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Auditor Report of Jindal Steel & Power Ltd.

Mar 31, 2016

We have audited the internal financial controls over financial reporting of Jindal Steel & Power Limited ("the Company") as of March 31, 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. 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, 2013.

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing as specified 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.

An 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 judgement, 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 qualified audit opinion on the internal financial controls 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 authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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.

QUALIFIED OPINION

According to the information and explanations given to us and based on our audit, the following material weakness has been identified in the operating effectiveness of the Company''s internal financial controls over financial reporting as at March 31, 2016:

(a) The Company''s internal financial controls over adjustment and provision to be made in regard to expense relating to additional coal levy were not operating effectively which could potentially result in the material mis-statement in the Financial Statements by way of company recording lower expenses.

(b) The Company''s internal financial controls over adjustment and provision to be made in carrying value of investment in mining assets including land, infrastructure and clearance etc. were not operating effectively which could potentially result in material mis-statement in the Financial Statements by way of the Company valuing assets on higher side.

A ''material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company''s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of March 31, 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, and except for the effects of our observation stated in (a) above and possible effects of our observation in (b) above of the material weakness described above on the achievement of the objectives of the control criteria, the Company''s internal financial controls over financial reporting were operating effectively as of March 31, 2016.

EXPLANATORY PARAGRAPH

We also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act, the standalone financial statements of Jindal Steel & Power Limited, which comprise the Balance Sheet as at March 31, 2016, and the related 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. This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 standalone financial statements of Jindal Steel & Power Limited and this report affect our report dated May 4, 2016, which expressed an qualified opinion on those financial statements.

To the Board of Directors of Jindal Steel & Power Limited

The accompanying abridged standalone financial statements, which comprise the abridged standalone balance sheet as at March 31, 2016, the abridged standalone statement of profit and loss and abridged standalone cash flow statement for the year then ended, and related notes, are derived from the audited standalone financial statements of Jindal Steel & Power Limited (''the Company'') as at and for the year ended March 31, 2016. We expressed a qualified audit opinion on those standalone financial Statements in our report dated May 4, 2016.

The abridged standalone financial statements do not contain all the disclosures required by the accounting principles generally accepted in India, including the Accounting Standards notified under Section 133 of the Companies Act, 2013 ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014 issued by Ministry of Corporate Affairs. Reading the abridged standalone financial statements, therefore, is not a substitute for reading the audited standalone financial statements of the Company.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the preparation of a summary of the audited standalone financial statements in accordance with the Accounting Standards notified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 issued by Ministry of Corporate Affairs and accounting principles generally accepted in India.

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on the abridged standalone financial statements based on our procedures, which were conducted in accordance with Standard on Auditing (SA) 810, "Engagements to Report on Summary Financial Statements" issued by the Institute of Chartered Accountants of India.

QUALIFIED OPINION

In our opinion, the abridged financial statements derived from the audited standalone financial statements of the Company as at and for the year ended March 31, 2016 are a fair summary of those financial statements, in accordance with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and accounting principles generally accepted in India. However, the abridged financial statements are misstated to the equivalent extent as the audited standalone financial statements of the Company as at and for the year ended March 31, 2016.

a) As detailed in note 40 (i) of the standalone financial statements, based on the Order of Hon''ble Supreme Court of India, the Company paid an additional levy of Rs.295 per metric ton on gross coal extracted from operational mines. Through March 31, 2015, such levy on the gross extraction amounts to Rs.2,082.23 crore. Based on legal opinion, the Company had recorded Rs.807.77 crore in the previous year as an exceptional item representing the levy on net extraction (run of mines less shale, rejects and ungraded middling) of coal. Had the gross levy been recorded, net loss before tax for the year ended March 31, 2016, would have been higher by Rs.1,274.46 crore and reserves and surplus as at March 31, 2016, would have been lower by Rs.1,274.46 crore. In respect of above matter, our audit report for the year ended March 31, 2015 was similarly qualified.

b) As detailed in note 40 (ii) of the standalone financial statements and referred above note, the Company has not made adjustment in the net carrying value of investment made in mining assets including land, infrastructure and clearance, etc., of Rs.425 crore as at March 31, 2016, pending finalization of the compensation claim filed by the Company with the Government authorities. Accordingly, we are unable to comment on the matter including any consequential adjustments that may be required in this regard in these financial statements. In respect of above matter, our audit report for the year ended March 31, 2015 was similarly qualified.

Our adverse audit opinion stated that except for the effects of our observation stated in (a) above and possible effects of our observations in (b) above, those financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2016, and its loss and its cash flows for the year ended on that date.

