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Auditor Report of Assam Company (India) Ltd.

Dec 31, 2014

We have audited the accompanying financial statements of Assam Company India Limited, which comprise the Balance Sheet as at December 31,2014, 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 forthe Financial Statements

Management is responsible for the preparation of these 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 Standards notified under the companies act, 1956 ("the act") read with the General circular15/2013 dated 13th September 2013 of the Ministry of corporate Affairs 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 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 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 entity''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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fairview 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 December 31,2014.

(b) In the case of the Statement of Profit and Loss Account, of the loss for the year ended on that date.

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

a. Without qualifying our opinion, we draw your attention to Note No.11 in relation to rate of depreciation on certain oil and gas producing assets of the company whose net book value at the year-end aggregate to Rs. 5,175.76 lakhs that are being depreciated on consistent basis in accordance with the "Unit of Production" method as per guidance note on "Accounting for Oil & Gas Producing Activities" issued by The Institute of Chartered Accountants of India in February 2003 because no rates have been specified for the aforesaid class of fixed assets under Schedule XIV to the Act. The depreciation on the balance oil and gas producing assets, whose net book value aggregating to Rs.102.35 lakhs has been provided as per Schedule XIV to the Act. The company is still awaiting the response to application to Central Government pursuant to Section 205 of the Act seeking approval to depreciate the aforesaid assets in accordance with the "Unit of Production" method. This financial statement does not include any adjustments on consequential impact should the Central Government direct the company to adopt any other method on rate of depreciation other than "Unit of Production" method.

b. Without qualifying our opinion, attention is drawn to Note No. 39 in relation to the AA ON/7 Exploration & Production (E&P) Asset,we are unable to express any opinion on the outcome of the project, pending execution of the new Production Sharing Contract (PSC).

c. Without qualifying our opinion, attention is drawn to Note No. 52 in relation to sale of assets both immovable and moveable, of Salonah Tea Estate pending execution of the conveyance in respect to the immovable properties.

Report on Other Legal and Regulatory Requirements

1. The Companies Act 2013 has been made effective since 1st April 2014. The Ministry of Corporate Affairs has not passed any Order under section 143(11) of the Companies Act, 2013 so far. Hence, until any Order, as aforesaid, is issued, no additional reporting under section 143(11) of the Companies Act, 2013 is required by the Auditors for Financial Year 2014-15. However, as the Financial Statements have been prepared as required under the Companies Act 1956, as required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches and tea estates / gardens not visited by us.

bb. the accounts of tea estates / gardens have been audited under section 228 by the company''s auditors. Hence, the requirement of forwarding the report by other auditors on the accounts of such branch offices, tea estates / gardens and dealing with the same in our report did not arise.

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 and with the returns received from branches and tea estates.

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act,1956 read with the General Circular15/2013 dated 13th September 2013 of the Ministry of corporate Affairs in respect of section 133 of the companies Act, 2013.

e. on the basis of written representations received from the directors as on December 31,2014, and taken on record by the Board of Directors, none of the directors is disqualified as on December 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to The Auditors'' Report

(Referred to in paragraph 3 of our report of even date to the member of Assam Company India Limited on the financial statements ended on 31st December, 2014)

i (a) The company has maintained proper records showing full particulars including quantitative details and

situation of Fixed Assets other than Oil and Gas Division. However, a list of fixed assets acquired for Oil & Gas Operation is maintained.

(b) The Fixed Assets of the company has been physically verified by the management periodically in phased manner, which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. In respect of assets physically verified, the details have been compared with the book records and discrepancies noticed were not material and have been properly dealt with in the books of account.

(c) The company has in the year 2012 entered into an Agreement for Sale of a substantial part (being a unit).The conveyance of the immovable property is pending.

ii (a) Physical verification of inventory has been conducted at reasonable intervals during the year by the

management except for Oil and Gas Division.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has maintained proper records of inventory. No material discrepancies were noticed on physical verification.

iii (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 covered in the register maintained under section 301 of The Companies Act, 1956.

(b) According to the information and explanations given to us, the company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956.

