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Auditor Report of Andrew Yule & Company Ltd.

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


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

 
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