Auditor Report of Jenson & Nicholson (India) Ltd.

Mar 31, 2016

To the Members of the Jenson & Nicholson (India) Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Jenson & Nicholson (India) Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2016 and the Statement of Profit and Loss and 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 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 and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule7 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 control, 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 standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and loss and its cash flows for the year ended on the date:

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure-I”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. The banks, financial institutions and other lenders have filed legal cases against the company for recovery of outstanding loans and interest thereon. No provision has been made in these accounts for additional interest, penal interest, liquidated damages etc. amounting to Rs.739.67 lacs as claimed by the above lenders at various legal forums, The same has been shown as contingent liability in notes to accounts attached to the said accounts. Company however had been providing interest on the above loans on a basis as considered appropriate by the management but up to 31^st March,2006. However, the company has stopped providing interest on all loans from banks and financial institutions whether secured or unsecured w.e.f. 01.04.2006 on the ground that these loans would have been declared NPA by them. Interest amounting to ''176928.23 lacs up to the current year ended 31^st March, 2016 has not been provided but the same has also been included in contingent liability.

3. These financial statements have been prepared on a going concern basis. The Company has incurred an operating profit during the year. The company is passing through a severe liquidity crisis and is unable to honour its commitment to lenders, preference shareholders, suppliers and employees. The bankers, financial institutions and other lenders have taken legal action for recovery of their dues. Several petitions for winding up of the company have been filed by the creditors and lenders. The company is contesting these petitions or is settling such petitions out of courts. The company is in the process of restructuring its business and also trying to identify alternative source of finance. In the absence of adequate financial support this basis would be invalid. Provision would then have to be made for any loss that might arise when the company''s assets are realized.

We further report that, the effect of our remarks in paragraph 2 and 3 could not be readily ascertained.

4. 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 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 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.

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

f. With respect to the adequacy of the financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure-II” and

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.

ii) The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.

iii) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund.

ANNEXURE-I TO INDEPENDENT AUDITORS’ REPORT - 31 MARCH 2016

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

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

b) As explained to us, fixed assets have been physically verified by the management at regular intervals; In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and the nature of its assets. As informed to us no material discrepancies were noticed on such verification.

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

ii. The inventory has been physically verified during the period by the management. The discrepancies noted on verification between the physical stock and the books were not material and have been properly dealt with in the books of account.

iii. In our opinion and according to the information and explanations given to us, the company has not granted any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 189 of the Act.

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

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013. Accordingly paragraph 3(v) of the Order is not applicable to the Company.

vi. We have broadly reviewed the cost records maintained by the Company as prescribed by the Central Government under Sub Section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie 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.

vii. a) According to the information and explanations given to us and on the basis of examination of records of the Company, amounts deducted/accrued during the year in the books of account in respect of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues have generally been regularly deposited during the year by the company with the appropriate authorities.

b) According to the information and explanations given to us, company has undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, were in arrears as at 31^st March,2016 for a period of more than six months from the date they became payable. The arrear as on 31^st March 2016 on the aforesaid dues were as below:

(Rs.in Lacs)

1	Provident Fund	51.87
2	Income Tax	3.60
3	Sales Tax	30.57
4	Customs Duty	73.67
5	Excise Duty	244.45
6	Professional Tax	3.16
7	ESI	14.86

c) According to the information and explanations given to us, dues that have not been deposited by the Company on account of disputes. We give below details of such disputed amount:-Statement of disputed dues

Name of the Statute	Nature of dues	Amount Rs.in lacs	Period	Forum where the dispute is pending
Central Sales Tax Act	Sales Tax	6.57 25.51 21.60 2.86 101.64 8.56 1.25	2003-2004 2004-2005 2007-2008 2007-2008 2008-2009 2009-2010 2010-2011	Commercial Tax Tribunal Commercial Tax Tribunal Additional Commissioner (Appeals) Additional Commissioner (Appeals) Commercial Tax Tribunal Additional Commissioner (Appeals) Additional Commissioner (Appeals)
State Sales Tax Acts	Sales Tax	7.91 2.69 0.80 0.72	2001-2002 2007-2008 2007-2008 2008-2009	Commercial taxes,Tribunal Addl Commissioner of Commercial Tax Commercial taxes,Tribunal Commercial taxes,Tribunal
Panvel Octroi	Octroi Assessed	71.91		Government of Maharashtra
Central Excise Act, 1944	Excise Duty	638.20		Excise Authority
Income Tax Act,1961	Income Tax	38.54 15.29	1998-1999 2011-2012	High Court at Kolkata Income Tax, Tribunal
Custom Duty	Custom Duty	322.56		Custom Authority

viii. The company had defaulted in repayment of dues to financial institution, banks and debenture holders. We give below a statement showing period and amount involved.

Parties		Amount Rs.in lacs	Period from
a)	Secured Debentures	4287.13	2000-07
b)	Term loans/Cash Credit/Working
	Capital Loans from Banks/Financial Institutions	5529.64	2000-07

By virtue of Assignment of Debts, all the secured loans from banks, financial institutions & debenture holders have been settled by M/s Vivid Colors Pvt. Ltd. The security given to secured lenders in fixed assets has also been charged in favour of M/s Vivid Colors Pvt. Ltd, with the Registrar of Companies after they took the assignment of loan. Now the company has only one secured lender which is M/s Vivid Colors Pvt. ltd and no bank and financial institutions are lenders of the company.

ix. The Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year. The Company has term loan outstanding amounting to Rs.1470.64 lacs as on 31^st March, 2016.The term loan have been applied for the purposes for which they where optioned.