(c) In our opinion, and according to information and explanations given to us, the rate of interest and other terms and conditions of loans given or taken by the company, secured or unsecured, are generally not prejudicial to the interest of the company, except in one case which in our opinion was prima facie prejudicial to the interest of the company on the ground of rate of interest paid and charged.

iv In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor we have been informed of any continuing or habitual failure to correct major weaknesses in the aforesaid internal control system.

v On the basis of our examination of the books of account, the company has not entered into any contract or arrangement with any party during the financial year that need to be entered in the register pursuant to Section 301 of the Companies Act, 1956.

vi The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under.

vii The company has an internal audit system commensurate with the size and nature of its business.

viii We have broadly reviewed the accounts maintained by the company in respect of tea products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. No cost record has been maintained with respect to its oil and gas products.

ix (a) According to records examined by us, in our opinion, the company is regular in depositing undisputed statutory dues including TDS, Provident Fund, Investor Education and Protection Fund, Income-tax, Sales tax, Wealth Tax, Service Tax, Excise Duty, Tea Cess, profession tax and the outstanding dues on the last date of financial year are not for a period of more than 6 months from the day they become payable.

(b) According to information and explanations given to us, there is no disputed dues regarding service tax, professional tax, wealth tax, provident fund, tea cess, investor Education and Protection Fund, but the details of disputed dues of sales tax and income tax are as follows:

Sl. Name of the Statute Nature of dues Amount No. Rs.

1 Income Tax Act, 1961 Income Tax 28,631,700

2 The West Bengal West Bengal 1,93,70,205 Sales tax Act, 1994 Sales tax Act, 1994

Do Do 15,36,066

Do Do 87,24,464

Do Do 1,90,72,936

Do Do 6,18,32,474

3 Central Sales Central Sales 75,34,984 Tax, 1956 Tax

Do Do 1,68,552

Do Do 61,83,248

Do Do 2,37,701

Do Do 1,34,56,558

Do Do 34,44,737

4 Assam General Assam Sales Tax 6,63,927 Sales Tax Act, 1993

5. The Assan Professional Tax 2,35,000 Professions, TRADE, Calling & Employment Taxation Act, 1947

Name of the Statute Period to Forum where which relates dispute is pending

Income Tax Act, 1961 2011-12 Under Assessment.

The West Bengal Sales tax Act, 1994 2002-03 Sr. Jt. Comm. of Commercial Taxes

DO 2003-04 Appellate & Revisional Board of Commercial Taxes

DO 2004-05 Do

DO 2006-07 Do

DO 2008-09 Do

Central Sales Tax, 1956 2001-02 Appellate& Revisional Board of Commercial Taxes

DO 2002-03 Do

DO 2003-04 Do

DO 2004-05 Do

DO 2006-07 Sr. Jt. Comm., South Circle

DO 2008-09 Appellate & Revisional Board of Commercial Taxes

Assam General Sales Tax Act, 1993 2001-02 Commissioner of Taxes

The Assan Professions, TRADE, Calling & Employment Taxation Act, 1947 2013-14 Profession Tax Authority

x The company has no accumulated losses as at 31st December, 2014 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

xi According to the records of the company examined by us and the information and explanations made available to us, at the Balance Sheet date, the company has defaulted in repayment of bank term loans of Rs.121.45 crores (Rs 2.08 crores since repaid), fell due on various dates during the year 2014. The company has also defaulted in repayment of principal matured Foreign Currency Convertible Bonds of $3.1 million (Rs.19.63 crores) details of the same is given in note 40 forming part of the Financial Statements.

xii The company has not granted any loans and advances on the basis of security by way pledge of shares, debentures and other securities.

xiii The provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ society are not applicable to the company.

xiv In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

xv In our opinion and according to information and explanations given to us, the terms and conditions of the guarantees given by the company, for loans taken by others from banks or financial institutions during the year are not prejudicial to the interest of the company.

xvi In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

xvii On the basis of an overall examination of the Balance Sheet of the company, in our opinion and according to the information and explanations, given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

xviii On the basis of an overall examination of the Balance Sheet of the company, in our opinion and according to the information and explanations, given to us, the company has not made any preferential allotment to parties and Companies covered in the register maintained under 301 of the Act.

xix On the basis of an overall examination of the Balance Sheet of the company, in our opinion and according to the information and explanations, given to us, the company has not issued any debentures during the year.

xx On the basis of an overall examination of the Balance Sheet of the company, in our opinion and according to the information and explanations, given to us, the company has not raised any money by public issues during the year.

xxi 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 such case by the management.