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm registration number: 301003E/E300005

per Anil Gupta

Partner

Membership no.: 87921

Place: New Delhi

Date: May 4, 2016


Mar 31, 2015

We have audited the accompanying financial statements of Jindal Steel & Power Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these 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.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Basis for Qualified Opinion

a) As detailed in note 40(i) and (ii) of the financial statements, based on the Order of Hon''ble Supreme Court of India, the Company is to pay an additional levy of Rs. 295 per metric ton on gross coal extracted from operational mines. Through March 31, 2015, such levy on the gross extraction amounts to Rs. 2,082.23 crore of which Rs. 1,989.83 crore has been paid under protest and Rs. 38.86 crore has been accrued. Of the total amount paid or accrued, based on legal opinion the Company has recorded Rs. 807.77 crore as an exceptional item representing the levy on net extraction (run of mines less shale, rejects and ungraded middling) of coal. Had the gross levy been recorded, exceptional items and net loss before tax for the year ended March 31, 2015 would have been higher by Rs. 1,274.46 crore.

b) As detailed in note 40 (iii) of the financial statements and referred above note, the Company has not made adjustment in the net carrying value of investment made in mining assets including land, infrastructure and clearance, etc., of Rs. 419.72 crore as at March 31, 2015, pending finalization of the compensation claim filed by the Company with the Government authorities. We are unable to comment on the matter including any consequential adjustments that may be required in this regard in these financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us except for the effects of our observation stated in (a) above and possible effects of our observations in (b) above, 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 31 March 2015,and its loss and its 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, 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.

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 the 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) Except for the effects of matter (a) and possible effect of matter (b) described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) The matters described in the Basis for Qualified opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31 March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 29 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

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

Annexure referred to in paragraph under the heading "Report on Other Legal and Regulatory requirements" of our report of even date

Re: Jindal Steel and Power Limited (''the Company'')

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

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

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed for significant inventory balance as at the year end.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. Discrepancies noted on physical verification of inventories were not material, and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a) and (b) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. during the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

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

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture/generation of Mineral Products, Iron & Non alloy Steel, Power and other products, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) (i) Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities.

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

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

Name of the Nature of dues Amount Amount of statue (Rs.in Crore) deposit (Rs.in crores)

Income tax Income Tax 751.52 296.57 Act,1961

Income tax Income Tax 4.20 4.20 Act,1961

Income tax Income Tax 42.26 - Act,1961

Central Excise Act, Excise duty 132.19 - 1944

Central Excise Act, Excise duty 0.10 - 1944

Central Excise Act, Excise duty 0.64 - 1944

Building & Other Building Cess 3.72 0.05 Construction Workers Welfare Cess Act, 1996

Clean Energy Cess Clean Energy 29.72 Rules, 2010 Cess Finance Act,1994 Service tax 0.11 -

Finance Act,1994 Service tax 0.01 -

Finance Act,1994 Service tax 0.35 -

Chhattisgarh Energy 333.06 38.17 Upkar Adhiniyam development 1981 Cess

Odisha Entry Tax Entry Tax 96.66 23.52 Act & Rules

Odisha Entry Tax Entry Tax 11.37 2.84 Act & Rules

Odisha Entry Tax Entry Tax 0.07 0.04 Act & Rules

Odisha Entry Tax Entry Tax 0.01 0.00 Act & Rules

Central Sales Tax Central Sales 0.24 0.15 Act, 1956 Tax

Central Sales Tax Central Sales 0.48 0.03 Act, 1956 Tax

Central Sales Tax Central Sales 0.45 0.45 Act, 1956 Tax

Odisha value State Sales Tax 0.20 0.04 added Tax

Odisha value State Sales Tax 0.30 0.17 added Tax

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

Income tax FY 2005-06 to Income Tax Appellate Act,1961 FY 2009-10 Tribunal

Income tax FY 2004-05 Commissioner of income Act,1961 Tax (Appeals), Rohtak

Income tax FY 2003-04 Punjab and Haryana High Act,1961 and FY 2004-05 Court, Chandigarh

Central Excise Act, FY 2001-02 to CESTAT, Delhi 1944 FY 2013-14

Central Excise Act, FY 95-96 Madhya Pradesh High Court 1944 Jabalpur

Central Excise Act, FY 2003-04 High Court Bilaspur 1944

Building & Other FY 2007-08 to Odisha High Court Construction 2013-14 Workers Welfare Cess Act, 1996

Clean Energy Cess FY 2010-11 to CESTAT, delhi Rules, 2010 FY 2011-12 Finance Act,1994 FY 2003-04 to CESTAT, delhi 2009-10

Finance Act,1994 FY 2006-07 Asst.Commissioner Bilaspur

Finance Act,1994 FY 2001-02, Additional Commissioner, FY 2002-03 & Raipur 2013-14

Chhattisgarh FY 2004-05 to Supreme Court Upkar Adhiniyam 2014-15 1981

Odisha Entry Tax FY 2007-2008 Sales Tax Tribunal Cuttack Act & Rules to 2010-2011 Odisha

Odisha Entry Tax Nov2010 to Odisha High Court, Cuttack Act & Rules July2011

Odisha Entry Tax FY 2007-2008 Add. Commissioner of Sales Act & Rules Tax, Cuttack