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

xi. According to the information and explanation given to us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. According to the information and explanation given to us, the Company is not a Nidhi Company as prescribed under Section 406 of the Act. Accordingly Para 3(xii) of the order is not applicable to the Company.

xiii. According to the information and explanation given to us, all transactions with the related parties are in compliance with Section 177 and 188 of the Act, where applicable and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

xiv. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partially convertible debentures during the year.

xv. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into non- cash transactions with the directors or persons connected with him

xvi. According to the information and explanation given to us, the Company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph, 3 (xvi) of the order is not applicable to the Company.

ANNEXURE-II TO INDEPENDENT AUDITORS’ REPORT

(Referred to in our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act.

We have audited the internal financial controls over financial reporting of Jenson & Nicholson (India) Ltd. (“the Company”) as at 31^st March 2016 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

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

Auditors’ Responsibility

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

The 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:

a) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

b) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

M. MUKERJEE & CO.

Chartered Accountants

FRN: 303013E 24,

Netaji Subhas Road

Kolkata-700 001

Sd/-

SPANDAN SENGUPTA

Place : Patna Partner

Date : May 27th, 2016 Membership No: 135833

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Mar 31, 2015

Report on the (Standalone) * Financial Statements

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

Management's Responsibility for the (Standalone) * Financial Statements

The management and Board of Directors of the Company are 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 Companies (Accounts) Rules, 2014. This responsibility 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 judgements and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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 there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. 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. 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 accounting policies used and the reasonableness of the accounting estimates made by the Company's management and Board of 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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March, 2015, its profit/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 section143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. The total liability of all the Secured lenders amounting to Rs. 26,323.02 lacs being principal and interest has been settled at a settlement amount of Rs. 3153.13 lacs and the same has been paid to the lenders by a investor M/s Vivid Colors Pvt. Ltd.(Vivid). The security given to secured lenders in fixed assets has also been charged in favour of Vivid with Registrar of Companies after they took the assignment of loan. The Company is now at an advance stage of negotiation with Vivid for entering into an agreement inter-alia recording the terms and conditions of assignment of loan and quantifying the amount payable by the company to Vivid in consideration of the assignment.

3. The Company has made a reference u/s 15(1) of SICA to BIFR and the same has been registered vide their letter no. 3(J-1)/BC/2014 dated March 20, 2015 under case no. 34/2014.

4. The Company has not made any provision in the accounts for additional interest, penal interest, liquidated damages etc. amounting to Rs. 739.67 lacs in view of the legal cases filed by various lenders against the Company for recovery of outstanding loan and interest and the same is shown as a contingent liability. The Company has been providing interest against the above loans on a basis as considered by the Management but up to 31st March, 2006. However the Company has stopped providing interest on all loans from banks and financial institutions whether secured or unsecured w.e.f 1st April, 2006 on the ground that these will be declared NPA by them and the same being Rs. 141786.65 lacs is included in the contingent liability.

5. As required by section 143(3) of the Act, we further report that:

a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

ii. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.

iii. There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund.

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT - 31ST MARCH, 2015

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

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

b) As explained to us, fixed assets have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification; Due to non-payment of debts, Asset Care Reconstruction Enterprises Limited (ACRE) had acquired the possession of SIKANDRABAD PROPERTY situated at Sikandrabad, Plot No. 21 & 22 UPSIDC, Industrial Area, Distt. Bulandshahar, UP in exercise of powers conferred u/s 13(4) of the said Act, on 21st May,2013, During this year the surplus land situated at Sikandrabad Plot No. 21 has been sold by Asset Care & Reconstruction Enterprises (ACRE) under SARFAESI Act in exercise of the powers conferred u/s 13(4) of the said Act. ACRE thereafter assigned the loan of Canara Bank to M/s Vivid Colors Pvt. Ltd. on 18th November, 2014. After assignment of Canara Bank's Loan by ACRE, the SARFAESI act is automatically withdrawn.

c) During this year the surplus land situated at Sikandrabad Plot No. 21 has been sold by Asset Care & Reconstruction Enterprises (ACRE) under SARFAESI Act in exercise of the powers conferred u/s 13(4) of the said Act. The profit from sale of surplus land & building situated at Sikandrabad are included in other income. The Sikandrabad land was a surplus land and the sales of assets do not affect the going concern assumption.

d) During this year the surplus land & Building situated at Gurgaon, Raichak & Karampura have been sold. The profit from sale of surplus land & building are included in other income. The sales of assets do not affect the going concern assumption.

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

b) The procedure 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) The company is maintaining proper records of inventory. The discrepancies noted on verification between the physical stock and the books were not material and have been properly dealt with in the books of account.

iii) The company has not granted any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 189 of the Act.

iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weakness has not been noticed or reported.

v) The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013.

vi) We have broadly reviewed the cost records maintained by the Company as prescribed by the Central Government under Sub Section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie 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.

vii) a) According to the information and explanations given to us and based on the records of the company examined by us, the company is not regular in depositing the undisputed statutory dues, including Provident Fund, , Employees' State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, with the appropriate authorities in India. The arrear as on 31st March 2015 on the aforesaid dues were as below:

(Rs. in lacs)

1 Provident Fund 71.82

2 Income Tax 28.67

3 Sales Tax 173.57

4 Customs Duty 73.67

5 Excise Duty 253.13

6 Professional Tax 3.50

7 ESI 14.87

b) According to the information and explanations given to us and based on the records of the company examined by us, there are dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes.

c) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund.

viii) In our opinion, the accumulated losses of the Company exceeded more than fifty percent of its net worth. The Company has incurred cash losses during the year covered by our audit and in the immediately preceding financial year.

ix) The company had defaulted in repayment of dues to financial institution, banks and debenture holders. We give below a statement showing period and amount involved.

