Auditor Report of Andrew Yule & Company Ltd.

Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Andrew Yule & Company Limited (‘‘the Company”), which comprise the balance sheet as at 31 March 2018, the statement of profit and loss (including other comprehensive income) and the statement of cash flows and the statement of changes in equity for the year ended and a summary of the 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 of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued thereunder. 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS 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 financial statements.

Basis for Qualified Opinion

No provision has been considered in the financial statement in respect of investments in Katras Jherriah Coal Company Limited amounting to Rs.6.95 lakh and New Beerbhoom Coal Company Limited amounting to Rs.12.27 lakh.

Due to non-provision of the above amount in the accounts, the reported profit of the Company has been overstated by Rs.19.22 lakh and the value of non-current investment has been overstated by the same amount and the provision has been understated by Rs.19.22 lakh.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except the matter described in the Basis for qualified opinion paragraph, the aforesaid standalone Ind AS 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 including the Ind AS, of the financial position of the Company as at 31 March, 2018, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Other Matters

Principal outstanding amount of West Bengal Sales Tax Loan of Rs.250 Lakhs has been repaid during the year towards full and final settlement. Interest amounting to Rs.530.44 Lakhs been written back in the books pending confirmation from West Bengal Sales Tax Department.

Report on Other Legal and Regulatory Requirements

[1] As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of section 143(11) 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 obtained ,except for the matter described in the Basis for Qualified Opinion Paragraph all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

[b] except for the matter described in the 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, the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;

[d] except for the effects of the matter described in the Basis for Qualified Opinion Paragraph ,in our opinion ,the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act read with relevant rule issued there under;

[e] the matter described in the Basis for Qualified Opinion paragraph above, in our opinion , has an adverse effect on the profit of the Company.

[f] Section 164[2] of the Companies Act,2013 regarding disqualification of the Director is not applicable to the Company being a government company vide notification no.G.S.R463[E] dated 05th June 2015.

[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 “Annexure C”; and

[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 standalone Ind AS financial statements — Refer Note 36 to the standalone Ind AS 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; and

[3] As required by section 143(5) of the Act the directions and sub-directions issued by the Comptroller &Auditor General Of India , we give our comments, action taken and the impact on the Standalone Financial Statement.

[i] [a] The Company is maintaining proper records showing full particulars, including quantitative details and situation of its fixed assets.

[b] As explained to us ,Fixed assets have been physically verified by the management at regular intervals and as informed to us ,no material discrepancies were noticed on such verification.

[c] As per records of the Company and according to the information and explanations given to us, the Title Deeds of immovable properties are held in the name of the Company except two properties situated at Kolkata , the title deeds of which have been lost and a General Diary has been lodged by the Company with Burrabazar Police Station on 25 th May, 2017.

[ii] According to the information and explanations given to us, the inventories have been physically verified during the year at reasonable intervals by the management .The discrepancies noticed on verification between the physical inventories and book records were not material in relation to the operation of the Company and the same have been properly dealt with in the books of account.

[iii] [a] According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured loans, during the year.

[b] However the outstanding amount due from Yule Electrical Limited arising out of making statutory payment by parent company amounting to Rs.3.29 lakh.

[iv] According to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans and investments made and guarantees given by it.

[v] According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year within the meaning of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under to the extent notified.

[vi] We have broadly reviewed the cost records maintained by the Company relating to all products of the Company. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete since cost audit for the year 2018-19 is yet to be completed.

[vii] [a] As per records of the Company and according to the information and explanations given to us, the Company is generally regular in depositing undisputed applicable statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Value Added Tax, Customs Duty, Excise Duty, Cess and any other statutory dues to the appropriate authorities and there are no undisputed amount payable in respect of the same which were in arrear as on 31^st March, 2018 for a period of more than six months from the date the same became payable.

[b] According to the information and explanations given to us, the Company has not deposited the following dues on account of disputes with the appropriate authority.

Nature of statute	Nature of Dues	Amount [Rs. lakh]	Period to which amount relates	Forum Where the dispute is pending
	Income Tax ( Penalty)	4.65	2004-05	C.I.T.(Appeal) (20)
Income Tax Act	Income Tax	2013.76	2010-11 - Rs.1873.94 lac 2012-13 - Rs. 84.23 lac 2013-14 - Rs. 23.07 lac 2014-15 - Rs. 32.52 lac	C.I.T.(Appeal)(20) ITAT-Calcutta Bench C.I.T.(Appeal)(2)
		586.80	1979-80 - Rs. 65.24 lac 1986-87 - Rs.74.77 lac 1988-89 - Rs.69.52 lac 2001-02 - Rs.37.66 lac 2004-05 - Rs.72.65 lac 2005-06 - Rs.0.22 lac 2006-07 - Rs.142.08 lac 2011-12 - Rs.82.14 lac 2012-13 - Rs.18.53 lac 2014-15 - Rs.23.99 lac	West Bengal Commercial Tax Appellate & Revisional Board.
W. B. Sales Tax & VAT	W. B. Sales Tax & VAT	366.79	1973-74 - Rs.0.24 lac 1987-88 - Rs.5.56 lac 1994-95 - Rs.216.36 lac 1997-98 - Rs.72.37 lac 1999-00 - Rs.45.97 lac 2000-01 - Rs.16.19 lac 2003-04 - Rs.10.10 lac	West Bengal Taxation Tribunal.
		908.04	1985-86 - Rs.53.16 lac 1987-88 - Rs.236.57 lac 1992-93 - Rs.309.90 lac 1996-97 - Rs.44.68 lac 1997-98 - Rs.71.07 lac 1999-00 - Rs.69.31 lac 2000-01 - Rs.88.34 lac 2003-04 - Rs.35.01 lac	Appellate Authority Calcutta High Court
		49.34	1980-81 - Rs.0.04 lac 1982-83 - Rs.4.55 lac 1983-84 - Rs.23.99 lac 1984-85 - Rs.20.75 lac	Appellate Authority, SoD
Assam Sales Tax and VAT	Sales Tax And VAT	152.93	1996-97 to 1998-99	Appellate Authority’ Revenue Board.

Orissa Sales Tax and VAT	Sales Tax	106.24 5.64	1999-2000 2001-2002	Appellate Authority Tribunal at High Court Cuttack
Karnataka Sales Tax and VAT	Karnataka Sales Tax	17.69	2017-18	Appellate Authority Karnataka Appellate Tribunal
Central Excise	Central Excise	331.98	1996-97, 1998-99, 1992-93, 1993-94, 1990-91, 2001 to 2003 2009-10	Appeal atCESTAT
		52.58	1991-92, 1992-93	Appeal at Calcutta High Court
		2.70	2012-13, 2013-14	Commissioner of Central Excise
Service Tax	Service Tax	30.64	2006-07, 2007-08, 2009-10, 2010-11	Appeal at Commissioner of Central Excise Appeals
		1.45	2006-07 & 2007-08	Commissioner of Central Excise

[viii] According to the information and explanations given to us and based on our examination of the books and records of the Company , we report that the Company has not defaulted in repayment of dues to financial institutions and banks.

[ix] According to the information and explanations given to us and based on our examination of the books and records of the Company, we report that the term loan has been applied for the purpose for which the same was 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 to us and based on our examination of the books and records of the Company, we report that the Company has paid or provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

[xii] According to the information and explanations given to us, the Company is not a Nidhi Company Accordingly, clause 3(xii) of the Order is not applicable.