For De Chakraborty & Sen

Chartered Accountants

F.R. No. 303029E

(Srijit Chakraborty)

Place: Kolkata Partner

Date: 27th February 2015 Membership No.: 055317


Dec 31, 2012

1. We have audited the attached Balance Sheet of Assam Company India Limited as at 31st December, 2012 and the related Statement of Profit & Loss and also the Cash Flow Statement of the Company for the year ended on that date annexed thereto. The said Balance Sheet, Statement of Profit & Loss and the Cash Flow Statement have been signed by us 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 auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall Financial Statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors'' Report) Order, 2003 as amended by the Companies (Auditors'' Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of Sub-Section 4(A) of Section 227 of ''The Companies Act, 1956'' (the "Act") and on the basis of such checks of books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure hereto, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying out- opinion, we draw your attention to Note No.11 in relation to rate of depreciation on certain oil and gas producing assets of the Company whose net book value at the year-end aggregate to Rs. 5,175.76 lakhs that are being depreciated on consistent basis in accordance with the "Unit of Production" method as per guidance note on "Accounting for Oil & Gas Producing Activities" issued by The Institute of Chartered Accountants of India in February, 2003, because no rates have been specified for the aforesaid class of Fixed Assets under Schedule XIV to the Act. The depreciation on the balance oil and gas producing assets, whose net book value aggregating to Rs. 197.00 lakhs has been provided as per Schedule XIV to the Act. The Company is still awaiting the response to application to Central Government pursuant to Section 205 of the Act seeking approval to depreciate the aforesaid assets in accordance with the "Unit of Production" method. This Financial Statement does not include any adjustments on consequential impact should the Central Government direct the Company to adopt any other method on rate of depreciation other than "Unit of Production" method.

5. Without qualifying our opinion, attention is drawn to Note No. 40 in relation to the AA-ON/7 Exploration

& Production (E&P) Asset about which we are unable to express any opinion on the outcome of the project, pending execution of the new Production Sharing Contract (PSC).

6. Without qualifying our opinion, attention is drawn to Note No. 43 relating to loan given to one of its Wholly Owned Subsidiaries (WOS) namely Duncan Macneill Natural Resources Limited (DMNRL) situated in UK. In the absence of sufficient and appropriate evidences relating to the said WOS, we are unable to express any opinion on the status of the loan and the related Exploration & Production (E&P) activities.

7. Attention is drawn to the Note No. 54 relating to the Act, of discontinuance of accounting for all incomes and expenses arising at Salonah Tea Estate with effect from 20th August, 2012, adopted pursuant to Clauses 2.2 and 7.1 of the Agreement for Sale pending execution of Conveyance Deed and completion of sale, is in deviation to the Accounting Standard 9-"Revenue Recognition". The impact of the above, if any, on the Profit, Liabilities including Tax and consequent impact on the Reserves and Surplus, presently is not ascertainable. Further, the Net Block of Fixed Assets includes Rs. 28.54 Crores representing an asset held for disposal, rather than showing it as part of current assets at lower of cost or net realizable value, is not consistent with the Accounting Standard 10 -"Accounting for Fixed Assets". In our opinion, this does not affect the true and fair view.

8. Further to our comments in the Annexure referred to above, we report that :

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 it appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the places not visited by us;

(c) The Balance Sheet, the Profit & Loss Account and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Profit & Loss Account and the Cash Flow Statement read with Notes on Accounts including Significant Accounting Policies comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Act except for and to the extent mentioned in paragraph number 7 above.

(e) On the basis of written representations from the Directors as on 31st December, 2012 and taken on record by the Board of Directors, none ofthe Director is disqualified on 31st December, 2012, from being appointed as a Director in terms of Sub-Section (I)(g) of Section 274 of the Act.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said Financial Statements together with the notes thereon and attached thereto and including SignificantAccounting Policies give, in the prescribed manner, the information required bytheAct, and, except for the effects of the matter referred to in paragraph 7 above give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of Balance Sheet, of the state of affairs of the Company as at31st December, 2012:

(b) in the case the Statement of Profit & Loss, of the profit for the year ended on that date; and

(c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to The Auditors'' Report

(Referred to in paragraph 3 of our Report of even date to the Member of Assam Company India Limited on the Financial Statements ended on 31st December, 2012)

i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets other than Oil and Gas Division. However, a list of Fixed Assets acquired for Oil & Gas Operation is maintained.