Parties Amount Rs. in lacs Period from

a) Secured Debentures 4287.13 2000-07

b) Term loans / Cash Credit / Working 5529.64 2000-07 Capital Loans from Banks / Financial Institutions

By virtue of Assignment of Debts, all the secured loans from banks, financial institutions & debenture holders have been settled by M/s Vivid Colors Pvt Ltd . The security given to secured lenders in fixed assets has also been charged in favour of M/s Vivid Colors Pvt Ltd, with the Registrar of Companies after they took the assignment of loan. Now the company has only one secured lender which is M/s Vivid Colors Pvt ltd and no bank and financial institutions are lenders of the company. x) In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from a bank or financial institution during the year. The company had given irrevocable guarantees for loans taken by others from the banks or financial institutions and a liability including interest of Rs.21552.50 lacs (previous year Rs.18150.30 lacs) has been claimed which the company has not acknowledged as debt on the ground that the company was taken over by a buyer but the liability on this account has also been shown in Contingent Liability.

xii) In our opinion, and according to the information and explanations given to us, the company has not raised any term loans during the year.

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

For M.MUKERJEE & CO.

Chartered Accountants

Place : Patna FRN : 303013E

Date : 22nd May, 2015 24, Netaji Subhas Road

Kolkata-700 001

sd/-

SPANDAN SENGUPTA

Partner

Membership No. 135833

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Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act 1956. 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, wherever due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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. The banks, financial institutions and other lenders have filed legal cases against the company for recovery of outstanding loans and interest thereon. No provision has been made in these accounts for additional interest, penal interest, liquidated damages etc. amounting to Rs. 739.67 lacs as claimed by the above lenders at various legal forums, The same has been shown as contingent liability in notes to accounts attached to the said accounts. Company however had been providing interest on the above loans on a basis as considered appropriate by the management but up to 31st March,2006. However, the company has stopped providing interest on all loans from banks and financial institutions whether secured or unsecured w.e.f. 01.04.2006 on the ground that these loans would have been declared NPA by them. Interest amounting to Rs.112655.45 lacs up to the current year ended 31st March, 2014 has not been provided but the same has also been included in contingent liability.

3. These financial statements have been prepared on a going concern basis. The Company has incurred an operating profit during the year. The company is passing through a severe liquidity crisis and is unable to honour its commitment to lenders, preference shareholders, suppliers and employees. The bankers, financial institutions and other lenders have taken legal action for recovery of their dues: Several petitions for winding up of the company have been filed by the creditors and lenders. The company is contesting these petitions or is settling such petitions out of courts. The company is in the process of restructuring its business and also trying to identify alternative source of finance. In the absence of adequate financial support this basis would be invalid. Provision would then have to be made for any loss that might arise when the company''s assets are realised.

We further report that, the effect of our remarks in paragraph 2 and 3 could not be readily ascertained.

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

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

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

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

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

e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditors Report

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

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

(b) According to the information and explanation given to us, the fixed assets are being physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Pursuant to this programme, some of the fixed assets have been physically verified by the management during the year, and no material discrepancies were noticed on such verification. Further due to non-payment of debts, ACRE has acquired the possession of the SIKANDRABAD PROPERTY situated at Sikandrabad, Plot No.21 & 22 UPSIDC, Industrial Area, Distt. Bulandshahr.UP in exercise of powers conferred u/s 13(4) of the said Act, on 21 May, 2013 and is still continuing.

(c) During the year ended 31st March,2014 the Land and Building situated at Panvel has been sold by Asset Care & Reconstruction Enterprises Limited (ACRE) under Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. Also Plant and Machinery situated at Panvel has been sold during the year. The Profits from sale of Land & Building and Plant and Machinery are included in other income. The Panvel Factory was not under operations since 2000 hence the sale of assets situated at Panvel do not affect the going concern assumption.

(ii) (a) The inventory has been physically verified during the

period by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedure 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) The company is maintaining proper records of inventory. The discrepancies noted on verification between the physical stock and the books were not material and have been properly dealt with in the books of account.

(lii) The Company has not granted any loan, secured or unsecured to companies, firms and other parties, covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of the business with regard to purchase of inventory, fixed assets and with regard to sale of goods. Though there is scope for further strengthening internal control, during the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal control system.

(v) (a )According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b)ln our opinion and according to the information and explanations given to us, all transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies Act 1956 and including those transactions exceeding the value of Rupees Five lakhs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, no deposits within the meaning of Sections 58A and 58AA or any other relevant provision of the act and rules framed there under have been accepted by the company.

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

(viii) 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 the cost records with a view to determine whether they are accurate or complete.

ix)(a)The company is not regular in depositing with appropriate authorities undisputed statutory dues such as provident fund, ESI, income tax, sales tax, customs duty, excise duty and other material statutory dues applicable to it. The arrear as on 31st March, 2014 on these dues were as below

(Rs in lacs)

1 Provident Fund 69.95

2 Income Tax 28.59

3 Sales Tax 220.83

4 Customs Duty 73.67

5 Excise Duty 249.81

6 Professional Tax 3.47

7 ESI 14.95

According to the information and explanations given to us undisputed amounts payable in respect of income tax, sales tax, customs duty, excise duty, Wealth Tax, Service Tax and Cess were in arrear as at 31st March,2014 for a period of more than six month from the date they became payable. The details are given in the following statement Statement of other statutory dues outstanding for more than six months.

