956.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other material statutory dues applicable to it.

(b) According to information and explanations given to us and on the basis of our examination of the books of account, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess were in arrears at the year-end for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income tax, sales tax, wealth tax, service tax and excise duty which have not been deposited on account of any dispute. The particulars of customs duty as at 31.03.2010 which have not been deposited on account of dispute are as follows:

Name of Nature of Amount* Period to which Forum where

Statute the Dues (Rs. in lacs) amount relates dispute pending

Customs Act, 1964 Custom Duty including 195.03 1989-91 Custom Department penalty

*net of deposit of Rs. 60 lacs

(x) The company does not have any accumulated losses. Hence, the provisions of clause 4(x) of the Order are not applicable to the company.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank. The company has not issued any debentures during the year.

(xii) In our opinion and according to the information & explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is not a chit fund or a nidhi/ mutual benefit fund/ society. Hence, the provisions of Clause 4(xiii) of the Order are not applicable to the company.

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

(xv) The Company has provided corporate guarantee amounting to US$ 42.50 million (equivalent to Rs.19,082.50 lacs) to Axis Bank Limited, Singapore Branch as a collateral security for providing financial assistance to its two Joint Venture Companies, Discovery Drilling Pte. Ltd., Singapore (DDPL) & Virtue Drilling Pte. Ltd., Singapore (VDPL). Further, the Company has pledged its 100% investment in the DDPL and VDPL to the Lenders of the respective Joint Venture Companies. The terms and conditions of the aforesaid arrangements are not, prima facie, prejudicial to the interest of the company.

(xvi) On the basis of records made available and according to information and explanations given to us, the company has applied its term loans for the purposes for which the loans were obtained.

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

(xviii) According to the information and explanations given to us, 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.

(xix) The company has not issued any debentures during the year.

(xx) Since the Company has not raised any money during the year by way of public issue, the provisions of clause 4(xx) of the Order are not applicable to the Company.

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

ForS.S.KOTHARIMEHTA&CO.

Chartered Accountants

Firms Regn. No. 000756N

ATULSEKSARIA

Partner

Membership No. 086370

Place : New Delhi

Date : May 19, 2010