(b) The Fixed Assets of the Company, has been physically verified by the Management periodically in phased manner, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In respect of assets physically verified, the details have been compared with the book records and discrepancies noticed were not material and have been properly dealt with in the books of account.

(c) The Company has during the year entered into an Agreement for Sale of a substantial part (being a unit). However on going through the evidences as made available to us, in our opinion, the same has not affected the going concern.

ii. (a) Physical verification of inventory has been conducted at reasonable intervals during the year by the Management except for Oil and Gas Division.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventory. No material discrepancies were noticed on physical verification. However, in view of the Agreement for Sale of a unit entered into by the Company during the year, records of the same were available upto 19th August, 2012.

iii. (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 covered in the Register maintained under Section 301 ofTheCompaniesAct, 1956.

(b) According to the information and explanations given to us, the Company has not taken any loans. Secured or Unsecured, from Companies, firms or other parties covered in the Register maintained underSection 301 ofTheCompaniesAct, 1956.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of loans given or taken by the Company, Secured or Unsecured, are generally not prejudicial to the interest of the Company, except in one case which in our opinion was prima facie prejudicial to the interest of the Company on the ground of rate of interest paid and charged.

iv. In our opinion and according to the information and explanations given to us, there is an adequate Internal Control System commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, we have neither come across nor we have been informed of any continuing or habitual failure to correct major weaknesses in the aforesaid Internal Control System.

v. On the basis of our examination of the books of account, the Company has not entered into any contract or arrangement with any party during the Financial Year that need to be entered in the Register pursuant to Section 301 of the Companies Act, 1956.

vi. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the Rules framed there under.

vii. The Company has an Internal Audit System commensurate with the size and nature of its business. However, there is scope of improving the effectiveness of Internal Audit system in the area of implementation of the Internal Audit recommendations.

viii. We have broadly reviewed the accounts maintained by the Company in respect of tea products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under Clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. No cost record has been maintained with respect to its oil and gas products.

ix. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing provident fund, tea cess and other material statutory dues as applicable with the appropriate authorities except that the Company is not regular in depositing Income Tax, Value Added Tax, Central Sales Tax, Land Revenue, Corporate Dividend Tax and Family Pension Fund Contribution. However, according to the information and explanations given to us and the records of the Company examined by us, there are no undisputed amounts payable in respect of statutory dues which were in arrears, as at 31st December, 2012, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of Service Tax, Customs Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute. The particulars of dues of Income-Tax and Sales-Tax as at 31st December, 2012, which have not been deposited on account of disputes are as follows:

Particulars of Income Tax, Sales Tax which have not been deposited on account of dispute:-

Sl. Name of the Statute Nature of dues Amount No.

1. The West Bengal West Bengal 19.370.205 Sales tax Act, 1994 Sales Tax

Do Do 1,536,066

Do Do 8,724,464

Do Do 19,072,936

Do Do 61,832,474

2. Central Sales Tax, Central Sales 357,866 1956 Tax

Do Do 790,022

Do Do 993,902

Do Do 8,141,318

Do Do 24,990,676

Do Do 168,552

Do Do 6,183,248

Do Do 237,701

Do Do 13,456,558 Do Do 3,444,737

3. Assam General Sales Assam Sales 9,190 Tax Act, 1993 Tax

Do Do 2,219,788

Do Do 2,655,377

Do Do 87,127

Name Period to Forum where which relates dispute is pending

The West Bengal 2002-03 Sr.Jt. Comm.of

Commercial Taxes.