[xiii] According to the information and explanations given to us and based on our examination of the books and records of the Company, we report that 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 standalone financial statement as required by the applicable accounting standards.

[xiv] According to the information and explanations given to us and based on our examination of the books and records of the Company, we report that the Company has not made any preferential allotment/private placement of shares or fully or partly convertible debentures during the year except shares allotted to the government of India and Bank of Baroda on conversion of their loans in the Equity Shares. Accordingly, Clause 3(xiv) of the Order is not applicable.

[xv] According to the information and explanations given to us and based on our examination of the books and records of the Company, we report that the Company has not entered into any non-cash transactions with directors or persons connected with him during the year. Accordingly, Clause 3 (xv) of the Order is not applicable.

[xvi] The Company is not required to be registered under section 45-1A of the Reserve Bank Of India Act ,1934.

We have audited the internal financial controls over financial reporting of Andrew Yule & Company 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 Respective Board of Directors of the Holding Company and its subsidiary companies, which are companies incorporated in India, are 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 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 Companies Act, 2013.

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 on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 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 auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 control 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 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 31 March 2018, 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 ICAI.

For U. S. Saha & Co.

Chartered Accountants

Firm Registration No.309037E

(U. S. SAHA, FCA)

Place : Kolkata Partner

Date : 30th May, 2018 Membership No.015491

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Mar 31, 2017

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Andrew Yule & Company Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2017, 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

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 to 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.

Auditor’s 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 and the Rules made thereunder including the accounting standards and matters which are required to be included in the Audit Report.

We conducted our audit in accordance with the Standards on Auditing, as specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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 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 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 financial statements.

Basis for Qualified Opinion

No provision has been made in the financial statements for diminution in the value ofnon current investments amounting to Rs.543.24 lakh (Refer Note 10.08) Had the observation been considered, Profit for the year before provision of taxes would have been Rs.2848.44 lakh as against the reported profit of Rs.3391.68 lakh, Reserves and Surplus would have been Rs.7735.90 lakh as against the reported Reserves and Surplus of Rs.8279.14 lakh and value of Non-Current Investments would have been Rs.317.18 lakh as against the reported figure of Rs.860.42 lakh.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the matter described in the Basis for Qualified Opinion paragraph, 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 31st March, 2017, and its profit and its cash flows for the year then ended.

Other Matters

[1] Note No.10.03 regarding sanctioned rehabilitation scheme vide Board for Industrial and Financial Reconstruction (BIFR) Order dated October 30, 2007. The rehabilitation schedule of the Company, with cutoff date 31st March, 2006 is in process of implementation.

[2] Note No.10.09 regarding Balances of Trade Receivables, Deposits and Advances to the parties, Non-Current Assets, Trade Payables, and Other Liabilities which are subject to confirmation. In absence of confirmations from the parties we are unable to verify adequacy of the provisions made for Bad & Doubtful Debts. Necessary adjustment, if required, will be made in the Standalone Financial Statements on receipt of confirmation of the parties.

[3] Note No.10.27 regarding Balances of Security Deposits and Earnest Money deposits which are under reconciliation.

[4] Note No.10.28 regarding Balances of Related Parties which are subject to reconciliation.

Our opinion is not modified in respect of these matters.

Report on Other legal and Regulatory Requirements

[1] As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act and on the basis of such checks of the books and records of the Company as considered appropriate and as per information and explanations given to us, we give in the Annexure-A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

[2] As required by section 143(3) of the Act, we report that :

[a] we have sought and obtained, except for the matters described in the Basis for Qualified Opinion paragraph above, 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 matters described in the Basis for 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 effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the 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, in our opinion, has an adverse effect on the profit of the Company;

[f] on the basis of the written representations received from the directors as on 31st March, 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

[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 Annexure-C; and

[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 knowledge and belief and according to the information and explanations given to us :

[i] the Company has disclosed its pending litigations on its financial position in its standalone financial statements. Refer Note No.10.02 to the Standalone 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 and

[iv] the Company has provided requisite disclosure in its standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. However, in the absence of denomination wise records of specified bank notes, we are unable to comment whether these are in accordance with the books of account maintained by the Company.

[3] As required by section 143(5) of the Act the directions and sub-directions issued by the Comptroller & Auditor General of India, we give our comments, action taken and impact on the standalone financial statements in Annexure-B annexed herewith.

ANNEXURE-A TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph-1 on Other Legal and Regulatory Requirements of our Report of even date to the members of Andrew Yule & Company Limited on the Standalone Financial Statements of the Company for the year ended 31st March, 2017)

[i] [a] The Company is maintaining proper records showing full particulars including quantitative details and situation of its Fixed Assets.

[b] As explained to us, Fixed Assets have been physically verified by the management at regular intervals and as informed to us no material discrepancies were noticed on such verification.

[c] As per records of the Company and according to the information and explanations given to us, the Title Deeds of immovable properties are held in the name of the Company except two properties situated at Kolkata, the title deeds of which have been lost and a General Diary has been lodged by the Company with Burrabazar Police Station on 25th May, 2017.

[ii] According to the information and explanations given to us, the inventories have been physically verified during the year at reasonable intervals by the management. The discrepancies noticed on verification between the physical inventories and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

[iii] [a] According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured, during theyear [excluding outstanding unsecured loans to its Wholly owned subsidiary Companies viz, Yule Electrical Limited (Rs.2.71 lakh), Hooghly Printing Company Limited (Rs.82.00 lakh) and Yule Engineering Limited (Rs.12.34 lakh) as on 31.03.2017] to companies, firms, Limited Liability Partnership or other parties covered in theregister maintained under Section 189 of the Act.

[b] No interest is being charged on the above loan except on loan given to Hoogly Printing Company Limited. Yule Electrical Limited and Yule Engineering Limited do not have any transactions with respect to the above mentioned loans and these Companies were formed as per BIFR Order. There are no schedules as regards to repayments of Principal amount and interest thereon and therefore we are not in a position to make any comments as to whether or not the Company was regular in receipt of principal amount and interest.

[c] In view of our comments in Para [a] and [b] above, we are not in a position to make any comments as to whether or not there were any overdue amounts and whether any reasonable steps have beentaken by the Company for recovery of the principal amount.

[iv] According to the information and explanations given to us, the Company has complied with the provisions of sections 185 and I86 of the Act, in respect of loans and investments made and guarantees given by it.

[v] According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year within the meaning of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under to the extent notified.

[vi] We have broadly reviewed the cost records maintained by the Company relating to all products of the Company. However we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

[vii] [a] As per records of the Company and according to the information

and explanations given to us, the Company is generally regular in depositing undisputed applicable statutory dues including Provident Fund, Employees’State Insurance, Excise Duty, Income Tax, Sales Tax, Service Tax, Custom Duty, Value Added Tax, Cess and any other statutory dues to the appropriate authorities and there are no undisputed amount payable in respect of the same which were in arrears as on 31st March, 2017 for a period of more than six months from the date the same became payable.