Name of the Nature of Amount- Period to which Due Date Statute the Dues Rsin lacs the amount is due from

Income Tax Act TDS 24.10 2002-03 Various Date

Sales Tax Act Collected 31.53 Various years Various Date

Customs Act Payable 73.67 1999-00 Various Date

Excise Act Payable 249.81 Various years Various Date

(b) According to the information and explanation given to us, there are dues of sales tax, income tax, wealth tax, service tax, custom duty and excise duty and cess which have not been deposited on account of any dispute.

We give below details of such disputed amount:- Statement of disputed dues

Name of Statute Nature of the Dues Amount Period the Rs in lacs

Central Sales Tax Sales Tax 0.62 1985-1986

1.14 1986-1987

4.12 1987-1988

1.61 1996-1997

0.79 1997-1998

0.8 1999-2000 1.22 2000-2001

6.57 2003-2004

25.51 2004-2005

15.40 2006-2007

24.46 2007-2008

101.64 2008-2009

8.56 2009-2010

State Sales Tax Sales Tax 8.37 1985-1986

9.16 1986-1987

2.85 1986-1987

8.47 1987-1988

2.19 1996-1997

9.14 1997-1998

3.59 1999-2000

4.93 2000-2001

7.91 2001-2002

0.98 2007-2008

2.69 2007-2008

0.51 2008-2009

Panvel Octroi Octroi Assessed 71.91

Central Excise Excise Duty 567.91 Act,1944

Income Tax Act,1961 Income Tax 38.54 1998-1999

0.75 2007-2008

Custom Duty Custom Duty 285.12

Name of Statute Forum where the dispute is pending

Central Sales Tax ACT High Court at Delhi

High Court at Delhi

High Court at Delhi

Deputy Commissioner of Sales Tax

Deputy Commissioner of Sales Tax

Deputy Commissioner of Commercial Taxes

Joint Commissioner of Commercial Tax

Commercial Tax Tribunal

Commercial Tax Tribunal

Additional CommissionerfAppeals)

Additional CommissionerfAppeals)

Additional Commissioner(Appeals)

Additional CommissionedAppeals)

Sate Sales Tax Act High Court at Delhi

High Court at Delhi

Commercial taxes .Tribunal

High Court at Delhi

Deputy Commissioner of Sales Tax

Deputy Commissioner of Commercial Taxes

Deputy Commissioner of Commercial Taxes

Dy.Commissioner of Commercial Taxes Commercial taxes .Tribunal

Additional Commissioner (Appeal)

Additional Commissioner (Appeals)

Joint Commissioner (Appeals)

Panvel Octroi Government of Maharashtra

Central Excise Act 1944 Excise Authority

Income Tax Act 1961 High Court at Kolkata

Commissioner of Income Tax (Appeals)

Custome Duty Custom Authority

(x) In our opinion, the accumulated losses of the Company exceeded more than fifty percent of its net worth. The Company has incurred cash losses during the year covered by our audit and in the immediately preceding financial year.

Annual Report 2013-14

(xi) The company has defaulted in repayment of dues to financial institution, banks and debenture holders. We give below a statement showing period and amount involved.

Parties Amount Rs in lacs Period from

a) Secured Debentures 4364.80 2000-07

Cash Credit from banks 7800.44 2000-07

Working Capital term loan from banks 4413.48 2000-07

Term loans and other loans 10632.10 2000-07

(xii) In our opinion the company has not granted loans and advances on the basis of securities by way of pledge of stocks, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a Nidhi/Mutual benefit fund/Society. Therefore, the provisions of clause 4

(xiii) of the Companies (Auditor''s Report) Order2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the company.

(xv) In our opinion, the company has given irrevocable guarantees for loans taken by others from the banks or financial institutions and a liability Including interest of 718150.30 lacs (previous year 715285.78 lacs) has been claimed which the company has not acknowledged as debt on the ground that the company was taken over by a buyer but the liability on this account has also been shown in Contingent Liability.

(xvi) During the year, the company has taken 7 275 lacs of Term Loan.

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

(xviii) During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. Accordingly, the provisions of clause 4

(xviii) of the order are not applicable to the company.

(xix) According to the information and explanations given to us, security documents are pending for 15% NCD placed with NIA, 15% NCD placed with UTI and 13.5% OCD placed with UTI. However, the entire loan of UTI has been assigned to Asset Care Enterprises Ltd (ACRE).

(xx) The company did not raise money by public issues during the year.

(xxi) According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

M.MUKERJEE&CO. Chartered Accountants Place: Gurgaon FRN: 303013E May 28th, 2014 24, Netaji Subhas Road Koikata-700 001 SPANDANSENGUPTA Partner Membership No: 135833

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Mar 31, 2013

We have Relations by and large cordial at all levels. As on today total number of employees at all levels are 215. report on the Financial Statements the have audited the accompanying financial statements of JENSON & NICHOLSON (INDIA) LIMITED, which comprise lie Balance Sheet as at March 31, 2013 and the Statement Uf Profit and Loss Account and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

