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Auditor Report of Terai Tea Company Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Terai Tea Company Limited (The Company') which comprise the Balance Sheet as at 31 st March 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there-under.

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 disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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, of the state of affairs of the Company as at 31 st March 2015 and its profit and its 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, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, 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 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 aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the directors as on 31 st March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 st March 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

f) 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. There is no likelihood of any material impact of pending litigations on its financial position which

requires disclosure in its financial statements

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts and

iii. There has been no requirement of transfer of any amount to the Investor Education and Protection Fund by the Company.

Annexure to the Auditors' Report

The Annexure referred to in our report to the members of Terai Tea Company Limited for the year ended 31 st March 2015. We report that:

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. Some of the fixed assets have been physically verified by the management in accordance with a program of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us no material discrepancies have been noticed on such verification.

ii. In respect of its Inventories:

a. As explained to us, the stock of finished products and stores materials of the company have been physically verified by the management during the year except for stock of tea lying at warehouse or consignment agents which has been verified by subsequent sales.

b. In our opinion, the procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c. On the basis of our examination of the inventory records, in our opinion the Company is maintaining proper records of inventory. The discrepancies between the physical stocks and the book stocks have been dealt with properly and were not material.

iii. According to the information and explanations given to us, the Company has not granted any loans to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013 and therefore paragraph 3(iii) of the Order is not applicable.

iv. In our opinion and in accordance with the information and explanation given to us, the internal control procedures for the purchase of inventory, raw materials, stores and fixed assets and for the sale of goods & services are adequate and commensurate with the size of the company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control system.

v. In our opinion and according to the explanations given to us, the company has not accepted Deposits from the public during the year. Therefore, paragraph 3(v) of the Order is not applicable to the company.

vi. We have broadly reviewed the books of account and records maintained by the Company relating to Plantation, pursuant to the order made by the Central Government for maintenance of cost record u/s 148(1) of The Companies Act, 2013 and are of the opinion that prima-facie the prescribed accounts and records have been made and maintained. We have however not made a detail examination of the records with a view to determining whether they are accurate or complete.

vii. According to the information and explanations given to us in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues including Provident fund, Income tax, Sales tax, Service tax, Excise duty, Cess and other material statutory dues applicable to it with the appropriate authorities during the year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of Income tax, Wealth tax, Service tax, Sales tax, Custom duty, Excise duty, Cess and other material statutory dues applicable to it were in arrears as on 31 st March, 2015 for a period of more than six months from the date they became payable except a sum of Rs, 79,465/- outstanding on account of Service Tax.

c. According to the information and explanations given to us and in our opinion, there are no material dues of Customs Duty, Service Tax, Excise Duty, Cess, Wealth Tax and Income Tax which have not been deposited as on 31st March 2015 on account of any dispute. However according to information and explanations given to us the following dues of Income Tax, Agricultural Income Tax, Sales Tax and Vat have not been deposited by the Company on account of disputes are pending are as under.

Statute Nature of Dues Amount (Rs,)

Income Tax Act, 1961 Income Tax 2,60,686/-

Bengal Agriculture Agriculture 8,70,114/- Tax, 1944 Income Tax

West Bengal Sales Vat & Sales Tax ##27,24,449/- Tax Act, 1994 Disputes

West Bengal Sales Vat & Sales 55,34,200/- Tax Act, 1994 Tax Disputes

West Bengal Sales Vat & Sales 12,61,694/- Tax Act, 1994 Tax Disputes

Central Sales Vat & Sales Tax ##13,10,610/- Tax Act,1956 DisputeS

Central Sales Vat & Sales 35,38,934/- Tax Act, 1956 Tax Disputes

Central Sales Vat & Sales 10,95,010/- Tax Act, 1956 Tax Disputes

statute Period for which Forum where it Relates Dispute is Pending

Income Tax Act, 1961 Assessment Year Commissioner of 2012-13 Income Tax (Appeals)

Bengal Agriculture Accounting Years West Bengal Tax,1944 1994-95 and 1995-96 Taxation Tribunal

West Bengal Sales Tax Act, 1994 Accounting Year Appealate and 2004-05 Revisional Board

West Bengal Sales Tax Act, 1994 Accounting Years Appealate and 2006-07,2009-10 Revisional Board and 2011-12

West Bengal Sales Tax Act, 1994 Accounting Years Commissioner 2007-08 and 2008-09 (Appeals)

Central Sales Tax Act,1956 Accounting Year Appealate and 2004-05 Revisional Board

Central Sales Tax Act,1956 Accounting Years Appealate and 2005-06, 2006-07 Revisional Board and 2011-12

Central Sales Tax Act,1956 Accounting Years Commissioner 2007-08 and 2008-09 (Appeals)

## Demand stayed by High Court

d. According to the information and explanation given to us no amount was required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there-under.

viii. The Company does not have any accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

ix. In our opinion and according to the explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

x. In our opinion and according to the information and explanation given to us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

xi. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For PK. Shah & Co.