[b] According to the information and explanations given to us the Company has not deposited the following dues on account of disputes with the appropriate authority :

Name of Statute	Nature of Dues	Amount [Rs.lakh]	Period to which amount relates	Forum where the dispute is pending
Income Tax Act.	Income Tax (Penalty)	8.20	1988-89	C.I.T. (Appeal)(20)
		4.65	2004-05	C.I.T. (Appeal)(20)
	Income Tax	2206.35	2010-11	ITAT - Cal
		84.23	2012-13	C.I.T. (Appeal)(2)
W.B.Sales Tax and VAT	W.B.Sales Tax & VAT	585.97	1979-80 1986-87 1988-89 2001-02 2004-05 2005-06 2006-07 2007-08 2009-10 2011-12	West Bengal Commercial Tax Appellate & Revisional Board.
		366.79	1973-74 1987-88 1994-95 1997-98 1999-00 2000-01 2003-04	West Bengal Taxation Tribunal.
		908.04	1985-86 1987-88 1992-93 1996-97 1997-98 1999-00 2000-01 2003-04	Appellate Authority, Calcutta High Court
		18.53	2012-13	Special Commissioner
		49.33	1980-81 1982-83 1983-84 1984-85	Appellate Authority, SoD

Assam Sales Tax and VAT	Sales Tax and Vat	152.93	1996-97 to 1998-99	Appellate Authority Revenue Board.
Orissa Sales Tax and VAT	Sales Tax	106.24	1999-2000	Appellate Authority Tribunal at High Court Cuttack.
		5.64	2001-02	2nd Appellate Authority Berhampore
Central Excise	Central Excise	331.98	1996-97 1998-99 1992-93 1993-94 1990-91 2001 to 2003 2009-10	Appeal at CESTAT.
		52.58	1991-92 1992-93	Appeal at Calcutta High Court
		25.81	1995 to 1997 2012-13 2013-14	Commissioner of Central Excise
Service Tax	Service Tax	13.91	2006-07 2007-08 2009-10 2010-11 2006-07 2007-08	Appeal at CESTAT.

viii. According to the information and explanations given to us and based on our examination of the books and records of the Company, we report thatthe Company has not defaulted in repayment of dues to financial institutions and banks. However we cannot comment on the repayment of Sales Tax Loan from Government of West Bengal of Rs.748.58 lakh (inclusive of interest Rs.367.16 lakh) as the repayment schedule of the same hasnot been provided for our verification.

ix. According to the information and explanations given to us and based on our examination of the books and records of the Company, we report that the term loan has been applied for the purpose for which the same was 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 to us and based on our examination of the books and records of the Company, we report that the Company has paid or provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. According to the information and explanations given to us, the Company is not a Nidhi Company Accordingly, clause 3 (xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the books and records of the Company, we report that 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 standalone 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 books and records of the Company, we report that the Company has not made any preferential allotment/ private placement of shares or fully or partly convertible debentures during the year except shares allotted to the Government of India and Bank of Baroda on Conversion of their loans in the Equity Shares .Accordingly, Clause 3 (xiv) of the Order is not applicable.

xv. According to the information and explanations given to us and based on our examination of the books and records of the Company, we report that the Company has not entered into any non-cash transactions with directors or persons connected with him during the year. Accordingly, Clause 3 (xv) of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-1A of the Reserve Bank of India Act, 1934.

For V. SINGHI & ASSOCIATES

Chartered Accountants

Firm Registration No. 311017E

(V. K. SINGHI)

Place : Kolkata Partner

Date : 30th May, 2017 Membership No. 050051

---

Mar 31, 2015

We have audited the accompanying standalone financial statements of Andrew Yule & Company Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, and 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 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 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.

Auditor's 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 required that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone financial statements.

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

No provision has been made in the accounts for diminution in the value of investment in equity shares of Webfil Limited amounting to Rs.14.50 lacs. Refer Note No.10.08. Had the observation been considered, Profit for the year after provision of taxes would have been Rs.1281.56 lacs as against the reported profit of Rs.1296.06 lacs, Reserves and Surplus would have been Rs.12303.00 lacs as against the reported Reserves and Surplus of Rs.12317.50 lacs and value of Non-current investments would have been Rs.824.12 lacs as against the reported figure of Rs.838.62 lacs.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the matter described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Other Matter

[i] Note No. 10.03 regarding sanctioned rehabilitation scheme vide Board for Industrial and Financial Reconstruction (BIFR) Order dated October 30, 2007. The rehabilitation schedule of the Company, with cutoff date 31st March, 2006 is in process of implementation.

[ii] Note No. 10.03a (i) & (iii) regarding further financial restructuring package sanctioned by Government of India and later approved by Board for Industrial and Financial Reconstruction (BIFR) vide Order No. 501 / 2003 dated 15.07.2013 for the reasons stated there in.

Our opinion is not qualified in respect of these matters.

Report on Other legal and Regulatory Requirements

[1] 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 the paragraphs 3 and 4 of the Order, to the extent applicable,

[2] As required by section 143(3) of the Act, we report to the extent applicable that:

[a] We have sought and obtained, except for the matters described in the Basis for Qualified Opinion paragraph, all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the standalone financial statements;

[b] Except for the effect of the matter described in the Basis for Qualified Opinion paragraph above, 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 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 accounts;

[d] Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the aforesaid Balance Sheet, Statement of Profit and Loss and Cash Flow Statements comply with the 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 of Qualified Opinion paragraph above, in our opinion, has an adverse effect on the profit of the Company.

[f] On the basis of written representation received from the Directors as on 31st March, 2015 taken on record by the Board of Directors, none of the Director is disqualified as on 31st March, 2015 from being appointed as a Director in terms of Section 164(2) of the Act; and

[g] 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 No.10.02 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 was no amount required to be transferred, to the Investor Education and Protection Fund by the Company during the year,

[3] As required under section 143(5) of the Companies Act, 2013, we enclose in Annexure-1 our observations on the directions issued by the Comptroller and Auditor General of India,

The Annexure referred to in our independent Auditor's Report to the Members of the Company on standalone financial statement for the year ended 31st March, 2015. We report that:

[01] [a] The Company is maintaining proper records showing full particulars including quantitative details and situation of its fixed assets.

[b] The Company has a regular programme for verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years, which is considered reasonable having regard to the size of the company and nature of its assets. Pursuant to the programme a physical verification of fixed assets was carried out by the Company during the year. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

[02] [a] The inventory of the Company has been physically verified during the year by the management.

[b] In our opinion the frequency of such verification is reasonable and adequate in relation to the size of the Company and nature of its business.

[c] The Company is maintaining proper records of inventories and material discrepancies were not noticed on such verification. Discrepancies noticed on physical verification have been properly dealt in the books of account.

[03] According to the information and explanations given to us, the Company has given loans to its fully owned Subsidiary Companies viz, Hooghly Printing Company Ltd. (Rs.50.00 lacs); Yule Electrical Ltd. (Rs.2.51 lacs); and Yule Engineering Ltd.(Rs.12.18 lacs). Hooghly Printing Company Ltd. has since repaid the loan. However Yule Electrical Ltd. & Yule Engineering Ltd. do not have any transactions and these Companies were formed as per BIFR order. As informed to us recoveries from these Companies will be made at a later date. Further, the Company has subscribed to Bonds issued by WEBFIL Ltd. amounting to Rs.305.00 lacs which was initially due for repayment on 20.12.2014. However a moratorium of 7 years has been granted to them.