Do 2003-04 Appellate &

Revisional Board of Commercial Taxes

Do 2004-05 Do

2006-07 Do

2008-09 Appellate &

Revisional Board of Commercial Taxes

1996-97 Do

1997-98 Do

1999-00 Do

2000-01 Do

2001-02 Do

2002-03 Do

2003-04 Do

2004-05 Do

2006-07 Sr.Jt.Comm., South Circle

2008-09 Appellate & Revisional Board of Commercial Taxes

1996-97 Commissioner of Commercial Taxes

2000-01 Do

2001-02 Do

2006-07 Do

x. The Company has no accumulated losses as at 31st December, 2012 and it has not incurred any cash losses in the Financial Year ended on that date or in the immediately preceding Financial Year.

xi. According to the records of the Company examined by us and the information and explanations made available to us, at the Balance Sheet date, The Company has defaulted in repayment ofbank term loans oft 0.24 Crores which has since been repaid. The Company has also defaulted in repayment of matured Foreign Currency Convertible Bonds of 143.52 Crores, out of which 112.27 Crores has since been repaid, and details ofthe same is given in note 41 forming part ofthe Financial Statements.

xii. The Company has not granted any loans and advances on the basis of security by way pledge of shares,. debentures and other securities.

xiii. The provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ society are not applicable to the Company.

xiv. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments. In our opinion and according to information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or Financial Institutions during the year are not prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

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

xviii.The Company has not made any preferential allotment to parties and Companies covered in the Register maintained under301 oftheAct.

xix. The Company has not issued any debentures during the year.

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

xxi. 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 such case bythe Management.

For De Chakraborty & Sen

Chartered Accountants

F.R. No. 303029E

(A.Deb)

Place: Kolkata Partner

Date: 28th February, 2013 M. No.: 051845


Dec 31, 2010

1. We have audited the attached Balance Sheet of Assam Company India Limited as at 31 December, 2010 and the related Profit and Loss Account and 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, (together the 'Order1), 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 of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. We draw your attention to Note no. 30 on Schedule no. 13, regarding overdue amounts, aggregating to Rs 2,777.64 lacs at the year end, due from certain customers which, according to the Management, are recoverable. However, the Management could not provide sufficient and appropriate evidence as to the realisability of the aforesaid overdue amounts for our examination and we are unable to concur with the Management's assertion in this respect that adequate consideration has been given to the concept of prudence set out in Accounting Standard 1 - Disclosure of Accounting Policies. The amount of overdue debts that may be required to be provided for, and impact thereof on the reported profit before tax for the year, debtors' balance and Reserves and Surplus balance at the year-end, could not be determined.

5. Without qualifying our opinion, we draw your attention to Note no. 31 (b) on Schedule no. 13, in relation to certain Oil and Gas producing properties of the Company, whose net book value at the year-end aggregated Rs. 5,193.06 lacs, that are being depreciated on consistent basis in accordance with the 'Unit of Production' method recommended in the Guidance Note on "Accounting for Oil and Gas Producing Activities" issued by the Institute of Chartered Accountants of India in February, 2003 because no rates have been prescribed for the aforesaid fixed assets in Schedule XIV to the Act. The Company is awaiting response to its application to the Central Government pursuant to Section 205 of the Act seeking approval to depreciate the aforesaid assets in accordance with the Unit of Production method. These financial statements do not include any adjustments, should the Central Government direct the Company to adopt a method/ rate of depreciation for the aforesaid assets other than the Unit of Production method.

6. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) Except for the matter referred to in paragraph 4 above, 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, except for the indeterminate effects of the matter referred to in paragraph 4 above, 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, except for the matter referred to in paragraph 4 above, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on 31 December, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 December, 2010 from being appointed as a director in terms of clause (g) of sub- section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the financial statements, together with the notes thereon and attached thereto, give, in the prescribed manner, the information required by the Act, and, except for the indeterminate effects of the matter referred to in paragraph 4 above, 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 31 December, 2010;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT [Referred to in paragraph 3 of our report of even date to the members of Assam Company India Limited on the financial statements for the year ended 31 December, 2010]

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets other than Oil and Gas Division. However, a list of fixed asset acquired for Oil & Gas operation is maintained.

(b) The fixed assets of the Company, except assets pertaining to Oil and Gas operations, have been physically verified by the management during the year, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In respect of assets physically verified, the details have been compared with the book records and discrepancies noticed thereof were not material and have been properly dealt with in the books of account.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) The inventories have been physically verified by the management during the year except in respect of stocks lying with third parties for which certificates have been obtained. Stock in transit at the year end has been verified by the management with reference to subsequent receipt and /or relevant documents. 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 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

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 inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. On the basis of our examination of the books of account, the Company has not entered into any contracts or arrangements with any party durinc the financial year that need to be entered in the register pursuant to the Section 301 of the Act except remuneration paid to a relative of a directoi which has been approved by the Central Government.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framec there under.

