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Auditor Report of REI Agro Ltd.

Mar 31, 2015

We have audited the accompanying Standalone financial statements of REI Agro Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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, which we have signed under reference to this report.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act 2013 ('the Act*) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flow of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true & fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

BASIS FOR QUALIFIED OPINION

1. The Company has not provided interest on loans availed from banks and financial institutions which have been classified as NPA by them. The amount not so provided amounts to Rs.425.23 Crores for the year ended 31st March 2015.

2. Provision for gratuity and leave encashment has been done on the basis of estimation and not as per the Actuarial Valuation, which is not in consonance with AS-15.

3. The company had provided Corporate Guarantee to the lenders for the borrowings by its Subsidiary Company namely Ammalay Commodities JLT. The said subsidiary company has defaulted in the repayment of the facilities provided by the lenders and therefore the lenders of the subsidiary company has invoked the Corporate Guarantee provided to them amounting to Rs. 3,105.93 Crores from the company against which no provision has been made in the books of the accounts for the year ended 31st March 2015. It has been explained by the management that it shall provide for the liability, if any, after the lender has not been able to recover the amount from the subsidiary company.

QUALIFIED OPINION

In our opinion, and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the basis for qualified opinion paragraph above, the accompanying standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

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

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

EMPHASIS OF MATTERS

We draw attention to the following matters in the Notes to the financial statements:

1. Note 29.1 to the financial statements that describe that due to liquidity crunch being faced by the company, it was not able to procure adequate quantum of Raw Material during the year, which has resulted in temporary shutdown of one of its unit and partly shut down of second unit. However the third being grading & packing units has been operational.

2. Note 29.2 to the financial statements that the Company has defaulted in payment of obligations in respect of all the Banks/Financial Institutions/Non- Convertible Debentures holders together with interest thereon on due dates. As a result thereof all the Working Capital Banks, Term Lenders and NCD Holders have initiated the Corrective Action Plan (CAP) through the Joint Lenders Forum (JLF) in accordance with the RBI's SMA Guidelines dated February 26,2014. A lender bank initiated a Winding up proceedings against the company for recovery of dues Notices have now been issued by certain lenders u/s 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. This may have adverse effect on the functioning of the company on going forward basis.

3. Note No.29.5 to the financial statement indicates that the company has accumulated losses and its net worth is fully eroded. The company has incurred net loss during the current year and previous year and company's current liabilities exceeded its current assets as at the balance sheet date.

These conditions along with other matters set out above indicates the existence of uncertainty that may cast doubt about the company's ability to continue as going concern. However the financial statements of the company has been prepared by the management on going concern basis.

Our opinion is not modified in respect of these matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

i) As required by the Companies (Auditor's Report) Order, 2015 ('the Order"), issued by the Central Government of India in terms of sub section (11) of Section 143 of the Companies Act 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 & 4 of the Order, to the extent applicable.

ii) As required by Section 143(3) of the Companies Act, 2013 we report that:

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

b. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above,in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

d. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above,in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. The matters described in the Basis for Qualified Opinion and emphasis of matters paragraphs above,

in our opinion, may have an adverse effect on the functioning of the Company.

f. The Company has defaulted in redemption of Non Convertible Debentures ("NCD") on due date and payment of interest due thereon and dividend on preference shares and such default has continued for more than one year. In terms of section 164(2) of the Companies Act 2013, the Directors of the Company are not eligible to be reappointed as Directors of the Company. As per the legal opinion obtained, the Directors of the Company may continue to hold their position as Directors till their reappointment date.

g. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements — Refer Note No. 28 & 29 to the financial statements.

ii) The Company did not have long-term contracts including derivative contracts any for which there were any material foreseeable losses.

iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE AUDITORS’ REPORT

(Referred to in paragraph 1 under the head "Report on Other Legal and Regulatory Requirements" 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 fixed assets.

b) Fixed Assets have been physically verified by the management during the year.

c) No substantial part of fixed assets has been disposed off by the company during the year.

ii. In respect of its Inventories:

a) As explained to us, the Inventories have been physically verified by the management at reasonable intervals. In our opinion the frequency of verification is reasonable.

