Jord Engineers India Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2009

We have audited the attached Balance Sheet of JORD ENGINEERS INDIA LIMITED Mumbai as at 31st March 2009 and annexed Profit & Loss Account and Cash Flow Statement of the Company for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

2. As required by the Companies {Auditors Report) Order, 2003 issued by the Central Government of India in terms of section 227(4

A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

3. Further to our comments stated in paragraph 1 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 accounts as required by law have been kept by the Company so far as appears from our examination of such books.

c. The Balance Sheet, Profit & Loss Account and cash flow statement dealt with by this report are in agreement with the books of accounts.

d. In our opinion the Balance Sheet, the Profit & Loss account and cash flow statement subject to para (f) herein below complies with the mandatory Accounting Standards referred in Section 211(3C) of the Companies Act, 1956.

e. On the basis of the written representation received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2009 from being appointed as a Director in terms of clause (g) of subsection (I) of section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the Accounts together with Notes tn Schedule 15 thereon and particularly Note no. 18 in respect of Income Tax and Sales Tax liabilities, amount unascertained; Note no. 19 regarding the amount due towards SSI units; Note no. 20 in respect of nonprovision of interest on overdue bills; Note no. 22 in respect of Interest on Term Loans and Working Capital Loans, the amount unascertainabte and Note No. 23 in respect of balances and liabilities on account of confirmation, reconciliation and adjustments, amount unascertainable; gives the information required by the Companies Act, 1956, in the manner so required and give a true & fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2009 and ~

(ii) In the case of the Profit & Loss Account, of the Profit for the year ended on that date.

(iii) In the case of the cash flow statement, of the cash flows for the year ended on that date.

Annexure to the Auditor Report (Referred to in paragraph (2) of our report of even date)

I a) The Company has maintained the record showing full particulars, except item wise depreciation, including quantitative details and situation of its fixed assets.

b) As explained to us, the fixed assets have been physically verified by the management at reasonable interval in a phased manner at least once in a year and no material discrepancy has been noticed on such verification and has been properly dealt with in the Books of Accounts.

c) As per the information and explanation given to us, no fixed assets have been disposedoff by the Company during the period.

II a) The Stock of finished goods, stores, spare parts and raw material and stock in process have been physically verified by the management at reasonable intervals during the year, having regards to the nature of business and particular circumstances.

b) The procedure of physical verification of stock followed by the management as explained to us, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

c) As per the information and explanation given to us and according to the records produced to us, no material discrepancies noticed on such physical verification as compared to book records, have been properly dealt with in the books of account.

III As per the information and explanation given to us, during the year, the Company has neither granted nor taken any loans, secured or unsecured, to any Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

IV According to the information and explanation given to us, in our opinion there are adequate internal control procedures commensurate with the size of the Company and nature of its business, for the purchase of inventory and fixed assets and for sale of goods. During the course of our audit, no major weaknesses has been noticed in the internal control system of the Company.

V a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered. b) In our opinion and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to 7 prevailing market prices at the relevant time,

VI The Company has not accepted any deposits from public.

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

VIM The Central Government has not prescribed the maintenance of cost records by the Company under section 209 {1) (d) of the Companies Act, 1956, therefore the provision of clause 4 (viii) of the Companies {Auditors Report) Order, 2003 is not applicable to the Company.

IX a) According to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues, including dues in respect of Income Tax, Wealth Tax, VAT, Service Tax, Custom Duty, Excise Duty and Provident Fund with the appropriate authorities except as mentioned in IX (b).

b) According to the information and explanation given to us, the following are undisputed amounts payable in respect of such i _statutory dues, which have remained outstanding as at 315 March 2009 for a period more than six months.

Name of Statute Nature of Amount Period to which the Dues (Rs. In Lacs) amount related

Sales Tax Sales Tax 221.14 199697 to 2004-05

Income Tax Fringe Benefit Tax 8.11 2007-08 & 2008-09

Investor Education & Dividend 0.81 Refer to note no. 24 of notes on accounts. Protection Fund

c) According to the records of the Company, the dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty, which _have not been deposited on account of disputes and from where the disputes is pending are as under:

Name of Statute Nature of Dues Amount From where Dispute is Pending Relating to Year (Rs. In Lacs)

Income Tax Act Income Tax 182.68 I.T.A.C. and Tribunal 1993 1994 to 1999 2000

Central Excise Excise 96.23 Commissioner (Appeal) 1999-2000

Custom Custom Duty 107.92 CEGAT/ Commissioner (Appeals)

ESIC Act ESIC Premium 18,79 Dy.Director 199495 to 2002-03

X As per the information and explanation given to us, the accumulated losses of the Company are more than 50% of its net worth as the Company is a sick Industrial Company registered with BIFR,

According to the records produced before us, the Company has not incurred cash losses in the current year and in the immediately preceding financial year.

XI The Company has taken in earlier years Secured/ Unsecured Term Loans, Working Capital and Non Convertible Debentures from Financial Institutions and Banks amounting to Rs. 16425.39 Lacs and Interest thereon amounting to Rs. 24106.26 Lacs and Sales Tax deferment loan Rs. 144.21 Lacs. The said amount is due for repayment as stated in Note No. 2 read Note No. 22 of Notes on Accounts. Since, the Company is a Sick Industrial undertaking registered with BIFR, it has submitted a detailed rehabilitation/ restructuring proposal to the lenders which has been sanctioned by majority of them and it is under active consideration of the remaining lenders.

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

XIII The Company is not a chit fund, nidhi or mutual benefit fund/ society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditor Report) Order 2003 are not applicable to the Company.

XIV In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.

XV According to the information and explanation given to us, the company has not given any guarantee for loan taken by others from Banks and Financial Institutions.

XVI The Company has neither raised any term loan during the year nor was any unrealized amount left on the account as at the beginning of the year. Therefore, the provisions of clause 4 (xvi) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

XVII According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that the funds raised on shortterm basis have not been used for longterm investment and vice versa.

XIII The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 during the year.

XIX No debentures have been issued by the Company during the year.

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

XXI To the best of our knowledge and beliefs and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.



FOR N. S. BHATT & CO.

Chartered Accountants

N.S. BHATT

Place: Mumbai (Proprietor)

Dated: July 31, 2009 M. No. 10149