Chartered Accountants

FRN:308150E

Sd/-

Hill Cart Road PK Shah

Siliguri - 734001 Partner

Dated : May 30, 2015 Membership No. 014740


Mar 31, 2014

1. We have audited the accompanying financial statements of "Terai Tea Company Limited'' ("The Company") which comprise the Balance Sheet as at 31 March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the 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 sub-section (3C) of section 211 of the Companies Act, 19S6 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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 disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient 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 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:

i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2014;

ii. In the case of the 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 Flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, 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 S of the Order.

8. 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 and with the returns received from branches not visited by us;

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 19S6 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e. On the basis of written representations received from the Directors as on 31st March 2014, and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March 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

The Annexure referred to in our report to the members of Terai Tea Company Limited for the year ended 31 March 2014.

We report that:

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. Some of the Fixed Assets have been physically verified by the management in accordance with a program of verification, which in our opinion provides for physical verification of all the Fixed Assets at reasonable intervals having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us no material discrepancies have been noticed on such verification.

c. No Fixed Assets were disposed off during the year.

ii. In respect of its Inventories :

a. As explained to us, the stock of finished products and stores materials of the Company have been physically verified by the management during the year except for stock of tea lying at warehouse or consignment agents which has been verified by subsequent sales and/or confirmations from Consignment Agents.

b. In our opinion, the procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c. On the basis of our examination of the inventory records, in our opinion the Company is maintaining proper records of inventory. The discrepancies between the physical stocks and the book stocks have been dealt with properly and were not material.

iii. In respect of unsecured loans granted by the Company to the parties covered in Register under Section 301 of the Companies Act,19S6 and according to the information and explanations given to us :

a. The Company has granted interest free unsecured loans / advances against contracts to eight parties. The maximum amount involved during the year and the year-end outstanding balance of such loans/ advances aggregates to - 273.1S Lakhs and - 0.9S Lakh respectively.

b. The Company has taken interest free unsecured loans / advances against contracts from eight parties. The maximum amount involved during the year and the year-end outstanding balance of such loans/ advances aggregates to - 299.67 Lakhs and - 19.67 Lakhs respectively.

c. In our opinion, considering the nature of transactions, the terms and conditions on which such loans/ advances have been granted to and taken from such parties are not, prima facie, prejudicial to the interest of the Company.

d. In respect of the loans/advances granted and taken as aforesaid there is no stipulation for repayment on fixed intervals.

iv. In our opinion and in accordance with the information and explanation given to us, the internal control procedures for the purchase of inventory, raw materials, stores and fixed assets and for the sale of goods & services are adequate and commensurate with the size of the Company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control system.

v. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act 19S6 and to the best of our knowledge & belief and according to information and explanations given to us :

a. The particulars of the contracts/ transactions that need to be entered into the register maintained under section 301 of the Companies Act, 19S6, have been so entered.

b. In our opinion and having regards to our comments in paragraph (iv) above, the transactions (excluding loans/ advances reported in paragraph (iii above) exceeding the value of - S lakhs in respect of any party during the period, have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the explanations given to us, the company has not accepted Deposits from the public during the year. Therefore, the provisions of clause 4(vi) of CARO are not applicable to the Company.

vii. In our opinion the company has internal audit system commensurate with the size and 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 Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not 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 in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Excise Duty, Cess and Other Material Statutory dues applicable to it with the appropriate authorities during the year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty, Cess and Other Material statutory dues applicable to it were in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable.

c. According to the information and explanations given to us and in our opinion, there are no dues of Customs Duty, Wealth Tax, Service Tax, Excise Duty, Cess and Income Tax which have not been deposited as on 31st March 2014 on account of any dispute, excepting the following-

i. Agricultural Income Tax liability of - 30.S2 lakhs for accounting year199S-96 and 1996-97 which is pending at West Bengal Tax Tribunal. (Refer Note No. 31)

x. The Company does not have any accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. In our opinion and according to the explanations given to us, the Company has not defaulted in repayment of dues to Financial Institution, Bank or Debenture Holders.

xii. The Company has not granted any 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.

xiv. The Company has not entered into transactions of dealing or trading in shares, securities, debentures and other investments, other than in the ordinary Course of Investments.

xv. The Company has not given any guarantees for loans taken by others from Banks or Financial Institutions.

xvi. To the best of our knowledge and belief and according to the information and explanations given to us, in our

opinion, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

xix. The Company has not issued any Debentures.

