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A Oneindia Venture

Nifty 25,966.40 +0.58%

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Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Auditor Report of Bajaj Hindusthan Sugar Ltd.

Mar 31, 2025

Bajaj Hindusthan Sugar Limited

Report on the Audit of the Standalone Financial Statements Qualified Opinion

We have audited the standalone financial statements of Bajaj Hindusthan Sugar Limited ("the Companyâ), which comprise the standalone balance sheet as at March 31, 2025, and the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of material accounting policies and other explanatory information (Collectively referred to as ''standalone financial statements'').

In our opinion and to the best of our information and according to the explanations given to us except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 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 (financial position) of the Company as at March 31, 2025, and its profit (financial performance including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note No. 36(I)(d) and Note No. 18.2 to the standalone financial statements regarding the following matters:

(i) The non-provision of the contractual obligation related to the premium payable on Optionally Convertible Debentures (OCDs) issued to lenders pursuant to the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme). As per the terms, the Yield to Maturity (YTM), being the difference between the weighted average cost of borrowing and the coupon interest rate, is contractually payable as a redemption premium at the time of redemption of the OCDs, which are redeemable in 13 equal annual instalments commencing from the financial year 2024-25. The Company, however, considers such YTM/redemption premium as a contingent liability and has not provided for the same in the books of account for the year ended March 31, 2025, amounting to Rs 699.60 crores (Previous Year: Rs 622.68 crores). The aggregate unprovided liability for such YTM from the date of allotment of the OCDs up to March 31, 2025, amounts to Rs 3,585.01 crores.

(ii) The Company has classified the principal liability of Rs 535.88 crores relating to Optionally Convertible Debentures (OCDs) under Non-Current Borrowings. This amount includes the overdue instalment of Rs 267.94 crores for the financial year 2024-25 and the instalment due in the financial year 2025-26, despite the Company having defaulted on the payment of the first redemption instalment of Rs 267.94 crores, coupon interest of Rs 87.08 crores, and the applicable YTM component, all of which were due on March 31, 2025. In the absence of a formal waiver or approved restructuring agreement as at the balance sheet date, such amounts should have been classified under Current Liabilities in accordance with Ind AS 1.

Had the above YTM been recognised and the overdue borrowings classified correctly as current liabilities, the reported net loss for the year ended March 31, 2025 would have been Rs 695.22 crores instead of net profit of Rs 4.38 crores, and the net worth of the Company would have been Rs 775.86 crores instead of Rs 4,360.87 crores. Further, current liabilities would have been higher by Rs 535.88 crores, with a corresponding reduction in non-current liabilities.

financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the standalone financial statements.

Material Uncertainty related to Going Concern

We draw attention to Note 50 of the standalone financial statements, which describes the circumstances that give rise to a material uncertainty related to going concern. As stated in the said note, the Company was unable to meet its obligations towards the first annual instalment of Optionally Convertible Debentures (OCDs), including the applicable coupon interest and yield-to-maturity (YTM), during the year ended March 31, 2025. The Company has submitted a debt resolution plan, which is currently under consideration by the consortium of lenders.

Further, the Company''s past performance was impacted by lower availability of sugarcane and lower sugar recovery, resulting in operational inefficiencies and inadequate cash surplus for timely payment of cane dues and for cane development activities.

These events or conditions, along with other matters set forth in the said note, indicate the existence of a material uncertainty that may cast significant doubt on the Company''s ability to continue as a going concern. However, based on the mitigating factors disclosed in the note, the management believes that the Company is well positioned to achieve self-sustainability and meet its obligations as they fall due, and accordingly, the financial statements have been prepared on a going concern basis.

Our opinion is not modified in respect of this matter.

Emphasis of Matter

As stated in note 45 of standalone financial statements, the Company holds investments aggregating Rs 2,530.58 crore (Previous Year: Rs 2,486.45 crore) in its subsidiaries, comprising equity investments, inter-corporate loans, and accrued interest thereon. As stated in the said note, management is taking appropriate measures to facilitate recovery and remains confident of realising the carrying value over a reasonable period. Further, in accordance with the principles of prudence and conservatism, the Company has deferred recognition of interest income amounting to Rs 112.43 crore for the year ended March 31, 2025 (Previous Year: Rs 112.43 crore).

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matter described below to be key audit matters to be communicated in our report.

The Key Audit Matter

How the matter was addressed in our audit

Impairment assessment for Investments, loans and interest on loan and receivables

The Company has exposure aggregating to Rs 2,530.58 crores, in its subsidiaries by way of investments, loans and accumulated interest on these loans.

These investments and loans to be individually assessed for impairment as per Ind AS 36 -Impairment of Assets.

We focussed on this area due to magnitude of the carrying value of investments, loans and accumulated interest on loan related to subsidiary companies, which comprise 16.75% of the total assets as at March 31, 2025 and are subject to annual impairment assessment.

Our audit procedures, in respect of testing impairment assessment in case of investments, loans given and interest accrued on loans included the following:

- Obtained understanding of the process, evaluated the effectiveness of controls in respect of impairment assessment of investments and loans.

- Held discussions with management regarding appropriate implementation of policy on impairment.

The Key Audit Matter	How the matter was addressed in our audit
	- Evaluated the future business plan and available valuation report. - Confirmations for above exposure.
	- Validated the S4A Restructuring Scheme clause related to obligation on the Company to recover the loan amount.
	- We evaluated the impairment assessment performed by management taking into account the requirements of Ind AS 36 Impairment of Assets

Other Information

The Company''s management and Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the standalone financial statements and our auditor''s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

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

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements

As part of an audit in accordance with Standards on Auditing (''SAs''), we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

a. We have sought and except for the matter described in Basis for Qualified Opinion section, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. Except for the possible effects of the matter described in the Basis of Qualified opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other

comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, except for the matter described in Basis for Qualified Opinion section, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act read with Companies (Indian Accounting Standard) Rules 2016 (as amended).

e. The matters described in ''Basis for Qualified Opinion'' paragraph and the Going concern matter described under Material Uncertainty related to Going Concern paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f. On the basis of the written representations received from the directors as on March 31, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2025 from being appointed as a director in terms of Section 164(2) of the Act.

g. The reservation relating to maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified opinion paragraph.

h. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

i. With respect to the matter to be included in the Auditors'' Report under Section 197(16) of the Act, as amended, in our opinion and according to the information and explanations given to us, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 36 to the standalone financial statements.

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

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

iv. (a) The management has represented that, to the best of their knowledge and belief,

other than as disclosed in the notes to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented, that, to the best of their knowledge and belief, other than as disclosed in the notes to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on our audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material mis-statement.

v. The Company has not declared or paid dividend during the year hence reporting of compliances of section 123 is not applicable.

vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31, 2025 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with. Also, the Company has preserved the audit trail as per the statutory requirements for record retention.

For Sidharth N Jain& Company

Chartered Accountants

Firm registration number:018311C

Sidharth Jain

Proprietor

Membership No.: 134684

UDIN: 25134684BMHTMM3893

Place: Lucknow

Date: May 29, 2025

Mar 31, 2024

Bajaj Hindusthan Sugar Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the standalone financial statements of Bajaj Hindusthan Sugar Limited ("the Company"), which comprise the standalone balance sheet as at March 31, 2024, and the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (Collectively referred to as ''standalone financial statements'').