)ur responsibility is to express an opinion on these financial itatements based on our audit. We conducted our audit in iccordance with the Standards on Auditing issued by the nstitute of Chartered Accountants of India. Those Standards equire that we comply with ethical requirements and plan ind perform the audit to obtain reasonable assurance about vhether the financial statements are free from material nisstatement. An audit involves performing procedures to ibtain audit evidence about the amounts and disclosures in he financial statements. The procedures selected depend >n the auditor''s judgment, including the assessment of the isks of material misstatement of the financial statements, vhether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We beiieve 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 Profit and Loss Account, of the loss for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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. The banks, financial institutions and other lenders have filed legal cases against the company for recovery of outstanding loans and interest thereon. No provision has been made in these accounts for additional interest, pedal interest, liquidated damages etc. amounting to ? 739.67 lacs as claimed by the above lenders at various legal forums,The same has been shown as contingent liability in notes to accounts attached to the said accounts. Company however had been providing interest on the above loans on a basis as considered appropriate by the management but up to 31" March, 2006. However, the company has stopped providing interest on all loans from banks and financial institutions whether secured or unsecured w.e.f. 01.04.2006 on the ground that these loans would have been declared NPA by them. Interest amounting to ? 88306.33 lacs up to the current year ended 31" March, 2013 has not been provided but the same has also been included in contingent liability.

3. These financial statements have been prepared on a going concern basis. The Company has incurred an operating loss during the year. The company is passing through a severe liquidity crisis and is unable to honour its commitment to lenders, preference shareholders, suppliers and employees. The bankers, financial, institutions and other lenders have taken legal action for recovery of their dues. Several petitions for winding up of the company have been filed by the creditors and lenders. The company Is contesting these petitions or is settling such petitions out of courts.The company is in the process of restructuring its business and also trying to identify alternative source of finance. In the absence of adequate financial support this basis would be invalid. Provision would then have to be made for any loss that might arise when the company''s assets are realised.

We further report that, the effect of our remarks in paragraph 2 and 3 could not be readily ascertained.

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

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

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

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

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

e. 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 the Auditor''s Report (Referred to in paragraph 3 of our Report of even date)

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

(b) According to the information and explanation given to us, the fixed assets are being physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Pursuant to this programme, some of the fixed assets have been physically verified by the management during the year, and no material discrepancies were noticed on such verification. Due to non payment of debts, ACRE has acquired the possession of the Pamvel Property situated at Panve (Khanda), Taluka-Panvel, Dist. Raigad (Maharas htra) in exercis e of powers conferred u/ s 13(4) of the s aid Act, on 9 February, 2012 and is still continuing. Further, due to non payment of debts, ACRE has also acquired the possession of Sikandrabad Property, the entire movable as s ets Including Current As s es ts s ituated at Plot No. 21 & 22, Sikandrabad Industrial Area, Dist. Bullandshahar (U.P.) in exercise of powers conferred u/s 13(4) of the said Act, on 21st May, 2013. (c) Fixed assets disposed off during the year were not substantial, and do not affect the going concern assumption.

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

(b) The procedure 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) The company is maintaining proper records of inventory. The discrepancies noted on verification between the physical stock and the books were not material and have been properly dealt with in the books of account.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms and other parties, covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of the business with regard to purchase of inventory, fixed assets and with regard to sale of goods. Though there is scope for further strengthening internal control, during the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) in our opinion and according to the information and explanations given to us, all transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies Act 1956 and including those transactions exceeding the value of Rupees Five lakhs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, no deposits within the meaning of Sections 58A and 58AA or any other relevant provision of the act and rules framed there under have been accepted by the company.

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

(viii) W e 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 the cost records with a view to determine whether they are accurate or complete.

ix) (a) The company is not regular in depositing with appropriate authorities undisputed statutory dues such as provident fund, ESI, income tax, sales tax, customs, duty, excise duty and other material statutory dues applicable to it. The arrear as on 31st March, 2013 on these dues were as below :-

(Rs.in lacs)

1 Provident Fund 135.75

2 Income Tax 29.20

3 Sales Tax 208.37

4 Customs Duty 73.67

5 Excise Duty 253.67

6 Professional Tax 3.71

7 ESI 15.67

(x) In our opinion, the accumulated losses of the Company exceeded more than fifty percent of its net worth. The Company has incurred cash losses during the year covered by our audit and in the immediately preceding financial year.

(xii) In our opinion the company has not granted loans and advances on the basis of securities by way of pledge of stocks, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a Nidhi/Mutual benefit fund/Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the company.

(xv) In our opinion, the company has given irrevocable guarantees for loans taken by others from the banks or financial institutions and a liability including interest of 715285.78 lacs (previous year X 12873.87 lacs) has been claimed which the company has not acknowledged as debt on the ground that the company was taken over by a buyer but the liability on this account has als o been s hown in Contingent Liability.

(xvi) During the year, the company has taken 350 lacs of Term Loan.

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

(xviii) During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. Accordingly, the provisions of clause 4 (xviii) of the order are not applicable to the company.

(xix) According to the information and explanations given to us, security documents are pending for 15% NCD placed with NIA, 15% NCD placed with UTI and 13.5% OCD placed with UTI. However, the entire loan of UTI has been assigned to Asset Care Enterprises Ltd (ACRE).

(xx) The company did not raise money by public issues during the year.

(xxi) According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

M. Mukerjee & Co.

Chartered Accountants

FRN: 303013E

Spandan Sengupta

Place: Gurgaon Partner

28th, May 2013 Members hip No: 135833

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Jenson & Nicholson (India) Limited, as at 31st March, 2012 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of The Companies Act, 1956' we enclose in the Annexure a statement on the matters stated in paragraphs 4 and 5 of the Order.

