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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 Jagatjit Industries Ltd.

Mar 31, 2025

We have audited the accompanying standalone financial statements
of Jagatjit Industries Limited [âthe Company"], which comprise
the Balance Sheet as at March 31, 2025, the Statement of Profit
and Loss [including Other Comprehensive Income], the Statement of
Changes in Equity and the Statement of Cash Flows for the year ended
on that date, notes to the standalone financial statements, including
a summary of the material accounting policy information and other
explanatory information.

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 Companies Act, 2013 [âthe
Act"] in the manner so required and give a true and fair view in
conformity with the Indian Accounting Standards prescribed under
section 133 of the Act read with the Companies [Indian Accounting
Standards] Rules, 2015, as amended, [âInd AS"] and other accounting
principles generally accepted in India, of the state of affairs of the
Company as at March 31,2025, its loss and total comprehensive
income, changes in equity and its cash flows for the year ended on
that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing [SAs] specified under
section 143[10] of the Act. 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 [ICAI] together
with the ethical requirements that are relevant to our audit of the
standalone financial statements under the provisions of the Act and
the Rules made thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAI''s
Code of Ethics.

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.

Key Audit Matters

1. Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the standalone
financial statements for the financial year ended March
31,2025. 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.

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

The Key Audit Matter

How the matter was addressed in our audit

1) Provision and contingent liabilities relating to taxation, litigation and
claims [as described in note, 31 of the financial statements.)

The company operates in various states within India, exposing it to a
variety of different Central and State Laws, Regulations and different
interpretations thereof. In this regulatory environment, there is an
inherent risk of litigation and claims.

Consequently, provisions and contingent liability disclosures may arise
from direct and indirect tax proceeding, legal proceedings including
regulatory and other government/department proceedings, as well
as investigations by authorities and commercial claims.

The level of management judgement associated with determining the
need for, and the quantum of, provisions for any liabilities and
disclosures of any contingent liabilities arising from these litigations is
considered to be high. This judgement is dependent on a number of
significant assumptions and assessments which involves interpreting
the various applicable rules, regulations, practices and considering
precedents in the various jurisdictions, for which the management uses
various subject matter experts.

In view of the uncertainty relating to the outcome of these litigations,
the significance of the amounts involved, and the subjectivity involved in
management''s judgement, this matter has been considered as a key
audit matter for the current year audit.

Our procedures included the following:

Assessed the appropriateness of the Company''s accounting
policies relating to provisions and contingent liabilities, in
accordance with the applicable accounting standards.

Obtained an understanding of the process, and evaluated the
design and tested the operating effectiveness of the key
internal controls around the recording and assessment ol
provisions and contingent liabilities.

On a sample basis, obtained and assessed the Company''s
assumptions and estimates in respect of litigations, including
the liabilities or provisions recognised or contingent liabilities
disclosed in the standalone financial statements, by reviewing
the appropriateness of the probability assessment ol
unfavourable outcomes of various litigations, with the help of
auditor''s subject matter specialists, wherever required.

Perused the orders of Assessing officer Appellate authorities
and the related Jurisdictional High Court judgment/other
courts on the matter.

On a sample basis, performed substantive procedures on the
underlying calculations supporting the amount involved
recorded as provisions or disclosed as contingent liability; and

The Key Audit Matter

How the matter was addressed in our audit

evaluated the appropriateness and adequacy of related
disclosures in the standalone financial statements in
accordance with applicable accounting standards.

2) Revenue recognition from sale of products/ Royalty and Franchise
agreements

(Note no 20 of the standalone financial statements)

Revenue from sale of products is recognised when control of products
has been transferred to the customer and there is no unfulfilled
obligation that could affect the customer''s acceptance of the products.
Revenue from sale of products is measured at the fair value of the
consideration received or receivable, net of returns and allowances,
discounts and incentives. Revenue generated on account of Royalty as
per commercial agreements is subject to waiver in respect of Minimum
Guarantee Quantum based on the premise of commercial expediency.

Our procedures included the following:

â¢ Assessed the Company''s revenue recognition accounting
policy for sale of products/ royalty and franchise
business including those relating to discounts and
incentives as per Ind As -115.

â¢ Understood, evaluated and tested on sample basis the
design and operating effectiveness of key internal
controls over recognition and measurement of revenue,
discounts, and incentives.

â¢ Performed test of details on a sample basis and
inspected the underlying accounting documents relating
to sales and accrual of discounts and incentives.

â¢ Tested on a sample basis, sales transactions during the
year.

â¢ Performed analytical procedures on revenue on all
streams.

â¢ Assessed the disclosures in the standalone financial
statements in respect of revenue, discounts and
incentives for compliance with disclosure requirements.

Information Other than the Standalone Financial Statements
and Auditorâs Report Thereon

The Company''s management and Board of Directors are
responsible for the preparation of 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, Corporate Governance Report etc. included in
Annual Report, 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
during the course of our audit or otherwise appears to be materially
misstated. In connection with the information included in the Annual
report i.e. Directors Report, Management Discussion and Analysis,
Corporate Governance Report, 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 this fact. We have
nothing to report in this regard.

Managementâs Responsibility for the Standalone Financial
Statements

The accompanying standalone financial statements have been
approved by the Company''s Board of Directors. The Company''s
Board of Directors is responsible for the matters stated in section
1 34(5) of the Act with respect to the preparation and presentation
of these standalone financial statements that give a true and fair

view of the financial position, financial performance including other
total comprehensive income, changes in equity and cash flows of
the Company in accordance with the Ind AS specified under Section
133 of the Act and other accounting principles generally accepted
in India. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy
and completeness of 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, the Board of
Directors management is 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 management either
intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.

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

Auditorâs Responsibilities for the Audit of the Standalone
Financial Statements

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 SAs specified under Section
143(10) of the Act, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:

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.

Obtain an understanding of internal controls 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

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

Conclude on the appropriateness of the Board of Directors 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.

Evaluate the overall presentation, structure and content of the
standalone financial statements, including the disclosures, and
whether the standalone 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.

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) Further to our comments in Annexure B, as required by Section

143(3) of the Act based on our audit, we report, to the extent

applicable, 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 of the
accompanying standalone financial statements;

(b) In our opinion proper books of account as required by law
have been kept by the Company so far as it appears from
our examination of those books read with our remarks for
certain matters in respect of audit trail as required under
Rule 11(g) of the Companies (Audit and Auditors) Rules,
2014 (as amend as stated in paragraph (i)(vi) below.

(d) In our opinion, the aforesaid standalone financial
statements comply with the Ind As as specified under
Section 133 of the Act.

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

(f) The modifications relating to the maintenance and other
matters connected therewith in respect of audit trail as
stated in the paragraph 1(b) above on reporting under
section 143 (3) (b) of the Act and paragraph (i)(vi) below
on reporting under Rule 11 (g) of the Companies (Audit
and Auditors) Rules, 2014 (as amended);

(g) With respect to the adequacy of the internal financial
controls with reference to financial statements of the
Company as on 31st March, 2025 and the operating
effectiveness of such controls, refer to our separate
report in âAnnexure Aâ wherein we have expressed an
unmodified opinion; and

(h) As required by Section 197(16) of the Act based on our
audit, we report that the Company has paid remuneration
to its directors during the year in accordance with the
provisions of and limits laid down under Section 197 read
with Schedule V to the Act.

(i) 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 (as
amended), in our opinion and to the best of our information
and according to the explanations given to us:

(i) The Company, as detailed in Note 31 to the standalone
financial statements, has disclosed the impact of pending

litigations on its financial position as at 31st March, 2025;

[ii] The Company did not have any long term contracts
including derivative contracts for which there were any
material foreseeable losses as at 31st March, 2025.

[iii] There has been no delay in transferring amounts, required
to be transferred, to the Investor Education and Protection
Fund by the Company during the year ended 31st March,
2025;

[iv] [a] The Management has represented that, to the best

of its knowledge and belief, no funds [which are
material either individually or in the aggregate] have
been advanced or loaned or invested [either from
borrowed funds or securities 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 [âIntermediaries"], 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 [âUltimate 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 its knowledge and belief as disclosed in Note 50
to the standalone financial statements,, no funds
[which are material either individually or in the
aggregate] have been received by the Company from
any person [s] or entity [ies], including foreign entity
[âFunding 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
[âUltimate Beneficiaries"] or provide any guarantee,
security or the like on behalf of the Ultimate
Beneficiaries and

[c] Based on such audit procedures performed as
considered reasonable and appropriate in the
circumstances, nothing has come to our notice that
has caused us to believe that the the management

representations , as provided under sub-clauses [a]
and [b] above, contain any material misstatement.

[v] The Company has neither declared/ paid any dividend
during the year, nor has proposed any final dividend for
the year and therefore the requirement of compliance of
Sec 123 of the Act are not applicable.

