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Auditor Report of Jyoti Structures Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Jyoti Structures Limited ('the Company'), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information in which are incorporated returns for the year ended on that date audited by the branch auditors of the Company's branches at Bangladesh, Bhutan, Dubai, Egypt, Georgia, Kuwait, Kenya, Rwanda, South Africa, Tajikistan, Tanzania, Tunisia and Uganda.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

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

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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 control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

BASIS OF QUALIFIED OPINION

a) As on 31st March, 2015, the trade receivables of the Company include amount of Rs. 7,045.80 lacs outstanding from a joint venture company, namely Lauren Jyoti Private Limited. Further an amount of Rs. 5,507.00 lacs was paid by the Company on account of Bank guarantee encashed by a customer of Lauren Jyoti Private Limited, which is debited to the said joint venture company. The other outstandings from Lauren Jyoti Private Limited are Rs. 830.30 lacs. As informed to us, the financial statements of the joint venture company are not available for the financial years ended 31st March 2014 and 31st March, 2015. Considering the fact that the financial statements of the joint venture company are not available and it is not regular in payment of the above outstanding, we are not able to comment on the recovery of the debt and impact of the same on the financial statements of the Company for the year.

b) The Company has invested Rs. 500 lacs in 50 lacs equity shares of Lauren Jyoti Private Limited. The financial statements of that company for the financial years ended on 31st March 2014 and 31st March 2015 are not made available to us. As per the financial statements for the year ended on 31st March, 2013, the net worth of that company is fully eroded. The Company has not made any provision for the diminution in the value of this investment. Due to this non-provision, the loss of the Company for the year is understated by Rs. 500 lacs and reserves of the Company are overstated by the same amount.

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 the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015; and its loss and its cash flows for the year ended on that date.

EMPHASIS OF MATTERS

a) We draw attention to clause 11 of note no. 31 to the financial statements. The Company has made investment of Rs. 6,000.65 lacs in the equity shares of its wholly owned subsidiary company, namely Jyoti International Inc. As on 31st March, 2015, the Company has also advanced loan of Rs. 9,861.35 lacs to Jyoti International Inc. Due to the losses incurred, the net worth of that company is fully eroded on that date. However, no provision for diminution in the value of the said investment or no provision for other outstanding amounts is made as the management is optimistic of turning around the business of that company in the near future.

b) We draw attention to clause 13 of note no. 31 to the financial statements. The Company has made investment of Rs. 419/- in the equity shares of its subsidiary company, namely Jyoti structures Africa (Pty) limited. As on 31st March, 2015, the Company has also advanced loan of Rs. 3,581.91 lacs to Jyoti structures Africa (Pty) Limited and the outstanding credit to that company is Rs. 3,277.65 lacs. Due to the losses incurred, the net worth of that company is fully eroded on that date. However, no provision for diminution in the value of the said investment or no provision for other outstanding amounts is made as the management is optimistic of turning around the business of that company in the near future.

c) We draw attention to clause 14 of note no. 31 to the financial statements stating that the company has paid managerial remuneration in excess of the provisions of the section 197 of the Companies Act, 2013 read with Part II of Schedule V, for which approval of shareholders in a general meeting and the permission of the Central Government is to be obtained.

OTHER MATTERS

We did not audit the financial statements/ information of fourteen branches incorporated in the standalone financial statements of the Company, whose financial statements/ financial information refect total assets of Rs. 20,812.13 lacs, as at 31st March 2015 and the total revenues of Rs. 22,993.19 lacs, for the year ended on that date, as considered in the standalone financial statements. The financial statements/ information of these branches have been audited by the branch auditors, whose reports have been furnished to us, and our opinion, in so far as it relates to amounts and disclosures included in respect of these branches, is based solely on the reports of such branch auditors.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors' Report) Order, 2015 ('the Order'), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, 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. Except for the matters stated in clause (a) of Basis of Qualified Opinion, We have sought and 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 except for the matters stated in clause (a) of Basis of Qualified Opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, and proper returns adequate for the purpose of our audit have been received from the branches not visited by us;

c. The reports on the accounts of the branch Offices of the Company audited under section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report;

d. 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 and with the returns received from branches not visited by us;

e. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

f. 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.

