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Auditor Report of Diana Tea Company Ltd.

Dec 31, 2013

1. We have audited the accompanying financial statements of Diana Tea Company Limited ("the Company"), which comprise the Balance Sheet as at 31st December, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

2. The Company''s 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 referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") and in accordance with the accounting principles generally accepted in India. 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.

AUDITORS'' RESPONSIBILITY

3. 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.

4. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 eff ectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

OPINION

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 aff airs of the Company as at 31st December, 2013;

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

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

EMPHASIS OF MATTER

7. Refer to (i) Note No. 15(b) for non-provision of Sundry Debtors considered doubtful of recovery, (ii) Note No. 17 (a) & (b) for non-provision of loans and advances receivable which is doubtful of recovery, (iii) Note No. 18 for non-provision of Interest and Replantation Subsidy Receivable which is doubtful of recovery,(iv) Note No. 28-8(b) for non-provision of Gratuity liability, (v) Note No. 28-9 for non-provision of diminution in value of long term investments in respect of quoted investments and, (vi) non-provision of Entry Tax.

Our opinion is not qualifi ed in respect of above matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

9. 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 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.

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

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act except for Accounting Standard 15 (Revised 2005), in respect of non- provision of part of gratuity liability as mentioned in point no. 8(b) of Note 28.

(e) On the basis of the written representations received from the directors as on 31st December, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31st December, 2013 from being appointed as a director in terms of Section 274(1)(g) of the Act.

Annexure to the Independent Auditors'' Report (Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) In respect of its fixed assets :

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

(b) As explained to us, fi xed assets have been physically verifi ed by the management at reasonable intervals; no material discrepancies were noticed on such verifi cation.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not aff ected the going concern status of the Company.

(ii) In respect of its inventory :

(a) The management has conducted physical verifi cation of inventory at reasonable intervals during the year except stock of tea lying with third party.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifi cation 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) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verifi cation of stocks by the management as compared to book records.

(iii) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, fi rms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company and hence, not commented upon.

(e) The Company has taken interest free unsecured loan from holding company. The amount of loan taken by the Company during the year was Rs. 44,50,000/-, at the year end the outstanding balance of such loan taken was Rs. 47,55,000/- and maximum amount involved during the year was Rs. 1,90,70,000/-.

(f) In our opinion, terms and conditions of such loans are prima facie not prejudicial to the interest of the Company.

(g) In respect of aforesaid loan the Company is regular in repayment of the principal amount as stipulated.

(iv) In our opinion and according to the information and explanations given to us there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories and fixed assets and payment for expenses and for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weakness in the internal controls has been noticed.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rupees five lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposit from the public covered under Section 58A and 58AA of the Companies Act, 1956.

(vii) As per information and explanations given by the management, the Company has an adequate internal audit system commensurate with the size and the nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

(ix) (a) Undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities.

(b) According to information and explanation given to us, the disputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty that have not been deposited on account of matters pending before appropriate authorities are as follows :

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

West Bengal Sales Tax Sales Tax 80,543/- 2000-2001 Act, 1994

West Bengal Value Added Sales Tax 15,56,546/- 2010-2011 Tax Act, 2003

Central Sales Tax Act, CST 25,28,836/- 2003-2004 1956

Central Sales Tax Act, CST 6,24,243/- 2010-2011 1956

Income Tax Act, 1961 Income Tax 59,206/- 2007-2008

Income Tax Act, 1961 Income Tax 14,43,100/- 2010-2011

Income Tax Act, 1961 Income Tax 15,94,320/- 2011-2012

Name of the Statute Forum where dispute is pending

West Bengal Sales Tax Act, 1994 Commercial Tax Officer

West Bengal Value Added Tax Act, Joint Commissioner of Commercial 2003 Taxes, Chowringhee Circle, Kolkata

Central Sales Tax Act, 1956 Joint Commissioner of Commercial Taxes, Chowringhee Circle, Kolkata

Central Sales Tax Act, 1956 Joint Commissioner of Commercial Taxes, Chowringhee Circle, Kolkata

Income Tax Act, 1961 Deputy Commissioner of Income Tax

Income Tax Act, 1961 Deputy Commissioner of Income Tax

Income Tax Act, 1961 Deputy Commissioner of Income Tax

(x) The Company does not have any accumulated losses at the end of the accounting year and has not incurred cash losses in the current year and the immediately preceding accounting year.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks or debenture holders.