[vi] Based on our examination which included test checks and
in accordance with requirements of the Implementation
Guide on Reporting on Audit Trail under Rule 11 [g] of the
Companies [Audit and Auditors] Rules, 2014, the
Company in respect of financial year commencing on 1st
April, 2024, has used accounting software''s for
maintaining its books of account, which have a feature of
recording audit trail [edit log] facility and the same has
operated throughout the year for all relevant transactions
recorded in the respective software. Further, during the
course of our audit we did not come across any instance
of audit trail feature being tampered with for the period
where audit trail is enabled and operated and for this we
also relied upon the certificate of the management.
Furthermore, the audit trail has been preserved by the
Company as per the statutory requirements for record
retention where the audit trail feature was enabled.
Further, the daily back-up of audit trail [edit log] in respect
of its accounting software for maintenance of all
accounting records, an accounting software for journal
entries has been maintained on the servers physically
located in India as certified by the management.

2] As required by the Companies [Auditor''s Report] Order, 2020
[the âOrder"] issued by the Central Government in terms of
Section 143[11] of the Act, we give in âAnnexure Bâ a
statement on the matters specified in paragraphs 3 and 4 of
the Order to the extent applicable

For V. P. Jain & Associates

Chartered Accountants
Firm''s registration number: 015260N

Sarthak Madaan

Place : New Delhi Partner

Date : 17.05.2025 Membership number: 547131

UDIN: 25547131BMOVAN4273

Mar 31, 2024

JAGATJIT INDUSTRIES LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Jagatjit Industries Limited [âthe Company"], which comprise the Balance Sheet as at March 31,2024, the Statement of Profit and Loss [including Other Comprehensive Income], the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.

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 Companies Act, 2013 [âthe Act"] in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies [Indian Accounting Standards] Rules, 2015, as amended, [âInd AS"] and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2024, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143[10] of the Act [SAs]. 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 [ICAI] together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical

responsibilities in accordance with these requirements and the ICAI''s Code of Ethics.

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.

Emphasis of matter:

We draw attention to the below mentioned notes to the accompanying standalone financial statements which more fully describes the matters.

Note No 6[ii] regarding loan due from an ex-employee, Note No 22[ii] and 22[iii][b] regarding items of exceptional nature.

Our opinion is not qualified 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 for the financial year ended March 31,2024. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

The Key Audit Matter

How the matter was addressed in our audit

1) Litigation Matters:

[as described in note 32 of the financial statements]

The company operates in various states within India, exposing it to a variety of different Central and State Laws, regulations and interpretations thereof. In this regulatory environment, there is an inherent risk of litigation and claims.

Consequently, provisions and contingent liability disclosures may arise from direct and indirect tax proceeding, legal proceedings including regulatory and other government/department proceedings, as well as investigations by authorities and commercial claims.

At March 31,2024, the Company''s contingent liabilities for legal matters were '' 1756 Lakhs.

Our procedures included the following:

â¢ Understanding of the Company''s process with respect to completeness and recognition of tax, contingencies/ claims and provisions.

â¢ Read relevant tax laws and discussed with the management, to understand the underlying matters in the demand orders / notices and basis for management judgement and estimates

â¢ Included tax specialists in our team to perform an evaluation of assumptions used by the management and relevant judgements passed by the authorities, including the interpretation of the relevant tax laws.

The Key Audit Matter

How the matter was addressed in our audit

The most significant contingent liability pertains to protective disallowance of sales promotion expenses of '' 3002 lakhs and substantive disallowance of purchases of '' 107 lakhs related to AY 2011-12 to 2013-14 .

â¢ Perused the orders of Assessing officer Appellate authorities and the related Jurisdictional High Court judgment on the matter substantially in favour of Company. Assessed the related disclosures in the standalone financial statements for compliance with disclosure requirements.

2) Revenue recognition from sale of products/ Royalty and Franchise agreements

(Note no 21 of the standalone financial statements)

Revenue from sale of products is recognised when control of products has been transferred to the customer and there is no unfulfilled obligation that could affect the customer''s acceptance of the products. Revenue from sale of products is measured at the fair value of the consideration received or receivable, net of returns and allowances, discounts and incentives. Revenue generated on account of Royalty as per commercial agreements is subject to waiver in respect of Minimum Guarantee Quantum based on the premise of commercial expediency.

Our procedures included the following:

â¢ Assessed the Company''s revenue recognition accounting policy for sale of products/ royalty and franchise business including those relating to discounts and incentives.

â¢ Understood, evaluated and tested on sample basis the design and operating effectiveness of key internal controls over recognition and measurement of revenue, discounts, and incentives.

â¢ Performed test of details on a sample basis and inspected the underlying accounting documents relating to sales and accrual of discounts and incentives.

â¢ Tested on a sample basis, sales transactions during the year.

â¢ Performed analytical procedures on revenue on all streams.

â¢ Assessed the disclosures in the standalone financial statements in respect of revenue, discounts and incentives for compliance with disclosure requirements.

3) Provision for trade receivables

(as described in note 10 of the standalone financial statements)

Trade receivable balances of '' 7650 lakhs represent significant portion of the total assets as at March 31,2024. Provision for expected credit loss at reporting date is significant at '' 3509 lakhs. Trade receivables include dues from state government corporations, distributors, retailers, contract manufacturing units and franchise partners. The Company records expected credit loss for unsecured trade receivables based on defined policy following simplified approach and wherever management considers necessary applying its judgment and estimates. At the reporting date provisions are reviewed. No significant provision for expected loss is made during the year. The state corporations make deductions in respect of various claims which are accounted on receipt of confirmations.

Timing of collection of dues from customers may differ from the contractual credit period. Significant judgment is involved in management estimates of the amounts unlikely to be ultimately collected.

Our procedures included the following:

â¢ Understood, evaluated and tested on a sample basis the design and operating effectiveness of internal controls over trade receivables.

â¢ Performed audit procedures on existence of trade receivables, which included reading and comparing balance confirmations with books of account, testing subsequent receipts and testing sales transactions on a sample basis.

â¢ Evaluated the assumptions used by management to calculate the expected credit loss for trade receivables through audit procedures which included analysis of ageing, past trend of bad debts write-off.

â¢ Assessed the disclosures in the standalone financial statements for compliance with disclosure requirements

Information Other than the Standalone Financial Statements In connection with our audit of the standalone financial statements, and Auditorâs Report Thereon our responsibility is to read the other information and, in doing so,

The Company''s management and Board of Directors are responsible ^{consider whether the other information is materiall}y ^{inconsistent with}for the preparation of the other information. The other information ^{the standalone financial statemen}te Â°^r Â°^ur kn^owledg^{e durin}g comprises the information included in the Management Discussion ^{the course of our audit or otherwise a}pp^{ears to be materiall}y and Analysis, Board''s Report including Annexures to Board''s Report, ^misstated. ''^{n connection with the information included in the Annual}Corporate Governance Report etc. included in Annual Report, but does ^rep^{ort ie Directors Re}p^ort, ^Manag^{ement Discussion and Anal}y^sis,

not include the standalone financial statements and our auditor''s ^{Corporate Governance Report, if based on the work we have}

report th_ereon performed, we conclude that there is a material misstatement ol

this other information, we are required to report this fact. We have

?^{ur o}p^{inion on the standalone financial statements does not cover} nothing to report in this regard. the other information and we do not express any form of assurance

conclusion thereon.

Managementâs Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of 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, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of 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 is 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The 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 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 financial controls 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 system 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 standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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 Section 143(3) of the Act, we report that:

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

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books read with our remarks for certain matters in respect of audit trail as stated in paragraph 1(i)(vi) below.

(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 statement of cash flow 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 Companies [Indian Accounting Standards] Rules 2015, as amended.

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

(f) The modifications relating to the maintenance and other matters connected therewith in respect of audit trail are as stated in the paragraph 1(b) above on reporting under section 143 (3) (b) of the Act and paragraph 1(i)(vi) below on reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014.

(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 Aâ; and

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act read with schedule V, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under section 197 read with schedule V of 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) 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 as at 31.03.2024 on its financial position in its standalone financial statements. (Refer Note 32 of 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. (a) The Management has represented that, to the

best of its knowledge and belief, no funds (which are material either individually or in the aggregate) 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 or entity, including foreign entity (âIntermediaries"), 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 (âUltimate 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 its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (âFunding 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 (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been 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 (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend during the year and has not proposed final dividend for the year and therefore the requirement of compliance of Sec 123 of the Act are not applicable.

vi. Based on our examination which included test checks and in accordance with requirements of the Implementation Guide on Reporting on Audit Trail under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, the Company has used accounting software''s for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software. Further, where audit trail (edit log) facility was enabled and operated throughout the year, we could not verify instance of audit trail feature being tampered with during the

financial year 2023-24, during the course of audit and for this we relied upon the certificate of the management.

2. As required by the Companies (Auditor''s Report) Order, 2020 (the âOrder") issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

For V. P. Jain & Associates

Chartered Accountants Firm''s registration number: 015260N

Sarthak Madaan

Place : New Delhi Partner

Date : 31.07.2024 Membership number: 547131

UDIN: 24547131BKGYWR8338

Mar 31, 2023

JAGATJIT INDUSTRIES LIMITED

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Jagatjit Industries Limited [âthe Company"], which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss [including Other Comprehensive Income], the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.