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

i) The banks, financial institutions and other lenders have filed legal cases against the company for recovery of outstanding loans and interest thereon. No provision has been made in these accounts for additional interest, penal interest, liquidated damages etc. amounting to Rs. 739.67 lacs as claimed by the above lenders at various legal forums,The same has been shown as contingent liability in notes to accounts attached to the said accounts. Company however had been providing interest on the above loans on a basis as considered appropriate by the management but up to 31s' March,2006. However, the company has stopped providing interest on all loans from banks and financial institutions whether secured or unsecured w.e.f. 01.04.2006 on the ground that these loans would have been declared NPA by them. Interest amounting to Rs. 67740.16 lacs up to the current year ended 31st March,2012 has not been provided but the same has also been included in contingent liability. (ii)These financial statements have been prepared on a going concern basis. The Company has incurred an operating loss during the year.The company is passing through a severe liquidity crisis and is unable to honour its commitment to lenders, preference shareholders, suppliers and employees. The bankers, financial institutions and other lenders have taken legal action for recovery of their dues. Several petitions for winding up of the company have been filed by the creditors and lenders. The company is contesting these petitions or is settling such petitions out of courts.The company is in the process of restructuring its business and also trying to identify alternative source of finance. In the absence of adequate financial support this basis would be invalid. Provision would then have to be made for any loss that might arise when the company's assets are realised.

We further report that, the effect of our remarks in paragraph 4(i) to 4(ii) could not be readily ascertained.

Subject to our remarks in Para 4 (i) to 4 (ii) above we further report that:

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

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

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

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

(v) On the basis of written representations received from the Directors as on March 31,2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31,2012 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 and subject to our remarks in paragraph 4(i) to 4(ii) above, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:-

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

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

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

Annexure to the Auditors' Report (Referred to in paragraph 3 of our Report of even date)

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

(b) According to the information and explanation given to us, the fixed assets are being physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Pursuant to this programme, some of the fixed assets have been physically verified by the management during the year, and no material discrepancies were noticed on such verification. Futher, due to non payment of debts, ACRE has acquired the possesion of the PANVEL PROPERTY situated at Panvel ( Khanda), Taluka- Panvel, Dist. Raigad (Maharashtra) in exercise of powers conferred u/s 13(4) of the said Act 9 February 2012.

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

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

(b) The procedure 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) The company is maintaining proper records of inventory. The discrepancies noted on verification between the physical stock and the books were not material and have been properly dealt with in the books of account.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms and other parties, covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of the business with regard to purchase of inventory, fixed assets and with regard to sale of goods. Though there is scope for further strengthening internal control, during the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section. (b) In our opinion and according to the information and explanations given to us, all transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies Act 1956 and including those transactions exceeding the value of Rupees Five lakhs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, no deposits within the meaning of Sections 58A and 58AA or any other relevant provision of the act and rules framed there under have been accepted by the company.

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

(viii) 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 the cost records with a view to determine whether they are accurate or complete.

ix) (a) The company is not regular in depositing with appropriate authorities undisputed statutory dues such as provident fund, ESI, income tax, sales tax, customs duty, excise duty and other material statutory dues applicable to it. The arrear as on 31st March, 2012 on these dues were as below :-

( Rs. in lacs)

1 Provident Fund 119.69

2 Income Tax 27.71

3 Sales Tax 181.97

4 Customs Duty 73.67

5 Excise Duty 255.51

6 Professional Tax 3.31

7 ESI 15.48

According to the information and explanations given to us undisputed amounts payable in respect of income tax, sales tax, customs duty, excise duty, Wealth Tax, Service Tax and Cess were in arrear as at 31st March, 2012 for a period of more than six month from the date they became payable. The details are given in the following statement :- Statement of other statutory dues outstanding for more than six months.

Name of the Nature of Amount- Period to which Due Statute the Dues Rs. in the amount is Date lacs due from

Income Tax Act TDS 24.10 2002-03 Various Dates Sales Tax Act Collected 31.53 Various years Various Dates

Customs Act Payable 73.67 1999-00 Various Dates Excise Act Payable 247.31 Various years Various Dates

(b) According to the information and explanation given to us, there are dues of sales tax, income tax, wealth tax, service tax, custom duty and excise duty and cess which have not been deposited on account of any dispute.

We give below details of such disputed amount:- Statement of disputed dues

Name of the Nature of the Amount Forum where the dispute is Statute Dues Rs.in lacs Period pending

0.62 1985-1986 High Court at Delhi Central Sales Sales Tax 1.14 1986-1987 High Court at Delhi Tax Act 4,12 1987-1988 High Court at Delhi

7.75 1996-1997 Addl. Commissioner of Commercial Tax

1.61 1996-1997 Assistant Commiss -ioner of Sales Tax

0.79 1997-1998 Assistant Commiss -ioner of Sales Tax

0.88 1999-2000 Deputy Commissioner of Commercial Taxes

1.22 2000-2001 joint Commissioner of Commercial Taxes

4.37 2002-2003 Deputy Commissioner of Commercial Taxes

6.57 2003-2004 Commercial Tax Tribunal

25.51 2004-2005 Commercial Tax Tribunal

5.39 2005-2006 Additional Commissioner (Appeals)

15.40 2006-2007 Additional Commissioner (Appeals)

21.60 2007-2008 Additional Commissioner (Appeals)

Stale Sales SalesTax 8.37 1985-1986 High Court at Delhi Tax Act 9.16 1986-1987 High Court at Delhi