[04] in our opinion and according to the information and explanations given to us, there is an adequate i nternal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventories and fixed assets and for sale of goods and services. On the basis of our examination of books and records, we have neither come across nor have been informed of any continuing failure to correct major weakness in such internal control.

[05] in our opinion and according to the information and explanation given to us and the accounting records checked by us the Company has not accepted any deposit from the public during the year. Therefore, directive issued by the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and rules framed there under is not applicable to the Company.

[06] We have broadly reviewed the cost records maintained by the Company relating to all the products of the Company. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

[07] [a] According to the information given and explanation offered and according to the books and records of the Company as produced to us, the company is generally regular in depositing un-disputed 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 any other statutory dues with the appropriate authorities.

[b] As on 31st March, 2015, according to the records of the company and the information and explanations given to us, the particulars of dues on account of Sales Tax, VAT, income Tax, Service Tax and Excise Duty that have not been deposited on account of any dispute are furnished below :—

Name of Nature of Amount Period to Forum where the which amount Statute Dues [Rs. lac] relates dispute is pending

income 1988-89 Tax 12.85 & CJX (Appeal)

incoAme Tax (Penalty) 2004-05 (IV) Act' income 47219 2009-10 to C.I.T. (Appeal) Tax 2012-13 (IV)

1979-80, 1986-87

to

1988-89 West Bengal 1996-97, Commercial 1045.35 2000-01, Tax Appellate 2005-06, & Revisional 2006- 07, Board. 2007-08, 2008-09, 2009-10 1973-74, 1994-95, 1997-98, West Bengal W.B.Sales 345'04 1999-2000, W.B.Sales Tribunal. Tax and & VAT Tax & VAT 2003-04 1985-86, 1992-93, Appellate 538.45 1997-98, Authority 1999-2000, Calcrutta High 2003-04 Court 2010-11 & Additional 143 15 2011-12 Commissioner 2001-02 & 120.32 2004 05 jt Commissioner 331.63 Semor|t. Commissioner

1980-81, 49.33 1982-83 to Appellare 1984-85 AuthoritY, SoD

Assam Assam 1996-97 to Appellare Sale Tax Gardens 152.93 1998-99 Authority . and VAT Revenue Board.

Appellate Auth- 106.24 1999-2000 ority Tribunal Orissa at High Court Orissa Sales Tax Cuttack. Sales Tax and VAT 2nd Appellate 5.64 2001-02 Authority Berhamprare

1996-97, 1998-99, 1992-93, 1993-94,

353.74 1990-91, Appeal at 2001 to CtSIAI' 2003 &

Central Central 2007-08, Excise Excise 2009-10

1991-92 Appeal at 52.58 1992-93 Calcutta High Court 1995 to Commissioner of 1997 Central Excise 1998-99, Commissioner of 4.34 1993 Appeal ServiceTax ServiceTax 12.21 2006-07, Appea| at 2007-08 CESTAT.

[c] There is no amount due to be transferred to investor education and protection fund in accordance with the relevant provisions of Companies Act, 1956 (1 of 1956) and the rules made there under.

[08] The company does not have accumulated losses aggregating to not less than fifty percent of net worth and has not incurred cash losses in the current year and in the immediately preceding financial year.

[09] The company has defaulted in repayment of dues amounting to Rs.1041.46 lacs to a public sector bank. The bank has agreed to convert the total principal outstanding of Rs.2990.96 lacs into equity which is pending approval of the Government of India.

[10] The Company has given corporate guarantee of Rs.334.70 lacs on behalf of its subsidiary company Hooghly Printing Company Limited for loan taken from a Bank. The terms and conditions of loan are not prejudicial to the interest of the Company.

[11] Term loans taken were applied for purpose for which the loans were obtained.

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

For Gupta & Co. Chartered Accountants Firm's Registration No.301028E (CA Arnab Deb)

Place : Kolkata Partner

Date : 30th May 2015. Membership No.062018

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Mar 31, 2014

We have audited the accompanying financial statements of Andrew Yule & Company Limited ("the Company"), which comprise the Balance Sheet as at 31st March 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

The Company''s management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs, Government of India, 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 fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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 the 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 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 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.

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

Basis for Qualified Opinion

No provision has been made in the accounts for diminution in the value of Investment in equity shares of WEBFIL Limited amounting to Rs. 14.50 lac. Refer note no 10.08. Had the observation been considered, Profit of the year after provision for taxes would have been Rs. 2214.76 lac as against the reported profit of Rs. 2229.26 lac, Reserve & surplus would have been Rs. 1159608 lac as against the reported Reserve & surplus of Rs. 11610.58 lac and value of non current investments would have been Rs. 824.12 lac as against the reported figure of Rs. 838.62 lac.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except to the effect of the matters described in the Basis for Qualified Opinion paragraph, the 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 31st March 2014;

[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.

Without Qualifying our Report Attention is Drawn to :

[i] Note no 10.03 regarding sanctioned rehabilitation scheme vide Board for Industrial and Financial Reconstruction (BIFR) order dated October 30, 2007. The rehabilitation schedule of the Company, with cut off date 31st March, 2006 is in process of implementation.

[i] Note 10.03a (i) to (iii) regarding further financial restructuring package sanctioned by Government of India and later approved by Board for Industrial and Financial Reconstruction (BIFR) vide order no 501/2003 dated 15.7.2013 for the reasons stated therein.

Report on Other Legal and Regulatory Requirements

[i] As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of section 227(4A) of the Act, we give in the Annexure a statement on matters specified in paragraphs 4 and 5 of the Order.

[ii] As required by section 227(3) of the Act, subject to as aforesaid we report that :

[a] we have obtained all the information and explanations which to the best 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 and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in section 211(3C) of the Act read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs, Government of India, in respect of section 133 of the Companies Act, 2013 and

[e] in terms of notification G.S.R. 829(E) dated 21st October, 2003 issued by the Central Government, the requirement of clause g of subsection 1 of Section 274 of the Act is not applicable to a Government Company.

ANNEXURE TO AUDITORS'' REPORT

The Annexure referred to in paragraph (i) of our Report on Other Legal and Regulatory Requirements

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that :

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

[b] The fixed assets of the Company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which is considered reasonable having regard to the size of the Company and nature of its assets. Pursuant to the programme, a physical verification of fixed assets was carried out by the Company during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

[c] During the year, in our opinion any substantial part of fixed asset has not been disposed off by the Company.

[2] [a] The inventory of the Company has been physically verified during the year by the management . 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 records of the inventory, in our opinion the Company has maintained proper records of its inventories and the discrepancies noticed on physical verification between the physical stocks and the book records have been properly dealt with in the books of accounts.

[3] [a] According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 ("the Act") during the year.

[b] In view of above, clauses 4 iii (b) to (d) of the Order are not applicable to the Company.

[c] The Company has not taken any secured or unsecured loans from any Company, firm or other party covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

[d] Accordingly, clauses 4 (iii) (f) and (g) of the order are not applicable to the Company.

[4] 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 inventories and fixed assets and for sale of goods and services. On the basis of our examination of the books and records, we have neither come across nor have we been informed of any continuing failure to correct major weakness in such internal control system.