In our opinion and to the best of our information and according to the explanations given to us except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 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 (financial position) of the Company as at March 31, 2024, and its loss (financial performance including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note No. 38(I)(d) to the standalone financial statements, regarding the non-provision of contractual obligation related to premium payable on Optionally Convertible Debentures (OCDs) at the time of redemption of OCDs issued to lenders pursuant to the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme) which stipulates that the yield to maturity (YTM) being the difference between weighted average interest and coupon rate payable as redemption premium at the time of redemption of OCDs redeemable in 13 equal instalments commencing from the Financial year 2024-25. The Company considers such YTM/redemption premium as contingent liability and has not provided for the same in the books of account for the year ended March 31, 2024 amounting to Rs 622.68 crores. The aggregate liability for such YTM from the date of allotment of OCDs till year ended March 31, 2024 is Rs 2,885.41 crores. Had such interest been provided, the reported net loss for the year ended March 2024 would have been Rs 714.21 crores instead of loss of Rs 91.53 crores and net worth of the Company would have been Rs 1,607.57 crores.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the standalone financial statements.

Material Uncertainty related to Going Concern

As stated in note 52 of the standalone financial statements, the Company during the last few years had incurred losses due to high raw material and other inputs costs, relatively lower realization of sugar, higher depreciation and finance expenses and lower price of Sugar. All these factors resulted into reduction of net worth of the Company. As at March 31,2024, the Company has sugar cane dues payable to farmers. The above factors indicate a material uncertainty, which may cast significant doubt about the Company''s ability to continue as a going concern.

The Company has plans to improve its sugar quality, increasing refined sugar capacity, entering into branded sugar segment, increasing sale to institutional buyers which will give better realization. Also, Sugar Industry associates are advocating for an increase in minimum selling price to the level of Rs 43-45 per kg. Further, a sizeable portion of cane / sugar is allowed to divert towards manufacturing of ethanol which is a big push by the Government to increase the ethanol production for blending in petrol up to 20% by 2025 which may turn around the economic dynamics of the sugar industry in future.

The Company''s investment in equity shares of the group''s power business have good potential of an upside as per its fair value resulting in an improvement in the net worth of the Company. The Company also expects to receive accrued benefits under the Sugar Industries Promotion Policy, 2004, for which it is entitled.

In view of the above, the management expects to generate positive cash flow from operation and accordingly, the financial statements are continued to be presented on going concern basis, which contemplates realization of assets and settlement of liabilities in the normal course of business.

Our opinion is not modified in respect of the above matter.

Emphasis of Matter

(i) As stated in Note 47 to the standalone financial statements, the Company has exposure aggregating to Rs 2,486.45 crores, in its subsidiaries, by way of investments, loans and accumulated interest on these loans. Management is of the view that sufficient efforts are being undertaken to revive the said subsidiaries in the foreseeable future to recover carrying value of the investments and loans, and the diminution/provisions, if any exists, is only of temporary nature and accordingly no provision, other than those already accounted for, has been considered necessary. Further based on principle of conservatism and prudence, the Company has not recognized interest income for the year ended on March 31, 2024, of Rs. 112.43 crores (March 31, 2023: Rs 112.43 crores), on inter corporate loans, as and when it realizes it will be recognized in the books.

(ii) As stated in note 18.2 to the standalone financial statements, the Company has disclosed the current maturity of OCD which is due for redemption in financial year 2024-25, as non-current liabilities under the head "Noncurrent borrowings" since in the opinion of the management redemption due in March 2025, is contingent upon certain condition.

Our opinion is not modified in respect of these matters.

Key Audit Matters

We have determined the matter described below to be key audit matters to be communicated in our report.

The Key Audit Matter

How the matter was addressed in our audit

Impairment assessment for Investments, loans and interest on loan and receivables

The Company has exposure aggregating to Rs 2,486.45 crores, in its subsidiaries by way of investments, loans and accumulated interest on these loans.

These investments and loans to be individually assessed for impairment as per Ind AS 36 - Impairment of Assets.

We focussed on this area due to magnitude of the carrying value of investments, loans and accumulated interest on loan related to subsidiary companies, which comprise 16.14% of the total assets as at March 31, 2024 and are subject to annual impairment assessment.

Our audit procedures, in respect of testing impairment assessment in case of investments, loans given and interest accrued on loans included the following:

- Obtained understanding of the process, evaluated the effectiveness of controls in respect of impairment assessment of investments and loans.

- Held discussions with management regarding appropriate implementation of policy on impairment.

- Evaluated the future business plan and available valuation report.

- Confirmations for above exposure.

- Validated the S4A Restructuring Scheme clause related to obligation on the Company to recover the loan amount.

- We evaluated the impairment assessment performed by management taking into account the requirements of Ind AS 36 Impairment of Assets.

Other Information

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

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

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process. Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

As part of an audit in accordance with Standards on Auditing (''SAs''), we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, we report that:

c. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Cash Flow Statement dealt with by this Report are in agreement with the books of account.

f. On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164(2) of the Act.

g. The reservation relating to maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified opinion paragraph.

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 38 to the standalone financial statements.

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

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

iv. (a) The management has represented that, to the best of their knowledge and belief, other than as disclosed in the notes to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on our audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (a) and (b) contain any material mis-statement.

v. The Company has not declared or paid dividend during the year hence reporting of compliances of section 123 is not applicable.

vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31,2024 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.

For Sidharth N Jain & Company

Chartered Accountants

Firm registration number: 018311C

Sidharth Jain

Proprietor

Membership No.: 134684

UDIN: 24134684BKAEVJ4083

Place: Lucknow

Date: May 10, 2024

Mar 31, 2023

Bajaj Hindusthan Sugar Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the standalone financial statements of Bajaj Hindusthan Sugar Limited ("the Companyâ), which comprise the standalone balance sheet as at March 31, 2023, and the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (Collectively referred to as ''standalone financial statements'').

In our opinion and to the best of our information and according to the explanations given to us except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 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 (financial position) of the Company as at March 31, 2023, and its loss (financial performance including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note No. 38(I)(d) to the standalone financial statements, regarding the non-provision of contractual obligation related to premium payable on Optionally Convertible Debentures (OCDs) at the time of redemption of OCDs issued to lenders pursuant to the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme) which stipulates that the yield to maturity (YTM) being the difference between weighted average interest and coupon rate payable as redemption premium at the time of redemption of OCDs redeemable in 13 equal instalments commencing from the Financial year 2024-25. The Company considers such YTM/redemption premium as contingent liability and has not provided for the same in the books of account for the year ended March 31, 2023 amounting to '' 478.61 crores. The aggregate liability for such YTM from the date of allotment of OCDs till year ended March 31, 2023 is '' 2,262.73 crores. Had such interest been provided, the reported net loss for the year ended March 2023 would have been '' 626.35 crores and net worth of the Company would have been '' 2,236.00 crores.

Material Uncertainty related to Going Concern

As stated in note 52 and note 18.6 of the standalone financial statements, the Company during the last few years had incurred losses due to high raw material and other inputs costs, relatively lower realization of sugar, higher depreciation and finance expenses and lower price of Sugar. All these factors resulted into reduction of net worth of the Company. As at March 31, 2023, the Company has sugar cane dues payable to farmers. Further, due to delay in overall debt servicing, the lenders have classified the Company''s account as Non - performing Assets (NPA) and initiated Corporate Insolvency Resolution Process (CIRP) of the Company before the Hon''ble National Company Law Tribunal (NCLT). The above factors indicate a material uncertainty, which may cast significant doubt about the Company''s ability to continue as a going concern.