b) The procedure of physical verification of inventories followed by the management is 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 its inventories and no material discrepancies were noticed on physical verification of inventories as compared to the book records.

iii. The company has not granted any loan parties covered in the register maintained under section 189 of the Companies Act.

iv In our opinion and according to the information and explanations given to us, the company has adequate internal control system with regards to the purchase of inventories, fixed assets and for the sale of goods needs to be further strengthened.

v. The company has not accepted any deposits from the public. Hence the provisions of clause 4 (v) of the order are not applicable.

vi. 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 (1) of Section 148 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.

vii. (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 generally regular in depositing undisputed statutory dues, in respect of Service tax , and Income Tax at source though there has been a slight delay or delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, investor education and protection fund, employees' state insurance, income tax, wealth tax, customs duty, excise duty and other material statutory dues, as applicable, with the appropriate authorities except as set out in the Table below:

Particulars Amount Amount (Rs) (Rs) Dividend Distribution Tax Payable (DDT) (Inclusive of Interest) F.Y 2011-12 94,754,183

F.Y 2012-13 85,118,164 179,872,347

Income Tax Payable for year ended 31/03/13 (A.Y 13-14)

(On the Basis of computation 602,606,045 as per IT Act, 1961)

(b) According to information and explanation given to us and the records of the company examined by us, the following disputed amount of statutory dues which have not been deposited.

Name Nature Amount Period Forum where of the of Rs. in which it Dispute is pending Statue Dues Lacs relates

PDIF Local 119.00 2008-09 Punjab & Haryana Act Tax High Court

Sales Local 144.00 2008-09 Punjab & Haryana Tax Tax High Court

viii. The Company has accumulated losses of Rs. 5493.13 Crores as at the end of the Financial Year and it has incurred cash losses of Rs. 5389.28 Crores during the current and NIL in the immediately preceding financial year.

ix. Based on our audit procedures and on the basis of information and explanations given to us, we are of the opinion that the Company has defaulted in the repayment of dues to financial institution, Bank and debenture holders as referred to Note No.5.4, 5.6 & 8.2 of the Notes to the Financial Statements.

x. In respect of loans granted by Banks to some of its wholly owned subsidiary company, this Company has given guarantees to the extent of Rs 3,105.93 Crores against credit facilities provided by the banks and Financial Institutions to two (2) Wholly Owned Foreign Subsidiaries companies - Ammalay Commodities JLT and Ammalay International PTE Ltd. But during the year bankers have invoked the corporate guarantee for which no provision has been made.

xi. In our opinion and according to the information and explanation given to us, the term loans were applied for the purpose for which these were raised. However, no Term Loan has been raised during the year.

xii. In our opinion and according to our information and explanation given by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For P. K. LILHA & CO.

Chartered Accountants Firm Reg. No.: 307008E

Sd/- (CA. P. K. LILHA) Partner M. No. 011092

Place : Kolkata Date : 13.06.2015


Mar 31, 2014

We have audited the accompanying financial statements of REI Agro Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, 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, which we have signed under reference to this report.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notifed under the Companies Act, 1956 of India (the "Act"). (Which continue to be applicable in respect of 133 sections of the Companies Act,2013 in terms of General Circular 15/ 2013 dated September 13, 2013 of the Ministry of Corporate Affairs) 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.

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 and other applicable authoritative pronouncements 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 auditors'' 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 consider 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 suffcient 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 accompanying financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

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

EMPHASIS OF MATTER

Without qualifying our opinion, we would like to draw your attention to the point No.''s 5.1(c) & Point No. 29 of the Notes to the accounts in the Financial Statements, which indicates that the company is facing liquidity crunch, mainly due to increase in Finance Cost and overdue Trade Receivables. This has resulted into default in payment of certain dues including those to lenders and debenture holders. As informed by the management, the company has approached to the bankers and Empowered Group of Joint Lenders Forum (JLF) Cell has admitted the company''s application under the Corrective Action Plan (CAP) Scheme. On the basis of strong expectations of the successful outcome of its CAP application, favourable considerations for reduction in Finance Cost, and recovery of its Trade Receivables , the company has prepared the accompanying Financial Statements on the Going Concern Assumption.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as "the Order"), 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 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;

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards notifed under the Act read with the General Circular 15/2013 dated September 13, 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 March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 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 1 under the head "Report on Other Legal and Regulatory Requirements" 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 fixed assets.

b. Fixed Assets have been physically verifed by the management during the year.

c. No substantial part of fixed assets has been disposed off by the company during the year.

ii. In respect of its Inventories:

(a) As explained to us, the Inventories have been physically verifed by the management at reasonable intervals. In our opinion the frequency of verifcation is reasonable.