Odisha Entry Tax FY 2006-2007 deputy Commissioner, Act & Rules Commercial Tax (Appeals), Cuttack

Central Sales Tax FY 2005-2006 deputy Commissioner, Sales Act, 1956 tax, Rourkela

Central Sales Tax FY 2006-2007 deputy Commissioner, Act, 1956 Commercial Tax, Cuttack

Central Sales Tax FY 2004-2005 Odisha High Court, Cuttack Act, 1956

Odisha value FY 2006-2007 deputy Commissioner, added Tax Commercial Tax (Appeals), Cuttack

Odisha value FY 2007-2008 Add. Commissioner of Sales added Tax Tax, Cuttack

(c) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The Company has no accumulated losses at the end of the financial year. It has incurred cash losses in the current year after considering the effect of matter stated in paragraph (a) of ''Basis for qualified Opinion'' of our auditor''s report and the Company has not incurred cash losses in the immediately preceding financial year.

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

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

(xi) Based on the information and explanations given to us by the management, term loans taken during the current year were applied for the purpose for which the loans were obtained.

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

For S.R.Batliboi & Co. LLP Chartered Accountants ICAI Firm Registration No. 301003E

Anil Gupta Partner Membership No. 87921

Place : new Delhi Dated: 27th May, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Jindal Steel & Power Limited(''the Company'') which comprises the Balance Sheet as at 31st March, 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and Notes to the 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'') read with the General circular 15/2013 dated 13th 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 controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, 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 but not for the purpose of expressing an opinion on the effectiveness of entity''s internal control. 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:

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

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

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

EMPHASIS OF MATTER

We draw attention to sub note (a) of Note 4 regarding accounting for sales tax included in sales price of products sold out of sales tax exempted unit under Sales Tax Subsidy/Capital Reserve Account in the circumstances as explained in the Note. Our opinion is not qualified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order''), as amended, issued by the Central Government of India in terms of subsection(4A) of section 227 of the Companies Act, 1956, 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 Companies Act, 1956, 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, read with the General circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013,

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

Annexure Re: Jindal Steel & Power Limited Referred to in clause 1 of paragraph on ''Report on Other Legal and Regulatory Requirements of our report of even date,

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. Discrepancies noticed on such verification as compared to book records were not material, and have been properly adjusted in the books of account.

(c) Fixed assets disposed off during the year were not substantial so as to impact going concern status of the Company.

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stocks in the possession and custody of third parties and stock in transit as at 31st March, 2014 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are, in our opinion, 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. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses (iii) (a) to (d) of paragraph 4 of order are not applicable to the company.

(b) The Company has taken an unsecured loan (year-end balance Rs. 2,455 crore) from a company covered in the register maintained under section 301 of the Act.

(c) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions of such unsecured loan taken by the Company is, prima facie, not prejudicial to the interest of the Company.

d) The Company is regular in payment of interest on such loan which is payable on demand.

4. In our opinion and according to the information & explanations given to us during the course of audit, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, 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 neither come across nor have we been informed of any instance of a major weakness in the aforesaid internal control systems.

5 (a) To the best of our knowledge and according to the information and explanations given to us, we are of the opinion that the particulars of 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) In our opinion and according to the information and explanations given to us, the transactions entered into in pursuance of contracts or arrangements, with whom transactions exceeding the value ofRs. five lacs in respect of each party have taken place during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6 In respect of fixed deposits accepted from the public in earlier years, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposits) Rules, 1975 have been complied with. We have been informed that no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8 We have broadly reviewed the cost accounting records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (l)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed records have been made & maintained. We are, however, not required to carry out a detailed examination of the same.

9 (a) In our opinion and according to the information and explanations given to us and according to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues, wherever applicable, have been regularly deposited with the appropriate authorities during the year and there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2014 except for collection of sales tax which have been collected pending receipt of necessary certificates from the customers.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess which have not been deposited on account of any dispute, except the following which have not been deposited as on 31st March, 2014 on account of disputes are given below:

Name of the Nature of Amount Forum where dispute is statue dues (Rs. in Crore) pending

Income tax Income Tax 11.38 Punjab & Haryana High Act, 1961 Court

Income tax Income Tax 539.59 Income Tax Appellate Act, 1961 Tribunal, New Delhi

Income tax Income Tax 4.2 Commissioner of income Act, 1961 tax(Appeals), Rohtak

Building & Other Building cess 3.35 Odisha High Court Construction Workers Welfare Cess Act, 1996.