The Company is continuously striving to improve its operational efficiency and operating parameters by way of improvement in sugar recovery, increase in production of alcohol/ ethanol by using B heavy molasses, increase in revenue of by-products, increase in Cogen export, reduction of overheads, finance, other costs and monetization of certain non-core assets etc. Also, Sugar Industry, Indian Sugar Mills Association (ISMA), National Federation of Co-operative Sugar Factories (NFCSF) are advocating for an increase in MSP to the level of '' 38-40 per kg which the Government will have to implement at the earliest. Further, a sizeable portion of cane / sugar is allowed to divert towards manufacturing of ethanol which is a big push by the Government to increase the ethanol production for blending in petrol up to 20% by 2025 which will turn around the economic dynamics of the sugar industry in a positive way.

The Company''s investment in equity shares of group''s power business have good potential of an upside as per its fair value resulting into improvement in the net worth of the Company. The Company also expects to receive accrued benefits under the Sugar Industries Promotion Policy, 2004, for which it is entitled.

The Company is actively pursuing the CIRP matter with SBI and other lenders and is confident to resolve the matter soon. As on date, the Company''s account is fully regular with all the lenders including SBI and there is no overdue outstanding. Based on the same, some of the lenders have already upgraded the Company''s account status to "Standard and Regularâ category, while other lenders are considering the upgrade.

In view of the above, the management expects to generate positive cash flow from operation and accordingly, the standalone financial statements are continued to be presented on going concern basis, which contemplates realization of assets and settlement of liabilities in the normal course of business.

Our opinion is not modified in respect of the above matter.

Emphasis of Matter

As stated in Note No. 47 to the standalone financial statements, the Company has exposure aggregating to '' 2,446.66 crores, in its subsidiaries, by way of investments, loans and accumulated interest on these loans. Management is of the view that sufficient efforts are being undertaken to revive the said subsidiaries in the foreseeable future so as to recover carrying value of the investments and loans, and the diminution/ provisions, if any exists, is only of temporary nature and accordingly no provision, other than those already accounted for, has been considered necessary. Further on the basis of principle of conservatism and prudence, the Company has not recognized interest income for the year ended on March 31, 2023, of '' 112.43 Crore, on inter corporate loans, as and when it realizes it will be recognized in the books.

Our opinion is not modified in respect of these matters.

Key Audit Matters

We have determined the matter described below to be key audit matters to be communicated in our report.

The Key Audit Matter

How the matter was addressed in our audit

Impairment assessment for Investments, loans and interest on loan and receivables

The Company has exposure aggregating to '' 2,446.66 crores, in its subsidiaries and, by way of investments, loans and accumulated interest on these loans.

Such investments and loans individually assessed for impairment as per Ind AS 36 - Impairment of Assets.

We focussed on this area due to magnitude of the carrying value of investments, loans and accumulated interest on loan related to subsidiary companies, which comprise 15.81% of the total assets as at March 31, 2023 and are subject to annual impairment assessment.

Our audit procedures, in respect of testing impairment assessment in case of investments, loans given and interest accrued on loans included the following:

- Obtained understanding of the process, evaluated the effectiveness of controls in respect of impairment assessment of investments and loans.

- Held discussions with management regarding appropriate implementation of policy on impairment.

- Evaluated the future business plan and available valuation report.

- Confirmations for above exposure.

- Validated the S4A Restructuring Scheme clause related to obligation on the Company to recover the loan amount.

- We evaluated the impairment assessment performed by management taking into account the requirements of Ind AS 36 Impairment of Assets

Other Information

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

As part of an audit in accordance with Standards on Auditing (''SAs''), we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Report on Other Legal and Regulatory Requirements

2. As required by Section 143(3) of the Act, we report that:

c. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other

comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Cash Flow Statement dealt with by this Report are in agreement with the books of account.

f. On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.

g. The reservation relating to maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified opinion paragraph.

i. With respect to the matter to be included in the Auditors'' Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by provisions of section 197 read with Schedule V to the Act. The Ministry of Corporate Affairs has not prescribed other details under section 197(16) of the Act which are required to be commented upon by us.

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 38 to the standalone financial statements.

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

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

iv. (a) The management has represented that, to the best of their knowledge and belief,

v. The Company has not declared or paid dividend during the year hence reporting of compliances of section 123 is not applicable.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.

For Sidharth N Jain& Company

Chartered Accountants Firm registration number:018311C

Sidharth Jain

Proprietor Membership No.: 134684 UDIN: 23134684BGVSRQ1877

Place: Lucknow Date: May 29, 2023

Mar 31, 2018

Report on the Ind AS financial statements

We have audited the accompanying standalone financial statements of Bajaj Hindusthan Sugar Limited (âthe Companyâ), which comprises the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managementâs Responsibility for the Ind AS financial statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and the 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.

Auditorâs Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, 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 auditorâs 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 Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 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, 2018 of its loss including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Material Uncertainty Related to Going Concern

As stated in Note No. 44 of the standalone financial statements, Company has incurred losses in current year and in past years resulting into reduction of considerable net worth to that extent. As at the year end, Company has overdue instalments of certain debts and dues payable to farmers for sugar cane purchases. The above factor indicates a material uncertainty, which may cast significant doubt about the Companyâs ability to continue as a going concern. However, based on the various corrective measures taken by Company including the restructuring of debts as stated in the said note, management is of the view that going concern of the accounting is appropriate.

Our opinion is not modified in respect of this matter.

Matter of Emphasis

As stated in Note No. 35 (e) of the standalone financial statements and as per representation given to us by the management of the Company, Optionally Convertible Debentures (OCDs) issued to lenders under S4A scheme carry yield to maturity (YTM) to be paid at agreed yield rate as premium at the time of redemption. The OCDs provide option to lenders a right to convert the outstanding OCDs into equity shares at a price determined in accordance with applicable laws (including ICDR regulations). Since premium to be paid is contingent on the occurrence of the event of redemption of OCDs, the YTM of â110.87 crore from the date of allotment of OCD till the year end is treated as contingent liability and would be accounted for as finance cost at the time of redemption of respective OCDs.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure-Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 including the Statement of Other Comprehensive income, Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act;

(e) The matters described under the material uncertainty related to going concern paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013;

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ to this report.

(h) With respect to the other matters to be included in the Auditorâs 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 Ind AS financial statements - Refer Note 35 to the financial statements;

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

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

Annexure âAâ referred to in paragraph 1 under the heading Report on other legal and regulatory requirements of our report of even date

i. In respect of its Fixed Assets:

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

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

(c) According to the information and explanations given to us, the immovable properties of the Company have been mortgaged with the lenders and the original title deeds are deposited with the lenderâs trustee. Based on the confirmation given by the trustee and verification of the copies of the title deeds / lease deeds in respect of immovable properties of free hold land, buildings and immovable properties of land that have been taken on lease and disclosed as fixed assets in the financial statement are held in the Companyâs name or in the Companyâs erstwhile name or in the name of companies amalgamated with the Company in past.

ii. In respect of its inventories:

As explained to us, physical verification of inventories have been conducted at reasonable intervals by the management, which in our opinion is reasonable, having regard to the size of the Company and nature of its inventories. No material discrepancies noticed on such verification of inventories as compared to the book records.

iii. On the basis of the audit procedures applied by us, and according to the information and explanations given to us on our enquiries on this behalf and records produced to us for our verification, the Company has not given loans and advances to Companies covered in the register maintained under Section 189 of the Act.

iv. In respect of loans, investments, guarantees and security, the Company has complied with the provisions of Sections 185 and 186 of the Act.

v. According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Therefore, the provisions of Clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi. To the best of our knowledge and as explained, the Company has maintained the cost records specified under Companies (cost records and audit) Rules, 2014 issued under sub section (1) of Section 148 of the Act, in respect of Companyâs products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

vii. In respect of Statutory dues:

(a) According to the records of the Company, undisputed statutory dues including Goods and Services Tax, Provident Fund, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it have been generally regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2018 for a period of more than six months from the date of becoming payable.