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

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

Place : Hill Cart Road, Siliguri For P.K. Shah & Co. Dated : 30th May, 2014 Chartered Accountants Firm Registration No. : 308150E

Sd/- P K Shah Partner Membership No. 14740


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of TERAI TEA COMPANY LIMITED which comprise the Balance Sheet as at 31st March 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards 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 judgement, 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 the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

i. in the case of the Balance Sheet, of the state of affairs of the Company as on 31 st March 2013;

ii. in the case of the 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 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"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account [and with the returns received from branches not visited by us];

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

e. on the basis of written representations received from the directors as on 31 st March 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 st March 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

The Annexure referred to in our report to the members of Terai Tea Company Limited for the year ended 31 st March 2013. We report that:

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. Some of the fixed assets have been physically verified by the management in accordance with a program of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us no material discrepancies have been noticed on such verification.

c. No fixed assets were disposed off during the year. ii. In respect of its inventories:

a. As explained to us, the stock of finished products and stores materials of the Company have been physically verified by the management during the year except for stock of tea lying at warehouse or consignment agents which has been verified by subsequent sales.

b. In our opinion, the procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c. On the basis of our examination of the inventory records, in our opinion the Company is maintaining proper records of inventory. The discrepancies between the physical stocks and the book stocks have been dealt with properly and were not material.

iii. In respect of unsecured loans granted by the Company to the parties covered in Register under Section 301 of the Companies Act,1956 and according to the information and explanations given to us:

a. The company has granted interest free unsecured loans / advances against contracts to 11 parties. The maximum amount involved during the year and the year-end outstanding balance of such loans/ advances aggregates to Rs. 31.35 Crores and Rs. Nil respectively.

b. The company has taken interest free unsecured loans / advances against contracts from seven parties. The maximum amount involved during the year and the year-end outstanding balance of such loans/ advances aggregates to Rs. 11 Crores and Rs. 0.18 Crores respectively.

c. In our opinion, considering the nature of transactions, the terms and conditions on which such loans/ advances have been granted to and taken from such parties are not, prima facie, prejudicial to the interest of the company.

d. In respect of the loans/advances granted and taken as aforesaid there is no stipulation for repayment on fixed intervals.

iv. In our opinion and in accordance with the information and explanation given to us, the internal control procedures for the purchase of inventory, raw materials, stores and fixed assets and for the sale of goods & services are adequate and commensurate with the size of the company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control system.

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

a. The particulars of the contracts/ 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 having regards to our comments in paragraph (iv) above, the transactions (excluding loans/ advances reported in paragraph (iii above) exceeding the value of Rs. 5 lakhs in respect of any party during the period, have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the explanations given to us, the company has not accepted Deposits from the public during the year. Therefore, the provisions of clause 4(vi) of CARO are not applicable to the Company.

vii. In our opinion the company has internal audit system commensurate with the size and 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 Act and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not 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 in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities during the year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it were in arrears as at 31 st March, 2013 for a period of more than six months from the date they became payable.

c. According to the information and explanations given to us and in our opinion, there are no dues of customs duty, Wealth Tax, Service Tax, Excise Duty, Cess and Income Tax which have not been deposited as on 31 st March 2013 on account of any dispute, excepting the following- Agricultural Income Tax liability of Rs. 30.52 lakhs for accounting yeaM 995-96 and 1996-97 which is pending at West Bengal Tax Tribunal. (Refer Note No. 35)"

x. The Company does not have any accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. In our opinion and according to the explanations given to us, the company has not defaulted in repayment of dues to Financial Institution, Bank or Debenture Holders.

xii. The Company has not granted any 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

xiv. The Company has not entered in to transactions of trading in shares, securities, debentures and other investments.

xv. The Company has not given any guarantees for loans taken by others from banks or financial institutions.

xvi. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

xix. The Company has not issued any debentures.

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

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

Place : Hill Cart Road, Siliguri For P.K. Shah & Co.

Dated : 29th May, 2013 Chartered Accountants

Firm Registration No. : 308150E

Sd/-

PKShah

Partner

Membership No. 14740


Mar 31, 2011

1. We have audited the attached Balance Sheet of TERAI TEA COMPANY LIMITED as at 31st March 2011, the Profit and Loss Account for the year ended on that date and the Cash Flow Statement for the year ended on that date both annexed thereto, both of 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 auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by 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 the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section 4A of Section 227 of the Companies Act, 1956, of India (the Act) and on the basis of such checks of the books and records of the company as we consider appropriate and according to the information and explanations given to us we enclose in the Annexure a statement on the matters specified in Paragraphs 4 & 5 of the said Order to the extent applicable.