(xii) According to Information and explanation given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) (a) In our opinion, the Company is not dealing in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable.

(b) According to the information and explanations given to us, long-term investments have been held by the Company in its own name.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or fi nancial institution.

(xvi) Based on our audit procedures and on the information given by the management, we report that the term loans have been applied by the Company during the year for the purposes for which they were obtained.

(xvii) Based on the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company as at 31st December, 2013, we report that funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

(xviii) Based on the audit procedures performed and the information and explanations given to us by the management, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the period.

(xx) The Company has not raised any money through public issue during the year.

(xxi) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For DAS & PRASAD Chartered Accountants Firm Registration No. 303054E

P. K. Agarwal Place : Kolkata Partner Dated : March 01, 2014 Membership No.056921


Dec 31, 2012

1. We have audited the attached Balance Sheet of Diana Tea Company Limited as at 31st December, 2012 and the Statement of Profit and Loss & Cash Flow Statement for the year ended on that date both 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 disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 Companies (Auditors'' Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-Section (4A) of Section 227 of "the Companies Act, 1956" we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. Further to our comments 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 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, the Statement of Profit and Loss & the Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss & the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-Section (3C) of Section 211 of the Companies Act, 1956 except for Accounting Standard 15(Revised 2005), in respect of non-provision of part of gratuity liability as mentioned in point no. 8 (b) of Note. 28.

e) On the basis of the written representation received from the Directors as on 31st December, 2012 and taken on record by the Board of Directors we report that none of the Directors is disqualified as on 31st December, 2012 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 statement of accounts read together with Significant Accounting Policies and Notes there on and subject to (a) Note No. 15 for non provision of sundry debtors considered as doubtful of recovery, (b) Note No. 17(1) & (2) for non provision for loans and advances receivable which is doubtful of recovery, (c) Note No. 18 for non provision of interest & Replantation subsidy receivable which is doubtful of recovery (d) Note No. 28-8 (b) for non provision of gratuity liability, (e) Note No. 28-9 for non- provision of diminution in value of long term investments in respect of quoted investments, (f) Note No. 28-11 for non- provision of professional tax liability. Had the effect of above Notes Nos. (a) to (f) been taken in the books, the profit for the year and reserves of the company would have been lower by the net of sum of the amounts referred in above notes; give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

i) in the case of Balance Sheet, of the state of affairs of the Company as at 31st December, 2012;

ii) in the case of Statement of Profit and Loss, of the PROFIT for the year ended on that date; and

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

(Referred to in paragraph 3 of our report of even date)

As required by the Companies (Auditors'' Report) (Amendment) Order 2004, we report that:

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

b) The fixed assets of the Company at all its locations were physically verified by the Management at reasonable intervals during the year. As informed, no material discrepancies were noticed on such verification.

c) In our opinion and according to the information and explanations given tc us, the Company has not disposed off any substantial part of fixed asset during the year.

ii) a) As explained to us, the Management has conducted physical verification of inventory at reasonable intervals during the year except stock of tea lying with third party .

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

c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii) In respect of loans granted/obtained by the Company to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us :

(a) The Company had granted inter-corporate loans to one company. At the year end the outstanding balance of such loan granted was NIL and maximum amount involved during the year was Rs. 8,00,000/-.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are prima facie not prejudicial to the interest of the Company.

(c) The receipt of principal amounts and interest has been regular during the year.

(d) There was no overdue amount in respect of above inter-corporate loans.