(b) The procedure of physical verifcation 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) The Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verifcation of inventories as compared to the book records.

iii. a. The company had given loan to one of its subsidiary, in respect of which the year end balance was NIL (Rs1482 Lacs) and the maximum amount outstanding at any time during the year amounted Rs 1627 Lacs (Rs.1493 Lacs)

b. In our opinion and according to the information and explanation given to us, the rate of interest and other terms & condition of the loans given by the company, are not prima facie prejudicial to the interest of the company.

c. The principal amounts including interest thereon are repayable on demand as such there are no overdue amounts

d. The Company has not taken any loans secured or unsecured from companies covered in the register maintained under Section 301 of the Companies Act, 1956.

iv In our opinion and according to the information and explanations given to us, the internal control with regards to the purchase of inventories, fixed assets and for the sale of goods needs to be further strengthened.

v. a. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register have been so entered.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs in respect of any party were made at prices which were reasonable having regard to the prevailing market prices at the relevant times.

vi. The company has not accepted any deposits from the public. Hence the provisions of clause 4 (vi) of the order are not applicable.

vii. In our opinion, the company has an internal audit system commensurate with the size of the company 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 (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.

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 generally regular in depositing undisputed statutory dues, in respect of Service tax , and Income Tax at source though there has been a slight delay or delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, investor education and protection fund, employees'' state insurance, income tax, wealth tax, customs duty, excise duty and other material statutory dues, as applicable, with the appropriate authorities except as set out in the Table below:

Particulars Amount (Rs.) Amount (Rs.)

Dividend Distribution Tax Payable (DDT) (Inclusive of Interest )

F.Y. 2011-12 94,754,183 F.Y. 2012-13 85,118,164 179,872,347

Income Tax Payable for year ended 31/03/14 (A.Y. 13-14)

(On the Basis of computation 602,606,045 as per IT Act, 1961)

(b) According to information and explanation given to us and the records of the company examined by us, the following disputed amount of statutory dues which have not been deposited.

Name Nature Amount Period to Forum where of the of Dues (Rs in which it Dispute is Statute Lacs) relates Pending

Income Income 411.36 2006-07to Commissioner Tax Tax 2012-13 of Income Act,1961 including Tax (Appeals), applicable Kolkata interest

PDIF Act Local Tax 119.00 2008-09 Punjab & Haryana High Court

Sales Tax Local Tax 144.00 2008-09 Punjab & Haryana High Court

x. The Company has no accumulated losses as at the end of the Financial Year and it has not incurred cash losses during the current and in the immediately preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given to us, we are of the opinion that the Company has defaulted in the repayment of dues to financial institution, Bank and debenture holders as referred to Note No.5.5 & 8.2 of the Notes to the Financial Statements.

xii. According to the information and explanations given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities, accordingly paragraph 4 (xii) of the Order is not applicable.

xiii. The company is not a Chit Fund/Nidhi/Mutual benefit Fund/Society. Therefore the provisions of Paragraph 4 (xiii) of the Order are not applicable to the company.

xiv The Company has in our opinion maintained proper records and contract notes with respect to its investments and timely entries have been made therein. All investments at the close of the year are held in the name of the Company.

xv In respect of loans granted by some of the Banks to its wholly owned subsidiary company this Company has given guarantees to the extent of Rs 2,98,292 Lacs against credit facility provided by the banks and financial institutions to two (2) Wholly Owned Foreign Subsidiaries Companies Ammalay Commoditiess JLT and Ammalay International PTE Ltd. However, According to the information and explanations given to us, we are of the opinion that the terms and condition thereof are not prima facie prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanation given to us, the term loans were applied for the purpose for which these were raised. However, no Term Loan has been raised during the year.

