1.  We have audited the attached Balance Sheet of Jaiprakash Associates
 Limited as at 31st March 2011 and also the annexed Profit and Loss
 Account and the Cash Flow Statement for the year ended on that date.
 These financial statements are the responsibility of the Jaiprakash
 Associates Limited management. Our responsibility is to express an
 opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. These Standards require that we plan and
 perform the audit to obtain reasonable assurance whether the Financial
 Statements are prepared 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 presentation of
 financial statement. 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, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (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 & 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 Accounting
 Standards referred to in sub-section (3C) of Section 211 of the
 Companies Act, 1956;
 
 (e) on the basis of written representations received from the
 directors, as on 31st March 2011, and taken on record by the Board of
 Directors, we report that none of the directors of the Company is
 disqualified as on 31st March 2011 from being appointed as a director,
 in terms of clause (g) of sub-section(1) of section 274 of the
 Companies Act, 1956;
 
 (f) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, read together with
 Significant accounting policies and notes thereon, give the information
 required by the Companies Act, 1956, in the manner so required and give
 a true and fair view:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March 2011;
 
 (ii) in the case of the Profit & Loss Account, of the Profit of the
 Company for the year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement of the cash flows of the
 Company for the year ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 Referred to in paragraph 3 of our report of even date on the accounts
 for the year ended 31st March 2011, of Jaiprakash Associates Limited.
 
 (i) (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets. The situation of the moveable assets used in the construction
 activity keeps on changing from works sites depending upon requirements
 for a particular contract.
 
 (b) A substantial portion of the Fixed Assets have been physically
 verified by the management during the year and in our opinion the
 frequency of verification is reasonable having regard to the size of the
 Company & nature of its assets. According to the information given to
 us and to the best of our knowledge, no material discrepancies were
 noticed on such physical verification.
 
 (c) Fixed assets disposed off by the Company during the year were not
 substantial; hence it does not affect the Company as a going concern.
 
 (ii) (a) The inventories have been physically verified by the management
 at reasonable intervals during the year. In our opinion the frequency
 of verification is reasonable.
 
 (b) The procedures of physical verification of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory.  The
 discrepancies noticed on physical verification were not material and
 these have been properly dealt with in the books of account.
 
 (iii) The Company has not granted nor taken any loans, secured or
 unsecured to/from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956.
 
 (iv) In our opinion and according to the information and 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 /real
 estate, electrical energy, services & supplies under EPC contracts.
 During the course of our audit we have not observed any continuing
 failure to correct major weakness in internal control system.
 
 (v) Based on the audit procedures applied by us and according to the
 information and explanations given to us we are of the opinion that the
 particulars of contracts or arrangements referred to in section 301 of
 the Companies Act, 1956 have been entered into the register required to
 be maintained under that section. The transactions made in pursuance of
 such contracts or arrangements have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time.
 
 (vi) In our opinion and according to the information and explanations
 given to us the Company has complied with the provisions of Section
 58A, 58AA and any other provisions of the Companies Act, 1956, and the
 rules framed thereunder with regard to the deposits accepted from the
 public. As informed to us, no order has been passed by the Company Law
 Board or National Company Law Tribunal or Reserve Bank of India or any
 court or any other Tribunal.
 
 (vii) In our opinion the Company has an internal audit system
 commensurate with the size & nature of its business.
 
 (viii) We have broadly reviewed the accounts and cost records
 maintained by the Cement & Power divisions of the Company pursuant to
 the Rules made by the Central Government for the maintenance of cost
 records under Section 209(1)(d) of the Companies Act, 1956, and are of
 the opinion that prima-facie the prescribed accounts and records have
 been maintained.  We have not, however, made a detailed examination of
 the records.
 
 (ix) (a) As per records produced before us, the Company is generally
 regular in depositing undisputed statutory dues like 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 applicable to it, with the
 appropriate authorities and there were no arrears of such dues at the
 year end which have remained outstanding for a period of more than six
 months from the date they became payable.
 
 (b) As per records produced before us the dues of Income- tax,
 Sales-tax, Wealth tax, Service tax, Customs Duty, Excise Duty and cess
 which have not been deposited on account of any dispute are stated
 hereunder:
 
                                                           Rs. Lakhs
 
                              Forum where dispute is pending 
 Name of 
 Statute    Period to 
            which                    Appellate 
                                     authorities-   High  Supreme   Total
 (Nature 
 of dues)   amount 
            relates  Commissionarate Tribunal       Court Court
 