Odisha Entry Tax Entry tax 5.44 Supreme Court Act & Rules

Odisha Entry Tax Entry tax 28.83 Odisha High Court Act & Rules

Odisha Entry Tax Entry tax on 84.14 Commissioner of Act & Rules imported Commercial Taxes, Cuttack, goods Odisha

Odisha Entry Tax Entry Tax 0.07 Additional Act & Rules Commissioner,Commercial tax (Appeals), Cuttack

Odisha Entry Tax Entry Tax 0.01 Deputy Commissioner, Act & Rules Commercial Tax(Appeals), Cuttack

Central Excise & Excise duty 1.03 High Court, Bilaspur Salt Act, 1944

Central Excise & Excise duty 0.10 Madhya Pradesh High Salt Act, 1944 Court, Jabalpur

Central Excise & Excise duty 168.95 CESTAT, New Delhi Salt Act, 1944



Name of the Statue Amount Period to which deposited the amount (Rs. in Crore) relates

Income tax Act, 1961 NIL AY 04-05

Income tax Act, 1961 214.93 AY 05-06 to 09-10

Income tax Act, 1961 4.2 AY 05-06

Building& Other Construction Workers Welfare Cess Act, 1996. 0.05 FYs 08-14

Odisha Entry Tax Act & Rules NIL FY 13-14

Odisha Entry Tax Act & Rules 2.84 FYs 10-14

Odisha Entry Tax Act & Rules 12.52 FYs07-10

Odisha Entry Tax Act & Rules 0.02 FY 07-08

Odisha Entry Tax Act & Rules 0.00 FY 06-07

Central Excise & Salt Act, 1944 NIL FY 94-95 to 07-08

Central Excise & Salt Act, 1944 NIL FY 95-96

Central Excise & Salt Act, 1944 13.74 FY 02-03 to 13-14

Name of the Nature of Amount Forum where dispute is statue dues (Rs. in Crore) pending

Central Sales Tax Central Sales 0.45 Odisha High Court Act, 1956 Tax

Central Sales Tax Central Sales 0.24 Deputy Commissioner, Act,1956 Tax Commercial Tax, Rourkela

Central Sales Tax Central Sales 0.48 Deputy Commissioner, Act,1956 Tax Commercial Tax, Cuttack

Odisha Value State Sales 0.20 Deputy Commissioner, added tax Tax Commercial Tax (Appeals), Cuttack

Odisha Value State Sales 0.30 Additional Commissioner added tax Tax Commercial Tax (Appeals), Cuttack

Chhattisgarh State Energy 227.17 Supreme Court Govt. Law Development cess

Name of the Statue Amount Period to which deposited the amount (Rs. in Crore) relates

Central Sales Tax Act, 1956 0.45 FY 04-05

Central Sales Tax Act, 1956 0.15 FY 05-06

Central Sales Tax Act, 1956 0.14 FY 06-07

Odisha Value added tax 0.04 FY 06-07

Odisha Value added tax 0.09 FY 07-08

Chhattisgarh State Govt. Law Nil FY 04-05 to 12-14

10 The Company does not have accumulated losses as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11 According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12 According to the information and explanations given to us and as per the books and records examined by us, adequate documents and records are maintained in cases where the Company has granted loan and advances on the basis of security by way of pledge of shares. The Company has not granted any loans and advances on the basis of security of debentures or other securities.

13 The Company does not fall within the category of Chit fund/ Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.

14 According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15 The Company has given guarantees against loans taken by others from banks and financial institutions; the terms and conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

16 In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where the lenders have stipulated such end use.

17 According to the information and explanations given to us and as per the books and other records including sanctions by the lenders examined by us, on an overall examination of the Balance Sheet of the Company combined with underlying nature, movement, maturity pattern of the funds and funds deployment policy of the Company, the funds raised by the Company on short term basis during the yearhave not been applied for long-term investment.

18 The Company has made preferential allotment of equity shares under an employee stock purchase scheme to its Managing Director, being a party covered in the register maintained under section 301 of the Companies Act, 1956, the terms whereof are not prejudicial to the interest of the Company.

19 According to the information and explanations given to us and on the basis of the records examined by us, the Company has created necessary securities for the secured debentures.

20 The Company has not raised any money by way of public issue during the year.

21 During the course 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 neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. Kothari Mehta & Co.

Chartered Accountants Firm Registration No. 000756N

K. K. Tulshan

Place : New Delhi Partner

Dated : 29th April, 2014 Membership No. 85033


Mar 31, 2013

We have audited the accompanying financial statements of Jindal Steel & Power Limited (''the Company'') which comprises the Balance Sheet as at 31st March, 2013,and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and Notes to the 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 ofthe 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 ofthe financial statements that give a true and fair view and are free from material misstatements, 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 ofthefinancial 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 said accounts 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 generallyaccepted in India:

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

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

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

EMPHASIS OF MATTER

We draw attention to sub note (a) of Note 4 regarding accounting forsales taxincluded in sales price of products sold out of sales tax exempted unit under Sales Tax Subsidy/ Capital Reserve Account in the circumstances as explained in the Note. Our opinion is not qualified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms 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) ofthe 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 ofthose 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 Act;

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 Act.

Annexure

Re: Jindal Steel & Power Limited

Referred to in clause 1 of paragraph on ''Report on Other Legal and Regulatory Requirements of our report of even date,

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. Discrepancies noticed on such verification as compared to book records were not material, and have been properly adjusted in the books of account.