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

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

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in clause 2 of note no. 31 of the financial statements;

ii. the Company has made provisions as required under the applicable law or Accounting Standards material foreseeable losses, if any, on long term contracts including derivative contracts. Referred to clause no. 10 of the note no. 31 of the Financial Statements;

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company as at the end of the year.

ANNEXURE TO AUDITORS' REPORT

Re: Jyoti Structures Ltd

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2015;

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

(b) As explained to us, the fixed assets have been physically verified by the management in a phased periodic manner during the year, which in our opinion is reasonable having regards to the size of the Company and the nature of the assets. No material discrepancies have been noticed on such verification.

2) (a) The inventories have been physically verified during the year by the management at reasonable intervals. In our opinion,

the frequency of verification is reasonable.

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

(c) On the basis of our examination of the records of inventories and according to the information and explanations given to us, we are of opinion that the Company has maintained proper records of inventories. As explained to us, the discrepancies noticed on verification of inventories have been properly dealt with in the books of accounts.

3) As per 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. Therefore, the provisions of paragraph 3(iii) of the Order are not applicable to the Company.

4) 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 nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and services. We have not observed any continuing failure to correct any weakness in internal control system except in case of sale of bought out components during the year for which the company has taken corrective measures and steps to strengthen the control. During the course of our audit, we observed that SAP software installed by the Company is still to be stabilized.

5) The Company has accepted deposits from public during the previous year. As per the information and explanation given to us and based on the records examined by us, we are of the opinion that the directives issued by Reserve Bank of India and provisions of section 73 to 76 and other relevant provisions of the Companies Act, 2013 and the rules framed there under, as applicable, have been complied with; except for a small delay of two days in making deposit required to be made as per the provisions of section 73(2)(c) of the Companies Act, 2013. As per the information and explanation given to us, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or other tribunal against the Company in respect of the deposits.

6) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by Central Government under Section 148(1)(d) of the Companies Act, 2013 and are of the opinion that, prima facie, the Company has made and maintained such accounts and cost records. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7) (a) According to the records of the Company and as per the information given to us, the Company is regular in depositing

undisputed statutory dues including Sales Tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and other statutory dues with the appropriate authorities, wherever applicable during the year, except for Provident Fund, Employees' State Insurance, Income Tax and Octroi where in the deposits are not regular.

(b) As per the information and explanations given to us and the records examined by us, the details of undisputed statutory dues which are outstanding as at the last day of the concerned financial year for more than six months from the date they become payable are as under.

Sr. No. Particulars Amount due .Lacs

1. Octroi 39.35

2. Income Tax – Tax Deducted at Source 216.58

3. Income Tax – Self Assessment Tax 2,480.57

4. Corporate Dividend Tax 30.95

(c) As explained to us and according to the records of the Company, the outstanding disputed statutory dues on account of Income Tax, Sales tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax or Cess are as follows.

Type of the Statute Nature of Dues dis- Amount (in Rs.. pute is pending Lacs )

Sales Tax Tax and Interest 32.68

Entry Tax Tax and Interest 18.86

Commercial Tax Tax and Interest 333.59

Commercial Tax Tax and Interest 70.34

Income Tax Tax and Interest 304.59

Income Tax Tax and Interest 8.96

Types of the Statue Financial year to which the Forum where dispute is amount relates pending

Sales Tax Various years between Appellate Tribunal 1995-96 to 1998-99

Entry Tax 2004-05 and 2005-06 Appellate Tribunal

Commercial Tax 2005-06 Appellate Tribunal

Commercial Tax 2006-07 Revision Board

Income Tax 2005-06 and 2006-07 Commissioner of Income Tax- (Appeals)

Income Tax 2007-08 ACIT (Rectification)

(d) According to the records of the Company, there are no amounts that are due to be transferred to the Investors Education and Protection Fund in accordance with the relevant provisions of Companies Act, 1956 and rules made there under.