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 Companies Act, 2013 [âthe Act"] in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies [Indian Accounting Standards] Rules, 2015, as amended, [âInd AS"] and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

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.

Emphasis of matter:

We draw attention to the below mentioned notes to the accompanying standalone financial statements which more fully describes the matters.

Note No 6[ii][b] regarding loan to ex-employee, Note No 9[i] regarding slow/non-moving inventory, Note No 12[i] regarding pending approval from UPSIDC , Note No 17[iv] regarding business surplus payable to ex- franchise partner, Note no 22[ii],[iii] and [iv] regarding the liability no longer required and items of exceptional nature, Note No 39[i] regarding going concern.

Our opinion is not qualified 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 for the financial year ended March 31,2023. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.

The Key Audit Matter

How the matter was addressed in our audit

1) Litigation Matters:

[as described in note 32 of the financial statements]

Consequently, provisions and contingent liability disclosures may arise from direct and indirect tax proceeding, legal proceedings including regulatory and other government/department proceedings, as well as investigations by authorities and commercial claims.

At March 31,2023, the Company''s contingent liabilities for legal matters were '' 1069 Lakhs [Previous year: '' 1134 Lakhs]

Our procedures included the following:

Obtained an understanding of the Company''s process with respect to completeness and recognition of tax contingencies/ claims and provisions.

â¢ Read the confirmations, on sample basis, from the Company''s external legal counsel on tax litigations and evaluated the independence, objectivity and competency of the Company''s specialists involved.

â¢ Read relevant tax laws and discussed with the management, to understand the underlying matters in the demand orders / notices and basis for management judgement and estimates

The Key Audit Matter

How the matter was addressed in our audit

The most significant contingent liability pertains to protective disallowance of sales promotion expenses of '' 5657 Lakhs and substantive disallowance of purchases of '' 107 Lakhs related to AY 2009-10 to 2013-14 (Previous year: '' 5657 Lakhs and '' 107 Lakhs) under Income Tax Act.

2) Revenue recognition from sale of products/ Royalty and Franchise agreements

(Note no 21 of the standalone financial statements)

Revenue from sale of products is recognised when control of products has been transferred to the customer and there is no unfulfilled obligation that could affect the customer''s acceptance of the products. Revenue from sale of products is measured at the fair value of the consideration received or receivable, net of returns and allowances, discounts and incentives. Revenue generated on account of Royalty as per commercial agreements is subject to waiver in respect of Minimum Guarantee Quantum based on the premise of commercial expediency.

Our procedures included the following:

â¢ Assessed the Company''s revenue recognition accounting policy for sale of products/ royalty and franchise business including those relating to discounts and incentives.

â¢ Understood, evaluated and tested on sample basis the design and operating effectiveness of key internal controls over recognition and measurement of revenue, discounts, and incentives.

â¢ Performed test of details on a sample basis and inspected the underlying accounting documents relating to sales and accrual of discounts and incentives.

â¢ Tested on a sample basis, sales transactions during the year.

â¢ Performed analytical procedures on revenue on all streams.

â¢ Assessed the disclosures in the standalone financial statements in respect of revenue, discounts and incentives for compliance with disclosure requirements.

3) Provision for trade receivables

(as described in note 1 0 of the standalone financial statements) Trade receivable balances of '' 6259 Lakhs (Previous year: '' 7755 Lakhs) represent significant portion of the total assets as at March 31,2023. Provision for expected credit loss at reporting date is significant at '' 3562 Lakhs (Previous year: '' 4438 Lakhs). Trade receivables include dues from state government corporations, distributors, retailers contract manufacturing units and franchise partners. The Company records expected credit loss for unsecured trade receivables based on defined policy following simplified approach and wherever management considers necessary applying its judgment and estimates at the reporting date provisions are reviewed. No significant provision for expected loss is made during the year. The state corporations make deductions in respect of various claims which are accounted on receipt of confirmations.

Timing of collection of dues from customers may differ from the contractual credit period. Significant judgment is involved in management estimates of the amounts unlikely to be ultimately collected.

Our procedures included the following:

â¢ Understood, evaluated and tested on a sample basis the design and operating effectiveness of internal controls over trade receivables.

â¢ Assessed the disclosures in the standalone financial statements for compliance with disclosure requirements.

4. Insurance Claim '' 237 Lakhs (as described in Note No 22(iv)(a) of standalone financial statements).

Our procedures included the following:

Assessed and evaluated the design and operation of prevalent internal control, Perused the surveyor''s report and the order of the National Consumer Disputes Redressal Commission.

Information Other than the Standalone Financial Statements and Auditorâs Report Thereon

The Company''s management and Board of Directors are responsible for the preparation of 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, Corporate Governance Report etc. included in Annual Report, 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 during the course of our audit or otherwise appears to be materially misstated. In connection with the information included in the Annual report i.e Directors Report, Management Discussion and Analysis, Corporate Governance Report, 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 this fact. We have nothing to report in this regard.

Managementâs Responsibility for the Standalone Financial Statements

The 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 SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Obtain an understanding of internal financial controls 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 system 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.

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.

Report on Other Legal and Regulatory Requirements

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

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

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

(c) the balance sheet, the statement of profit and loss including other comprehensive income, statement of changes in equity and the statement of cash flow dealt with by this Report are in agreement with the books of account.

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

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Aâ; and

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act read with schedule V, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section

197 of the Act.

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

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

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 its knowledge and belief, no funds (which are material either individually or in the aggregate) 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 or entity, including foreign entity (âIntermediaries"), 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 (âUltimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been 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 (i) and (ii) of Rule 11 (e), as provided under (a) and (b) above, contain any material misstatement.

2. As required by the Companies [Auditor''s Report] Order, 2020 [the âOrder"] issued by the Central Government in terms of Section 143[11] of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

For V. P. Jain & Associates

Chartered Accountants Firm''s registration number: 015260N

Sarthak Madaan

Place : New Delhi Partner

Date : 14-08-2023 Membership number: 547131

UDIN: 23547131BGYXFI5960

Mar 31, 2018

Independent Auditors'' Report

To the Members of Jagatjit Industries Limited Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Jagatjit Industries Limited [''the Company''], which comprise the balance sheet as at March 31, 2018, the statement of profit and loss and the cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards [Ind AS] prescribed under section 133 of the Act read with the Companies [Indian Accounting Standards] Rules 201 5, as amended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134[5] of the Companies Act, 2013 ["the Act"] with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with the Companies [Indian Accounting Standards] Rules 201 5. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of 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.

Auditors'' Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis for qualified opinion

[1] In the opinion of the management, Trade Receivable and Loans and Advances have a value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet.

During the financial year ended March 31, 2018 confirmatory letters had been sent to the sundry creditors, suppliers and Trade Receivables requesting them to confirm and reconcile the account balances as on March 31, 2018. A significant number of parties have not yet confirmed/reconciled the balances as on the date of signing of the financial statements. Company has a policy of providing for [a] all debts outstanding beyond 3 years or [b] where recovery is considered doubtful irrespective of the fact that legal action has been initiated or not However non - moving debts outstanding beyond 1 year are to the extent of Rs. 750 Lacs for which confirmations and reconciliations are not available and have not been provided for. The system of obtaining confirmations and reconciliation need to be strengthened.

[2] An amount of Rs. 2,977 Lacs is outstanding in books of accounts of the Company, being an advance to its wholly owned subsidiary M/s S.R.K. Investments Pvt. Ltd., since 2010-11. No recovery of this amount has been made since disbursal of advance, to the aforementioned subsidiary.

The Company''s management, based on internal assessments and evaluations, have represented that the balance outstanding advances are recoverable and that no accrual for diminution of advances is necessary as at balance sheet date. The Company has received confirmation from the aforementioned subsidiary on March 31, 2018.

The Company has not created a provision against this advance in its books of accounts. In our opinion, there is significant uncertainty and doubt about the recovery of this advance from the subsidiary, as considerable period of time has elapsed from grant of advance and therefore, a provision for doubtful advance should have been accounted for in the financial statements for the year ended March 31, 2018.

Consequently, the loss for the year ended March 31, 2018 is understated and reserves and surplus (other equity] as at March 31, 2018 are overstated to the extent of Rs 3,727 Lacs. It may be noted that modified opinion was given in respect of the above two matters by the previous Auditors on the financial statements for the period ended 31st March 2017. We have also given modified opinion vide report (dated 30th May, 2018] in pursuance of Regulation 33 of SEBI (listing obligations]

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, subject to matters described in basis for qualified opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018 and its loss, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.