(c) Fixed assets disposed off during the year were not substantial so as to impact going concern status ofthe Company.

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stocks in the possession and custody of third parties and stock in transit as at 31st March, 2013 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are, in our opinion, reasonable and adequate in relation to the size ofthe Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books ofaccount.

3. (a) The Company has neithergranted nor taken any loans, secured or unsecured, to/ from companies, firms or other parties listed in the register maintained under section 301 ofthe Companies Act, 1956. Accordingly, clauses (iii) (a) to (g) of paragraph 4 of CARO are not applicable.

4. In our opinion and according to the information & explanations given to us during the course of audit, there are adequate internal control systems commensurate with the size ofthe Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination ofthe books and records ofthe Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of a major weakness in the aforesaid internal control systems.

5. (a) To the best of our knowledge and according to the information and explanations given to us, we are of the opinion that the particulars of 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) In our opinion and according to the information and explanations given to us, the transactions entered into in pursuance of contracts or arrangements, with whom transactions exceeding the value of Rupees five lacs in respect of each party have taken place during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public in earlier years, the provisions of section 58A and 58AA or any other relevant provisions ofthe Companies Act, 1956 including the Companies (Acceptance of Deposits) Rules, 1975 have been complied with. We have been informed that no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8. We have broadly reviewed the cost accounting records maintained by the Company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (l)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed records have been made & maintained. We are, however, not required to carry out a detailed examination ofthe same.

9. (a) In our opinion and according to the information and explanations given to us and according to the records ofthe Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues, wherever applicable, have been regularly deposited with the appropriate authorities during the year and there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2013 except for collection of Sales tax which have been collected pending receipt of necessary certificates from the customers.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess which have not been deposited on account of any dispute, except the following which have not been deposited as on 31st March, 2013 on account of disputes are given below:

Name of Statute Nature of Dues Amount Forum where dispute is pending Rs. in Crore

Central Excise and Salt Excise Duty 0.04 Appellate Commissioner, Raipur Act, 1944

156.69 CESTAT, NewDelhi

1.03 Chhattsgarh High Court, Bilaspur

0.10 Madhya Pradesh High Court, Jabalpur

Central Sales Tax Act/ Entry Tax 48.46 Deputy Commissioner, Local Sales Tax Act/ Commercial Tax (Appeals), Entry Tax Rourkela

0.01 Deputy Commissioner, Commercial tax (Appeals), Cuttack

0.15 Additional Commissioner, Commercial tax (Appeals), Cuttack

Central Sales Tax Act/ State Sales Tax/ 0.20 Deputy Commissioner, Value added Tax Commercial Tax (Appeals), Cuttack

Local Sales Tax Act/ 0.60 Additional Commissioner, Entry Tax Commercial tax (Appeals), Cuttack

Central Sales Tax Act/ Central Sales 0.45 Orissa High Court, Cuttack Local Sales Tax Act/ Tax 0.48 Deputy Commissioner, Commercial Tax, Cuttack

Entry Tax 0.24 Deputy Commissioner, Commercial Tax, Rourkela

Chattisgarh State Govt. Energy 183.19 Honourable Supreme Court Law Deveploment Cess

Business & Other Cess 2.94 Orissa High Court, Cuttack Construction workers welfare cess Act, 1996

Income Tax Act,1961 Income Tax 11.38 Punjab and Haryana High Court

176.86 Income Tax Appellate Tribunal, New Delhi

4.75 Commissioner of Income Tax (Appelas), Rohtak

Name of Statute Amount Period to which Deposited the amount Rs. in Crore relates

Central Excise and Salt Act, 1944 NIL FY 11-12 to 12-13

13.93 FYs 99-13

NIL FY 94-95 to 07-08

NIL FY 95-96

Central Sales Tax Act 16.06 FY 10-11

0.00 FY 06-07

0.02 FY 07-08

Central Sales Tax Act 0.04 FY 06-07 Local Sales Tax Act 0.09 FY 07-08

Central Sales Tax Act 0.45 FY 04-05

Local Sales Tax Act 0.14 FY 05-06

Entry Tax 0.15 FY 06-07

Chattisgarh State Govt Law NIL FY 04-05 to 12-13

Business & Other Construction workers welfare cess Act 1996 0.05 FYs 08-13

Income Tax Act 1961 NIL AY 04-05

2.90 AY 05-06 to 08-09

NIL AY 05-06 & 07-08

10. The Company does not have accumulated losses as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

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

13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements ofthe Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements ofthe Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks and financial institutions; the terms and conditions of such guarantees are not, prima facie, prejudicial to the interest ofthe Company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where the lenders have stipulated such end use.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long-term investment.

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

19. According to the information and explanations given to us and on the basis ofthe records examined by us, the Company has created necessary securities for the debentures issued in earlier years.

20. The Company has not raised any money by way of public issue during the years.

21. During the course 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 neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed ofsuch case bythe management.