[5] In respect of contracts or arrangements referred to in section 301 of the Companies Act, 1956 —

[a] In our opinion and according to the information and explanations given to us, the transactions made pursuant to contracts or arrangements that need to be entered in 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 transactions made in pursuant to contracts/arrangements entered in the Register mainatained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of each party during the year have been made at prices, which appear reasonable as per information available with the Company.

[6] According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. Therefore, the provisions of Clause (IV) of paragraph 4 of the order are not applicable to the Company.

[7] The Company has its own internal audit department and has also appointed outside agencies in respect of internal audit of operating divisions. In our opinion, the present internal audit system is generally commensurate with the size of the Company and the nature of its business. However, it is felt that such audits should be more ''in-depth''.

[8] We have broadly reviewed the books of account maintained by the Company relating to the manufacture of industrial fans, tea and power transformers pursuant to the rules made by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and we 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 with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information given to us, Central Government has issued order u/s 233B of the Companies Act, 1956 for all the products of the Company for the year.

[9] [i] According to the latest information given and explanations offered and according to the books and records of the Company as produced, there are no undisputed statutory dues and the Company is generally regular in depositing undisputed dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance scheme, Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess etc and there are no undisputed statutory dues as at 31st March, 2014 for a period of more than six months from the date they became payable.

[ii] As at 31st March 2014, according to the records of the Company and the information and explanations given to us, the particulars of dues on account of Sales Tax, VAT, Income Tax, Service Tax and Excise Duty that have not been deposited on account of any dispute are furnished below :— Period Name of Nature of Amount to which Forum where the Statute Dues [Rs. lac] amount dispute is pending

Name of Nature of Amount Statute Dues [Rs. lac]

Income Tax 50.53 (Penalty) Income Tax Act. Income Tax 387.96

W.B.Sales W.B.Sales 1513.76 Tax and VAT Tax & VAT

W.B.Sales W.B.Sales 345.04 Tax and VAT Tax & VAT - (Contd.) - (Contd.) 538.44

140.36

49.33

Assam Sales Assam 152.93 Tax and VAT Gardens

Orissa Sales Orissa 106.24 Tax and VAT Sales Tax 5.64

Central Central 378.20 Excise Excise 52.58

4.34

Service Tax Service Tax 12.16

Period to which Forum where the amount dispute is pending relates

1988-89 & C.I.T. (Appeal)(IV) 2004-05

2009-10 to C.I.T. (Appeal)(IV) 2011-12

1979-80, 1986-87 to 1988-89 1996-97, 1998 99 West Bengal 2000-01, Commercial 2004-05 Tax Appellate 2005-06, & 2006-07, Revisional Board. 2007-08, 2008-09, 2009-10 1973-74, 1994-95, West Bengal 1997-98, 1999-2000, & Taxation Tribunal. 2003-04

1985-86, 1992-93, Appellate 1997-98: Authority 1999-2000, Kolkata High & Court 2003-04

2010-11 Additional & Commissioner 2011 12

1980-81, 1982-83 Appellate to Authority, SoD 1984-85

1996-97 Appellate Auth to ority Revenue 1998-99 Board.

Appellate Authority 1999-2000 Tribunal at High Court Cuttack.

2nd Appellate 2001-02 Authority Berhampore

1996-97, 1998-99, 1992-93, 1993-94, 1995-96, Appeal at CESTAT. 1990-91, 2001 to 2003 & 2007-08, 2009-10

1991-92, Appeal at Kolkata 1992-93 High Court

1998-99 Commissioner of 1993 Appeals

2006-07, 2007-08 App at CESTAT.

[10] The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

[11] As appearing in the records and according to the information and explanations given to us, taking into account the reliefs, concessions and restructuring of dues payable to financial institutions and banks as per sanctioned scheme and Order of BIFR dated 30th October 2007 and further fresh arrangement with banks/financial institutions, the Company has not defaulted in repayment of dues to them.

[12] In our opinion and according to the information and explanations 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.

[13] The provisions of any special statute as specified under clause 4 (xiii) of the order are not applicable to the Company.

[14] In our opinion and according to information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments.

[15] According to the information and explanations given to us, the terms and conditions of the guarantee given by the Company amounting to Rs.676.45 lacs and outstanding as at 31st March 2014 for loans taken from bank by other Companies, in our opinion, are not prima facie prejudicial to the interest of the Company.

[16] In our opinion and according to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

[17] Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, there are no funds raised on short-term basis which have been used for long-term investment, and vice versa.

[18] It appears from the records that the Company has not made any preferential allotment of shares to any party or Company covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

[19] As explained to us, wherever applicable, securities have been created in respect of bond issued by the Company.

[20] The Company has not raised any money by public issues during the year.

[21] 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 any such case by the management.

For Gupta & Co. Chartered Accountants Firm''s Registration No.301028E (CA Arnab Deb)

Partner Kolkata - 27th May, 2014. Membership No.062018

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Andrew Yule & Company Limited as at 31 st March, 2012 and also the 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 conducted our audit in accordance with generally accepted auditing standards in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit includes examining, on a test basis, evidences 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 as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our report we draw attention to Note No.10.03 that in the proceedings of hearing held on 30th October, 2007 before the Board for Industrial and Financial Reconstruction (BIFR). Rehabilitation Schedule of the Company with cut off date as 31st March, 2006 has been sanctioned which is in the process of implementation. The accounts for the year have been prepared on the principle applicable to a going concern after giving due consideration to the rehabilitation package.

However, net worth of the Company has become positive at the year end.

5. Further, to our comments referred in paragraph 3 above, we report that:

[i] Note No. 10.08 regard! ig non provision against diminution in the value of investment in Yule Financing & Leasing Co. Limited amounting Rs.27.88 lakhs.

[ii] Again, Note No.10.08 regarding non provision against diminution in the value of investment in equity shares of WEBFIL Limited which is not ascertainable at this stage.

6. Read wrth our above comments :-

[a] We have 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 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 and Loss and the Cash Flow Statement dealt with by this report have been prepared in compliance with the Accounting Standard (AS) referred to in Section 211(3C) of the Act.

7. In terms of Notification No. G.S.R 829(E) dated 21 st October, 2003, issued by the Central Government, the requirement of Clause (g) of Sub-section (1) of Section 274 of the Act is not applicable to a Government Company.

8. Had the observations made under item No. 5(i) above been considered, the profit for the year after provision for taxation would have been Rs.156.75 lakhs as against the reported profit of Rs. 184.63 lakhs, Reserves & Surplus would have been Rs.6916.88 lakhs as against the reported Reserves & Surplus of Rs.6944.76 lakhs and the value of investments would have been f835.43 lakhs as against the reported value of Rs.863.31 lakhs.

Further, the impact of investment in equity shares on profit for the year after provision for taxation, Reserves and Surplus and Investments, as stated in item 5(H) above, could not be ascertained at this stage.

9. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the accounting policies and notes on accounts together with our observations in paragraph 5 above and Note 10.11 and also our comments in paragraphs 2, 7 and 11 in the Annexure to this report, 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 :-

[i] in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

[ii] in the case of the Statement of Profit and Loss, 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 AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

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

[b] The fixed assets of the Company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which is considered to be reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a physical verification of fixed assets was carried out by the Company during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

[c] During the year, in our opinion, any substantial part of fixed assets has not been disposed off by the Company.