(b) On the basis of our examination of accounts and documents on records of the Company and information and explanations given to us upon enquires in this regard, the disputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Custom Duty and Excise Duty/Cess not deposited with the appropriated authorities are as under:

Name of statute	Nature of dues	Amount (Rs. in Crore)	Period	Forum where dispute is pending
Central Sales	Sales Tax,	22.41	Various year from 2010-11 to 2016-17	Commissioner Sales Tax/VAT
Tax Act, 1956 and Sales Tax Act/VAT Act of various states	VAT and Entry Tax	47.65	Various year from 1982-83 to 2013-14	Sales Tax Appellate Tribunal
Tax Act, 1956 and Sales Tax Act/VAT Act of various states	VAT and Entry Tax	3.42	Various year from 1989-90 to 2010-11	High Court
Central Excise Act, 1944	Excise and Service Tax	2.40	Various year from 1977-78 to 2015-16	Commissioner of Central Excise (Appeals)
		7.06	Various year from 1981-82 to 2013-14	Central Excise and Service Tax Appellate Tribunal
		5.59	Various year from 2004-05 to 2005-06	Supreme Court
		0.05		High Court
	Total	88.58

viii. In our opinion and according to the information and explanations given to us, the Company has delayed in repayment of dues to financial institutions, banks and government during the year. The lender-wise details of the default as on March 31, 2018 is tabulated as under:-

Particulars	Amount of Default as at March 31, 2018 (Rs. in Crore)
	Principal*	Interest**
Allahabad Bank	13.56	3.22
Bank of Baroda	3.28	0.92
Bank of India	1.93	0.43
Bank of Maharashtra	9.67	2.18
Canara Bank	6.58	1.78
Central Bank of India	9.32	2.48
Corporation Bank	8.00	1.23
IDBI Bank Ltd.	11.83	2.13
Indian Overseas Bank	2.93	0.72
Oriental Bank of Commerce	10.49	2.09
Punjab National Bank	19.68	4.95
State Bank of India	31.57	7.16
UCO Bank	4.25	1.06
IDBI Bank	-	0.12
Total	133.09	30.47

* The Principal amount is due for repayment on March 31, 2018 and has been not paid.

** The Interest amount is due for repayment on March 31, 2018 and has been paid thereafter in April 2018.

ix. The Company has not raised money by way of initial public offer or further public offer (including debt instruments) or term loan during the year and hence clause (ix) of paragraph 3 of the Order is not applicable to the Company.

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

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

xiii. In respect of transactions with related parties:

In our opinion and according to the information and explanations given to us, all transactions with related parties are in compliance with Sections 177 and 188 of the Act and their details have been disclosed in the financial statements etc., as required by the applicable accounting standards.

xiv. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures except for allotment of optionally convertible debentures during the year to the lenders pursuant to the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme) adopted by the Joint Lenderâs Forum (JLF) as stated in Note 16.1 to the standalone financial statement. In respect of the same, in our opinion, the Company has complied with the requirements of Section 42 of the Act and Rules framed thereunder. Further, the debentures have been issued by conversion of existing loans and no additional amounts are raised. Therefore, the question of utilisation of amounts raised does not arise.

xv. In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transaction with the directors or persons connected with him and covered under Section 192 of the Act. Hence, clause (xv) of the paragraph 3 of the Order is not applicable to the Company.

xvi. To the best of our knowledge and as explained, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Annexure âBâ to the Independent Auditorsâ Report Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

We have audited the Internal Financial Control over financial reporting of Bajaj Hindusthan Sugar Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year then ended.

Management Responsibility for the Internal Financial Controls

The Companyâs 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 Companyâs 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.

Auditorâs Responsibility

Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) 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 auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A Companyâs 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 Companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companyâs 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 March 31, 2018, 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 ICAI.

For Chaturvedi & Shah

Chartered Accountants

Firm Registration No. 101720W

Jignesh Mehta

Partner

Membership No. 102749

Mumbai

Dated: May 26, 2018

Mar 31, 2017

To the Members of Bajaj Hindusthan Sugar Limited

Report on the financial statements

We have audited the accompanying standalone financial statements of Bajaj Hindusthan Sugar Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Ind AS financial statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and change in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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, issued by the Institute of Chartered Accountants of India, 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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, 2017, of its loss including other comprehensive income, the changes in equity 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, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the "Annexure-A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 including the Statement of Other Comprehensive income, Statement of Changes in Equity 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 and the Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of Section 164 (2) of the Companies Act, 2013;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report;

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

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

- Refer Note 35 to the financial statements;

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

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

iv. The Company has provided requisite disclosures in the standalone financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O.3407(E) dated November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the Management, we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.

Annexure "A" referred to in paragraph 1 under the heading Report on other legal and regulatory requirements of our report of even date

i) In respect of its Fixed Assets:

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

b. As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. According to the information and explanations given to us, the immovable properties of the Company have been mortgaged with the lenders and the original title deeds are deposited with the lender''s trustee. Based on the confirmation given by the trustee and verification of the copies of the title deeds/lease deeds in respect of immovable properties of free hold land, buildings, immovable properties of land that have been taken on lease and disclosed as fixed assets in the financial statement are held in the Company''s name or in the Company''s erstwhile name or in the name of companies amalgamated with the Company in past as at balance sheet date.

ii) In respect of its inventories:

iii) On the basis of the audit procedures applied by us, and according to the information and explanations given to us on our enquiries on this behalf and records produced to us for our verification, the Company has not given loans and advances to companies covered in the register maintained under Section 189 of the Act.

iv) In respect of loans, investments, guarantees and security, the Company has complied with the provisions of Sections 185 and 186 of the Act.

v) According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Therefore, the provisions of Clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi) To the best of our knowledge and as explained, the Company has maintained the cost records specified under Companies (Cost Records and Audit) Rules, 2014 issued under sub section (1) of Section 148 of the Act, in respect of Company''s products to which said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

vii) In respect of Statutory dues:

a. According to the records of the Company, undisputed statutory dues including provident fund, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it have been generally regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2017 for a period of more than six months from the date of becoming payable.

b. On the basis of our examination of accounts and documents on records of the Company and information and explanations given to us upon enquiries in this regard, the disputed amounts payable in respect of income tax, sales tax, service tax, customs duty and excise duty/cess not deposited with the appropriate authorities are as under:

Name of statute	Nature of dues	Amount (Rs, in Crore)	Period	Forum where dispute is pending
Central Sales	Sales Tax,	8.85	Various year from 2001-02 to 2016-17	Commissioner Sales Tax/VAT
Tax Act, 1956 and Sales Tax Act/VAT Act of various states	VAT and Entry Tax	47.65	Various year from 1982-83 to 2014-15	Sales Tax Appellate Tribunal
Tax Act, 1956 and Sales Tax Act/VAT Act of various states	VAT and Entry Tax	3.42	Various year from 1989-90 to 2010-11	High Court
Central Excise Act, 1944	Excise and Service Tax	0.25	Various year from 1977-78 to 2015-16	Commissioner of Central Excise (Appeals)
		16.35	Various year from 1981-82 to 2013-14	Central Excise and Service Tax Appellate Tribunal
		5.59	Various year from 2004-05 to 2005-06	Supreme Court
	Total	82.11

viii) In our opinion and according to the information and explanations given to us, the Company has delayed in repayment of dues to financial institutions, banks and government during the year. The Lender-wise details of the default as on March 31, 2017 is tabulated as under:-

Particulars	Amount of Default as at March 31, 2017 (Rs, in Crore)
	Principal*	Interest**
Allahabad Bank	31.13	7.06
Bank of Baroda	7.55	1.71
Bank of India	4.45	1.01
Bank of Maharashtra	22.25	5.05
Canara Bank	15.13	3.42
Central Bank of India	22.89	5.16
Corporation Bank	10.27	2.32
IDBI Bank Ltd.	20.61	4.65
Indian Overseas Bank	6.67	1.50
Oriental Bank of Commerce	20.32	4.62
Punjab National Bank	42.15	9.63
State Bank of Hyderabad	7.24	1.64
State Bank of India	50.26	11.09
State Bank of Patiala	12.46	2.83
UCO Bank	9.80	2.23
Total	283.18	63.91

The Company has not issued debentures.

*The Principal amount is due for repayment as on the balance sheet date and has been not paid.

** The Interest amount is due for repayment as on balance sheet date and has been paid within 30 days.

ix) The Company has not raised money by way of initial public offer or further public offer (including debt instruments) or term loan during the year and hence clause (ix) of paragraph 3 of the Order is not applicable to the Company.

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

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

xiii) In respect of transactions with related parties:

xiv) In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and hence clause (xiv) of paragraph 3 of the Order is not applicable to the Company.

xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transaction with the directors or persons connected with him and covered under Section 192 of the Act. Hence, clause (xv) of the paragraph 3 of the Order is not applicable to the Company.

xvi) To the best of our knowledge and as explained, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Annexure "B" to the Independent Auditors'' Report

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the Internal Financial Control over financial reporting of Bajaj Hindusthan Sugar Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year then ended.

Management Responsibility for the 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.

Auditor''s Responsibility

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

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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 March 31, 2017, 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 ICAI.

For Chaturvedi & Shah

Chartered Accountants

Firm Registration No. 101720W

Jignesh Mehta

Partner

Membership No. 102749

Mumbai

Dated: May 25, 2017

Mar 31, 2016

Report on the Financial Statements

We have audited the accompanying financial statements of Bajaj Hindustan Sugar Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the Financial Statements

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

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 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 loss and its cash flows for the year ended on that date.

Emphasis of matter

As stated in Note 41 of the accompanying financial statements, the Company carries investment of Rs, 693.72 crore by way of beneficial interest in trust. Also, Company has investment of Rs, 720.52 crore in Preference shares and Debentures of Phenil Sugars Limited. The realizable value of these investments has reduced substantially. For the reasons stated in the note and in view of long term nature of these investments, in the opinion of the management no provision for permanent diminution in value of these investments is considered necessary.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Act, we give in the Annexure "A" a statement on the matters specified in paragraphs 3 and 4 of the Order,

2. As required by Section 143(3) of the Act, we report that:

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

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

c. The matter described in the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company,

d. 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.

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

f. On the basis of 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.

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

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

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

- Refer Note 35 to the financial statements.

ii. The Company did not have any long term contracts including derivative contracts that require provision under any law or accounting standards for which there were any material foreseeable losses.

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

Annexure "A" referred to in paragraph 1 under the heading Report on other legal and regulatory requirements of our report of even date

i) In respect of its Fixed Assets :

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

c. According to the information and explanations given to us, the immovable properties of the Company have been mortgaged with the lenders and the original title deeds are deposited with the lender''s trustee. Based on the confirmation given by the trustee and verification of the copies of the title deeds / lease deeds in respect of immovable properties of free hold land, buildings, immovable properties of land that have been taken on lease and disclosed as fixed assets in the financial statement are held in the Company''s name or in the Company''s erstwhile name or in the name of companies amalgamated with the Company in past as at balance sheet date.

ii) In respect of its inventories :

iv) In respect of loans, investments, guarantees and security, the Company has complied with the provisions of Sections 185 and 186 of the Act.

vii) In respect of Statutory dues :

a. According to the records of the Company, undisputed statutory dues including Provident Fund, Income-Tax, Sales-Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it have been regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2016 for a period of more than six months from the date of becoming payable.

b. On the basis of our examination of accounts and documents on records of the Company and information and explanations given to us upon enquiries in this regard, the disputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Customs Duty and Excise Duty/Cess not deposited with the appropriate authorities are as under:

Name of Statute	Nature of Dues	Amount (Rs, in Crore)	Period	Forum where dispute is Pending
Central Sales Tax Act, 1956,	Sales Tax, VAT & Entry	27.26	Various Years from 1997-98 to 2014-15	Deputy/ Joint Commissioner/ Commissioner (Appeals)
and Sales Tax	Tax	48.76	Various Years 1982-83 to 2013-14	Sales Tax Appellate Tribunal
Act / VAT Act of various states		1.80	Various Years from 1989-90 to 2010-11	High Court
Central Excise Act, 1944	Excise and Service Tax	0.21	Various Years from 2005-06 to 2012-13	Commissioner of Central Excise (Appeals)
		126.14	Various Years from 2005-06 to 2012-13	Central Excise and Service Tax Appellate Tribunal
		1.03	Various Years from 2005-06 to 2013-14	High Court
		5.59	Various Years from 2004-05 to 2005-06	Supreme Court
Income Tax Act, 1961	Income Tax	9.59	Assessment Year 2006-07 & 2007-08	Commissioner of Income Tax (Appeal)
	Total	220.38

viii) Based on our audit procedures, information and explanations given by the management and considering the corrective action plan for restructuring of credit facilities of the Company approved under JLF route in accordance with the applicable framework and guidelines issued by RBI, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and government. The Company has not issued debentures.

xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause (xii) of paragraph 3 of the Order are not applicable to the company.

xiii) In respect of transactions with related parties:

xiv) In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment or private placement of fully or partly convertible debentures during the year and hence clause (xiv) of paragraph 3 of the Order is not applicable to the Company,

xvi) To the best of our knowledge and as explained, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Annexure "B" to the Independent Auditors'' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the Internal Financial Control over financial reporting of Bajaj Hindusthan Sugar Limited ("the company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year then ended.

Management responsibility for the 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.

Auditor''s responsibility

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

Meaning of Internal Financial Controls Over Financial Reporting

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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 March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For Chaturvedi & Shah

Chartered Accountants

Firm Registration No. 101720W

Jignesh Mehta

Partner

Membership No. 102749

Mumbai

Dated: May 30, 2016

Mar 31, 2015

We have audited the accompanying financial statements of BAJAJ HINDUSTHAN SUGAR 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 Financial Statements

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

Auditors' responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 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 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, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of matter

1. We draw attention to note 36 (I) (a) (iv) and note 40 of the accompanying financial statements in respect of contingency related to recompense payable in lieu of bank sacrifice, the outcome of which is materially uncertain and cannot be determined currently.