For S. S. KOTHARI MEHTA & COMPANY

Chartered Accountants

Firm Registration No. 000756N

K. K. Tulshan

Place: New Delhi Partner

Date : 25th April, 2013 Membership No. 85033


Mar 31, 2012

1. We have audited the attached Balance Sheet of JINDAL STEEL & POWER LIMITED, as at 31st March, 2012, the Statement of Profit & 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) order, 2003 as amended by the Companies (Auditors' Report) (Amendment) Order 2004 (Collectively the Order), issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

(iv) In our opinion and read with sub note (a) of Note 4 regarding accounting for sales tax included in sales price of products sold out of sales tax exempted unit under Sales Tax Subsidy / Capital Reserve account in the circumstances as explained in the Note, the Balance Sheet, Statement of Profit & Loss and Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub - section (3C) of section 211 of the Companies Act, 1956;

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

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

(a) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

(b) in the case of Statement of the Profit & Loss of the Profit for the year ended on that date; and

(c) in the case of Cash Flow statement, of the Cash Flows for the year ended on that date.

Annexure Re: Jindal Steel & Power Limited Referred to in paragraph 3 of our report of even date

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. Discrepancies noticed on such verification as compared to book records were not material and have been properly adjusted in the books of account.

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

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stocks in the possession and custody of third parties and stock in transit as at 31st March, 2012 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are, in our opinion, 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. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(b) Since there are no such loans, comments regarding terms & conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

(c) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(d) Since there are no such loans, comments regarding terms & conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

4. In our opinion and according to the information & explanations given to us during the course of audit, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, 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 neither come across nor have we been informed of any instance of a major weakness in the aforesaid internal control systems.

5. (a) To the best of our knowledge and according to the information and explanations given to us, we are of the opinion that the particulars of 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) In our opinion and according to the information and explanations given to us, the transactions entered into in pursuance of contracts or arrangements, with whom transactions exceeding the value of Rs. Five lacs in respect of each party have taken place during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposits) Rules, 1975 have been complied with. We have been informed that no Order has been passed by the Company Law Board or National Company Law Tribunal or RBI or any Court or any other Tribunal in this regard.

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

8. We have broadly reviewed the cost accounting records maintained by the Company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (l)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed records have been made & maintained. We are however, not required to carry out a detailed examination of the same.

9. (a) In our opinion and according to the information and explanations given to us and according to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty,

Cess and other material statutory dues, wherever applicable, have been regularly deposited with the appropriate authorities during the year and there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2012.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Custom duty and Wealth tax which have not been deposited on account of any dispute, except the following in respect of disputed Excise duty, Sales tax, Service tax, Cess, Entry tax, Income tax and the forum where dispute is pending:

Name of the Statute Nature of dues Amount (Rs. in Crore)

Central Excise and Salt Excise Duty 1.55 Act, 1944 0.70

92.41 2.54 0.10

Central Sales Tax Act/ Entry Tax 45.93 Local Sales Tax Act/

Entry Tax Entry Tax 0.15

Central SalesTax Act/ State Sales Tax/Value 0.20 Local Sales Tax Act/Entry added tax Tax 0.60

Central Sales Tax Act/ Central Sales Tax 0.44 Local SalesTax Act/Entry 0.72 Tax 0.26

Chhattisgarh State Govt. Energy Development 136.75 Law Cess

Business & Other Cess 2.28 Construction Workers Welfare Cess Act, 1996

Income Tax Act, 1961 Income Tax 186.56 1.20



Name of the Staatue Forum where dispute is pending Amount deposited (Rs. in Crore)

Central Excise and Salt Act, 1944 Chhattisgarh High Court, Bilaspur 1.00

Appellate Commissioner, Raipur NIL

CESTAT, New Delhi 0.47

Chhattisgarh High Court, Bilaspur NIL

Madhya Pradesh High Court, NIL Jabalpur

Central Sales Tax Act/ Local SalesTax Act/ Entry Tax Deputy Commissioner, Commercial 14.36 Tax (Appeals), Rourkela

Additional Commissioner, 0.02 Commercial tax (Appeals), Cuttack

Central SalesTax Act/ Local Sales Tax Act/Entry Tax Deputy Commissioner, Commercial 0.04 Tax (Appeals), Cuttack

Additional Commissioner, 0.09 Commercial Tax (Appeals), Cuttack

Central Sales Tax Act/ Local Sales Tax Act/Entry Tax Orissa High Court, Cuttack 0.44

Deputy Commissioner, Commercial 0.29 Tax, Cuttack

Deputy Commissioner, Commercial 0.13 Tax(Appeals), Rourkela

Chhattisgarh State Govt. Law Honorable Supreme Court NIL

Business & Other Construction Workers Welfare Cess Act, 1996 Orissa High Court, Cuttack 0.05

Income Tax Act, 1961 Income Tax Appellate Tribunal, 1.22 New Delhi

Commissioner of Income Tax 0.64 (Appeals), Rohtak

10. The Company does not have accumulated losses as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

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

13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks and financial institutions; the terms and conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where the lenders have stipulated such end use.