(e) The Company has taken interest free unsecured loan from holding company. The amount of loan taken by the Company during the year was Rs. 69,62,000/- at the year end the outstanding balance of such loan taken was Rs. 1,90,70,000/- and maximum amount involved during the year was Rs. 1,92,15,000/-

(f) In our opinion, terms and conditions of such loans are prima facie not prejudicial to the interest of the Company.

(g) In respect of aforesaid loan the Company is regular in repayment of the principal amount as stipulated.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for purchase of inventory, fixed assets and for the sale of goods & services. During the course of audit, no major weakness has been noticed in the internal control in respect of these areas.

v) a) To the best of our knowledge and belief and according to the information and explanation given to us, we are of the opinion that the particulars of the transactions that need to be entered into 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 pursuance of such contracts or arrangements in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

vi) The Company has not accepted any deposits from the public under Sections 58A and 58AA of the Act and the rules framed thereunder.

vii) In our opinion, the Company has an internal audit system which need to be further strengthened in order to make it commensurate with the size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company in respect of 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 (i) of Section 209 of the Act and are of 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.

ix) According to the information and explanations given to us and the records of the Company examined by us in respect of Statutory and other dues

(a) In our opinion, Undisputed Statutory dues including Provident Fund, Investor Education & Protection Fund, Employees'' State Insurance, Sales Tax, Wealth Tax and any other statutory dues has been regularly deposited with the appropriate authorities during the year except:

1. West Bengal Professional Tax Liability of Rs. 3,27,417/- in respect of interest for which the Company had applied for waiver as mentioned in point no 11 of Note. 28.

2. Dividend Distribution Tax Liability of Rs. 18,23,937/- as mentioned in point no 5 of Note no. 28.

(b) According to the records of the Company, the disputed statutory dues on account of sales tax, income tax, wealth tax, service tax, excise duty and cess that have not been deposited on account of matters pending before appropriate authorities are as follows :

Name of the Statute Nature of Dues Amount Period to which Forum where (in Rs.) the Amount dispute is relates pending

West Bengal Sales Tax Act, 1994 Sales Tax 80,543/- 2000-2001 Commercial Tax Officer

Central Sales Tax Act, 1956 CST 25,28,836/- 2003-2004 Deputy Commissioner

Income Tax Act, 1961 Income Tax 7,92,584/-# 2007-2008 Commissioner of Income Tax (Appeal)

Income Tax Act, 1961 Income Tax 14,08,126/- 2008-2009 Commissioner of Income Tax (Appeal)

Income Tax Act, 1961 Income Tax 98,810/- 2009-2010 Commissioner of Income Tax (Appeal)

#The company has paid Rs. 8,00,000/- against the same on protest.

x) The Company does not have any accumulated losses at the financial year ended 31st December 2012 and it has not incurred cash losses in the current and immediate preceding financial year.

xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to the Financial Institutions.

xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loan or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the nature of activities of the Company is such that the provisions of any special statute including chit fund/nidhi/mutual benefit fund/societies are not applicable to it.

xiv) (a) According to the information and explanations given to us, Company is not dealing/trading in shares, securities or debentures and other investments. Therefore, the provisions of Clause 4 (xiv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

(b) According to the information and explanations given to us, long-term investments have been held by the Company in its own name.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from the Bank or Financial Institutions during the year.

(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) According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no fund raised on short term basis have been used for long term investment and no long term fund have been used to finance the short term assets.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956 during the year and hence the question of the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

(xix) The Company has not raised debentures during the year and hence question of any security in respect of debentures does not arise.

(xx) The Company has not raised any money through public issue during the year.

(xxi) During the course of our examination of the books and records of the Company and based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given to us by the management, we have neither come across any instance of fraud on or by the Company noticed or reported during the year nor have been informed of such case by the management.