8) The Company does not have accumulated losses as at 31st March, 2015 but it has incurred cash losses in the financial year ended on that date and it has not incurred cash losses in the immediately preceding financial year.

9) According to the information and explanations given to us and based on the documents and records examined by us, taking into consideration the Master Restructuring Agreement for the restructuring of debt and outstanding interest, in our opinion, the Company has defaulted in repayment of loans due to financial institutions, banks and debenture holders. The details of the same are as follows.

Particulars Period Amount.Lacs

Bank - Repayment of Principal and Interest September, 2014 to March, 2015 1,559.87

Debenture Holders – Payment of Interest Various periods 333.73

10) According to the information and explanations given to us, the Company has given corporate guarantees for loans taken by two of its wholly owned subsidiaries and a joint venture company from banks. We are of opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the company.

11) According to the information and explanations given to us and on the basis of examination of the relevant records, prima facie, it appears that the term loans are applied for the purpose for which they are obtained.

12) According to information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company has been noticed or reported during the year.

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

Firm Registration No.117247W

KOMAL SEVAK

Partner Membership No. 143685 Place : Mumbai Date : 30th May, 2015.


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under 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 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

Basis of Qualified Opinion

The trade receivables of the Company include amount of Rs. 7,045.80 Lacs outstanding from Joint Venture Company namely, Lauren Jyoti Private Limited. As informed to us, the accounts of the Joint Venture are not available for financial year ended 31st March, 2013 as well as for the financial year ended 31st March, 2014. Considering the facts that the accounts of that company are not available and considering the fact that the joint venture company is not regular in the payment of the above outstanding, we are not able to comment on the recovery of the debt and impact of the same on the Balance Sheet and Statement of Profit and Loss of the Company for the year.

The Company has invested Rs. 500 Lacs in 50 Lacs equity shares of Lauren Jyoti Private Limited. In absence of availability of annual accounts of the company for the financial year ended on 31st March 2013 and for the financial year ended on 31st March, 2014, we are not able to comment, if there is other than temporary diminution in the value of the said investment and impact of the same on the Balance Sheet and Statement of Profit and Loss of the Company for the year.

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

(a) Except as stated in our comments under Basis of Qualified Opinion, 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 [and proper returns adequate for the purposes of our audit have been received from branches not visited by us];

(c) The audit reports on the accounts of the Company''s overseas branch offices at Uganda, Bhutan, South Africa, Bangladesh, Tunisia and Kenya for the year ended March 31, 2014 have been forwarded to the company by the respective branch auditors and those have been considered in preparing our report.

(d) 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 [and with the returns received from branches not visited by us];

(e) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the 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;

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

ANNEXURE TO AUDITORS'' REPORT

[Referred to in Paragraph 1 under the heading of "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 the quantitative details and situation of fixed assets on the basis of available information.

b) The fixed assets have been physically verified by the management in a phased periodic manner during the year, which in our opinion is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies have been noticed on such verification.

c) The company has not disposed off any substantial part of its fixed assets during the year

2) a) The inventories have been physically verified by the management at reasonable intervals during the year

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

c) On the basis of our examination of the records of inventories and according to the information and explanations given to us, we are of the opinion that the Company has maintained proper book records of inventories. As explained to us, the discrepancies noticed on verification of inventories between the physical stocks and book records have been properly dealt in the books of accounts.

3) a) As informed 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 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(iii)(a), 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Order are not applicable to the Company.

b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore the provisions of clause 4(iii)(e), 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the Company.

4) In our opinion and according to the information and explanations given to us, there is generally adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventories and fixed assets and for sale of goods and services, except for timely billing from certain sites which needs improvement. During the course of our audit, we have observed that the Company has installed and implemented SAP software but the same is not fully stabilized as yet.