17 According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long-term investment.

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

19. According to the information and explanations given to us and on the basis of the records examined by us, the Company has created necessary securities for the debentures issued in earlier years.

20. The Company has not raised any money by way of public issue during the years.

21. During the course 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 neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. KOTHARI MEHTA & CO.

Chartered Accountants FRN No. 000756N

(Arun K. Tulsian) Place: New Delhi Partner

Dated: 27th April, 2012 Membership No. 89907




Mar 31, 2011

1. We have audited the attached Balance Sheet of Jindal Steel & Power Limited, as at 31st march, 2011, the Profit & Loss account and the Cash Flow statement for the year ended on that date annexed thereto. these financial statements are the responsibility of the Company's 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. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. we believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) order, 2003 as amended by the Companies (Auditors' Report) (Amendment) order, 2004 issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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

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

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

(iv) In our opinion and read with note no. B.3 of schedule 20 regarding accounting for sales tax included in sales price of products sold out of sales tax exempted unit under Sales Tax Subsidy Reserve account, 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, 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) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the Accounting Policies and Notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

(c) in the case of the Cash Flow statement, of the Cash Flows for the year ended on that date.

Annexure to Auditors' Report Referred to in paragraph 3 of our report of even date

1. (a) The Company has maintained proper records

showing full particulars including quantitative details and situation of fixed assets.

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. discrepancies noticed on such verification as compared to book records, which were not material, have been properly adjusted in the books of account.

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

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stock in the possession and custody of third parties and stock in transit as at 31st march, 2011 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. in our opinion, the frequency of such verification is reasonable.

(b) the procedures for the physical verification of inventories followed by the management are, in our opinion, 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. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(b) Since there are no such loans, comments regarding terms and conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

(c) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(d) Since there are no such loans, comments regarding terms and conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

4. In our opinion and according to the information and explanations given to us during the course of audit, there are adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, 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 neither come across nor have we been informed of any instance of a major weakness in the aforesaid internal control system.

5. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions with parties, with whom transactions exceeding the value of Rupees Five Lacs in respect of each party have been entered into during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6. in respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 includingthe Companies (Acceptance of deposit) Rules, 1975 have been complied with. We have been informed that no order has been passed by the Company Law Board or National Company Law tribunal or RBi or any Court or any other Tribunal in this regard.

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

8. We have broadly reviewed the cost accounting records maintained by the Company pursuant to the rules prescribed bythe Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of such books and records.

9. (a) In our opinion and according to the information and explanations given to us and according to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues, wherever applicable, have been regularly deposited with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st march,2011.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Custom duty and Wealth tax which have not been deposited on account of any dispute, except the following in respect of disputed Excise duty, Sales tax, Service tax, Cess, Entry tax and Income tax :

Name of the Statute Nature of dues Amount (Rs. in Lacs)

Central Excise and Salt Act, Excise duty 155.00 1944

63.68

24,506.22 253.88

10.38

Central Sales tax Act/Local Entry Tax 3455.99 Sales Tax Act / Entry Tax

Entry Tax 0.88

Central Sales tax Act/Local State Sales Tax 20.21 Sales Tax Act/Entry Tax

Central Sales tax Act/Local Central Sales 44.05 Sales Tax Act/Entry Tax Tax

71.93

Chhattisgarh State Govt. Law Energy 10406.66 development Cess

Business & other Cess 6922.00 Construction Workers Welfare Cess Act, 1996

Income Tax Act, 1961 Income Tax 11,103.17

7,617.38

Name of the Statue Forum where dispute is Amount pending deposited (Rs. in Lacs)

Central Excise and Salt Act, 1944 Chhatisgarh High Court, 100.00

Bilaspur

Appellate Commissioner, NIL

Raipur

CESTAT, Delhi 113.08

Chattisgarh High Court, NIL

Bilaspur

Madhya Pradesh High court, NIL Jabalpur

Central Sales tax Act/Local Sales Tax Act / Entry Tax Deputy Commissioner, 1152.00

Commercial Tax (Appeals) ,Rourkela

Deputy Commissioner 0.36 , Commercial Tax (Appeals),Cuttack

Central Sales tax Act/Local Sales Tax Act/Entry Tax Deputy Commissioner, 3.79 Commercial Tax (Appeals), Cuttack

Central Sales tax Act/Local Sales Tax Act/Entry Tax Orissa High Court, Cuttack 44.05

Deputy Commissioner, 28.72 Commercial Tax, Cuttack

Chhattisgarh State Govt. Law Honorable Supreme Court NIL

Business & other Construction Workers Welfare Cess Act, 1996 Orissa High Court,Cuttack 5.00

Income Tax Act, 1961 Income Tax Appellate 121.97 Tribunal, New Delhi

Commissioner of Income Tax NIL (Appeals), Rohtak

10. The Company does not have accumulated losses as at the end of the financial year. there are no cash losses during the financial year under report and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

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

13. The Company does not fall within the category of Chit fund / Nidhi / mutual benefit fund / Society and hence the related reporting requirements of the order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the order are not applicable.