For DAS & PRASAD

Chartered Accountants

Firm Regn. No. 0303054E

4, Chowringhee Lane P. K. Agarwal

Kolkata - 700 016 Partner

Date : March 26, 2013 Membership No.056921


Dec 31, 2009

1. We have audited the attached Balance Sheet of DIANA TEA COMPANY LIMITED as at 31st December, 2009 and the Profit & Loss Account and Cash Flow Statement for the year ended on that date both annexed thereto, 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 disclosure 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 of our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) Amendment Order, 2004 (CARO) 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 on the basis of information and explanations given to us during the course of audit we state that:

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

b) The fixed assets of the Company at all its locations were physically verified by the Management at reasonable intervals during the year. As informed, no material discrepancies were noticed on such verification.

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

ii) a) As explained to us, the Management has conducted physical verification of inventory at reasonable intervals during the year except stock of tea lying with third party .

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of Inventory followed by the Management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii) In respect of loans granted/obtained by the Company to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us :

a) The Company has granted inter-corporate loans to one Company. At the year end the outstanding balance of such loan granted was Rs. 8,00,000/- and maximum amount involved during the year was Rs. 8,00,000/-.

b) In our opinion, the rate of interest and other terms and conditions of such loans are prima-facie not prejudicial to the interest of the Company.

c) The receipt of principal amounts and interest has been regular during the year.

d) There was no overdue amount in respect of above inter-corporate loans.

e) The Company has taken interest free unsecured loan from holding Company. At the year end the outstanding balance of such loan taken was Rs. 10,000/- and maximum amount involved during the year was Rs. 20,00,000/-.

f) In our opinion, terms and conditions of such loans are prima-facie not prejudicial to the interest of the Company.

g) In respect of aforesaid loan the Company is regular in repayment of the principal amount as stipulated and is also regular in payment of interest where applicable.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for purchase of inventory, fixed assets and for the sale of goods & services. During the course of audit, no major weakness has been noticed in the internal control in respect of these areas.

v) a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of the transactions that need to be entered into 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 with parties, with whom transactions exceeding the value of Rupees Five Lacs in respect of each party have been entered into during the financial year, are at prices, which are reasonable, having regard to the prevailing market prices at the relevant time where such market prices are available.

vi) The Company Has not accepted any deposits from the public under Sections 58A and 58AA of the Act and the rules framed thereunder.

vii) According to the information and explanations given to us, Company has an internal audit system commensurate with the size and nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company in respect of 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 (i) of Section 209 of the Act and are of 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.

ix) According to the information and explanations given to us and the records of the Company examined by us in respect of Statutory and other dues :-

a) In our opinion, undisputed Statutory dues including Provident Fund, Investor Education & Protection Fund, Employees State Insurance, Sales Tax, Wealth Tax and any other statutory dues has been regularly deposited with the appropriate authorities during the year except:

West Bengal Professional Tax of Rs. 4,25,807/- including interest, out of the same principal amount Rs. 98,390/- has been paid and the Company has applied waiver for interest.

b) According to the records of the Company, the disputed statutory dues on account of sales tax, income tax, wealth tax, service tax, excise duty and cess that have not been deposited on account of matters pending before appropriate authorities are as follows :

Name of the Statute Nature ofDues Amount Period to which Forum where dispute (in Rs.) the Amount is pending relates West Bengal Sales Tax 80,543/- 2000-2001 Assistant Commissioner Sales Tax Act, 1994

Central Sales Tax Act, 1956 CST 25,28,836/- 2003-2004 Assistant Commissioner

Central Sales Tax Act, 1956 CST 1,94,968/- 2004-2005 Assistant Commissioner

Income Tax Act, 1961 Income Tax 47,71,575/- 2005-2006 Income Tax Appellate Tribunal Income Tax Act, 1961 Income Tax 94,181/- 2006-2007 Commissioner ofIncome Tax (Appeal)

Income Tax Act, 1961 Income Tax 31,00,689/- 2007-2008 Commissioner of income Tax (Appeal)

x) The Company does not have any accumulated losses at the financial year ended 31st December, 2009 and it has not incurred cash losses in the current and immediate preceding financial year.

xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to the Financial Institutions.

xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loan or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion the Company is not a chit fund or nidhi/mutual benefit fund/societies. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xiv) (a) According to the information and explanations given to us, Company is not dealing/trading in shares, securities or debentures and other investments. Therefore, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(b) According to the information and explanations given to us, long-term investments have been held by the Company in its own name.

xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from the Bank or Financial Institutions during the year.