2. As stated in note 42 of the accompanying financial statements, the Company carries investment of Rs. 693.72 crore by way of beneficial interest in trust. Also, Company has investment of Rs. 720.52 crore in Preference shares and Debentures of Phenil Sugars Limited. The realisable value of these investments has reduced substantially. For the reasons stated in the notes and in view of long term nature of these investments, management does not expect any provision for permanent diminution in value of these investments.

Report on other legal and regulatory requirements

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

2. As required by Section 143(3) of the Act, we report that:

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

b. In our opinion, proper books of account as required by 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 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 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015, from being appointed as a director in terms of Section 164(2) of the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 36(I)(a) to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts that require provision under any law or accounting standards for which there were any material foreseeable losses.

iii. There were no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company during the year.

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE

i) In respect of its Fixed Assets :

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

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

ii) In respect of its inventories:

a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii) On the basis of the audit procedures applied by us, and according to the information and explanations given to us on our enquiries on this behalf and records produced to us for our verification, the Company has not given loans and advances to companies 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 an adequate internal control system commensurate with the size of the Company and nature of its business for the purchases of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

v) According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Therefore, the provisions of Clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi) To the best of our knowledge and as explained, the Company has maintained the cost records specified under Companies (Cost Records and Audit) Rules, 2014 issued under sub Section (1) of Section 148 of the Act, in respect of Company's product to which the said rules are made applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

vii) In respect of Statutory dues :

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it have been regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2015 for a period of more than six months from the date of becoming payable.

b) On the basis of our examination of accounts and documents on records of the Company and information and explanations given to us upon enquiries in this regard, the disputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and Excise Duty/Cess not deposited with the appropriated authorities are as under:

Name Nature Amount Period Forum where dispute is of statute of dues Rs in pending crore) Central Sales Tax, 2.80 Various Deputy/ Joint Sales Tax VAT & Years from Commissioner/ Act, 1956, Entry Tax 1997-98 to Commissioner and Sales 2013-14 (Appeals) TaxAct/ 57.50 Various Sales Tax VAT Act of Years Appellate Various 1982-83 to Tribunal states 2013-14 3.52 Various High Court Years from 1989-90 to 2010-11 Central Excise and 1.26 Various Commissioner Excise Service Years from of Central Act, 1944 Tax 1981-82 to Excise (Appeals) 2012-13 18.74 Various Central Excise Years from and Service tax 2002-03 to Tribunal 2012-13 0.31 Various High Court Years from 1981-82 to 2010-11 5.59 Various Supreme Court Years from 2004- 05 to 2005- 06

Income Income 9.59 Assessment Commissioner Tax Tax Years 2006-07 of Income Tax Act, 1961 & 2007-08 (Appeal) 8.90 Various Commissioner Assessment of Income Tax Years from (Appeal) 2010-11 to 2015-16 (TDS)

Total 108.21

c) There were no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company during the year.

viii) The Company's accumulated losses at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

ix) Based on our audit procedures, information and explanations given by the management and considering the corrective action plan for restructuring of existing credit facilities of the Company approved under JLF route in accordance with the applicable framework and guidelines issued by RBI, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions and banks. The Company has not issued debentures.

x) In our opinion and according to the information and explanations given to us, the Company has given guarantee for loans taken by subsidiary/ associate from Banks. The terms and conditions where of in our opinion are not prima facie prejudicial to the interest of the Company.

xi) Based on the information and explanation given to us by the management, the term loans were applied for the purpose for which the loans were obtained.

xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we have not come across any instance of material fraud on or by the Company, noticed or reported during the period, nor have been informed of such case by the management.

For Chaturvedi & Shah Chartered Accountants Registration No.: 101720W Amit Chaturvedi Partner Membership No. 103141

Place: Mumbai Dated: May 28, 2015

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of BAJAJ HINDUSTHAN LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Prof t and Loss and Cash Flow Statement for the eighteen months period 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 ("the Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

Opinion

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

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

b) in the case of the Statement of Prof t and Loss, of the loss of the Company for the period ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows of the Company for the period 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. 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 Prof t 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 Prof t and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956, read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

e) on the basis of written representations received from the directors as on 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 REFERRED TO IN INDEPENDENT

AUDITOR''S REPORT

RE: BAJAJ HINDUSTHAN LIMITED (''THE COMPANY'')

[Referred to in paragraph (1) under the heading ("Report on Other Legal and Regulatory Requirements") of our Report of even date.]

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

b) As explained to us, all the foxed assets have been physically verified by the management in a phased periodical manner as per regular programme of verification, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification;

c) In our opinion, the Company has not disposed off substantial part of its fixed assets during the period and the going concern status of the Company is not affected.

2. In respect of its inventories:

a) As explained to us, the inventory has been physically verified by the management at reasonable intervals, during the period;

b) As explained to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business;

c) According to the inventory records produced to us for our verification, we are of the opinion that the Company is maintaining proper records of inventory. The differences between the physical verification of inventories, as compared to book records, though not material, have been properly dealt with in the books of account.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has given unsecured loans to three subsidiary companies. In respect of the said loans, the maximum amount outstanding at any time during the period is Rs. 1097.56 crore and the year end balance is Rs. 1097.56 crore;

b) In our opinion and according to information and explanations given to us, the rate of interest, where applicable and the other terms and conditions of the loans given by the Company, are not, prima facie prejudicial to the interest of the Company;

c) The principal amounts are repayable on demand and there is no repayment schedule. The interest is payable on demand;

d) In respect of said loans, the interest is payable on demand and therefore the question of overdue amount doesn''t arise;

e) The Company has not taken any loan during the period from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirements of Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable.

4. 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 inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a) On the basis of the audit procedures applied by us, and according to the information and explanations given to us on our enquiries on this behalf and the records produced to us for our verification, the contracts or arrangements that need to be maintained under Section 301 of the Companies Act, 1956 have been so entered;

b) The transaction so entered, aggregating in excess of Rs. 5,00,000/- in respect of each party during the period, have been, in our opinion, as per the information and explanations given to us, made at prices, which are reasonable having regard to the prevailing market prices available at which transactions for similar goods have been made with other parties at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued under Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposit accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of Company''s product to which the said rules are made applicable and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

9. In respect of statutory dues:

a) According to the records of the Company, the Company has been generally regular in depositing with statutory authorities, undisputed statutory dues, including provident fund, income-tax, sales-tax, wealth-tax, service tax, customs duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding, as at March 31, 2014 for a period of more than six months from the date they became payable.

b) On the basis of our examination of documents on records of the Company and information and explanations given to us upon our inquiries in this regard, the disputed amounts payable in respect of Income tax, Sales tax, Wealth tax, Service tax, Customs duty and Excise Duty/Cess not deposited with the appropriate authorities are as under:

Name Nature Amount Period Forum where of the of ( Rs. in for dispute is Statute Dues crore) which pending amount relates

Central Sales 15.57 Various Deputy/Joint Sales Tax, years from Commissioner/ Tax Act, VAT 1997-98 Commissioner 1956 and to (Appeals) and Entry 2012-13

Sales Tax Tax Act/VAT Act of various states

44.36 Various Sales Tax years from Appellate 1982-83 Tribunal to 2012-13

1.80 Various High Court years from 1989-90 to 2009-10

Central Excise 5.30 Various Commissioner Excise and years from of Central Act, Service 1981-82 to Excise 1944 Tax 2012-13 (Appeals)

19.29 Various Central Excise years from and Service 1981-82 to Tax Appellate 2011-12 Tribunal

0.93 Various High Court years from 1989-90 to 2009-10

12.42 Various Supreme Court years from 2004-05 to 2005-06

Total 99.67

10. The Company has accumulated losses at the end of the financial period, which are less than fifty percent of its net worth. The Company has incurred cash losses during the period covered under the audit, but has not incurred cash losses in the immediately preceding financial year.