Emphasis of Matter

â¢ Attention is drawn to Note No. 4[vi] regarding fair value of investment properties; Note No. 5 [iii] regarding nil diminution in the value of investment of Rs. 1,016 Lacs in the subsidiary company, Note No. 6 [i] and 6 [ii] regarding loan to related parties and employees Note No. 8 [i] regarding MAT credit and Note No. 8 [iii] regarding interest free security deposits, Note No. 8[iv] &. Note 39 [iii] regarding provision made for advance to director in earlier year, Note No. 13 [i] regarding security deposits and loans and advances to employees, Note No. 14 [i] regarding commercial advance of Rs. 132 Lacs to a group company, Note No. 15 regarding advances given to associate company; Note No 16 regarding assets held for sale, Note No. 23 [i] and 24[ii] regarding bills payable; Note No. 24 [iii] regarding claim of GAIL [India] Ltd, Note No. 35B[i] regarding deferred tax, Note No. 44 regarding various risks, Note No. 45 regarding borrowings not shown at amortised cost.

â¢ Without qualifying our opinion, we draw attention to Note 2.3 in the financial statements which indicates that the Company incurred a net loss of Rs. 7,433 Lacs during the year ended March 31, 2018 and, as of that date, the company''s current liabilities exceeding the total assets by Rs. 7,620 Lacs. These conditions along with other matters as set forth in Note 2.3, indicate the existence of a material uncertainty that may cast significant doubt about the company''s ability to continue as a going concern. Company has disclosed the mitigating factors vide the said Note and we have relied upon the same.

â¢ We draw attention to Note 46 [iv], the Company has published the standalone and consolidated Financial results for the year ended March 2018 and we have issued the report dated May 30, 2018 in pursuance of regulation 33 of SEBI [listing obligations and Disclosure Requirements] Regulations 2015. After publishing the results, certain adjusting events have occurred, which has resulted in confirmation of contingent liability of Rs. 320 Lacs, estimated at Rs. 9,933 Lacs till contract year 2016 and disclosed vide note no. 7 of the published results. Therefore in accordance with IND AS - 10, financial statements to that extent are amended. Impact of the adjusting event is that contingent liabilities of Rs. 9,933 Lacs are reduced and confirmed liability of Rs. 320 Lacs is provided resulting in increase of loss of the year by Rs. 320 Lacs; decrease in retained earnings by Rs. 320 Lacs and corresponding increase in the current liability of Rs. 320 Lacs. Company has taken Legal opinion that it is neither required to adopt revised Financial Results for the period ended March 31, 2018 under Regulation 33 of SEBI [Listing Obligations and Disclosures Requirements] Regulations, 2015 nor the Company is required to revise the Financial Statements for the said period under section 131 of the Companies Act, 2013. We have relied upon the legal opinion.

â¢ The Internal Audit system of the company needs to be substantially strengthened in scope, coverage and compliance in respect of Hamira Plant and Head Office operations.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies [Auditors'' 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 the paragraph 3 and 4 of the order.

2. As required by Section 143 [3] of the Act, we report that: [a] we have sought, and except for the matters described

in Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

[b] except for possible effects of the matters described in Basis for Qualified Opinion paragraph, in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

[c] the balance sheet the statement of profit and loss including other comprehensive income, statement of changes in equity and the statement of cash flow dealt with by this Report are in agreement with the books of account;

[d] except for possible effects of the matters described in Basis for Qualified Opinion paragraph, in our opinion, the aforesaid standalone financial statements substantially comply with the Indian Accounting Standards [Ind AS] specified under Section 133 of the Act, read with the Companies [Indian Accounting Standards] Rules, 201 5;

[e] the matters described in Basis for Qualified Opinion paragraph, and the matter described in Emphasis of matter paragraph, in our opinion, may have an adverse effect on functioning of the Company:

[f] on the basis of the written representations received from the directors as on March 31, 2018 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 Act;

[g] the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion;

[h] with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and

[i] with respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies [Audit and Auditors] Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

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

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

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

	for Madan &i Associates
	Chartered Accountants
	Firm''s registration number: 000185N
	M. K. Madan
Date: September 20, 2018	Proprietor
Place: New Delhi	Membership number: 082214

Annexure A to The Independent Auditors'' Report

The Annexure referred to in Independent Auditors'' Report to the members of the Jagatjit Industries Limited on the standalone financial statements for the year ended March 31, 2018, we report that:

[i] In respect of fixed assets:

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

[b] The Company has a programme of verification of fixed assets to cover all the items in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the said programme, certain fixed assets were physically verified by the Management during the year. However physical verification report and reconciliation of the same with financial records/books is in progress and discrepancies if any will be adjusted on completion of exercise.

[c] According to the information and explanations given to us and on the basis of our examination of the records of the Company and certificate provided by the Company, the title deeds of immovable properties are held in the name of the Company except in respect of Immovable property [4th and 5th Floor, Bhandari House, Nehru Place, Delhi] having gross book value of Rs. 103 Lacs [Original Cost] and Net book value of Rs. 93 Lacs.

Title deeds in respect of Immovable Properties as mentioned in Note No. 19 are held by the lenders as Equitable Mortgage against the borrowing. Confirmations from the banks are awaited.

Company has provided photocopies of the title deeds/ lease deeds in respect of Leasehold Land situated at Sikandrabad [ U.P.] and Sahibabad [U.P.] as the originals are held by Uttar Pradesh State Industrial Development Corporation [UPSIDC].

[ii] In respect of its inventories:

[a] As explained to us, inventories have been physically verified during the year by the Management at reasonable intervals, other than stock lying with third parties where certificates confirming physical inventory have been received.

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

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

[iii] [a] According to Information and explanation given to us, the Company has granted loan to its subsidiary and advance to associate company covered in register maintained u/s 189 of the Companies Act, 2013 in earlier years The Company has given interest bearing advance of Rs. 265 Lacs during the year and Rs. 75 Lacs towards expense reimbursements [interest free] arising out of commercial and contractual obligations.

[b] In respect above advances, no terms and conditions and stipulation regarding payment of principal amount or interest have been laid out. Accordingly no repayments have been received. Regarding recovery of principal amount and interest it is informed that associate company has more than adequate amount of immovable property and the amount will be recovered through sale of immovable property in due course. Regarding advance of Rs. 2,977 Lacs given to another subsidiary company, the matter has been qualified by us vide paragraph 2 of basis for qualified opinion of our audit report.

[iv] [a] Company had given loan of Rs. 339 Lacs [Interest free amount is Rs. 214 Lacs and interest bearing amount is Rs. 125 Lacs] to an employee in the earlier years who became Additional Director w.e.f. April 28, 2017 and ceased to be director w.e.f. February 1, 2018. It has been informed that during the year, Company further advanced Rs. 45 Lacs [42.92 Lacs given during the tenure of Directorship] to the Director and received back the same during the year. Total amount outstanding at the year end is Rs. 295 Lacs [Interest free amount is Rs. 170 Lacs and interest bearing amount is Rs. 125 Lacs]. Company has taken Legal opinion that it is has not contravened the provisions of Section 185 of the Companies Act, 201 3 by extending loan during the tenure as Whole Time Director commencing from April 28, 2017 till January 31, 2018

[b] Company has represented before us that provision of section 185/186 are not applicable for advances given prior to Companies Act 2013 and are still outstanding. Similarly it has been represented that advance to associate company during the year [as described in para [iii][a]] are on account of commercial and contractual obligations and are therefore not covered within the meaning of Section 185/186.

[v] According to the information and explanation given to us, the company has not accepted any deposits during the year. Company is of the view that provision of Section 74[1 ][b] of the Act are complied with in pursuance of Rule 19 of the Acceptance of Deposits Rules, 2014. It is also confirmed by the company that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

[vi] According to the information and explanations given to us and certified by the management provision of Section 148[1 ] of the Companies Act 2013 for maintenance of Cost records are not applicable as products manufactured by the company as specified in Table A/Table B under rule 3 of Companies [Cost Records & Audit Rules], 2014 represents a by-product and no cost is incurred for the same.

[vii] In respect of statutory dues:

[a] According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company has generally been regular in depositing undisputed statutory dues, including provident Fund, Employees State insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of the aforesaid statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

[b] According to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess which have not been deposited as at March 31, 2018 on account of any dispute except as follows:

Sr. No.	Name of Statute	Nature of Dues	Amount (Rs)	Period for which the amount relates	Forum where dispute is pending.
	EXCISE DUTY
1	Central Excise Act, 1 944	Demand of Cess on manufacturing of Corrugated Paper Board	58,736	November 201 2 to September 201 5	Commissioner (Appeals] Chandigarh - I
2	Central Excise Act, 1 944	Penalty in the above matter	58,736	November 201 2 to September 201 5	Commissioner (Appeals] Chandigarh - I
3	Central Excise Act, 1 944	Demand of Cess on manufacturing of Corrugated Paper Board	1,468	October 2015 to June 2017	Commissioner (Appeals] Ludhiana
4	Central Excise Act, 1 944	Penalty in the above matter	1,468	October 2015 to June 2017	Commissioner (Appeals] Ludhiana
5	Central Excise Act, 1 944	Demand for clearance of Broken glass generated during the handling of Bottles used for IMFL and Country liquor	13,10,346	June 2013 to Oct 2015	Assistant Commissioner, CE & ST, Jalandhar
6	Central Excise Act, 1 944	Demand for clearance of Broken glass generated during the handling of Bottles used for IMFL and Country liquor	3,63,094	Nov 15 to June 2017	Assistant Commissioner, CE & ST, Jalandhar
	SERVICE TAX
7	The Finance Act, 1 994	Wrong availment of Service Tax Cenvat Credit	53,82,166.35	October 2003 to September 2007	CESTAT, Chandigarh
8	The Finance Act, 1 994	Penalty in the above matter	53,82,166.35	October 2003 to September 2007	CESTAT, Chandigarh
9	The Finance Act, 1 994	Wrong availment of Service Tax Cenvat Credit	69,70,632	October 2007 to March 2008	CESTAT, Chandigarh
10	The Finance Act, 1 994	Penalty in the above matter	69,70,632	October 2007 to March 2008	CESTAT, Chandigarh
11	The Finance Act, 1 994	Demand and Penalty towards Management maintenance and Repair Services	17,97,534	June, 2005	CESTAT, Chandigarh
12	The Finance Act, 1 994	Demand and Penalty towards conversion charge for SMP & Ghee under category of Supply of Tangible Goods	62,21,720	May 2008 to April 2010	CESTAT, Chandigarh
13	The Finance Act, 1 994	Penalty in the above matter	62,21,720	May 2008 to April 2010	CESTAT, Chandigarh
	SALES TAX
14	Sales Tax under Telangana VAT Act	Demand and Penalty on account of VAT on Royalty Income	1,03,00,000	2012 - 13 to November 2014	Appellate Deputy Commissioner, Hyderabad
15	Sales Tax under Punjab VAT Act & Central Sales Tax Act	Demand and Penalty on account of disallowance of VAT input credit on Rice Husk	2,19,67,703	2010 - 11	Deputy Excise and Taxation Commissioner [Appeals], Jalandhar
16	Sales Tax under Haryana VAT Act	Demand and Penalty on account of disallowance of VAT input credit on Rice Husk	39,69,900	2011 - 12	Joint Excise & Taxation Commissioner [A], Rohtak
17	Sales Tax under Jharkhand VAT Act	Demand in respect to VAT assessment	20,32,974	2013 - 2014	Commissioner (Appeals], Ranch!
18	Sales Tax under Punjab VAT Act & Central Sales Tax Act	Disallowance of ITC on purchase of Rice Flour	1,07,54,088	2011 - 2013	VAT Appellate Tribunal

[viii] According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government during the year.

[ix] In our opinion and according to the information and explanation given to us, the term loans have been applied by the company during the year for the purposes for which they were obtained.

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

[xi] According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

[xii] In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3[xii] of the Order is not applicable.

[xiii] According to the information and explanations given to us and on the basis of Legal opinion [regarding maintenance charges of Rs. 194 lacs paid to corporate facility management] [refer Note No. 39B[d]] obtained by the company and based on our

examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

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

[xv] According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3[xv] of the Order is not applicable.

[xvi] The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

	for Madan & Associates
	Chartered Accountants
	Firm''s registration number: 000185N
	M. K. Madan
Date: September 20, 2018	Proprietor
Place: New Delhi	Membership number: 082214

Annexure B to The Independent Auditors'' Report

[Referred to in Paragraph 2 [f] under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Jagatjit Industries Limited on the financial statements for the year ended March 31, 2018]

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

We have audited the internal financial controls over financial reporting of Jagatjit Industries Limited ["the Company"] as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the 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 authorisations of management and directors of the company, and [3] provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls 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 generally has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were generally operating effectively as at March 31, 2018, except in respect of trade receivable reconciliation and provision for bad and doubtful debts where controls were found to be ineffective and in respect of various areas namely Capitalisation of Fixed Assets [Hamira], Classification of an asset to an asset group in Fixed Asset Register (Hamira], Accounts payable process (Head office & Hamira], Debit notes (Head office & Hamira], Bank reconciliation process (Head office & Hamira], Cash Management (Hamira], TDS Payment compliance, Prepaid Expenses, Goods & Service Tax, Reconciliation with Contract Manufacturing Units,

Foreign Exchange management (Head office], Contracts for Rental Income (Head Office], Revenue recognition of Royalty Income from Franchise operation (Head office & Hamira], TDS Return Compliance [Behror] where controls were effective but need to be strengthened based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

	for Madan & Associates
	Chartered Accountants
	Firm''s registration number: 000185N
	M. K. Madan
Date: September 20, 2018	Proprietor
Place: New Delhi	Membership number: 082214

Mar 31, 2016

TO THE MEMBERS OF JAGATJIT INDUSTRIES LIMITED

Report on the Standalone Financial Statements

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

Management''s Responsibility for the Standalone Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement ,whether due to fraud or error.

Auditors'' Responsibility

3. 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.

4. 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.

5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis for qualified opinion

7. In the opinion of the management, Accounts Receivable & Loans and Advances have a value on realization in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet.

During the financial year ended 31^st March 2016 confirmatory letters have been sent to the sundry creditors, suppliers and sundry debtors requesting them to confirm and reconcile the account balances as on 31^st March, 2016. A number of parties have not yet confirmed/reconciled the balances as on the date of signing of the financial statements.

Accordingly, Trade payables, Loans and Advances and balances appearing under Trade Receivables are subject to reconciliation & confirmation. The financial impact of this is not ascertainable and to that extent we do not have any information in respect of such balances.

Qualified Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion Paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;

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

Emphasis of Matter

9. Attention is invited to Note No. 30.1 (iv) regarding Gas Sales Agreement with Gail (India) Limited, wherein there was non utilization of RLNG for contract year 2014 and 2015. Against these, the company received demand from supplier aggregating to Rs.7,015 lacs towards Annual Take or Pay Deficiency basis. The company has denied the liability in this regard to the supplier and the management is confident that there will be no material amount on resolution. In view of this, no effect of the same has been given in these accounts. The said amount has been considered as contingent liability.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of subsection (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.

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

(a) Except for the matter described in the Basis of Qualified Opinion Paragraph above, 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) Except for 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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) Except for the matter described in the Basis of Qualified Opinion Paragraph above, in our opinion, the aforesaid standalone financial statements comply with Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) the matter described in the Basis for Qualified Opinion paragraph above, and the matter described in the Emphasis of Matter 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, 2016, and 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; and

(g) the qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above;

(h) 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".

(i) 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 best of our information and according to explanations given to us;

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 30 to the financial statements.

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

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

ANNEXURE ''A'' TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in Paragraph 10 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Jagatjit Industries Limited on the financial statements for the year ended March 31, 2016)

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

(c) According to the information and explanations given to us by the management and on the basis of the examination of the records of the Company, the title deeds of immovable properties included in fixed assets are held in the name of the Company except two Immovable properties having gross book value of Rs.15 lacs (original cost) and net book value of Rs.6 lacs for which title deeds were not available with the Company and hence were are unable to comment on the same.

Immovable properties whose title deeds have been pledged with banks as security for term loans, are held in the name the of Company based on the Mortgage deeds executed between the banks and the Company for which confirmations have been obtained from respective bankers.

(ii) The physical verification of inventory has been conducted at reasonable intervals by the management during the year. In respect of inventory lying with third parties, these have been substantially confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records have been appropriately dealt with in the books of account. In our opinion, the frequency of verification is reasonable.

(iii) (a) According to the information and explanations given to us, the Company has granted loan to one of its subsidiary company covered in the registered maintained under section 189 of the Companies Act, 2013, in an earlier year. No loan was granted to any entity covered in the registered maintained under section 189 of the Companies Act, 2013 during the current year.

(b) In respect of the above, there is no stipulation regarding repayment of principal amount or interest. No repayment of either the principal or the interest has taken place during the current year.

(c) The overdue amount exceeding 90 days is Rs.185 lacs. According to the information and explanations given to us, in our opinion reasonable steps have been taken by the company for recovery of the principal and interest.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security.

(v) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by Reserve Bank of India and provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Rules framed there under to the extent notified 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 the Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the sub-section (1) of section 148 of the Companies Act, specified by the Central Government and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) (i) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed

statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues with the appropriate authorities.

(ii) According to the information and explanations given to us, there were no undisputed dues in respect of Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues which were in arrears as at March 31, 2016, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Sales Tax, Income Tax, Custom Duty, Service Tax, Excise Duty, Value Added Tax and Cess as at March 31, 2016 which have not been deposited on account of a dispute, are as follows: -

Name of the statute

Nature of dues

Amount(Rs.)