5) According to the information and explanations given to us, in our opinion there are no contracts or arrangements, particulars of which are needed to be entered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(v)(a) and 4(v)(b) of the Order are not applicable to the Company.

6) The Company has accepted deposits from public during the year and as per the information and explanation given to us and based on the records examined by us, we are of the opinion that the directives issued by Reserve Bank of India and the provisions of section 58A and 58AA of the Companies Act, 1956 and other provisions of the Act and rules framed there under as applicable have been complied with.

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

8) We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act,1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have however, not made a detailed examination of cost records with a view to determine whether they are accurate or complete.

9) a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, and other applicable statutory dues with the appropriate authorities except Income Tax, wherein there are delays. As per the information and explanations given to us, there are no undisputed arrears of statutory dues as at 31st March 2014, which are outstanding for more than six months from the date they became payable other than Income Tax dues amounting to Rs. 183.11 Lacs.

b) As explained to us and according to the records of the Company, the outstanding disputed statutory dues are as follows:

Type of the Statute Nature of Dues dispute Forum where dispute is is pending pending

Sales Tax Tax and Interest Appellate Tribunal - Orissa

Entry Tax Tax and Interest Appellate Tribunal

Commercial Tax Tax and Interest Board

Commercial Tax Tax and Interest Tribunal

Income Tax Tax and Interest CIT - Appeals

Income Tax Tax and Interest ACIT (Rectification)

(Rs. in Lacs)

Type of the Statute Financial Year Amount Sales Tax 1995-96 to 1998-99 32.68

Entry Tax 2004-05 and 2005-06 18.86

Commercial Tax 2006-07 70.34

Commercial Tax 2005-06 333.59

Income Tax 2005-06 and 2006-07 304.59

Income Tax 2007-08 42.45

10) The Company does not have any accumulated losses as at March 31st, 2014 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11) Based on our Audit procedures and according to the information and explanations given to us and based on the documents and the books and records examined by us, we report that the Company has defaulted in payments of Rs. 1,000 Lacs to a financial institution, and the amount is outstanding on the balance sheet date. It has also made delayed repayments to foreign banks amounting to Rs. 5,742.96 Lacs ( USD 93.73 Lacs) during the year, which are paid with delay of 7 to 73 days, except an amount of Rs. 717.39 Lacs (USD12.01 Lacs), which is unpaid on the balance sheet date.

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

13) In our opinion, the Company is not a Chit Fund / Nidhi / Mutual benefit Fund / Society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14) According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

15) According to the information and explanations given to us, the Company has given corporate guarantees for loans taken by two of its subsidiaries and a joint venture company from banks. We are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the company.

16) According to the information and explanations given to us and on the basis of examination of the relevant records, prima facie, it appears that the term loans are applied for the purpose for which they are obtained.

17) According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no funds raised on short- term basis have been used for long-term investments.

18) During the year, the Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained u/s 301 of the Companies Act, 1956.Therefore, the provisions of the clause 4(xviii) of the Order are not applicable to the Company.

19) The Company has created securities / charges in respect of secured debentures issues.

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

21) According to the information and explanation given by the management, we report that no material fraud on or by the Company has been noticed or reported during the year or has been informed to us by the management.

For R. M. AJGAONKAR & ASSOCIATES Chartered Accountants Firm''s Registration Number: 117247W

R. M. AJGAONKAR Place: Mumbai Partner Date: 30th May, 2014 Membership Number: 31927


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books [and proper returns adequate for the purposes of our audit have been received from branches not visited by us];

c. The audit report on the accounts of the companies at overseas branch offices at Uganda, Bhutan, South Africa, Bangladesh and Kenya for the year ended 31.03.2013 have been forwarded to the company by the respective branch auditors and those have been considered in preparing our report.

d. 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 [and with the returns received from branches not visited by us];

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

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

ANNEXURE TO AUDITORS'' REPORT

[Referred to in Paragraph 1 under the heading of "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 the quantitative details and situation of fixed assets on the basis of available information.

b) The fixed assets have been physically verified by the management in a phased periodic manner during the year, which in our opinion is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies have been noticed on such verification.

c) The company has not disposed off any substantial part of its fixed assets during the year.

