We have audited the attached Balance Sheet of JAY SHREE TEA &
 INDUSTRIES LIMITED as at 31st March, 2012, the statement of Profit &
 Loss and the Cash Flow Statement of the said Company for the year ended
 on that date, annexed thereto. These financial statements are the
 responsibility of the Company''s management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 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 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.
 
 As required by the Companies (Auditors'' Report) Order, 2003 as amended
 by Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the
 Central Government of India in terms of sub-section (4A) of section 227
 of the Companies Act, 1956, we enclose in the Annexure a statement on
 the matters specified in paragraphs 4 & 5 of the said order.
 
 Further to our comments in the Annexure referred to above, we report
 that:
 
 i) 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.
 
 ii) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books.
 
 iii) We have incorporated the statement of garden expenditure of Sungma
 Tea Estate, North Tukvar Tea Estate, Singbulli Tea Estate, Balasun Tea
 Estate and Marionbarie Tea Estate audited by branch auditor as required
 by clause (c) of sub-section (3) of section 228 of the Companies Act,
 1956.
 
 iv) The Balance Sheet, the statement of Profit & Loss and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account.
 
 v) In our opinion, the Balance Sheet, the statement of Profit & Loss
 and the 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.
 
 vi) On the basis of written representations received from the directors
 as on 31st March, 2012 and taken on record by the Board of Directors,
 we report that none of the directors are disqualified as on 31st March,
 2012 from being appointed as a director in terms of clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956.
 
 vii) Without qualifying our opinion, attention is invited to the
 following:
 
 a.  Note no 2.28.E.iii and 2.28.E.iv regarding carry forward of Minimum
 Alternate Tax (MAT) Credit Entitlement of Rs 372.78 lacs and recognition
 of deferred tax assets of Rs 227.33 lacs on capital loss up to 31st March
 2012, based on the future taxable income projected by the company.
 However, we are unable to express our opinion on the convincing
 evidence of future taxable income and the corresponding recognition
 thereof;
 
 b.  Note no 2.28.I regarding non-provision for diminution in value of
 investment of a Subsidiary Company amounting to Rs 356.20 lacs and
 non-provision for advances and security deposits given to such
 subsidiary amounting to Rs 292.63 lacs in view of the reason stated in
 the said note.
 
 viii) In our opinion and to the best of our information and according
 to the explanations given to us, the said account together with notes
 thereon and attached thereto, give the information required by the
 Companies Act, 1956, in the manner so required and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 a) In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2012;
 
 b) In the case of the statement of Profit & 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.
 
 ANNEXURE TO THE AUDITORS'' REPORT 
 
 (Referred to in paragraph 3 of our report of even date)
 
 As required by the Companies (Auditors'' Report) (Amendment) Order 2004,
 we report that:
 
 (i) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 (b) The fixed assets were physically verified during the year by the
 management which in our opinion provides for physical verification of
 all the fixed assets at reasonable intervals. According to the
 information and explanations given to us, no material discrepancies
 were noticed on such verification.
 
 (c) The Company has not disposed off substantial part of fixed assets
 during the year.
 
 (ii) In respect of its inventories:
 
 (a) As explained to us, inventories were physically verified during the
 year by the management at reasonable intervals.
 
 (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 the information and explanations given to us,
 the company has granted unsecured loans /
 
 advances to three (three) Subsidiaries Companies and 1 (one) step down
 subsidiary company amounting to Rs1994.53 lacs (balance at the year
 end)(maximum amount outstanding during the year was Rs 4241.33 lacs)
 which is repayable on demand. The terms and conditions of the
 loans/advances are prima-facie not prejudicial to the interest of the
 Company.
 
 (b) Since there is no overdue amount of principal and interest, hence
 clause 4 (iii) (d) of this Order is not applicable.
 
 (c) The company has taken unsecured advances from one subsidiary
 company amounting to Rs 79.12 lacs (balance at the year end) (maximum
 amount outstanding during the year was Rs 79.12 lacs) which is repayable
 on demand. The terms and conditions of the loans are prima-facie not
 prejudicial to the interest of the company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 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, no major
 weakness has been noticed in the internal control system.
 
 (v) In respect of transactions entered in the register maintained in
 pursuance of section 301 of the Companies Act, 1956:
 
 (a) To the best of our knowledge and belief and according to the
 information and explanations given to us, transactions that needed to
 be entered into the register have been so entered.
 