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) According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no fund raised on short term basis have been used for long term investment and no long term fund have been used to finance the short term assets.

xviii) The Company has not made any preferential allotment of shares to parties or Companies covered in the register maintained under Section 301 of the Companies Act, 1956, during the year and hence the question of the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

xix) The Company has not raised debentures during the year and hence question of any security in respect of debentures does not arise.

xx) The Company has not raised any money through public issue during the year.

xxi) During the course of our examination of the books and records of the company and based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given to us by the management, we have neither come across any instance of fraud on or by the Company noticed or reported during the year nor have been informed of such case by the management.

4. Further to our comments 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 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, Profit & Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, except for Accounting Standard 15 (Revised 2005), in respect of non-provision of part of gratuity liability indicated in Note No. B-8 of Schedule 13.

e) On the basis of the written representation received from the Directors as on 31st December, 2009 and taken on record by the Board of Directors we report that none of the Directors is disqualified as on 31st 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 statement of accounts read together with Notes as appearing in Schedule 13 to the Accounts particularly (a) Note No.B-5 for non provision of sundry debtors considered as doubtful of recovery, (b) Note No.B-8 for non provision of gratuity liability, (c) Note No.B-9 for non-provision of diminution in value of investments, (d) Note No.B-12 for non provision of professional tax liability and (e) Note No.B-13 for non provision of loan receivable. Had the effect of above Notes Nos. (a) to (e) been taken in the books the profit as well as carried forward profit would have been reduced by the net of sum of the amounts referred in above notes; give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

i) in the case of Balance Sheet, of the state of affairs of the Company as at 31st December, 2009;

ii) in the case of Profit & 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 Flow for the year ended on that date.

For DAS & PRASAD Chartered Accountants Registration No. 303054E 4, Chowringhee Lane P. K. Agarwal Kolkata - 700 016 Partner Date : March 30, 2010 Membership No. 056921


Dec 31, 2000

We have audited the attached Balance Sheet of DIANA TEA COMPANY LIMITED, Kolkata as at 31st December, 2000 and the Profit & Loss Account annexed thereto for the period ended on that date and we report that :-

1) As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by the Central Government and on the basis of such checks as we considered appropriate and information and explanations given to us during the course of audit, we state that:-

1.1) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. As explained to us all these Fixed Assets have been physically verified by the Management at reasonable intervals during the year and no material discrepancies were noticed on such verification.

1.2) Land & Plantation of Companys Diana, Baintgoorie and Goodhope Tea Estates has been revalued during the year.

1.3) The stock of Finished Goods except lying with other parties, Stores and Spare Parts and Raw Materials have been physically verified by the Management at reasonable intervals during the period including at the period end.

1.4) As explained to us the procedures of physical verification of the above referred stocks followed by the Management are, in our opinioa reasonable and adequate in relation to the size of the Company and nature of its business.

1.5) The discrepancies noticed on physical verification of stocks as compared to book records were not material and have been properly dealt with in the books of account.

1.6) In our opinion and on the basis of our examination the valuation of stock is fair and proper in accordance with normally accepted accounting principles.

1.7) The Company has not taken any loans secured or unsecured from firms, companies and other parties listed in the Register maintained under section 301 of the Companies Act, 1956 and / or from the Companies under the same management within the meaning of Section 370(1-B) of the Companies Act, 1956.