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, the company has kept proper books of account as required by Law so far it appears from our examination of those books.

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

d) In our opinion, Balance sheet, Profit and Loss account and Cash Flow Statement dealt with by this Report comply with accounting standards referred to in sub-section 3C of Section 211of the Companies Act, 1956 excepting those reported in Schedule XVII - "Significant Accounting Policies".

e) On the basis of written representations received from the directors, as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 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, subject to the Note 7 regarding non-provision of Agricultural Income Tax liability, the impact of which on the company's profit / reserves has been indicated in the said Note, and read together with the Notes appearing thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view-

a. In the case of the Balance Sheet of the State of Affairs of the company as at 31st March 2011

b. In the case of Profit and Loss account of the Profit for the year ended 31st March 2011

c. 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. Some of the fixed assets have been physically verified by the management in accordance with a program of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us no material discrepancies have been noticed on such verification.

c. No fixed assets were disposed off during the year.

ii. In respect of its inventories:

a. As explained to us, the stock of finished products and stores materials of the company have been physically verified by the management during the year except for stock of tea lying at warehouse or consignment agents which has been verified by subsequent sales.

b. In our opinion, the procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c. On the basis of our examination of the inventory records, in our opinion the Company is maintaining proper records of inventory. The discrepancies between the physical stocks and the book stocks have been dealt with properly and were not material.

iii. In respect of unsecured loans granted by the Company to the parties covered in Register under Section 301 of the Companies Act,1956 and according to the information and explanations given to us:

a. The company has granted interest free unsecured loans / advances against contracts to 13 parties. The maximum amount involved during the year and the year-end outstanding balance of such loans/ advances aggregates to Rs.23.89 Crores and Rs.17.17 Crores respectively.

b. The company has taken interest free unsecured loans / advances against contracts from four parties. The maximum amount involved during the year and the year-end outstanding balance of such loans/ advances aggregates to Rs.10.3 Crores and Rs.9.58 Crores respectively.

c. In our opinion, considering the nature of transactions, the terms and conditions on which such loans/advances have been granted to and taken from such parties are not, prima facie, prejudicial to the interest of the company.

d. In respect of the loans/advances granted and taken as aforesaid there is no stipulation for repayment on fixed intervals.

iv. In our opinion and in accordance with the information and explanation given to us, the internal control procedures for the purchase of inventory, raw materials, stores and fixed assets and for the sale of goods & services are adequate and commensurate with the size of the company and the nature of its business. During the course of our audit we have not observed any continuing failure to correct major weakness in the internal control system.

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

a. The particulars of the contracts/ 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 having regards to our comments in paragraph (iv) above, the transactions (excluding loans/ advances reported in paragraph iii above) exceeding the value of Rs 5 lakhs in respect of any party during the period, have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the explanations given to us, the company has not accepted Deposits from the public during the year. Therefore, the provisions of clause 4(vi) of CARO are not applicable to the Company.

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

viii. The Central Government has not prescribed maintenance of the cost records under Section 209(1)(d) of the Companies Act, 1956 for the product of the company.

ix. According to the information and explanations given to us in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues including provident fund, income tax, sales tax, service tax, excise duty, cess and other material statutory dues applicable to it with the appropriate authorities during the year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it were in arrears as at 31st March, 2011 for a period of more than six months from the date they became payable.

c. According to the information and explanations given to us and in our opinion, there are no dues of customs duty, Wealth Tax, Service Tax, Excise Duty, Cess and Income Tax which have not been deposited as on 31st March 2011 on account of any dispute, excepting Agricultural Income Tax liability of Rs. 54.39 lakhs for accounting year 1994-95, 1995-96 and 1996-97 which is pending at West Bengal Tax Tribunal. (Refer Note No. 7 of Notes to Accounts

x. The Company does not have any accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. In our opinion and according to the explanations given to us, the company has not defaulted in repayment of dues to financial institution, bank or debenture holders.

xii. The company has not granted any 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.

xiv. The company has not entered in to transactions of dealing or trading in shares, securities, debentures and other investments.

xv. The company has given guarantees of Rs.634.76 Lakhs for loans taken by others from banks or financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interests of the company.

xvi. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment.

xviii. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

xix. The company has not issued any debentures.

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

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For P. K. SHAH & CO. Chartered Accountants Firm Registration No. : 308150E

P. K. Shah Partner (Membership No. 014740)

Place Kolkata Dated 31st May, 2011

 
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