2.85 1986-1987 Commercial taxes Tribunal

8.47 1987-1988 High Court at Delhi

4.31 1996-1997 Addl. Commissioner of Commercial Tax

2.19 1996-1997 Assistant Commiss -ioner of Sales Tax

9.14 1997-1998 Assistant Commiss -ioner of Commercial Taxes

0.74 1998-1999 Dy. Commissioner (Appeals)-Commer -cial Taxes

8.59 1999-2000 Dy. Commissioner (Appeals)-Commer -cial Taxes

3.59 1999-2000 Dy. Commissioner of Commercial Taxes

0.24 1999-2000 Joint Commissioner of Commercial Taxes

1.42 1999-2000 Dy. Commissioner of Commercial Taxes

0.71 2000-2001 Dy. Commissioner of Commercial Taxes

4.93 2000-2001 Joint Commissioner of Commercial Taxes

7.91 2001-2002 Commercial Tax Tribunal

6.89 2001-2002 Dy. Commercial of Commercial Taxes

1.45 2005-2006 Dy Commissioner (Appeal)

0.65 2005-2006 Additional Commissioner (Appeal)

0.98 2007-2008 Addl. Commissioner of Commercial Taxes 1.77 2008-2009 Asst. Commissioner of Flying Squad

0.17 2010-2011 Asst.Commissioner of Commercial Taxes

0.31 2010-2011 Dy. Commissioner of Commercial Taxes

0.97 2011-2012 Dy. Commissioner of Commercial Taxes

Panvel Octroi Octroi 71.91 Government of Maharashtra Assessed

Central Excise Excise Duty 404,51 Excise Authority Act, 1944

Income Tax Income Tax 38.54 1998-1999 High Court at Kolkata Act, 1961 6.45 2002-2003 Commissioner of Income Tax (Appeals) Custom Duty Custom Duty 228,96 Custom Authority

(x) In our opinion, the accumulated losses of the Company exceeded more than fifty percent of its net worth. The Company has incurred cash losses during the year covered by our audit and in the immediately preceding financial year.

(xi) The company has defaulted in repayment of dues to financial institution, banks and debenture holders. We give below a statement showing period and amount involved.

Parties Amount Period from Rs.in lacs

a) Secured Debentures 5662.40 2000-07

Cash Credit from banks 9749.76 2000-07

Working Capital term loan from banks 5457.06 2000-07

Term loans and other loans 12696.45 2000-07

b) Unsecured Loan 2534.96 2000-12

(xii) In our opinion the company has not granted loans and advances on the basis of securities by way of pledge of stocks, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a Nidhi/ Mutual benefit fund/Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the company. (xv)ln our opinion, the company has given irrevocable guarantees for loans taken by others from the banks or financial institutions and a liability including interest of Rs. 12873.87 lacs (previous year Rs. 10842.96 lacs) has been claimed which the company has not acknowledged as debt on the ground that the company was taken over by a buyer but the liability on this account has also been shown in Contingent Liability.

(xv) During the year, the company has not taken any Term Loan.

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

(xviii)During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. Accordingly, the provisions of clause 4 (xviii) of the order are not applicable to the company.

(xix) According to the information and explanations given to us, security documents are pending for 15% NCD placed with NIA, 15% NCD placed with UTI and 13.5% OCD placed with UTI. However, the entire loan of UTI has been assigned to Asset Care Enterprises Ltd (ACRE).

(xx) The company did not raise money by public issues during the year.

(xxi) According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For M. Mukerjee & Co Chartered Accountants

Spandan Sengupta

Place: Gurgaon Partner

Date : 29th May, 2012 Membership No. 135833 FRN No. 303013E

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Jenson & Nicholson (India) Limited, as at 31st March,2010 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of The Companies Act, 1956, we enclose in the Annexure a statement on the matters stated in paragraphs 4 and 5 of the Order.

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

i) The banks, financial institutions and other lenders have filed legal cases against the company for recovery of outstanding loans and interest thereon. No provision has been made in these accounts for additional interest, penal interest, liquidated damages etc. amounting to Rs. 73967 thousand as claimed by the above lenders at various legal forums, The same has been shown as contingent liability in notes to accounts attached to the said accounts. Company however had been providing interest on the above loans on a basis as considered appropriate by the management but up to 31st March,2006. However, the company has stopped providing interest on all loans from banks and financial institutions whether secured or unsecured w.e.f. 01.04.2006 on the ground that these loans would have been declared NPA by them. Interest amounting to Rs. 3698462 thousand up to current year ended 31st March,2010 has not been provided but the same has also been included in contingent liability.

ii) In the absence of documentary evidences and confirmations, amount of Interest payable to the suppliers in the form of Micro, Small and Medium Enterprises and others under the provision of the Micro,Small and Medium Enterprises Development Act, 2006 could not be ascertained.

iii) In the absence of adequate details and information and explanations we are unable to comment as to the extent of recoverability of Loans and advances and Sundry Debtors considered good amounting to Rs. 13712 thousand and Rs. 445 thousand respectively.

(iv) These financial statements have been prepared on a going concern basis. The Company has incurred a loss during the year. The company is passing through a severe liquidity crisis and is unable to honour its commitment to lenders, preference shareholders, suppliers and employees. The bankers, financial institutions and other lenders have taken legal action for recovery of their dues. Several petitions for winding up of the company have been filed by the creditors and lenders. The company is contesting these petitions or is settling such petitions out of courts. The company is in the process of restructuring its business and also trying to identify alternative source of finance. In the absence of adequate financial support this basis would be invalid. Provision would then have to be made for any loss that might arise when the companys assets are realised.

We further report that, the effect of our remarks in paragraph 4 (ii) to 4(iv) could not be readily ascertained.

