We have audited the attached Balance Sheet of JAY SHREE TEA &
 INDUSTRIES LIMITED as at 31st March, 2011, the Profit & Loss Account
 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 mis-statement. 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 TukvarTea Estate, Singbulli Tea Estate, Balasun Tea
 Estate, Marionbarie Tea Estate and accounts of Jay Shree Sugar Mill
 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 and the Profit & Loss Account 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 and the Profit & Loss Account and
 the Cash Flow Statement dealt with by this report, subject to clause
 (vii) (a) below, 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, 2011 and taken on record by the Board of Directors,
 we report that none of the directors are 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.
 
 vii) Attention is invited to the following:
 
 a.  Note no. H in schedule 23 regarding giving impact to the scheme of
 amalgamation and arrangement based on approval of Hon''ble High Court at
 Calcutta pending completion of formalities relating to filing the
 scheme with appropriate authorities to make the scheme effective;
 
 b.  Note no. D (iii) and (iv) in schedule 23 regarding carry forward of
 Minimum Alternate Tax (MAT) Credit Entitlement of Rs.407.01 lacs and
 recognition of deferred tax assets of Rs.197.69 lacs on capital loss
 upto 31st March 2011, 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;
 
 c.  Note No. Fin schedule 23 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.258.63 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, subject to point no (vii) (a) above and
 read with para (vii) (b) & (c) above, 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, 2011;
 
 b) In the case of the Profit & Loss Account, 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.
 
 (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;
 
 (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 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) The Company has generally been regular in depositing undisputed
 statutory dues, including provident fund, employees'' state insurance,
 investor education and protection fund, income tax, sales tax, wealth
 tax, service tax, custom duty, excise duty, cess and any other
 statutory dues with the appropriate authorities during the year except
 Professional Tax of Rs.91,835/-, House Tax of Rs.57,052/- and Panchayat
 Tax of Rs.2,20,000/- which are outstanding for more than six months.
 
 (b) The following disputed statutory liabilities have not been
 deposited in view of pending Appeals:
 
 Statute         Nature      Forum         Amount involved  Related year
                                             (in lacs)
 
 Income Tax Act  Income Tax  CIT (A)           107.82       2006-07 & 
                                                            2007-08
 
 WB Sales Tax 
 Act             Sales Tax   W.B 
                             Appellate &       243.64       1996-97 to 
                                                            1997-98,
                             revisional 
                             Board                          2000-01 & 
                                                            2003-04
                                                            2005-06 & 
                                                            2006-07
 WB Sales 
 Tax Act        Sales Tax    Joint 
                             Commissioner       17.33       1999-00,
                                                            2001-02
                             of Commercial 
                             Taxes                          & 2006-07
 
 Provident 
 Fund Act       Provident 
                Fund         Hon''ble 
                             Calcutta           24.39        1999 to 2005
                             High Court
 
 (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.
 
 (xv) According to the information and explanations given to us, the
 Company has given a guarantee to a bank amounting to Rs. 3568.40 lacs
 for loan taken by a subsidiary company from the 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, funds raised on short-term basis, prima facie to the
 tune of Rs. 2568.68 lacs 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 notarise.
 
 (xix) No debentures is outstanding at the year end. Hence, this clause
 is not applicable.
 
 (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 24th day of August, 2011           (Membership No. 50773)