Period to which the amount relates

Forum where the Dispute is pending

EXCISE DUTY

Central Excise Act, 1944

Demand of Cess on manufacturing of Corrugated Paper Board

36,978

November 2010 to October 2012

Commissioner (Appeals) Chandigarh - I

Central Excise Act, 1944

Penalty in the above matter

36,978

November 2010 to October 2012

Commissioner (Appeals) Chandigarh - I

Name of the statute	Nature of dues	Amount(Rs.)	Period to which the amount relates	Forum where the Dispute is pending
SERVICE TAX
The Finance Act, 1994	Wrong a ailment of Service Tax Cenvat Credit	13,127,235	October 2003 to September 2007	CESTAT, New Delhi
The Finance Act, 1994	Penalty in the above matter	13,127,235	October 2003 to September 2007	CESTAT, New Delhi
The Finance Act, 1994	Wrong a ailment of Service Tax Cenvat Credit	6,970,632	October 2007 to March 2008	CESTAT, New Delhi
The Finance Act, 1994	Penalty in the above matter	6,970,632	October 2007 to March 2008	CESTAT, New Delhi
The Finance Act, 1994	Demand of Service Tax on Tie-up Operations and Royalty	3,122,000	July 2003 to March 2004	CESTAT, New Delhi
The Finance Act, 1994	Penalty in the above matter	3,123,000	July 2003 to March 2004	CESTAT, New Delhi
The Finance Act, 1994	Demand of Service Tax on Tie-up Operations and Royalty	9,186,110	2007-2008	CESTAT, New Delhi
The Finance Act, 1994	Penalty in the above matter	18,373,220	2007-2008	CESTAT, New Delhi
The Finance Act, 1994	Demand and Penalty Management maintenance and Repair Services	1,797,534	June, 2005	CESTAT, New Delhi
SALES-TAX
Punjab Haryana General Sales Tax Act	Purchase Tax	325,247	1999-2000	Deputy Excise & Taxation Commissioner (Appeals), Patiala
Sales Tax under Bihar Finance Act	Inclusion of excise duty to determine gross turnover	1,896,695	1984-1985	Commercial Tax Tribunal, Ranchi
Central Sales Tax Act	Liquor stock destroyed, reprocessed and resold	133,017	1988-89	Sales Tax Appellate Tribunal, Hyderabad
Sales Tax under Telangana VAT Act	Demand and Penalty on account of VAT on Royalty Income	1,03,00,000	2012-13 to November,2014	Appellate Deputy Commissioner, Hyderabad
Sales Tax under Punjab VAT Act & Central Sales Tax Act	Demand and Penalty on account of disallowance of VAT input credit on Rice Husk	2,21,48,291	2010-11	Deputy Excise and Taxation Commissioner (Appeals), Jalandhar
Sales Tax under Haryana VAT Act INCOME TAX ACT³	Demand and Penalty on account of disallowance of VAT input credit on Rice Husk	39,69,900	2011-12	Joint Excise & Taxation Commissioner (A), Rohtak

Departmental Appeals in respect of Income Tax Act, 1961 before the Higher Authorities are not being considered as there is no stay on

the Order of Lower Authority favouring the Company and the amount is not ascertainable.

(viii) In our opinion and according to the explanations given to us by the management, the Company has not defaulted in the repayment of dues to financial institutions and banks. The Company has not issued any debentures.

(ix) The Company has not raised any moneys by way of initial public offer or further Public offer (including debt instruments) during the period. Moneys raised by way of Term Loan were applied for the purpose for which those are raised.

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

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) To the best of our knowledge and according to the information and explanations given to us by the management, the Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company.

(xiii)In our opinion and according to the explanations given to us by the management, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause 3 (xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us the Company has not entered into any non-cash transactions with directors or person connected with him covered by section 192 of the Act.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

ANNEXURE ''B'' TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in Paragraph 11(h) under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Jagatjit Industries Limited on the financial statements for the year ended March 31, 2016)

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

We have audited the internal financial controls over financial reporting of Jagatjit Industries Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our responsibility is to express 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 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 Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with the 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 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

(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 Institute of Chartered Accountants of India.

Emphasis of Matter

We would draw attention to matters disclosed in Paragraphs under ''Basis for Qualified Opinion'', which could indicate possible lapses in internal financial controls system.

Our opinion under Clause (i) of Sub-section 3 of Section 143 of the Act is not qualified in respect of this matter.

Nitin Chaudhry

Partner

Membership No. F 91463

For and on behalf of Mittal Chaudhry & Co.

Place : New Delhi Chartered Accountants

Date : 2^nd September, 2016 Firm Registration No. 002336N

Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these 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 provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

3. 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.

4. 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.

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

6. 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

7. 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

(b) In the case of the Statement of Profit and Loss, of the loss 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.

Report on Other Legal and Regulatory Requirements

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

9. 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 it appears from our examination of those books.

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

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

(e) On the basis of the written representations received from the directors as on March 31, 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 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 30 to the

financial statements. ii. the Company did not have any long-term contracts including derivative contracts for which there were any material for seeable 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 TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 8 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Jagatjit Industries Limited on the financial statements for the year ended March 31, 2015)

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

(ii) (a) The inventory (excluding stocks with third parties) has been physically verified during the year by the management. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the books records were not material.

(iii) The Company has not granted loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clause 3 (iii)(a) &(b) of the said Order are not applicable to the Company.

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

(v) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by Reserve Bank of India and provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Rules framed there under to the extent applicable 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 the Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth- Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities. Further, there were no undisputed amounts outstanding at the year-end for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty, Value Added Tax and Cess as at March 31, 2015 which have not been deposited on account of a dispute, are as follows:-

Name of the statute Nature of dues Amount (Rs.)

EXCISE DUTY Central Excise Act, 1944 Demand of Cess on manufacturing 36,978 of Corrugated Paper Board

Central Excise Act, 1944 Penalty in the above matter 36,978

SERVICE TAX

The Finance Act, 1994 Wrong availment of Service Tax 13,127,235 Cenvat Credit

The Finance Act, 1994 Penalty in the above matter 13,127,235

The Finance Act, 1994 Wrong a ailment of Service Tax 6,970,632

The Finance Act, 1994 Penalty in the above matter 6,970,632

The Finance Act, 1994 Demand of Service Tax on Tie-up 3,122,000 Operation and Royality

The Finance Act, 1994 Penalty in the above matter 3,123,000

The Finance Act, 1994 Demand of Service Tax on Tie-up 9,186,110 Operations and Royalty

The Finance Act, 1994 Penalty in the above matter 18,373,220

The Finance Act, 1994 Demand and Penalty Management 1,797,534 maintenance and Repair Services

SALES-TAX Punjab Haryana Purchase Tax 325,247 General Sales Tax Act

Sales Tax under Bihar Inclusion of excise duty to 1,896,695 Finance Act determine gross turnover

Central Sales Tax Act Liquor stock destroyed, 133,017 reprocessed and resold INCOME TAX ACT*

Name of the Statute Period to which the Form where the amount relates Dispute is pending EXCISE DUTY

Central Excise Act, 1944 November 2010 to Commissioner (Appeals) October 2012 Chandigarh - I

Central Excise Act, 1944 November 2010 to Commissioner (Appeals) October 2012 Chandigarh - I

SERVICE TAX

The Finance Act, 1994 October 2003 to CESTAT, New Delhi September 2007

The Finance Act, 1994 October 2003 to CESTAT, New Delhi September 2007

The Finance Act, 1994 October 2007 to CESTAT, New Delhi March 2008

The Finance Act, 1994 October 2007 to CESTAT, New Delhi March 2008

The Finance Act, 1994 July 2003 to CESTAT, New Delhi March 2004

The Finance Act, 1994 July 2003 to CESTAT, New Delhi March 2004

The Finance Act, 1994 2007-2008 CESTAT, New Delhi

The Finance Act, 1994 2007-2008 CESTAT, New Delhi

The Finance Act, 1994 June,2005 CESTAT, New Delhi

SALES-TAX Punjab Haryana 1999-2000 Deputy Excise & Taxation General Sales Tax Act Commissioner (Appeals), Patiala

Sales Tax under Bihar 1984-1985 Commercial Tax Finance Act Tribunal, Ranchi

Central Sales Tax Act 1988-89 Sales Tax Tribunal, Hyderabad

INCOME TAX ACT*

*Departmental Appeals in respect of Income Tax Act, 1961 before the Higher Authorities are not being considered as there is no stay on the Order of Lower Authority favoring the Company and the amount is not ascertainable.

Associate Company:-

Name of the statute Nature of dues Amount(Rs.) the amount relates Dispute is pending

EXCISE ACT

AP Excise Act Arrears of License Fees and 826,000 Label approval fees

VALUE ADDED TAX AP Value Added Tax VAT on Lease Rent 545,000

INCOME TAX ACT

Income Tax Act Tax Demand 8,782,000

Income Tax Act Tax Demand 11,491,000

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

EXCISE ACT

AP Excise Act FY-1889-93 Andhra Pradesh High Court

VALUE ADDED TAX AP Value Added Tax Oct 2006 to Sales Tax April, 2007 Appellate Tribunal

INCOME TAX ACT

Income Tax Act FY-2007-08 Second Appellate Authority

Income Tax Act FY-2009-10 First Appellate Authority

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

(viii) The Company has no accumulated losses at the end of the financial year and it has incurred cash losses in the current and immediately preceding financial year.

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

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

(xi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

(xii) To the best of our knowledge and according to the information and explanations given to us, no instances of material fraud on or by the Company has been noticed or reported during the course of our audit.

Nitin Chaudhry

Partner

Membership No. F 91463

For and on behalf of

Mittal Chaudhry & Co.