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

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

c) On the basis of our examination of the records of inventories and according to the information and explanations given to us, we are of the opinion that the Company has maintained proper book records of inventories. As explained to us, the discrepancies noticed on verification of inventories between the physical stocks and book records have been properly dealt in the books of accounts.

3) a) As informed 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 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(iii)(a), 4(iii)(b),4(iii)(c)and 4(iii)(d) of the Order are not applicable to the Company.

b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(iii)(e), 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the Company.

4) In our opinion and according to the information and explanations given to us, there is generally adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventories and fixed assets and for sale of goods and services, except for timely billing from certain sites which needs improvement. During the course of our audit, we have observed that the Company has installed and implemented SAP software but the same is not fully stabilized as yet.

5) According to the information and explanations given to us, in our opinion there are no contracts or arrangements, particulars of which are needed to be entered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(v)(a), 4(v)(b) of the Order are not applicable to the Company.

6) The Company has accepted the deposits from public during the year and as per the information and explanation given to us and based on the records examined by us, we are of the opinion that the directives issued by Reserve Bank of India and the provisions of section 58A and 58AA of the Companies Act, 1956 and other provisions of the Act and rules framed thereunder was applicable have been complied with.

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

8) We have broadly reviewed the cost records maintained by the company pursuant to the company''s Cost Accounting Records Rules, 2011 prescribed by the Central Government section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have however, not made a detailed examination of cost records with a view to determine whether they are accurate or complete.

9) a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, and other applicable statutory dues with the appropriate authorities except Income Tax, where in there are certain delays. As per the information and explanations given to us, there are no undisputed arrears of statutory dues as at 31st March 2013, which are outstanding for more than six months from the date they became payable.

10) The Company does not have any accumulated losses as at March 31st, 2013 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11) Based on our Audit procedures and according to the information and explanations given to us and based on the documents and 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 based on the records produced before us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the Company is not a Chit Fund/ Nidhi/ Mutual benefit Fund/ Society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14) According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provision of clause 4(xiv) of the Order is not applicable to the Company.

15) According to the information and explanations given to us, the Company has given corporate guarantees for loans taken by two of its subsidiaries and a joint venture company from banks. We are of the opinion that the term and condition there of are not prima facie prejudicial to the interest of the company.

16) According to the information and explanations given to us and on the basis of examination of the relevant records, primafacie, it appears that the term loans are applied for the purpose for which they are obtained.

17) According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no funds raised on short- term basis have been used for long-term investments.

18) During the year the Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained u/s 301 of the Companies Act, 1956. Therefore, the provisions of the clause 4(xviii) of the Order are not applicable to the Company.

19) As per the information and explanation given to us and records examined by us, no securities or charge has been created in respect of debentures issued. However as informed to us, the same could be created in within the required period.

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

21) According to the information and explanation given by the management, we report that no material fraud on or by the Company has been noticed or reported during the year or has been informed to us by the management.

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

Firm''s Registration Number: 117247W R. M. AJGAONKAR

Place: Mumbai Partner

Date: 29th May, 2013 Membership Number: 31927


Mar 31, 2012

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

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

3. As required by the Companies (Auditors' Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the company 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 clauses 4 and 5 of the said Order.

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

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

(ii) In our opinion, proper books of account ,as required by law, have been kept by the Company so far as appears from our examination of those books, and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

(iii) The audit reports on the accounts of Company's overseas branch offices at Tunisia, Uganda, Bhutan, South Africa and Bangladesh for the year ended on 31st March, 2012 have been forwarded to the Company by the respective branch auditors and those have been considered in preparing our report.