7. In our opinion, the Company has an internal audit system commensuratf with its size and nature of its business.

8. We have broadly reviewed the books of account maintained by thi Company in respect of tea products where, pursuant to the Rules madi by the Central Government of India, the maintenance of cost records ha been prescribed under clause (d) of sub-section (1) of Section 209 of tin Act and are of the opinion that prima facie, the prescribed accounts an records have been made and maintained. We have not, however, mad a detailed examination of the records with a view to determine whetht they are accurate or complete. No cost record has been maintained im'I respect to its oil and gas products.

9. (a) According to the information and explanations given to us and records of the Company examined by us, in our opinion, th Company is regular in depositing provident fund, made tea cess an other material statutory dues as applicable with the appropriat authorities except that Company is not regular in depositing incorr tax, value added tax, central sales tax, land revenue, corpora dividend tax and family pension fund contribution. Howeve according to the information and explanations given to us and tt records of the Company examined by us, there are no undisputc amounts payable in respect of statutory dues which were in arrear as at 31 December, 2010 for a period of more than six months fro the date they became payable.

(b) According to the information and explanations given to us and tl records of the Company examined by us, there are no dues service tax, customs duty, wealth tax, excise duty and cess wh» have not been deposited on account of any dispute. The particula of dues of income-tax and sales-tax as at 31 December, 2010 whi have not been deposited on account of a dispute, are as follows:

Amount Period to which Name of the Statute Nature of the Dues (inRs) the amount relates

West Bengal Sales Tax Act, 1994 West Bengal Sales Tax 29,333,466 2003-04

2004-05 2006-07

19,370,205 2002-03

8,608,490 2005-06

2007-08

Assam General Sales Tax Act, 1993 Assam Sales Tax 4,902,623 1996-97

2000-01 2001-02 2005-06

Central Sales Tax Act, 1956 Central Sales Tax 20,235,373 1996-97

2003-04 2004-05 2006-07

639,644 2005-06

2007-08

34,760,848 1997-98

1999-00 2000-01 2001-02 2005-06

168,552 2002-03

Income Tax Act, 1961 Income Tax 20,824,240 2008-09



Name of the Statue Forum where the dispute is pending

West Bengal Sales Tax Act, 1994 Appellate and Revisional Board of Commercial Taxes

Joint Commissioner of Commercial Taxes

Senior Joint Commissioner of Commercial Taxes

Assam General Sales Tax Act, 1993 Commissioner of Taxes

Central Sales Tax Act, 1956 Appellate and Revisional Board of Commercial Taxes

Sr Joint Commissioner of Commercial Taxes

Commissioner of Taxes

Joint Commissioner of Commercial Taxes

Income Tax Act, 1961 Commissioner of Income Tax (Appeals)

10. The Company has no accumulated losses as at 31 December, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank at the Balance Sheet date.

12. 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 applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

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

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 Act during the year.

19. The Company has not issued any debentures during the year.

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 such case by the management.

Partha Mitra Partner

Membership Number 50553

For Lovelock & Lewes

Firm Registration Number - 301056E

Kolkata, 5th September, 2011 Chartered Accountants






Dec 31, 2009

To The Members of Assam Company India Limited (formerly known as Assam Company Limited)

1. We have audited the attached Balance Sheet of Assam Company India Limited (formerly known as Assam Company Limited) as at 31 December, 2009 and the related Profit and Loss Account on that date annexed thereto, and Cash Flow Statement for the year ended on that date, which we have signed 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.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, (together the Order1), 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 of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the Directors, as on 31 December, 2009 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31 December, 2009 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act 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 31 December, 2009;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

[Referred to in paragraph 3 of our report of even date to the members of Assam Company India Limited (formerly known as Assam Company Limited) on the financial statements for the year ended 31 December, 2009].

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets other than Oil and Gas Division.

(b) The fixed assets of the Company other than Oil and Gas Division are physically verified by the management according to a phased programme designed to cover all the items over a period of three

years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No physical verification of the fixed assets was carried out during the year pursuant to the above programme except for certain assets at one of the tea estate. In respect of assets physically verified, the details have been compared with the book records and discrepancies noticed thereof were not material and have been properly dealt with in the books of account.