Place :New Delhi Chartered Accountants

Date :September 01, 2015 Firm Registration No. 002336N

Mar 31, 2014

1. We have audited the accompanying financial statements of Jagatjit Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and 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

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards 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

3. 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.

4. 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 auditors considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

7. 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.

8. 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, 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 comply with the Accounting Standards referred to in sub-section (3C) of section 211 of 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;

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

TO THE MEMBERS OF JAGATJIT INDUSTRIES LIMITED ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in Paragraph 7 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Jagatjit Industries Limited on the financial statements for the year ended March 31, 2014)

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

(ii) (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) The Company has not granted loans, unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(b) to (iii)(d) of the paragraph 4 of the Order are not applicable to the Company during the current year. (e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(f) to (iii)(g) of the paragraph 4 of the Order are not applicable to the Company during the current year.

(iv) In our opinion and according to the information and explanations given to us, there is, in general, an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are prima facie reasonable, having regard to the prevailing market prices at the relevant time where such prices are available.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act 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 the Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

(viii) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us, there were no undisputed dues in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues which were outstanding, at the Balance Sheet date, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess as at March 31, 2014 which have not been deposited on account of a dispute, are as follows:-

Name of the statute Nature of dues Amount(Rs.)

EXCISE DUTY

Central Excise Act, 1944 Demand of Excise duty on sale 3,088,547 of Spent Grain

Central Excise Act, 1944 Penalty in the above matter 2,690,619

Central Excise Act, 1944 Demand of Cess on 17,824 manufacturing of Corrugated Paper Board

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

EXCISE DUTY September 2001 to CESTAT, New Delhi June 2005

Central Excise Act, 1944 September 2001 to CESTAT, New Delhi June 2005

Central Excise Act, 1944 November 2010 to Commissioner (Appeals) October 2011 Chandigarh - I

Name of the statute Nature of dues Amount(Rs.)

Central Excise Act, 1944 Penalty in the above matter 17,824

SERVICE TAX

The Finance Act, 1994 Wrong availment of Service 13,127,235 Tax Cenvat Credit

The Finance Act, 1994 Penalty in the above matter 13,127,235

The Finance Act, 1994 Wrong availment of Service 6,970,632 Tax Cenvat Credit

The Finance Act, 1994 Penalty in the above matter 6,970,632

The Finance Act, 1994 Demand of Service Tax on Tie- 3,122,000 up Operations and Royalty

The Finance Act, 1994 Penalty in the above matter 3,123,000

The Finance Act, 1994 Demand of Service Tax on Tie- 9,186,110 up Operations and Royalty

The Finance Act, 1994 Penalty in the above matter 18,373,220

SALES-TAX Punjab Haryana Purchase Tax 325,247 General Sales Tax Act

Sales Tax under Bihar Inclusion of excise duty to 1,896,695 Finance Act determine gross turnover

Central Sales Tax Act Liquor stock destroyed, 133,017 reprocessed and resold

State and Central Sales tax on Sales of ENA and 7,300,201 Sales Tax Acts Spent Grain INCOME TAX ACT*

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

Central Excise Act, 1944 November 2010 to Commissioner (Appeals) October 2011 Chandigarh - I SERVICE TAX

The Finance Act, 1994 October 2003 to CESTAT, New Delhi September 2007

The Finance Act, 1994 October 2003 to CESTAT, New Delhi September 2007

The Finance Act, 1994 October 2007 to CESTAT, New Delhi March 2008

The Finance Act, 1994 October 2007 to CESTAT, New Delhi March 2008

The Finance Act, 1994 July 2003 to CESTAT, New Delhi March 2004

The Finance Act, 1994 July 2003 to CESTAT, New Delhi March 2004

The Finance Act, 1994 2007-2008 CESTAT, New Delhi

The Finance Act, 1994 2007-2008 CESTAT, New Delhi

SALES-TAX

Punjab Haryana 1999-2000 Deputy Excise &

General Sales Tax Act Taxation Commissioner Appeals), Patiala

Sales Tax under Bihar 1984-1985 Commercial Tax Finance Act Tribunal, Ranchi

Central Sales Tax Act 1988-89 Sales Tax Appellate Tribunal, Hyderabad

State and Central 2001-02 to 2002-03 Allahabad, High Court. Sales Tax Acts INCOME TAX ACT*

*Departmental Appeals in respect of Income Tax Act, 1961 before the Higher Authorities are not being considered as there is no stay on the Order of Lower Authority favouring the Company and the amount is not ascertainable.

(x) The Company has no accumulated losses as at March 31, 2014 and it has incurred cash losses in the financial year ended on that date.

However the Company had not incurred cash losses in the immediately preceding financial year.

(xi) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

(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) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

(xiv) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

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

(xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

(xvii) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

(xix) The Company has not issued any debentures accordingly, no securities has been created.

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

(xxi) 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 material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

Nitin Chaudhry Partner Membership No. F 91463 For and on behalf of Mittal Chaudhry & Co. Place :New Delhi Chartered Accountants Date :10th July, 2014 Firm Registration No. 002336N

Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of Jagatjit Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 201 3, and 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

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

Auditors'' Responsibility

3. 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.

4. 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 auditors considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

7. 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.

8. 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, 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 comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act;

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in Paragraph 7 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Jagatjit Industries Limited on the financial statements for the year ended March 31, 2013).

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

(ii) (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) The Company has not granted loans, unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(b) to (iii)(d) of the paragraph 4 of the Order are not applicable to the Company during the current year.

(e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(f) to (iii)(g) of the paragraph 4 of the Order are not applicable to the Company during the current year.

(iv) In our opinion and according to the information and explanations given to us, there is, in general, an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are prima facie reasonable, having regard to the prevailing market prices at the relevant time where such prices are available.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act 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 the Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

(viii)We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us, there were no undisputed dues in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues which were outstanding, at the Balance Sheet date, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess as at March 31, 2013 which have not been deposited on account of a dispute, are as follows:-

(x) The Company has no accumulated losses as at March 31, 2013 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

(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) The provisions of any special statute applicable to chitfund/nidhi/mutual benefit fund/societies are not applicable to the Company.

(xiv) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

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

(xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

(xvii) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

(xix) The Company has not issued any debentures accordingly, no securities has been created.

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

(xxi) 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.

Nitin Chaudhry

Partner

Membership No. F 91463

For and on behalf of

Mittal Chaudhry & Co.

Place : New Delhi Chartered Accountants

Date : 30th May, 2013 Firm Registration No. 002336N

Mar 31, 2012

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

2. We 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comment in paragraph 3 above, we report that:

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

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

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

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

(e) On the basis of written representation received from Directors, as on March 31, 2012 and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

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

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

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

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

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 3 of the Auditors' Report of even date to the members of Jagatjit Industries Limited on the financial statements for the year ended March 31, 2012)

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

(ii) (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) The Company has not granted loans, unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(b) to (iii)(d) of the paragraph 4 of the Order are not applicable to the Company during the current year.

(e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(f) to (iii)(g) of the paragraph 4 of the Order are not applicable to the Company during the current year.

(iv) In our opinion and according to the information and explanations given to us, there is, in general, an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are prima facie reasonable, having regard to the prevailing market prices at the relevant time where such prices are available.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act 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 the Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

(viii)We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us, there were no undisputed dues in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues which were outstanding, at the Balance Sheet date, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess as at March 31, 2012 which have not been deposited on account of a dispute, are as follows:-

Name of the Nature of dues Amount statute (Rs.)

EXCISE DUTY

Central Excise Demand of Excise 3,088,547 Act, 1944 duty on sale of Spent Grain

Central Excise Penalty in the above matter 2,690,619 Act, 1944

SERVICE TAX

The Finance Wrong availment of Service 13,127,235 Act, 1994 Tax Cenvat Credit

The Finance Penalty in the above matter 13,127,235 Act, 1994

The Finance Wrong availment of 6,970,632 Act, 1994 Service Tax Cenvat Credit

The Finance Penalty in the above matter 6,970,632 Act, 1994

The Finance Demand of Service Tax 3,122,000 Act, 1994 on Tie-up Operations and Royalty

The Finance Penalty in the above matter 3,123,000 Act, 1994

The Finance Demand of Service Tax 9,186,110 Act, 1994 on Tie-up Operations and Royalty

The Finance Penalty in the above matter 18,373,220 Act, 1994

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

EXCISE DUTY

Central Excise Act, 1944 September 2001 CESTAT, New Delhi to June 2005

Central Excise Act, 1944 September 2001 CESTAT, New Delhi to June 2005

SERVICE TAX

The Finance Act, 1994 October 2003 CESTAT, New Delhi to September 2007

The Finance Act, 1994 October 2003 CESTAT, New Delhi to September 2007

The Finance Act, 1994 October 2007 CESTAT, New Delhi to September 2008

The Finance Act, 1994 October 2007 CESTAT, New Delhi to September 2008

The Finance Act, 1994 July 2003 CESTAT, New Delhi to March 2004

The Finance Act, 1994 July 2003 CESTAT, New Delhi to March 2004

The Finance Act, 1994 2007-2008 CESTAT, New Delhi

The Finance Act, 1994 2007-2008 CESTAT, New Delhi

Name of the Nature of dues Amount statute (Rs.)