xvii. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used for long term investment.

xviii. The Company has not made any preferential allotment of shares during the year to parties or companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

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

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

xxi. In our opinion and according to our information and explanation given by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For P.K.LILHA & CO. Chartered Accountants Firm Reg. No.: 307008E

(CA. P.K. LILHA) Partner M. No. 011092 Place : Kolkata Date : 30th May, 2014


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

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

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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. 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 our audit provides a reasonable basis for our opinion.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the financial statements read with notes give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. 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;

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, 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 1 under the head "Report on Other Legal and Regulatory Requirements" 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 fixed assets.

b. All Fixed Assets have not been physically verified by the management during the year but there is a regular programme of physical verification which, in our opinion, is reasonable having regards to the size of the company and nature of its assets. No material discrepancies were noticed on such verification.

c. No substantial part of fixed assets have been disposed off by the company during the year.

ii. In respect of its Inventories:

(a) As explained to us the Inventories have been physically verified by the management at reasonable intervals. In our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification of Inventories as compared to the book records.

iii.

(a) The company has given loan to one of its subsidiary. In respect of which the maximum amount outstanding at any time during the year amounts to Rs. 1493 Lacs and the year end balance was Rs. 1482 Lacs .

(b) In our opinion and according to the information and explanation given to us, the rate of interest and other terms & condition of the loans given by the company, are not prima facie prejudicial to the interest of the company.

(c) The principal amounts including interest thereon are repayable on demand as such there are no overdue amounts.

(d) The Company has not taken any loans secured or unsecured from companies covered in the register maintained under Section 301 of the Companies Act, 1956.

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

v.

(a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs in respect of any party were made at prices which were reasonable having regard to the prevailing market prices at the relevant times.

vi. The company has not accepted any deposits from the public during the year. Hence the provisions of clause 4 (vi) of the order are not applicable.

vii. In our opinion, the company has an internal audit system commensurate with the size of the company and nature of its business.

viii. We have broadly reviewed the Books of Accounts maintained by the Company in respect of manufacturing of packaged food products , basmati rice and generation of electricity from wind power where pursuant to the rules made by the Central Government of India, the maintenance of Cost Records have been prescribed U/s 209(1)(d) 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 cost records with a view to determine whether they are accurate or complete.

ix.

(a) On the basis of examination of records of the Company, undisputed statutory dues including Provident fund, Employee''s State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Service Tax, Sales tax, Custom Duty, Excise, Cess and any other material statutory dues have been generally regularly deposited with the appropriate authorities during the year.

(b) No undisputed amounts payable were outstanding at the year end, for a period of more than six months from the date they became payable.

(c) According to information and explanation given to us and the records of the company examined by us, there are no undisputed amount of statutory dues which have not been deposited.

x. The Company has no accumulated losses as at the end of the year and it has not incurred cash losses during the current and in the immediately preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given to us, we are of the opinion that the company has not defaulted in the repayment of dues to any financial institution, or Bank, or debenture holders.

xii. According to the information and explanations given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities, accordingly paragraph 4 (xii) of the Order is not applicable.

xiii. The company is not a Chit Fund/Nidhi/Mutual Benefit Fund/Society. Therefore the provisions of Paragraph 4 (xiii) of the Order are not applicable to the company.

xiv. The Company has in our opinion maintained proper records and contract notes with respect to its investments and timely entries have been made therein. All investments at the close of the year are held in the name of the Company.

xv. The Company has given guarantees for loans taken by five subsidiary companies from banks and financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and condition thereof are not prima facie prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanation given to us, the term loans were applied for the purpose for which these were raised.

xvii. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

xviii. The Company has not made any preferential allotment of shares during the year to parties or companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

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

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

xxi. In our opinion and according to our information and explanation given by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For PK.LILHA & CO.

Chartered Accountants

Firm Reg. No.: 307008E

(CA. P.K. LILHA)

Partner

M. No. 011092

Place : Kolkata

Date : 30th May, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet and Statement of Profit and Loss of REI AGRO LIMITED as at 31st March, 2012 also the Cash Flow Statement for the year ended on that date annexed thereto. These Financial Statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these Financial Statements based on our audit.