11. Based on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions and banks. The Company has not issued debentures

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities

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

14. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name.

15. The Company has given guarantee for loans taken by its erstwhile subsidiary/associate from banks. The terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the Company.

16. Based on the information and explanation given to us by the management, the term loans were applied for the purpose for which the loans were raised.

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

18. The Company has not made during the period any preferential allotment of shares to Companies, firms, parties covered under register maintained under Section 301 of the Companies Act, 1956.

19. In our opinion and according to the information and explanations given to us, the Company has not issued any secured debentures during the period covered by our report. Accordingly, provisions of clause (xix) of paragraph 4 of the Order are not applicable.

20. The Company has not raised any money by public issues during the period.

21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we have not come across any instance of material fraud on or by the Company, noticed or reported during the period, nor have been informed of such case by the management.

For and on behalf of

CHATURVEDI & SHAH

Firm Registration No. 101720W

Chartered Accountants

Amit Chaturvedi

Partner

Membership No. 103141

Place: Mumbai

Date: May 16, 2014

Sep 30, 2012

We have audited the attached Balance Sheet of BAJAJ HINDUSTHAN LIMITED (''the Company'') as at September 30, 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

2. As required by the Companies (Auditor''s Report) Order 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

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

e) On the basis of written representations received from the Directors as on September 30, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on September 30, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required, and present 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 September 30, 2012;

(ii) in the case of the Statement of Profit and Loss, 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 REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE RE: BAJAJ HINDUSTHAN LIMITED (THE COMPANY'')

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

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner as per regular programme of verification, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification;

c) In our opinion, the Company has not disposed of substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

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

b) As explained to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business;

c) According to the inventory records produced to us for our verification, we are of the opinion that the Company is maintaining proper records of inventory, if any, referred to above, as compared to book records, though not material, have been properly dealt with in the books of account.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has given unsecured loans to three subsidiary companies of which one of the subsidiary company was merged with the Company. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 1,018.73 crore and the year end balance is Rs.740.70 crore;

b) In our opinion and according to the information and explanations given to us, the rate of interest, where applicable and the other terms and conditions of the loans given by the Company, are not, prima facie prejudicial to the interest of the Company;

c) The principal amounts are repayable on demand and there is no repayment schedule. The interest is payable on demand;

d) In respect of said loans, the same is repayable on demand and therefore the question of overdue amount doesn''t arise;

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

4. 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 inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In respect of contracts or arrangements referred to in section 301 of the Companies Act, 1956:

a) On the basis of the audit procedures applied by us, and according to the information and explanations given to us on our enquiries on this behalf and the records produced to us for our verification, the contracts or arrangements that need to be maintained under Section 301 of the Companies Act, 1956 have been so entered;

b) The transaction so entered, aggregating in excess of Rs. 5,00,000/- in respect of each party during the year, have been, in our opinion, as per the information and explanations given to us, made at prices, which are reasonable having regard to the prevailing market prices available at which transactions for similar goods have been made with other parties at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued under section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposit accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of Company''s product to which the said rules are made applicable and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

9. In respect of statutory dues:

a) According to the records of the Company, the Company has been generally regular in depositing with statutory authorities, undisputed statutory dues, including Provident Fund, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding, as at September 30, 2012 for a period of more than six months from the date they became payable;

b) On the basis of our examination of documents on records of the Company and information and explanations given to us upon our inquiries in this regard, the disputed amounts payable in respect of Income tax, Sales tax, Wealth tax, Service tax, Customs duty and Excise Duty/Cess not deposited with the appropriate authorities are as under:

Name Nature Amount Period Forum where of the of (Rs. in for dispute is Statute Dues crores) which pending amount relates

Central Sales 25.34 Various Deputy/Joint Sales Tax, years from Commissioner/ Tax Act, VAT 1997-98 Commissioner 1956 and to 2011- (Appeals) and Entry 12 State Tax Sales Tax Act/VAT Act of various states

1.23 Various Sales Tax years from Appellate 1982-83 Tribunal to 2011-12

0.43 Various High Court years from 1989-90 to 2006-07

Central Excise 3.02 Various Commissioner Excise and years from of Central Act, Service 1981-82 to Excise 1944 Tax 2011-12 (Appeals)

26.38 Various Central Excise years from and Service 1981-82 to Tax Appellate 2010-11 Tribunal

Total 56.40

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

11. Based on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order 2003, (as amended) are not applicable to the Company

14. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name.

15. The Company has given guarantee for loans taken by its one subsidiary company from banks; the terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the Company

16. Based on the information and explanations given to us by the management, the term loans were applied for the purpose for which the loans were obtained.

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

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

19. In our opinion and according to the information and explanations given to us, the Company has not issued any secured debentures during the period covered by our report. Accordingly, provisions of clause (xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable.

20. The Company has raised monies by way of right issue of equity shares during the year. We have verified the end use of monies raised by rights issues of equity shares and the same has been disclosed in Note 41.

21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we have not come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have been informed of such case by the management.

For and on behalf of

CHATURVEDI & SHAH

Firm Registration Number : 101720W

Chartered Accountants

Amit Chaturvedi

Partner

Membership No. 103141

Place: Mumbai

Date: November 26, 2012

Sep 30, 2010

We have audited the attached Balance Sheet of BAJAJ HINDUSTHAN LIMITED as at 30th September, 2010, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These Financial Statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

2. As required by the Companies (Auditors Report) Order, 2003 (CARO, 2003), (as amended) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act,1956, we annex hereto a Statement on the matters specified in paragraph 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 above, we report that:- (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

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

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

(e) On the basis of the written representations received from the Directors, as on 30th September, 2010 and taken on record by the Board of Directors, we report that none of the Directors are disqualifed as on 30th September, 2010, from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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

(a) in the case of the Balance Sheet, of the state of the affairs of the Company as at 30th September, 2010;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE Re : BAJAJ HINDUSTHAN LIMITED (ÃÃthe Company")

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

b) As explained to us, all the fxed assets have been physically verifed by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verifcation.

c) In our opinion, the Company has not disposed off substantial part of its fxed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a) As explained to us, the inventories have been physically verifed by the management at reasonable intervals during the year;

b) As explained to us, the procedures of physical verifcation of the inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business;

c) According to the inventory records produced to us for our verifcation, we are of the opinion that the Company is maintaining proper records of its inventory. Further, discrepancies noticed on physical verifcation of inventories, if any, referred to above, as compared to book records, though not material, have been properly dealt with in the books of account.

3. In respect of the loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has given loans to three subsidiary companies. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 2,193.23 crores and the same has been squared off during the year.