2. [a] The inventory of the Company has been verified by the Management during the year. In our opinion, the frequency of verification of high value items is reasonable, but for other items, frequency of verification needs to be improved.

[b] In our opinion, the procedures of physical verification of inventory followed by the Management were found reasonable for high value items and adequate in relation to the size of the Company and the nature of its business, but for other items the procedure needs improvement to make it adequate in relation to the size and nature of its business.

[c] On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory for high value items and the discrepancies noticed on physical verification between the physical stocks and book records have been properly dealt with in the books of account, mainly for high value items.

3. [a] According to the information and explanations given to us, the Company has not granted any secured or unsecured loans to any companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 during the year.

[b] In view of the above, clauses 4(iii) (b) to (d) of the Order are not applicable to the Company.

[c] The Company has not taken any secured or unsecured loans from any company, firm or other party covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

[d] Accordingly, clauses 4(iii)(f) and (g) of the Order are not applicable to the Company.

4. 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 with regard to purchase of inventory and fixed assets and sale of goods and services. On the basis of our examination of the books and records, we have neither come across nor have we been informed of any continuing failure to correct major weakness in such internal control system.

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 -

[a] In our opinion and according to the information and explanations given to us, the transaction made pursuant to contracts or arrangements that need to be entered in 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 pursuant to contracts/ arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of ^5,00,000/- in respect of each party during the year have been made at prices, which appear reasonable as per information available with the Company.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. Therefore, the provisions of Clause (IV) of Paragraph 4 of the Order are not applicable to the Company.

7. The Company has its own Internal Audit Department. The Company has also appointed outside agencies in respect of Internal Audit of operating Divisions. In our opinion, the present internal audit system is generally commensurate with the size of the Company and nature of its business. However, it is felt that such audit should be more in-depth and coverage should be enlarged.

8. We have broadly reviewed the books of account maintained by the Company relating to the manufacture of industrial fans, tea and power transformers pursuant to. the rules made by the Central Government for maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 and we 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 with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information given to us Central Government has not issued any order u/s 233B of the Companies Act, 1956 for any of the products of the Company for the year.

9. [i] According to the latest information given and explanations offered and according to the books and records of the Company as produced, there is no undisputed statutory dues and the Company is generally regular in depositing undisputed dues including Provident Fund, Investors Education Fund, Employees State Insurance Premium, TDS, Custom Duty, Excise Duty, Cess etc. and there is no undisputed statutory dues as at 31st March, 2012 for a period of more than six months from the date they became payable.

[ii] As at 31st March, 2012 according to the records of the company and the information and explanations given to us, the particulars of dues on account of sale tax, entry tax, and agricultural income tax, professional tax and excise duty that have not been deposited on account of any dispute are furnished below :-

Name of Nature of Amount Period to Forum where Statute dues (Rs. lacs) which the dispute amount is pending relates

Income Tax Income Tax 50.53 1988-89 C.I.T.(Appeal) Act. (Penalty) & 2004-05

Income Tax 132.74 2009-10 C.I.T.(Appeal)

W.B.Sales W.B.Sales 27.53 Pre-amal- Appellate Tax and Tax & VAT gamation Authority VAT

2854.49 1979-80, Moved Revision 1986-87 before the to West Bengal 1988-89 Commercial 1996-97, Tax Appellate 1998-99, & Revisional 2000-01, Board. 2001-02, 2004-05, 2006-07

345.04 1973-74, Appellate Auth- 1994-95, ority West 1997-98, Bengal Taxation 1999-2000 Tribunal. & 2003-04

76.53 2007-08 & Appellate 2008-09 Authority before Sr.J.C.C.T.

538.45 1985-86, Appellate 1992-93, Authority before 1997-98, the High Court. 1999-2000, Kolkata. 2003-04

49.34 1980-81, Appellate 1982-83 Authority, to SoD 1984-85

Assam Assam 152.93 1996-97 Appellate Auth- Sales Tax Gardens to ority Revenue VAT 1998-99 Board.

Orissa Orissa Sales 161.83 1999-2000 Appellate Autn- Sales Tax Tax & ority Tribunal and VAT 2000-2001 at High Court Cuttack.

6.64 2001-02 2nd Appellate Authority Berhampore

Central Central 469.70 1996-97, Appeal at Excise Excise 1998-99, CESTAT. 1992-93, 1993-94, 1989-90, 1990-91, 2001 to 2003 & 2007-08

29.52 1995-96 Appeal at to Commissioner 1998-99 & 2008-09

52.59 1991 to Appeal at 1993 High Court. Kolkata.

10. The net worth of the Company became positive (Rs.31.35 crore) without considering Share Pending Allotment of Rs.1.50 crore and Revaluation Reserve of Rs.103.33 crore at the end of the financial year. However, the accumulated loss of the Company is more than fifty percent of its net worth. The company has not incurred Cash Loss in the financial year and the immediately preceding financial year.

11. As appearing in the record and according to the information and explanations given to us, taking into account the reliefs, concessions and restructuring of dues payable to Financial Institutions and Banks as per sanctions scheme as per order of BIFR dated 30th October, 2007, and fresh arrangement with Banks/financial institutions, the Company has not defaulted in repayment of dues to them except repayment of Short Term Borrowings from a bank amounting to Rs.353.79lacs.

12. In our opinion and according to the information and explanations 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.

13. The provisions of any special statute as specified under Clause 4(xiii) of the Order are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the terms and conditions of the guarantee given by the Company amounting to

Rs.593.00 lakhs and outstanding as at 31st March, 2012, for loans taken from bank by the other Companies, in our opinion, are not prima facie prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment, and vice versa.

18. It appears from the records that the Company has not made any preferential allotment of shares to any Party or Company covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

19. As explained to us, wherever applicable, securities have been created in respect of Bond issued by the Company.

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

21. 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 any such case by the management.

For GUPTAS CO.

Chartered Accountants

Firm's Registration No.301028E

(CA A. Deb)

Partner

Membership No.062018

Kolkata - 2nd July, 2012.

---

Mar 31, 2011

We have audited the attached Balance Sheet of Andrew Yule & Company Limited as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, both annexed thereto, which we have signed this day 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.

We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform our audit to obtain reasonable assurance as to whether the aforesaid financial statements are free from material misstatements. An audit includes examining, on a test basis, evidences 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 expressing our opinion on the aforesaid financial statements of the Company.

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

Further to our comments in the Annexure referred to above, we report the following :-

1. In the proceedings of hearing held on 30th October, 2007 before the Board for Industrial and Financial Reconstruction (BIFR). Rehabilitation Scheme of the Company with cut- off date as at 31st March, 2006 has been sanctioned which is in the process of

implementation. The accounts for the year have been prepared on the principle applicable to a going concern after giving due consideration to the rehabilitation package. Net worth of the Company has become positive at the year end.

2. Non-provision against diminition in value of investments in Yule Financing & Leasing Co. Ltd. amounting to Rs. 27.88 lakhs. [Refer Note No. 13 in Schedule 20].

3. Read with our above comments :-

(a) We have 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 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 and Loss Account and the Cash Flow Statement dealt with by this report have been prepared in compliance with the applicable accounting standards (AS) referred to in Section 211(3C) of the Act.