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 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 Companies (Auditor's Report) Order, 2003, (as amended) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, and we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable to the Company.

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 purpose of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies as per Notes 1 & 2 and others, 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;

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

2) in the case of Statement of Profit and Loss, of the Profit of the Company for the year ended on that date, and

3) 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)

i. In respect of its Fixed Assets:

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

(b) In our opinion, the company has a regular programme of physical verification of fixed assets which, in our opinion, is reasonable having regards to the size of the company and nature of its assets. In accordance with this programme, fixed assets were physically verified by the management during the year and that no material discrepancies were noticed on verification.

(c) There was no substantial disposal of its fixed assets during the year, which may have any impact on the going concern nature of the Company

ii. In respect of its Inventories:

(a) As explained to us the Inventories have been physically verified by the management at reasonable intervals. In our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification of Inventories as compared to the book records.

iii. (a) The company has given loan to one subsidiary. In respect of said loan the maximum amount outstanding at any time during the year and the year end balance was Rs. 1476.86 Lacs including interest thereon.

(b) In our opinion and according to the information and explanation given to us, the rate of interest and other terms & condition of the loans given by the company, are not prima facie prejudicial to the interest of the company.

(c) The principal amount are repayable on demand including interest.

(d) In respect of the said loans and interest thereon, there are no overdue amount.

(e) The Company has not taken any loans secured or unsecured from companies covered in the register maintained under Section 301 of the Companies Act, 1956.

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

v.(a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs in respect of any party were made at prices which were reasonable having regard to the prevailing market prices at the relevant times.

vi. The company has not accepted any deposits from the public during the year. Hence the provisions of clause 4 (vi) of the order are not applicable.

vii. In our opinion, the company has an internal audit system commensurate with the size of the company and nature of its business.

viii. We have broadly reviewed the Books of Accounts maintained by the Company in respect of generation of electricity from wind power where pursuant to the rules made by the Central Government of India, the maintenance of Cost Records have been prescribed U/s 209(1)(d) 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.

ix.(a) On the basis of examination of records of the Company, undisputed statutory dues including Provident fund, Employee's State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Service Tax, Sales tax, Custom Duty, Excise, Cess and any other material statutory dues have been generally regularly deposited with the appropriate authorities during the year.

(b) No undisputed amounts payable were outstanding at the year end, for a period of more than six months from the date they became payable.

(c) According to information and explanation given to us and the records of the company examined by us, there are no undisputed amount of statutory dues which have not been deposited.

x. The Company has no accumulated losses as at the end of the year and it has not incurred cash losses during the current and in the immediately preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given to us, we are of the opinion that the company has not defaulted in the repayment of dues to any financial institution, or Bank, or debenture holders.

xii. According to the information and explanations given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities, accordingly paragraph 4 (xii) of the Order is not applicable.

xiii. The company is not a Chit Fund/Nidhi/Mutual Benefit Fund/Society. Therefore the provisions of Paragraph 4 (xiii) of the Order are not applicable to the company.

xiv. The Company has in our opinion maintained proper records and contract notes with respect to its investments and timely entries have been made therein. All investments at the close of the year are held in the name of the Company.

xv. The Company has given guarantees for loans taken by two subsidiary companies from banks and financial institutions.

According to the information and explanations given to us, we are of the opinion that the terms and condition thereof are not prima facie prejudicial to the interest of the Company.

xvi. In our opinion and according to the information and explanation given to us, the term loans were applied for the purpose for which these were raised.

xvii. According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

xviii. The Company has not made any preferential allotment of shares during the year to parties or companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix. The Company has issued during the year secured non convertibles debentures amounting to Rs. 343.5 crores and has created securities / charges in respect of secured debentures issued.

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

xxi. In our opinion and according to our information and explanation given by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For P.K.LILHA & CO.

Chartered Accountants

Firm Reg. No.: 307008E

(CA. P.K. LILHA)

Partner

M. No. 11092

Place : Kolkata

Date : 30.05.2012


Mar 31, 2011

1. We have audited the attached Balance Sheet and Profit & Loss Account of REI AGRO LIMITED as at 31st March, 2011 also the Cash Flow Statement for the year ended on that date annexed thereto. These Financial Statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these Financial Statements based on our audit.