(c) In our opinion and according to the information and explanations

given to us, a substantial part of fixed assets has not been disposed off by the Company during the year except assets at abandoned oil fields which has been surrendered. In our opinion, the disposal of the said part of fixed assets has not affected the going concern status of the Company.

2. (a) The inventories have been physically verified by the management

during the year except in respect of stocks lying with third parties for which certificates have been obtained. Stock in transit at the year end has been verified by the management with reference to subsequent receipt and /or relevant documents. 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 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured to

companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

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 inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. On the basis of our examination of the books of account, the Company has not entered into any contracts or arrangements with any party during the financial year that need to be entered in the register pursuant to the Section 301 of the Act except remuneration paid to a relative of a director which has been approved by the Central Government.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business. No internal audit was conducted for the Oil and Gas Division in the current year.

8. We have broadly reviewed the books of account maintained by the Company in respect of tea products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. No cost record has been maintained with respect to its oil and gas products.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing provident fund, service tax and other material statutory dues as applicable, with the appropriate authorities except that Company is not regular in depositing income tax, sales-tax, wealth tax, cess, deposit linked insurance, family pension fund, land revenue, professional tax and undisputed statutory dues in respect of tax deducted at source from supplier of green leaf.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of undisputed amounts payable in respect of statutory dues which were in arrears, as at 31 December, 2009 for a period of more than six months from the date they became payable, are as follows -

Name of the Statute Nature of Dues Amount (Rs.) Period to which the amount relates Assam Value Added Value Added Tax 117,308 April, 2009 Tax Act, 2003 Assam Taxation Land Revenue 1,290,605 Various (on Specified Lands) Act, 1990 Assam Taxation Tax Deducted at 371,428 March, 2009 (on Specified Lands) Source from supplier to June, 2009 Act, 1990 of Green Leaf Consent Fee under Water Air and Water 600,250 Various (Prevention & Control of Pollution Cess Pollution) Act, 1974 and Air (Prevention & Control of Pollution) Act, 1981

Name of the Statute Due Date Date of Payment Assam Value Added 21 May, 2009 19 April, 2010 Tax Act, 2003 Assam Taxation Various Not Yet Paid (on Specified Lands) Act, 1990 Assam Taxation Various 20 March, 2010 (on Specified Lands) Act, 1990 Consent Fee under Water Various Not Yet Paid (Prevention & Control of Pollution) Act, 1974 and Air (Prevention & Control of Pollution) Act, 1981

(c) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of service tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute. The particulars of dues of income-tax and sales-tax as at 31 December, 2009 which have not been deposited on account of a dispute, are as follows:

Amount Name of the Statute Nature of the Dues (in Rs) West Bengal Sales Tax Act, 1994 West Bengal Sales Tax 1,536,066 23,718,210 8,724,464 19,370,205 Assam General Sales Act, 1993 Assam Sales Tax 3,745,636 Central Sales Tax Act, 1956 Central Sales Tax 33,659,292 6,420,949 98,207,659 168,552 Income Tax Act, 1961 Income Tax 10,84,258

Period to which Forum where the Name of the Statute the amount relates dispute is pending West Bengal Sales Tax Act, 1994 2003-04 Appellate and Revisional Board of Commercial Taxes 2005-06,2006-07 Deputy Commissioner of Commercial Taxes 2004-05 Senior Joint Commissioner of Commercial Taxes 2002-03 Assistant Commissioner of Commercial Taxes Assam General Sales Act, 1993 2000-01,2001-02 Commissioner of Taxes Central Sales Tax Act, 1956 1999-00,2000-01 Commissioner of Taxes 2001-02 2003-04,2004-05 Appellate and Revisional Board of Commercial Taxes 2005-06,2006-07 Deputy Commissioner of Commercial Taxes 2002-03 Assistant Commissioner of Commercial Taxes Income Tax Act, 1961 2006-07 Assistant Commissioner of Income Tax

10. The Company has no accumulated losses as at 31 December, 2009 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceeding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date.

12. 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 applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

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

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 Act during the year.

19. The Company has not issued any debentures during the year.

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 such case by the management.

Partha Mitra Partner Membership Number 50553 For Lovelock & Lewes Firm Registration Number - 301056E Kolkata, 7th May, 2010 Chartered Accountants

 
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