4. In terms of Notification No.G.S.R.829(E) dated 21st October, 2003, issued by the Central Government, the requirement of Clause (g) of Sub-section (1) of Section 274 of the Act is not applicable to a Government Company.

5. Without considering Item No.l above, had the observation under Item No. 2 been considered, the profit for the year after extra-ordinary income and provision for taxation would have been Rs. 4104.43 lakhs as against the reported profit of Rs. 4132.31 lakhs, accumulated loss would have been Rs. 5215.07 lakhs as against

the reported accumulated loss of Rs.5187.19 lakhs, value of investments would have been Rs.835.43 lakhs as against the reported value of Rs.863.31 lakhs.

6. In our opinion and to the best of our information and according to the explanations given to us the said accounts read with the accounting policies and notes on accounts as given in Schedule 20 together with the observations in Item Nos.2 and 5 and Note No. 16 in Schedule-20 and our comments in paragraph 4 and 7 in the annexure to this report, 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 31 st March, 2011;

(b) in the case of the Profit and Loss Account of the "profit" of the Company 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 AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

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

(b) The fixed assets of the Company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which is considered to be reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a physical verification of fixed assets was carried out by the Company during the year. Reconciliation in respect of Tea and General Divisions has been done during the year and the discrepancies noticed on such verification valuing Rs.19.48 lakhs have been written off during the year in the books. (Refer Note No.24 of Schedule 20).

(c) During the year, in our opinion, any substantial part of fixed assets has not been disposed off by the Company.

2. (a) The inventory of the Company has been verified by

the management during the year. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the management were found 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 records of inventory, in our opinion, the Company has maintained proper records of inventory and the discrepancies noticed on physical verification between the physical stocks and book records have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has not granted any unsecured loan to any Company, Firm or other party listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) Clause (iii)(b) to (d) of the Annexure are not applicable to the Company.

(c) The Company has not taken any unsecured loan from any company covered in the register maintained under section 301 of the Companies Act, 1956. The outstanding balance of such loan taken including interest as at the year end is Rs.Nil.

(d) In our opinion, the rate of interest and other terms and conditions on which loan have been taken from a Company listed in the register maintained under section 301 of the Companies Act, 1956, are not prima facie prejudicial to the interest of the Company.

(e) Paragraph 4(iii)(g) of the Order is not applicable in respect of loan taken.

4. In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets, for sale of goods and for services. However, holding of disproportionate stocks of stores at Tea Estates were noticed on many occasions. Internal Control needs to be strengthened in these areas. Subject to above on the basis of our examination of the books and records, we have neither come across nor have we been informed of any continuing failure to correct major weakness in Internal Control procedures.

5. (a) In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

(b) In view of above para 4(v)(b) of the Annexure is not applicable to the Company.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, as applicable, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order under the aforesaid sections 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.

7. The Company has its own Internal Audit Department. The Company has also appointed outside agencies in respect of Internal Audit of operating Divisions. In our opinion, the present internal audit system is generally commensurate with the size of the Company and nature of its business. However, it is felt that such audit should be more indepth.

8. We have broadly reviewed the books of account maintained by the Company relating to the manufacture of industrial fans, tea and power transformers pursuant to the rules made by the Central Government for maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 and we 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 with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information given to us Central Government has not issued any order u/s.233B of the Companies Act, 1956 for any of the products of the Company.

9. (i) According to the latest information given and explanations offered and according to the books and records of the Company as produced, there is no undisputed statutory dues and the Company is generally regular in depositing undisputed dues including Provident Funds, Investors Education Fund, Employees State Insurance Premium, TDS, Custom Duty, Excise Duty, Cess etc. and there is no undisputed statutory dues as at 31st March, 2011 for a period of more than six months from the date they became payable.

(ii) As at 31 st March, 2011 according to the records of the Company and the information and explanations given to us, the particulars of dues on account of sales tax, entry tax, agricultural income tax, professional tax and excise duty that have not been deposited on account of any dispute are furnished below :-

Name of Nature of Amount Period to Forum where

Statute dues (Rs.lacs) which the dispute

amount is pending relates

Income Tax Income Tax 50.53 1993-94 C.I.T(Appeal) Act. (Penalty)

W.B. Sales W.B.Sales 27.53 Preamal- Appellate Tax and Tax & VAT gamation Authority VAT

5498.04 1987-88 Moved Revision

to before the

1988-89 Boaid against

1999-2000 Appellate

to Order. 2001-02 1996-97

to 1997-98 2003-04

to 2004-05 & 1998-99 & 2006-07

401.24 1973-74, Appellate Auth-

1979-80 & ority Taxation

1986-87 Tribunal

43.72 2005-06 Appellate

Authcrity before DCCT.

306.12 1992-93 Appellate

& Authority before 1985-86 the High Court. 55.06 1980-81, Appellate 1982-83 Authority, to SoD 1984-85

Assam Assam 39.90 2005-06 Appellate Auth-

Sales Tax Gardens to ority,

2006-07 Revision Bench. 152.93 1996-97 Appellate Auth- to ority Revenue 1998-99 board.

Orissa Orissa Sales 161.83 1999-01 Appellate Auth-

Sales Tax Tax ority Tribunal at High Court cuttack.

Central Central 455.85 1989-90 to Appealat

Excise Excise 2001-02 CESTAT.

2003-04 to 2006-07

30.51 1995-96 Appealat

to Commissioner 1998-99

52.59 1991 to Appealat

1993 High Court.

10. The not worth of the Company became positive (Rs.11.77 crore) without considering Share Pending Allotment of Rs.3.00 crore and Revaluation Reserve of Rs.103.34 crore at the end of the financial year. However, the accumulated loss of the Company is more than fifty percent of its net worth. The Company has not incurred Cash Loss in the Financial year and immediately preceding such financial year.

11. As appearing in the record and according to the information and explanations given to us, taking into account the reliefs, concessions and restructuring of dues payable to Financial Institutions and Banks as per sanctioned scheme as per Order of BIFR dated 30th October, 2007, and fresh arrangement with Banks/ financial institutions, the Company has not defaulted in repayment of dues to them.

12. In our opinion and according to the information and explanations 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.

13. The provisions of any special statute as specified under Clause 4(xiii) of the Order are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

15. According to the information and explanations given to us, the terms and conditions of the guarantee given by the Company amounting to Rs.593.00 lakhs and outstanding as at 31st March, 2011, for loans taken from bank by the other Companies, in our opinion, are not prima facie prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

17. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment, and vice versa.

18. It appears from the records that 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.

19. As explained to us, wherever applicable, securities have been created in respect of Bond issued by the Company.

20. The Company has not raised any money by public issue during the year.

21. According to the information and explanations given to us, during the year, no fraud on or by the Company has been noticed or reported.

For S. GHOSH & CO.,

Chartered Accountants,

Firm Registration No.304016E

(CA S. Ghosh)

Partner.

Kolkata-23rd June, 2011. Membership No.5268

---

Mar 31, 2010

We have audited the attached Balance Sheet of Andrew Yule & Company Limited as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, both annexed thereto, which we have signed this day 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.

We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform our audit to obtain reasonable assurance as to whether the aforesaid financial statements are free from material misstatements. An audit includes examining, on a test basis, evidences 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 expressing our opinion on the aforesaid financial statements of the Company.