(iv) 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;

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

(vi) On the basis of written representations received from the directors, as at 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 sub-clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and Notes thereon give the information required by the Companies Act, 1956, in the manner so required and give, except subject to the note number 30(25), to which we hereby draw attention of members, 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, 2012;

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

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

[Referred to in the clause 3 of the Auditors' Report of even date to the members of Jyoti Structures Ltd. ("the Company") on the financial statements for the year ended 31st March, 2012]

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

b) The fixed assets have been physically verified by the management in a phased periodic manner during the year, which in our opinion is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies have been noticed on such verification.

c) The Company has not disposed off any substantial part of its fixed assets during the year.

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

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

c) On the basis of our examination of the records of inventories and according to the information and explanations given to us, we are of the opinion that the Company has maintained proper records of inventories. The discrepancies noticed on verification between the physical stocks and book records have been properly dealt with in the books of accounts.

3) a) As informed 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 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(iii)(a), 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Order are not applicable to the Company.

b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act. Therefore, the provisions of clause 4(iii)(e), 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the Company.

4) In our opinion and according to information and explanations given to us, there is generally adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventories and fixed assets and for sale of goods and services except for timely billing from certain sites which needs improvement. During the course of our audit, we have observed that the company is taking steps for correcting the weaknesses in the internal control system.

5) In our opinion and according to information and explanations given to us, there are no contracts or arrangements, particulars of which are needed to be entered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(v)(a) and 4(v)(b) of the Order are not applicable to the Company.

6) As per the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable to the Company.

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

8) We have broadly reviewed the cost records maintained by the company pursuant to the company's Cost Accounting Records) Rules 2011 prescribed by the Central Government section 209(1)(d) of the companies act 1956 and are of the opinion that primafacie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9) a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other applicable Statutory dues with the appropriate authorities except Income Tax, wherein there are certain delays. As per the information and explanations given to us, there are no undisputed arrears of statutory dues as at 31st March 2012, which are outstanding for more than six months from the date it has became payable.

b) As explained to us and according to the records of the Company, the outstanding dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess on account of any dispute are as follows:

Name of the Nature of Forum where Financial Year to which Amount Statute Dues Dispute is pending the amount relates (Rs in Lacs)

The Sales Tax Act, 1959 Tax and Interest Orissa High Court 1996-97 to 32.68 1998-99 and 2000-01

Tax and Interest Appellate Tribunals 2004-05 & 18.86 2005-06

The Central Excise Act, Duty and Penalty Appeal with CESTAT 2001-02 515.59 1944

10) The Company does not have any accumulated losses as at 31st March, 2012 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11) According to the information and explanations given to us and based on the documents and 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 based on records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the Company is not a Chit Fund/Nidhi/Mutual Benefit Fund/Societies. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

15) According to the information and explanations given to us, the Company has given corporate guarantees for loans taken by one of its subsidiaries and a joint venture company from a bank. We are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the company.

16) According to the information and explanations given to us and on the basis of examination of the relevant records, prima facie, it appears that the term loans were applied for the purposes for which they were obtained.

17) According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no funds raised on short-term basis have been used for long-term investments.

18) During the year, the Company has not made preferential allotment of shares to companies/firms/parties covered in the register maintained u/s 301 of the Companies Act, 1956. Therefore, the provisions of the clause 4(xviii) of the Order are not applicable to the Company.

19) The Company has created securities/charges in respect of secured debentures issued.

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

21) According to the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.



For R. M. AJGAONKAR & ASSOCIATES

Firm Registration No. 117247W

Chartered Accountants

R. M. AJGAONKAR

Partner

Mumbai; 25th May, 2012 Membership No. 31927


Mar 31, 2011

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

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

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the company 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 in paragraph 3 above, we report that:

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

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books, and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

(iii) The audit reports on the accounts of Companys overseas branch offices at Tunisia, Uganda and Bhutan for the year ended on 31st March, 2011 have been forwarded to the Company by the respective branch auditors and those have been considered in preparing our report.