 Central 
 Excise
 
            1988-92           13.65         -           -     -     13.65
 
            2000-02             -        1.32        2.16     -      3.48
 
            2000-03             -       12.55           -     -     12.55
 
            2000-04             -       88.22           -     -     88.22
 
            2002-04             -       72.93           -     -     72.93
 
            2003-06             -           -        3.62     -      3.62
 
            2004-05             -      140.97           -     -    140.97
 
            2005-06             -       64.88           -     -     64.88
 
            2005-07            2.06         -           -     -      2.06
 
            2006-07             -        0.58           -     -      0.58
 
            2007-08             -      480.81           -     -    480.81
 
            2007-09             -      585.07           -     -    585.07
 
            2008-09             -      321.30           -     -    321.30
 
            2006-10          807.63         -           -     -    807.63
 
            2009-10             -      819.92           -     -    819.92
 
            2005-10             -           -      552.84     -    552.84
 
            2009-11            4.68         -           -     -      4.68
 
 Electri-
 city 
 Duty & 
 Cess
 
            1991-02             -           -    1,844.71     -  1,844.71
 
            2003-04             -           -           - 92.49     92.49
 
 U.P. 
 Trade Tax
 
            1998-99             -           -      235.04     -    235.04
 
            1999-00             -           -           - 480.15   480.15
 
            2000-01             -           -           - 810.29   810.29
 
            2001-02             -           -           - 711.14   711.14
 
            2002-03             -           -           - 584.78   584.78
 
            2003-04             -           -           - 289.77   289.77 
 
            2004-05             -           -           - 612.94   612.94
 
            2007-08             -       57.28           -      -    57.28
 
 U.P.
 Entry Tax
 
            2003-04             -           -           -  256.53  256.53
 
            2004-05             -           -           -   53.00   53.00
 
            2005-06             -           -           -  452.75  452.75
 
            2006-07             -           -           -  366.74  366.74
 
            2007-08             -           -    1,304.45 1,262.85 2,567. 
                                                                    30
 
            2008-09         81.84           -    3,462.52     -  3,544.36
 
            2009-10        202.68           -    3,804.60     -  4,007.28
 
            2008-11             -           -       83.92     -     83.92
 
            2010-11         11.01           -      488.80     -    499.81
 
 M.P.
 Entry Tax
 
            2000-01          0.90           -           -     -      0.90
 
            2001-02             -           -      148.75     -    148.75
 
            2004-05         12.67           -           -     -     12.67
 
            2006-07         57.34           -           -     -     57.34
 
            2007-08        211.95           -           -     -    211.95
 
            2005-11             -           -           - 3,481.81 3,481. 
                                                                     81
 
            2008-11             -           -           -     2.45   2.45
 
 Himachal 
 Pradesh 
 Entry 
 Tax        2010-11             -           -      363.38       -  363.38
 
 MPCT/
 CST
            1999-00          9.83           -           -       -    9.83
 
            2001-02         20.38           -           -       -   20.38
 
            2004-05             -       48.14           -       -   48.14
 
            2005-06             -           -      252.70       -  252.70
 
            2006-07             -       23.60           -       -   23.60
 
            2007-08         50.06           -           -       -   50.06
 
 Royalty
  on 
 limestone
 including 
 interest
 
            Upto Dec 
            2008                -           -     9,034.98      -  9,034.
                                                                     98
 
 Building 
 and Other
 Construc-
 tion 
 Workers 
 Welfare
 Cess
            2008-11             -           -       234.04      -  234.04
 
 Rural 
 Infra-
 struc-
 ture 
 Tax
 
            Oct 05- 
            Dec09               -           -           -  289.30  289.30
 
 Tax on 
 transport-
 ation of
 goods in 
 Himachal 
 Pradesh
 
            2010-11             -           -      243.67       -  243.67
 
 Service 
 Tax
            2008-09             -      185.00           -       -  185.00
 
 Income 
 Tax
          AY 2008-09       399.85           -           -       -  399.85
 
 (x) The Company does not have any accumulated losses and has not
 incurred any cash losses during the financial year covered by our audit
 or in the immediately preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 financial institutions, banks or debenture holders.
 
 (xii) The Company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 (xiii) In our opinion the Company is not a chit fund or a nidhi/ mutual
 benefit fund/society. Therefore, clause (xiii) of Para 4 of the Order is
 not applicable.
 
 (xiv) In our opinion the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly,
 clause (xiv) of Para 4 of the Order is not applicable.
 
 (xv) In our opinion and according to the information and explanations
 given to us, where the Company has given guarantee for loans taken by
 its subsidiaries from banks or financial institutions, the terms and
 conditions thereof are not prejudicial to the interest of the Company.
 
 (xvi) To the best of our knowledge and belief and according to the
 information and explanations given to us, term loans availed by the
 Company were applied by the Company during the year for the purposes
 for which the loans were obtained, other than temporary deployment
 pending application.
 
 (xvii) According to the information and explanations given to us and on
 the overall examination of the Balance Sheet of the Company for the
 year under report, we are of the opinion that no funds raised on short
 term basis have been used for long term investment.
 
 (xviii) According to the information and explanations given to us the
 Company has not made any preferential allotment of shares to parties
 and companies covered in the Register maintained under section 301 of
 the Companies Act, 1956.
 
 (xix) According to the information and explanations given to us, the
 Company has created security/charge in respect of secured
 non-convertible debentures issued and outstanding at the year end.
 
 (xx) A the Company has not raised any money by way of public issues
 during the year, Clause (xx) of Para 4 of the Order is not applicable.
 
 (xxi) According to the information and explanations given to us, no
 material fraud by or on the Company has been noticed or reported during
 the year.
 
                                            For M.P. SINGH & ASSOCIATES
 
                                                  Chartered Accountants 
 
                                                  Firm Regn No. 002183C
 
                                                        (CA M.P. Singh)
 
                                                      Partner M.No.1454 
 
 Place : Noida 
 
 Dated : 12 August 2011