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

Further to our comments in the Annexure referred to above, we report the following :- 1. In the proceedings of hearing held on 30th October, 2007 before the Board for Industrial and Financial Reconstruction (BIFR). Rehabilitation Scheme of the Company with cut-off date as at 31st March, 2006 has been sanctioned which is in the process of

implementation. The accounts for the year have been prepared on the principle applicable to a going concern after giving due consideration to the rehabilitation package, even though the net worth of the Company is fully erroded.

2. Non-provision against diminition in value of investments in Yule Financing & Leasing Co. Ltd. amounting to Rs.27.88 lakhs. [Refer Note No.12 in Schedule 20].

3. Read with our above comments :-

(a) We have 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 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 and Loss Account and the Cash Flow Statement dealt with by this report have been prepared in compliance with the applicable accounting standards (AS) referred to in Section 211(3C) of the Act.

4. In terms of Notification No.G.S.R.829(E) dated 21st October, 2003, issued by the Central Government, the requirement of Clause (g) of Sub-section (1) of Section 274 of the Act is not applicable to a Government Company.

5. Without considering Item No.1 above, the effect of which could not be determined, had the observation under Item No. 2 been considered, the profit for the year after extra- ordinary income and provision for taxation would have been Rs.7510.42 lakhs as against the reported profit of Rs.7538.30 lakhs, accumulated loss would have been Rs.9347.08 lakhs as against the reported accumulated loss of Rs.9319.20 lakhs, value of investments would have been Rs.833.24 lakhs as against the reported value of Rs.861.12 lakhs.

6. In our opinion and to the best of our information and according to the explanations given to us the said accounts read with the accounting policies and notes on accounts as given in Schedule 20 together with the observations in Item 2 and 5 and Note No.15 in Schedule-20 and our comments in paragraph 1, 5, 7 and 8 in the annexure to this report, 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 31st March, 2010;

(b) in the case of the Profit and Loss Account of the “profit” of the Company 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 AUDITORS REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

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

(b) The fixed assets of the Company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which is considered to be reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a physical verification of fixed assets was carried out by the Company during the year in respect of Engineering and Electrical Divisions only of the Company. Discrepancies noticed on such verification valuing Rs.22.47 lakhs have been written off during the year in the books. (Refer Note No.23 of Schedule 20).

(c) During the year, in our opinion, any substantial part of fixed assets has not been disposed off by the Company.

2. (a) The inventory of the Company has been verified by the management during the year. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the management were found 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 records of inventory, in our opinion, the Company has maintained proper records of inventory and the discrepancies noticed on physical verification between the physical stocks and book records have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has not granted any unsecured loan to any Company, Firm or other party listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) Clause (iii)(b) to (d) of the Annexure are not applicable to the Company.

(c) The Company has not taken any unsecured loan from any company covered in the register maintained under section 301 of the Companies Act, 1956. The outstanding balance of such loan taken including interest as at the year end is Rs.Nil.

(d) In our opinion, the rate of interest and other terms and conditions on which loan have been taken from a Company listed in the register maintained under section 301 of the Companies Act, 1956, are not prima facie prejudicial to the interest of the Company. However, the loan has since been repaid.

(e) Paragraph 4(iii)(g) of the Order is not applicable in respect of loan taken.

4. In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets, for sale of goods and for services. Further, on the basis of our examination of the books and records of the Company, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

(b) In view of above para 4(v)(b) of the Annexure is not applicable to the Company.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, as applicable, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order under the aforesaid sections 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.

7. The Company has its own Internal Audit Department. The Company has also appointed outside agencies in respect of Internal Audit of operating Divisions. In our opinion, the present internal audit system is generally commensurate with the size of the Company and nature of its business. However, the frequency and area of coverage of such audit need to be widened.

8. We have broadly reviewed the books of account maintained by the Company relating to the manufacture of industrial fans, tea and power transformers pursuant to the rules made by the Central Government for maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and we 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 with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information given to us Central Government has not issued any order u/s.233B of the Companies Act, 1956 for any of the products of the Company.

9. (i) According to the latest information given and explanations offered and according to the books and records of the Company as produced, there is no undisputed statutory dues as at 31st March, 2010 for a period of more than six months from the date they became payable.

(ii) As at 31st March, 2010 according to the records of the Company and the information and explanations given to us, the particulars of dues on account of sales tax, entry tax, agricultural income tax, professional tax and excise duty that have not been deposited on account of any dispute are furnished below :–

Name of Nature of Amount Period to Forum where Statute dues (Rs. lacs) which the dispu amount is pending relates

Income Tax Income Tax 50.53 1993-94 C.I.T.(Appeal) Act. (Penalty)

W.B.Sales W.B.Sales 27.53 Preamal- Appellate Tax and Tax and VAT gamation Authority VAT 5841.59 1987-88 Moved Revision

to before the

1988-89 Board against

1999-2000 Appellate

to Order.

2001-02

1996-97

to 1997-98 2003-04

to

2004-05 &

1998-99

139.81 1973-74, Appellate Auth-

1979-80 & ority Taxation 1986-87 Tribunal

128.28 2005-06 & Appellate

2006-07 Authority before DCCT.

252.96 1992-93 Appellate

Authority before the High Court.

113.21 1980-81, Appellate

1982-83 Authority,

to SoD

1985-86

Assam Assam 199.93 2002-03 Appellate Auth- Sales Tax Gardens to ority, Dy.

and VAT 2006-07 Commissioner/ Commissioner Commercial Taxes. 129.41 1997-98 Appellate Auth- and ority Revenue 1998-99 Board.



Orissa Orissa Sales 161.83 1999-2001 Appellate Auth- Sales Tax Tax ority Tribunal and VAT at High Court

Cuttack.



Central Central 425.79 1989-90 Appeal at

Excise Excise to CESTAT.

2001-02

104.02 1991-92 Appeal at

to Commissioner

1998-99 of C.E.

52.59 1991 to Appeal at

1993 High Court.



10. The accumulated loss of the Company at the end of the financial year is more than fifty percent of its net worth. The Company has not incurred cash loss in the financial year and immediately preceeding such financial year also.

11. In our opinion and according to the information and explanations given to us, taking into account the reliefs, concessions and restructuring of dues payable to Financial Institutions and Banks as per sanctioned scheme as per Order of BIFR dated 30th October, 2007, the Company has not made repayment of dues to Banks within due dates as stated below :–

(a) State Bank of India Rs.216.95 lakhs

(b) Bank of Baroda Rs.378.00 lakhs

12. In our opinion and according to the information and explanations 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.

13. The provisions of any special statute as specified under Clause 4(xiii) of the Order are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

15. According to the information and explanations given to us, the terms and conditions of the guarantee given by the Company amounting to Rs.593.00 lakhs and outstanding as at 31st March, 2010, for loans taken from bank by the other Companies, in our opinion, are not prima facie prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

17. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment, and vice versa.

18. 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.

19. As explained to us, wherever applicable, securities have been created in respect of Bond issued by the Company.

20. The Company has not raised any money by public issue during the year.

21. According to the information and explanations given to us, during the year, no fraud on or by the Company has been noticed or reported.

For S. GHOSH & CO.,

Chartered Accountants,

Firm Registration No.304016E

(CA A. K. Mukherjee)

Partner,

Kolkata - 27th July, 2010. Membership No.5243