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 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 Companies (Auditor's Report) Order, 2003, (as amended) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, and we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable to the Company.

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 purpose of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, 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 Section 211(3C) of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on 31stMarch,2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies as per Schedule 20 and Notes thereon as per Schedule 21, 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;

1) in the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch,2011;

2) in the case of Profit and Loss Account, of the Profit of the Company for the year ended on that date, and

3) 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)

i) In respect of its Fixed Assets:

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

(b) In our opinion, the company has a regular programme of physical verification of fixed assets which, in our opinion, is reasonable having regards to the size of the company and nature of its assets. In accordance with this programme, fixed assets were physically verified by the management during the year and that no material discrepancies were noticed on verification.

(c) There was no substantial disposal of its fixed assets during the year, which may have any impact on the going concern nature of the Company.

ii) In respect of its Inventories:

(a) As explained to us the Inventories have been physically verified by the management at reasonable intervals. In our opinion the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification of Inventories as compared to the book records.

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. Accordingly the provisions of other sub - clauses are not applicable to the Company.

(b) The Company has not taken any loans secured or unsecured from companies covered in the register maintained under Section 301 of the Companies Act, 1956.

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

v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs in respect of any party were made at prices which were reasonable having regard to the prevailing market prices at the relevant times.

vi) The company has not accepted any deposits from the public during the year. Hence the provisions of clause 4 (vi) of the order are not applicable.

vii) In our opinion, the company has an internal audit system commensurate with the size of the company and nature of its business.

viii) We have broadly reviewed the Books of Accounts maintained by the Company in respect of generation of electricity from wind power where pursuant to the rules made by the Central Government of India, the maintenance of Cost Records have been prescribed u/s 209(l)(d) 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.

ix) (a) On the basis of examination of records of the Company, undisputed statutory dues including Provident fund, Employee's State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Service Tax, Sales tax, Custom Duty, Excise, Cess and any other material statutory dues have been generally regularly deposited with the appropriate authorities during the year.

(b) No undisputed amounts payable were outstanding at the year end, for a period of more than six months from the date they became payable.

(d) According to the information and explanations given to us and the records of the Company examined by us, there are no undisputed amounts of statutory dues, which have not been deposited. The details of disputed dues as at 31 st March, 2011 in respect of income tax that have not been deposited by the Company, are as follows:-

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

Income Tax Income Rs.149.52 AY CIT (A),

Act, 1961 Tax Lacs 2008-09 Kolkata

x) The Company has no accumulated losses as at the end of the year and it has not incurred cash losses during the current and in the immediately preceding financial year.

xi) Based on -our audit procedures and on the basis of information and explanations given to us, we are of the opinion that the company has not defaulted in the repayment of dues to any financial institution, or Bank, or debenture holders.

xii) According to the information and explanations given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities, accordingly paragraph 4 (xii) of the Order is not applicable.

xiii) The company is not a Chit Fund/Nidhi/Mutual Benefit Fund/Society. Therefore the provisions of Paragraph 4 (xiii) of the Order are not applicable to the company.

xiv) The Company has in our opinion maintained proper records and contract notes with respect to its investments and timely entries have been made therein. All investments at the close of the year are held in the name of the Company.

xv) The Company has given guarantees for loans taken by others from banks and financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and condition thereof are not prima facie prejudicial to the interest of the Company.

xvi) In our opinion and according to the information and explanation given to us, the term loans were applied for the purpose for which these were raised.

xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

xviii) The Company has not made any preferential allotment of shares during the year to parties or companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix) The Company has issued during the year secured non convertibles debentures amounting to Rs.99 crores and has created securities / charges in respect of secured debentures issued.

xx) The Company has raised monies through Right issue during the year to the extent of Rs.1245.38 Crores.

xxi) Based upon the audit procedures performed and information and explanation given by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

ForP.K.LILHA&CO.

Chartered Accountants

Firm Reg.No.:307008E

(CAPK.LILHA)

Place: Kolkata Partner

Date: 21/05/2011 M.No.011092











 
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