Subject to our remarks in Para 4 (i) to 4 (iv) above we further report that:

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

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

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

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

(v) As the company had made defaults in redemption of debentures, we report that except the nominee directors of the financial institutions/BIFR, all the directors of the Company are disqualified as on 31st March,2010 from being appointed/reappointed as a director in any other company, u/s 274(1 )(g) of the Companies Act, 1956 read with Companies (Disqualification of Directors of the Companies Act, 1956) Rules 2003.

(vi) In our opinion and to the best of our information and according to the explanations given to us and subject to our remarks in paragraph 4(i) to 4(iv) above, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and

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

Annexure to the Auditors Report (Referred to in paragraph 3 of our Report of even date)

(i) (a) Although the company has maintained records showing particulars including quantitative details and situation of fixed assets, the same however are not updated.

(b) The assets have not been physically verified by the management during the year. Material discrepancies, if any, are not ascertainable.

(c) No substantial part of the fixed assets has been disposed off during the year.

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

(b) The procedure 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) The company is maintaining proper records of inventory. The discrepancies noted on verification between the physical stock and the books were not material and have been properly dealt with in the books of account.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms and other parties, covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of the business with regard to purchase of inventory, fixed assets and with regard to sale of goods. Though there is scope for further strengthening internal control, during the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companes Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, all transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies Act 1956 and including those transactions exceeding the value of Rupees Five lakhs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, no deposits within the meaning of Sections 58A and 58AA or any other relevant provision of the act and rules framed there under have been accepted by the company.

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

(viii) According to the information and explanations given to us maintenance of Cost Records pursuant to rules made by the Central Government under section 209 (1) (d) of the Companies Act, 1956 was applicable to the Company for manufacturing of resins at its Naihati Factory. However in view of the suspension of operation at Naihati Factory, Cost audit was not carried out for the year.

ix) (a) The company is not regular in depositing with appropriate authorities undisputed statutory dues such as provident fund, ESI, income tax, sales tax, customs duty, excise duty and other material statutory dues applicable to it. The arrear as on 31st March,2010 on these dues were as below :-

i , (Rs.in thousands)

1 Provident Fund 13,824

2 Income Tax 2,698

3 Sales Tax 10,684

4 Customs Duty 7,367

5 Excise Duty 24,986

6 Professional Tax 339

7 J ESI 1,262

According to the information and explanations given to us undisputed amounts payable in respect of income tax, sales tax, customs duty, excise duty , Wealth Tax, Service Tax and Cess were in arrear as at 31st March,2010 for a period of more than six month from the date they became payable. The details are given in the following statement :-

Statement of other statutory dues outstanding for more than six months.

Name of Nature of Amount Period to Due

statute the Dues (Rs.OOO) which the Date

amount is

due from

Income TDS 2,396 2002-03 Various

Tax Act Dates

Sales Various Various

Tax Act Collected 5,367 Year Date

Customs Payable 7,367 1999-00 Various

Act Dates

Excise Act Payable 24,986 Various Various

Year Dates



(b) According to the information and explanation given to us, there are dues tax,wealth tax,service tax,custom duty and excise duty and cess which deposited on account of any dispute

We give below details of such disputed amount :-

Statement of disputed dues

Name of Nature of Amount Forum Where

Disputed dues the Dues (Rs.OOO) dispute is pending

Central Sales 24,749 Commissioner

Tax Act and Sales Sales Tax (Appeals)/

Tax act of Various Appellate Tribunal

States

Panvel octroi Octroi Assessed 7,191 Maharashtra Gov.

Central Exise Excise Duty 39,539 Excise Authority

Act, 1944

Income Tax Act Income Tax 2,06,044 Commissioner of

1961 Income Tax

(Appeals)

Custom Duty Custom Duty 21,024 Custom Authority



(x) In our opinion, the accumulated losses of the Company exceeded more than fifty percent of its net worth. The Company has incurred cash losses during the year covered by our audit and in the immediately preceding financial year.

(xi) The company has defaulted in repayment of dues to financial institution, banks and debenture holders. We give below a statement showing period and amount involved.

Parties Amount (Rs.OOO) Period from

a) Secured Debentures 566,240 2000-07

Cash Credit from banks 974,976 2000-07

Working Capital term

loan from banks 545,706 2000-07

Term and other loans 1,269,645 2000-07

b) Unsecured Loan 2,23,429 2000-10

(xii) In our opinion the company has not granted loans and advances on the basis of securities by way of pledge of stocks, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a Nidhi/Mutual benefit fund/Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xv) In our opinion, the company has given irrevocable guarantees for loans taken by others from the banks or financial institutions and a liability including interest of Rs. 913281 thousand (previous year Rs. 769270 thousand) has been claimed which the company has not acknowledged as debt on the ground that the company was taken over by a buyer but the liability on this account has also been shown in Contingent Liability.

(xvi) During the year, the company has not taken any Term Loan.

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

(xviii) During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. Accordingly, the provisions of clause 4 (xviii) of the order are not applicable to the company.

(xix) According to the information and explanations given to us, security documents are pending for 15% NCD placed with NIA (Rs. 30168 thousand), 15% NCD placed with UTI (Rs. 117547 thousand) and 13.5% OCD placed with UTI (Rs. 126403 thousand).

(xx) The company did not raise money by public issues during the year.

(xxi) According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

M. Mukerjee & Co

Chartered Accountants

Rana Chatterjee

Place: Patna Partner

Date: 28,h May, 2010 Membership No.53209