 (b) According to the information and explanations given to us, certain
 transactions for purchase and sale of goods and materials with the
 subsidiary Companies for which alternate quotations were not available,
 have been made at prices which are prima facie reasonable having regard
 to the 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 or any other relevant provisions of the Act, and the rules
 framed there under and the directives issued by the Company Law Board,
 National Company Law Tribunal or the Reserve Bank of India, or any
 Court or any other Tribunal where applicable, with regard to the
 deposits accepted from the public.
 
 (vii) In our opinion, the internal audit functions carried out during
 the year by firms of Chartered Accountants appointed by the management
 have been commensurate with the size of the Company and the nature of
 its business.
 
 (viii)We have broadly reviewed the books of account and records
 maintained by the Company relating to plantation and the manufacture of
 Sulphuric Acid & Sugar pursuant to the order 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 made and maintained.  We
 have, however, not made a detailed examination of the records with a
 view to determining whether they are accurate or complete. To the best
 of our knowledge and according to the information and explanations
 given to us, the Central Government has not prescribed the maintenance
 of cost records for any other product of the Company.
 
 (ix) According to the information and explanations given to us in
 respect of statutory and other dues:
 
 (a) According to the information and explanations given to us and on
 the basis of our examination of the records of the Company, amounts
 deducted/accrued in the books of account in respect of undisputed
 statutory dues including Provident Fund, Investor Education and
 Protection Fund, Income tax, Sales tax, Wealth tax, Service tax and
 other material statutory dues have been regularly deposited during the
 year by the Company with the appropriate authorities.
 
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of Provident Fund, Investor
 Education and Protection Fund, Income tax, Sales tax, Wealth tax,
 Service tax and other material statutory dues were in arrears as at
 31st March, 2012, for a period of more than six months from the date
 they become payable.
 
 (b) The following disputed statutory liabilities have not been
 deposited in view of pending Appeals:
 
                                        Amount involved
 
 Statute        Nature        Forum         ( in lacs)       Related year
 
 Income Tax Act Income Tax    CIT (A)         86.51     2006-07 & 2007-08
 
 Income Tax Act Income Tax    CIT(A)          94.96               2008-09
 
 W B Sales 
 Tax Act        Sales Tax     First
                              appellate      164.29      1999-00, 1996-97
                                                             ,    1997-98,
 
                              Authorities/               2001-02, 2002-03,
                                                                  2003-04,
 
                              revisional 
                              board                      2005-06, 2006-07,
                                                                  2007-08
 
                                                            &     2008-09
 
 W B Sales
 Tax Act        Sales Tax     Taxation 
                              Tribunal        20.30               2003-04
 
 (x) The Company does not have accumulated losses as at the end of the
 year and the Company has not incurred cash losses during the current
 and the immediately preceding financial year.
 
 (xi) Based on our audit procedures and on the basis of information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in the repayment of dues to financial
 institutions and banks.
 
 (xii) According to the information and explanations given to us, the
 Company has not granted loans or advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 (xiii)In our opinion, the nature of activities of the company is such
 that the provisions of any special statute including chit
 fund/nidhi/mutual benefit fund/societies are not applicable to it.
 
 (xiv)In our opinion and according to the information and explanations
 given to us, the Company is not a dealer or trader in securities. The
 Company has invested surplus funds in marketable securities and mutual
 funds.  According to the information and explanations given to us,
 proper records have been maintained of the transactions and contracts
 relating to purchase of investments and timely entries have been made
 therein.  All the investments have been held by the Company in its own
 name except beneficial interest in shares amounting to Rs 9969.70 lacs
 have been held by two separate trusts.
 
 (xv) According to the information and explanations given to us, the
 Company has given a guarantee to a bank amounting to Rs 4070.40 lacs and
 pledged its own investment amounting to Rs1400 lacs for banking facility
 taken by a subsidiary company from a bank during the year and the terms
 & conditions whereof 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, prima facie, applied by the Company during the year for
 the purposes for which the loans were obtained.
 
 (xvii)According to the information and explanations given to us, on an
 overall basis, no funds raised on short-term basis been used during the
 year 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 Companies Act, 1956, during the year and hence the question
 of whether the price at which shares have been issued is prejudicial to
 the interest of the Company does not arise.
 
 (xix) The Company did not have any outstanding debenture during the
 year.
 
 (xx) The Company has not raised monies by public issue during the year
 and hence the question of disclosure and verification of end use of
 such monies does not arise.
 
 (xxi)To the best of our knowledge and belief 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 SINGHI & CO.
 
                                               Chartered Accountants
 
                                        Firm Registration No.302049E
 
                                                PRADEEP Kumar SINGHI
 
 1-B, Old Post Office Street                                 Partner
 
 Kolkata, the 30th day of May, 2012            (Membership Mo.50773)