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

c) The principal amounts are repayable on demand and there is no repayment schedule. The interests is payable on demand.

d) In respect of the said loans, the same have been repaid during the year. Therefore question of repayment overdue amount does not arise.

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

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

5. According to information and explanation given to us, there are no contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301. Therefore, the provisions of clause 5 (b) of the Companies (Auditors Report) Order 2003, (as amended) is not applicable to the Company.

6. In our opinion and according to the information and explanations given to us the company has complied with the directives issued by the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of Companys products to which the said rules are made applicable and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

9. In respect of statutory dues:

a) According to the records of the Company, the Company has been generally regular in depositing with statutory authorities, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess were outstanding, at the year end for a period of more than six months from the date they became payable.

b) On the basis of our examination of the documents and records of the Company and the information and explanations given to us upon our inquiries in this regard, there were no disputed amounts payable in respect of Income-tax, Sales Tax, Wealth-tax, Service tax, Customs Duty and Excise Duty/cess and not deposited with the appropriate authorities other than those stated hereunder :

Name of the Nature of Dues Amount Period for Forum where Statute (Rs. in which amount dispute is crores) relates pending

Central Sales Sales Tax, 0.61 Various years Deputy/Joint Tax Act, 1956 VAT and Entry from 1997-98 Commissioner /Commi- and State Sales Tax to 2009-10 ssioner (Appeals) Tax Act/VAT Act of various states

0.58 Various years Sales Tax Appellate from 1997-98 Tribunal to 2007-08

0.63 Various years High Court from 1985-86 to 2006-07

Central Excise Excise and 6.45 Various years Commissioner of Act, 1944 Service Tax from 1999- Central Excise 2000 to 2009-10 (Appeals)

19.44 Various years Central Excise and from 1981-82 Service Tax Appellate to 2008-09 Tribunal

0.10 1994 High Court

Total 27.81

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

11. Based on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi/ mutual Benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order 2003, (as amended) are not applicable to the Company.

14. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name.

15. The Company has given guarantee for loans taken by its two subsidiary companies from banks; the terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the company.

16. Based on the information and explanations given to us by the management, the term loans were applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us and on 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.

18. The Company has not made any preferential allotment of shares to companies/ firms/ parties covered in the register maintained under section 301 of the Companies Act, 1956, except the shares issued during the year against the warrants allotted during the previous year on preferential basis to promoter group in according with the SEBI preferential issue guidelines.

19. In our opinion and according to the information and explanations given to us, the Company has not issued any secured debentures during the period covered by our report. Accordingly, provisions of clause (xix) of the Companies (Auditors Report) Order, 2003 are not applicable.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For and on behalf of

CHATURVEDI & SHAH

Firm Registration No. 101720W Chartered Accountants

RAJESH CHATURVEDI

Partner Membership No. 45882

Mumbai, December 20, 2010

Sep 30, 2009

We have audited the attached Balance Sheet of BAJAJ HINDUSTHAN LIMITED, as at 30th September, 2009, 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.

1. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An Audit includes examining, on a test basis, evidence supporting the amounts and disclosures in 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 reasonable basis for our opinion.

2. As required by the Companies (AuditorsÃ Report) Order, 2003 (CARO, 2003), (as amended) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act,1956, we annex hereto a Statement on the matters specified in paragraph 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 above, we report that:- (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

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

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

(e) On the basis of the written representations received from the Directors, as on 30th September, 2009 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 30th September, 2009, from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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

(a) in the case of the Balance Sheet, of the state of the affairs of the Company as at 30th September, 2009;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITORS REPORT OF EVEN DATE ON THE ACCOUNTS FOR THE YEAR ENDED 30TH SEPTEMBER, 2009 OF BAJAJ HINDUSTHAN LIMITED

On the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we state that:- i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. Additions and deductions made during the year as per Companys practice, will be entered in the said records during the current year (i.e.2009-2010). As explained to us, physical verification has been conducted by the management during the year covering major portion of its fixed assets in phased manner to cover all assets over a period of two years, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. As informed, no material discrepancies were noticed on such verification.

As per the information and explanation given to us on our enquiries, the disposal of assets during the year were not substantial so as to have an impact on the operations of the company, or affect its going concern;

ii) (a) As explained to us, the inventories have been

physically verified by the management at reasonable intervals during the year and/or at the close of the year;

(b) As explained to us, the procedures of physical verification of the inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) According to the inventory records produced to us for our verification, we are of the opinion that the Company is maintaining proper records of its inventory. Further, discrepancies noticed on physical verification of inventories, if any, referred to above, as compared to book records, though not material, have been properly dealt with in the books of account;

iii) The Company has not taken/granted any loans, secured or unsecured from/to Companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, except loans granted on current account to its Subsidiaries, the rate of interest and terms and conditions were not prima-facie prejudicial to the interest of the Company. The outstanding dues as at the year end from Subsidiary Companys amounted Rs. 4013.02 Million.

iv) In our opinion and according to the information and explanations given to us, there are generally adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory and fixed assets and for the sale of goods. There was no sale of services during the year. During the course of our audit, no major weaknesses in internal control had come to our notice;

v) (a) On the basis of the audit procedures applied by us, and according to the information and explanations given to us on our enquiries on this behalf and the records produced to us for our verification, the contracts or arrangements that need to be entered into the register required to be maintained under Section 301 of the Companies Act, 1956 have been so entered;

(b) The transactions so entered, aggregating in excess of Rs.5,00,000/- in respect of each party during the year, have been, in our opinion, as per the information and explanation given to us, made at prices, which are reasonable, having regard to the prevailing market prices available with the Company for such transactions or prices at which transactions for similar goods have been made with other parties at the relevant time;

vi) In our opinion, and according to the information and explanations given to us, the Company has complied with the directives issued by the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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 books of account

maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of Companys products to which the said rules are made applicable and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

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

(b) On the basis of our examination of the documents and records of the Company and the information and explanations given to us upon our inquiries in this regard, disputed amounts payable in respect of Income tax, Sales Tax, Wealth tax, Service tax, Customs Duty and Excise Duty / cess not deposited with the appropriate authorities are as follows:

Sr. STATUTES FORUMS BEFORE WHOM PENDING TOTAL No

Commissioner Tribunal High Supreme Appeals Court Court Rs. Rs. Rs. Rs. Rs.

1 Sales Tax / 13663 228308 3300612 - 3542583 Trade Tax

2 Excise Duty 241496276 67090287 - - 308586563

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

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

xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) All investments held by the Company at the close of the year are held in its own name.

xiv) The Company has given guarantee for loans taken by its subsidiary from a bank, the terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the Company.

xv) Based on the information and explanations given to us by the management the term loans were applied for the purpose for which the loans were obtained.

xvi) According to the information and explanations given to us and on 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.

xvii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under section 301 of the Companies Act, 1956. However, the Company has during the year allotted warrants on preferential basis to promoter group in accordance with the SEBI preferential issue guidelines.

xviii) According to the information and explanations given to us and records examined by us, in respect of secured debentures issued during the year, security/charge is pending for creation.

xix) The Company has not raised any money by public issues during the year.

xx) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

In view of the nature of activities carried on by the Company clause no. (xiii) of CARO, 2003 is not applicable to the Company.

For and on behalf of

DALAL & SHAH

Chartered Accountants

SHISHIR DALAL

Partner Membership No. 37310

Mumbai,

15th December, 2009

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