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

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

(vi) On the basis of written representations received from the directors, as at 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 sub-clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vii) As mentioned in note no. 15 of Schedule 22 for the reasons mention therein, no provision for diminution in the value of investment or any provision for loans or debt outstanding from Jyoti Structures Africa (Pty) Ltd. is made. We are unable to comment on the same.

(viii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes thereon and subject to para 4 (vii) of this report 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 the paragraph 3 of the Auditors Report of even date to the members of Jyoti Structures Ltd. ("the Company") on the financial statements for the year ended 31st March, 2011]

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

b) The fixed assets have been physically verified by the management in a phased periodic manner during the year, which in our opinion is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies have been noticed on such verification.

c) The Company has not disposed off any substantial part of its fixed assets during the year.

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

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

c) On the basis of our examination of the records of inventories and according to the information and explanations given to us, we are of the opinion that the Company has maintained proper records of inventories. The discrepancies noticed on verification between the physical stocks and book records were not material in relation to the size and operations of the Company.

3) a) As informed 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 301 of the Companies Act, 1956. Therefore, the provisions of paragraph 4(iii)(a), 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Order are not applicable to the Company.

b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act. Therefore, the provisions of paragraph 4(iii)(e), 4(iii)(f) and 4(iii)(g) of the order are not applicable to the Company.

4) In our opinion and according to information and explanations given to us, there is generally adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventories and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5) In our opinion and according to information and explanations given to us, there are no contracts or arrangements, particulars of which are needed to be entered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of paragraph 4(v)(a) and 4(v)(b) of the Order are not applicable to the Company.

6) As per the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable to the Company.

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

8) On the basis of information and explanations given to us, the Central Government has not prescribed maintenance of cost accounting records under section 209 (1)(d) of the Companies Act, 1956 for the products manufactured by the Company.

9) a) The Company is generally regular in depositing 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 Statutory dues with the appropriate authorities. As per the information and explanations given to us, there are no undisputed arrears of statutory dues as at 31st March 2011, which are outstanding for more than six months from the date they became payable.

b) As explained to us and according to the records of the Company, the outstanding dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess on account of any dispute are as follows:

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

The Sales Tax Act, Tax and Interest Various years from Orissa High Court 1.30 1959 1996-97 to 1998-99 and 2000-01

Tax and Interest Various years from Appellate Authority 1.89 2004-05 to 2005-06

The Central Excise Duty and Penalty 2001-02 Appeal with CESTAT 51.56 Act, 1944

Finance Act, 1994 Service Tax Penalty 2004-05 Asst. Commissioner 0.03 (Service Tax) Central Excise-Appeal

10) The Company does not have any accumulated losses as at 31st March, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11) According to the information and explanations given to us and based on the documents and 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 based on records produced before us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion, the Company is not a Chit Fund/Nidhi/Mutual Benefit Fund/Societies. Therefore, the provisions of paragraph 4(xiii) of the Order are not applicable to the Company.

14) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of paragraph 4(xiv) of the Order are not applicable to the Company.

15) According to the information and explanations given to us, the Company has given corporate guarantee for loans taken by others from a bank. We are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the company.

16) According to the information and explanations given to us and on the basis of examination of the relevant records, prima facie, it appears that the term loans were applied for the purposes for which they were obtained.

17) According to the information and explanations given to us and an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no funds raised on short-term basis have been used for long-term investments.

18) During the year, the Company has not made preferential allotment of shares to companies/firms/parties covered in the register maintained u/s 301 of the Companies Act, 1956. Therefore, the provisions of the paragraph 4(xviii) of the Order are not applicable to the Company.

19) The Company has created securities/charges in respect of secured debentures issued.

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

21) According to the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For R. M. AJGAONKAR & ASSOCIATES

Firm Registration No. 117247W Chartered Accountants

R. M. AJGAONKAR

Partner Mumbai; 27th May, 2011 Membership No. 31927

 
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