15. The Company has given guarantees against loans taken by others from banks and financial institutions; the terms and conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where the lenders have stipulated such end use.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long-term purposes.

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

19. According to the information and explanations given to us and on the basis of the records examined by us, the Company has created necessary securities for the debentures issued in earlier years.

20. The Company has not raised any money by way of public issue during the year.

21. during the course 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 neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. KOTHARI MEHTA & CO.

Chartered Accountants Registration No. 000756N

(ARUN K. TULSIAN)

Place: New Delhi Partner

Dated: 21st April, 2011 Membership No. 89907


Mar 31, 2010

1. We have audited the attached balance sheet of JINDAL STEEL & POWER LIMITED, as at 31st March, 2010, and also the profit & loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the 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. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

necessary for the purposes of our audit; (ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears

from our examination of those books; (iii) The balance sheet, profit & loss account and cash flow statement dealt with by this report are in agreement with

the books of account; (iv) In our opinion and read with note no. B.4 of schedule 20 regarding accounting for sales tax included in sales price

of products sold out of sales tax exempted Unit under Sales Tax Subsidy Reserve account, 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) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the accounting policies and notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(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.

Annexureto Auditors Report Referred to in paragraph 3 of our report of even date

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. Discrepancies noticed on such verification as compared to book records, which were not material, have been properly adjusted in the books of account.

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

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stock in the possession and custody of third parties and stock in transit as at 31st March, 2010 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are, in our opinion, 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. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(b) Since there are no such loans, comments regarding terms and conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

(c) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(d) Since there are no such loans, comments regarding terms and conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

4. In our opinion and according to the information and explanations given to us during the course of audit, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, 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 neither come across nor have we been informed of any instance of a major weakness in the aforesaid internal control procedures.

5. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions with parties, with whom transactions exceeding the value of Rupees Five Lacs in respect of each party have been entered into during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposit) Rules, 1975 have been complied with. We have been informed that no Order has been passed by the Company Law Board or National Company Law Tribunal or RBI or any Court or any other Tribunal in this regard.

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

8. We have broadly reviewed the cost accounting records maintained by the Company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of such books and records.

9. (a) In our opinion and according to the information and explanations given to us and according to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues, wherever applicable, have been regularly deposited with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2010.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Custom duty and Wealth tax which have not been deposited on account of any dispute, except the following in respect of disputed Excise duty, Sales tax, Service tax, Cess, Entry tax and Income tax:

Amount Amount Forum where Name of the Statute Nature of dues deposited (Rsin Lacs) dispute is pending (Rs.in Lacs)

Central Excise and Salt Act Excise Duty 155.00 High Court, Chhattisgarh 100.00 217.11 Appellate Comm- issioner, 60.89 Raipur

23,301.30 Excise Tribunal, Delhi 132.20

Finance Act, 1994 Service Tax 34.84 CESTAT,New Delhi 1.00

Central Sales Tax Act/Local Entry Tax 0.88 Deputy Commiss- ioner, NIL

Sales Tax Act / Entry Tax Commercial Tax (Appeals), Cuttack Central Sales Tax Act/Local State Sales Tax 6.21 Deputy Commissioner 6.21 Sales Tax Act/Entry Tax Commercial Tax (Appeals), Raipur

Central Sales Tax Act/Local State Sales Tax 20.21 Deputy Commissioner, NIL

Sales Tax Act/Entry Tax Commercial Tax (Appeals), Cuttack Central Sales Tax Act/Local Central Sales Tax 44.05 High Court,Cuttack 44.05 Sales Tax Act/Entry Tax 74.26 Deputy Commissioner, NIL Commercial Tax, Cuttack Chhattisgarh State Govt. Energy Devel- opment 8,233.73 Honorable Supreme Court NIL Law Cess Customs Act, 1962 Customs Duty 3.16 Joint Secretary, NIL Government of India

Business & Other Cess 11,750.00 Orissa High Court 5.00 Construction Workers Welfare Cess Act,1996

Income Tax Act, 1961 Income Tax 11,066.36 Income Tax Appellate NIL Tribunal 36.82 Commissioner of Income NIL Tax (Appeals)

10. The Company does not have accumulated los ses as at the end of the financial year. There are no cash losses during the financial year under report and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

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

13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks and financial institutions; the terms and conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where the lenders have stipulated such end use.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long-term purposes.

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

19. According to the information and explanations given to us and on the basis of the records examined by us, the Company has created necessary securities for the debentures issued.

20. The Company has not raised any money by way of public issue during the year.

21. During the course 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 neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. Kothari Mehta & Co. Chartered Accountants

Registration No. 000756N

J. Krishnan Partner

Membership No. 84551

Place : New Delhi Dated : 4th May, 2010



 
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