1.8) The Company has not granted any loans secured or unsecured to firms and other parties listed in the Register maintained under section 301 of the Companies Act, 1956. However, as per information and explanations given to us the rates of interest and terms and conditions on which loans have been granted to Companies under Section 301 of the Companies Act, 1956 and/or to the companies under the same management within the meaning of section 370(1-B) of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

1.9) The principal amount and interest wherever charged in respect of loans and advances in the nature of loans, given by the company to body corporates, employees and others have been recovered/adjusted in accordance with the stipulations.

1.10) Having regard to the greater degree of personal supervision exercised by the Directors, in our opinion and according to the information and explanations given to us during the course of the audit, the internal control procedure of the Company relating to purchase of stores, raw materials and fixed assets and sale of goods are commensurate with the size and the nature of business of the Company.

1.11) According to informations and explanations given to us there are no transaction of purchase of goods, materials and sales of goods and services aggregating during the year to Rs. 50,000/- or more in respect of each party made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the Companies Act, 1956.

1.12) As explained to us, the Company has a regular procedure for the determination of unserviceable or damaged stores, raw materials and finished goods. Adequate provision has been made in the accounts for the loss, if any, arising on the items so determined.

1.13) The company has not accepted any deposit from the public during the year under Section 58A of the Companies Act, 1956.

1.14) As per the informations and explanations given to us, the Company has maintained reasonable records for the sale and disposal of old materials. The company has no by-products.

1.15) The company has appointed a firm of Chartered Accountants for carrying out the internal audit periodically and the same is commensurate with the size and nature of its business.

1.16) We are informed that the Company has not been required to maintain cost records under Section 209(l)(d) of the Companies Act, 1956.

1.17) According to the records of the Company, the Provident Fund and the Employees State Insurance dues wherever applicable, have been regularly deposited during the year with the appropriate authorities.

1.18) According to the informations and explanations given to us, there are no undisputed amounts payable in respect of Income-tax, Sales-tax, Wealth-tax, Custom Duty and Excise Duty outstanding for a period of more than six months as at 31st December, 2000 from the date they became payable.

1.19) According to the informations and explanations given to us and the records examined by us, no personal expenses have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice.

1.20) In our opinion, the Company is not a sick industrial Company within the meaning of Clause (O) of sub Section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986).

1.21) In respect of investment activities the Company has maintained proper records of transactions and contracts and timely entries thereof have been maintained therein.

2) Subject to the above we further report that -.-

2.1) We have obtained all informations and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

2.2) 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 these books.

2.3) The Balance Sheet and Profit & Loss Account referred to in this report are in agreement with the books of account as submitted to us.

2.4) In our opinion, the Balance Sheet and the Profit & Loss Account have been drawn up in accordance with the Accounting Standards referred to in clause 3(C) of section 211 of the Companies Act, 1956 except for Accounting Standard- 15, in respect of Non-provision of part of gratuity liability indicated in Note No. A 10 (a) of Schedule 13.

2.5) According to the information and explanations given to us and on the basis of the written declarations received from the directors of the Company, we report that none of the directors is disqualified as on 31st December, 2000 from being appointed as a director in terms of clause (g) of sub- section (1) of Section 274 of the Companies Act, 1956.

2.6) On our opinion and to the best of our information and according to the explanation given to us the said statement of accounts read together with Notes as appearing in Schedule 13 to the Accounts particularly (a) Note No.B- 6 for non-provision of sundry debtors considered as doubtful of recovery (b) Note No. B-8 non-provision of part of gratuity liability (c) Note No. B-9 for non-provision for diminution in value of investment and (d) Note No. B-10 for change in treatment of borrowing cost due to Accounting Standard 16. Had the effect of above Note a,b,c and d been taken in the books the Profit as well as carried forward Profit would have been reduced by the net of the above referred amounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view :

i) In the case of Balance Sheet of the state of affairs of the Company as at 31st December, 2000

AND

ii) In the case of the Profit & Loss Account of the PROFIT for the period ended on that date.

For Das & Prasad

9, Jagmohan Mullick Lane, Chartered Accountants

Kolkata - 700 007 P. K. Agarwal

Dated, the 5th July, 2001. Partner

 
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