SALES-TAX

Punjab Haryana Purchase Tax 325,247 General Sales Tax Act

Sales Tax under Bihar Inclusion of excise duty to 1,896,695 Finance Act determine gross turnover

Central Sales Tax Act Liquor stock destroyed, 133,017 reprocessed and resold

State and Central Sales tax on Sales of ENA 7,300,201 Sales Tax Acts and Spent Grain

INCOME TAX ACT*

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

SALES-TAX

Punjab Haryana General Sales Tax Act 1999-2000 Deputy Excise & Taxation Commissioner (Appeals), Patiala

Sales Tax under Bihar Finance Act 1984-1985 Commercial Tax Tribunal, Ranchi

Central Sales Tax Act 1988-89 Sales Tax Appellate Tribunal, Hyderabad

State and Central Sales Tax Acts

INCOME TAX ACT* 2001-02 to 2002-03 Allahabad, High Court.

*Departmental Appeals in respect of Income Tax Act, 1961 before the Higher Authorities are not being considered as there is no stay on the Order of Lower Authority favouring the Company and the amount is not ascertainable.

(x) The Company has no accumulated losses as at March 31, 2012 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

(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) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

(xiv) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

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

(xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

(xvii) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment.

(xviii)The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

(xix) The Company has not issued any debentures accordingly, no securities has been created.

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

(xxi) 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.

Nitin Chaudhry

Partner

Membership No. F 91463

For and on behalf of Mittal Chaudhry & Co.

Place: New Delhi Chartered Accountants

Date : 31st July, 2012 Firm Registration No. 002336N

Mar 31, 2011

1. We have audited the attached Balance Sheet of Jagatjit Industries Limited, as at March 31, 2011, and the related Profit and Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comment in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

(e) On the basis of written representation received from Directors, as on March 31, 2011 and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

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

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

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

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

ANNEXURE TO AUDITORS' REPORT

(Referred to in paragraph 3 of the Auditors' Report of even date to the members of Jagatjit Industries Limited on the financial statements for the year ended March 31, 2011)

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

(ii) (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) The Company has not granted loans, unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(b) to (iii)(d) of the paragraph 4 of the Order are not applicable to the Company during the current year.

(e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(f) to (iii)(g) of the paragraph 4 of the Order are not applicable to the Company during the current year.

(iv) In our opinion and according to the information and explanations given to us, there is, in general, an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are prima facie reasonable, having regard to the prevailing market prices at the relevant time where such prices are available.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act 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 the Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

(viii)We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed

under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us, there were no undisputed dues in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues which were outstanding, at the Balance Sheet date, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess as at March 31, 2011 which have not been deposited on account of a dispute, are as follows:-

Name of the Nature of dues Amount statute (Rs.)

EXCISE DUTY

Central Excise Demand of Excise 3,088,547 Act, 1944 duty on sale of Spent Grain

Central Excise Act, 1944 Penalty in the above matter 2,690,619

SERVICE TAX

The Finance Wrong availment of Service 13,127,235 Act, 1994 Tax Cenvat Credit

The Finance Act, 1994 Penalty in the above matter 13,127,235

The Finance Wrong availment of 6,970,632 Act, 1994 Service Tax Cenvat Credit

The Finance Penalty in the above matter 6,970,632 Act, 1994

SALES-TAX

Punjab Haryana Purchase Tax 325,247 General Sales Tax Act

Sales Tax under Bihar Inclusion of excise duty to 1,896,695 Finance Act determine gross turnover

Central Sales Tax Act Liquor stock destroyed, 133,017 reprocessed and resold

U.P. Trade Tax Act Demand in respect of 6,446,192 Entry Tax

State and Central Sales tax on Sales of ENA 7,300,201 Sales Tax Acts and Spent Grain

INCOME TAX ACT*

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

EXCISE DUTY

Central Excise Act, 1944 September 2001 CESTAT, New Delhi to June 2005

Central Excise Act, 1944 September 2001 CESTAT, New Delhi to June 2005

SERVICE TAX

The Finance Act, 1994 October 2003 CESTAT, New Delhi to September 2007

The Finance Act, 1994 October 2003 CESTAT, New Delhi to September 2007

The Finance Act, 1994 October 2007 CESTAT, New Delhi to September 2008

The Finance Act, 1994 October 2007 CESTAT, New Delhi to September 2008

SALES-TAX

Punjab Haryana General Sales Tax Act 1999-2000 Deputy Excise & Taxation Commissioner (Appeals), Patiala

Sales Tax under Bihar Finance Act 1984-1985 Commercial Tax Tribunal, Ranchi

Central Sales Tax Act 1988-89 Sales Tax Appellate Tribunal, Hyderabad

U.P. Trade Tax Act 2005-2006 Allahabad, High Court.

State and Central Sales Tax Acts 2001-02 to 2002-03 Allahabad, High Court.

INCOME TAX ACT*

*Departmental Appeals in respect of Income Tax Act, 1961 before the Higher Authorities are not being considered as there is no stay on the Order of Lower Authority favouring the Company and the amount is not ascertainable.

(x) The Company has no accumulated losses as at March 31, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

(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) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

(xiv) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

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

(xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

(xvii) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

(xix) The Company has not issued any debentures accordingly, no securities has been created.

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

(xxi) 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.

Nitin Chaudhry Partner Membership No. F 91463

For and on behalf of Mittal Chaudhry & Co. Chartered Accountants Firm Registration No. 002336N

Place : New Delhi Date : 20th July, 2011

Mar 31, 2010

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

2. We 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comment in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

(e) On the basis of written representation received from Directors, as on March 31, 2010 and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(0 In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act, and also give a true and fair view in conformity with the accounting principles generally accepted in India:

(0 in the caseof the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

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

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

ANNEXURE TO AUDITORS REPORT

(Referred to in paragraph 3 of the Auditors Report of even date to the members of Jagatjit Industries Limited on the financial statements for the year ended March 31, 2010)

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

(ii) (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) The Company has not granted loans, unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(b) to (iii)(d) of t he paragraphy 4 of the Order are not applicable to the Company during the current year.

(e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(f) to (iii)(g) of the paragraph 4 of the Order are not applicable to the Company during the current year.

(iv) In our opinion and according to the information and explanations given to us, there is, in general, an adequate

internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are prima facie reasonable, having regard to the prevailing market prices at the relevant time where such prices are available.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with

the provisions of Sections 58A and 58AA or any other relevant provisions of the Act 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 the Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

(viii) We have broadly reviewed the books of account maintained by the Company in respect of products where,

pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us, there were no undisputed dues in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth-tax, Service tax, Custom duty, Excise duty, Cess and other statutory dues which were outstanding, at the Balance Sheet date, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess as at March 31, 2010 which have not been deposited on account of a dispute, are as follows:-

Name of the Nature of dues Amount Period to which Forum where the

statute (Rs.) the amount relates dispute is pending

EXCISE DUTY

Punjab Excise Act Distillery license 12,750,000 1967-2010 Supreme Court

renewal fee

Central Excise Act, Demand of Excise duty 3,088,547 September 2001 to CESTAT, New Delhi

1944 on sale of Spent Grain June 2005

Central Excise Act, Penalty in the above matter 2,690,619 September 2001 to CESTAT, New Delhi

1944 June 2005

SERVICE TAX

The Finance Act, 1994 Wrongavailment of 13,127,235 October 2003 to Commissioner (Appeals),

Service Tax Cenvat Credit September 2007 Chandigarh

The Finance Act, 1994 Penalty in the above matter 13,127,235 October 2003 to Commissioner (Appeals),

September 2007 Chandigarh

SALES-TAX

Punjab Haryana Purchase Tax 325,247 1999-2000 Deputy Excise & Taxation

General Sales Tax Act , Commissioner (Appeals),

Patiala

Sales Tax under inclusion of excise duty 1,896,695 1984-1985 Commercial Tax Tribunal,

Bihar Finance Act to determine gross turnover Ranchi

Central Sales Tax Act Liquor stock destroyed, 133,017 1988-89 Sales Tax Appellate

reprocessed and resold Tribunal, Hyderabad

U.P. Trade Tax Act Demand inrespect of 6,446,192 2005-2006 Allahabad, High Court.

Entry Tax

State and Central Sales tax on Sales of 7,300,201 2001-02 to 2002-03 Allahabad, High Court.

Sales Tax Acts ENA and Spent Grain

INCOME TAX ACT*

* Departmental Appeals in respect of Income Tax Act, 1961 before the Higher Authorities are not being considered as there is no stay on the Order of Lower Authority favouring the Company and the amount is not ascertainable.

(x) The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

(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) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

(xiv) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

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

(xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

(xvii) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

(xix) The Company has not issued any debentures accordingly, no securities has been created.

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

(xxi) 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.

Nitin Chaudhry

Partner

Membership No. F 91463

For and on behalf of

Place : New Delhi Mittal Chaudhry & Co.

Date : 31st July, 2010 Chartered Accountants

Firm Registration No. 002336N

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