Assam Company

1.  We have audited the attached Balance Sheet of ASSAM COMPANY
 LIMITED, as at 31st December, 2008 and the related Profit and Loss
 Account and Cash Flow Statement for the year ended on that date annexed
 thereto, which we have signed under reference to this report. These
 financial statements are the responsibility of the Companys
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements.  An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004,
 (together the Order), issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of
 India (the Act) and on the basis of such checks of the books and
 records of the Company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (b) In our opinion, proper books of account as required
 
 by law have been kept by the Company so far as appears from our
 examination of those books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of Section 211 of the Act;
 
 (e) On the basis of written representations received from the
 directors, as on 31 st December, 2008 and taken on record by the Board
 of Directors, none of the directors is disqualified as on 31st
 December, 2008 from being appointed as a director in terms of clause
 (g) of sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto give in the prescribed
 manner the information required by the Act and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st December, 2008;
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO AUDITORS REPORT
 
 [Referred to in paragraph 3 of the Auditors Report of even date to the
 members of Assam Company Limited on the financial statements for the
 year ended 31st December, 2008.]
 
 1.  (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets of the Company have been physically verified by
 the management according to a phased programme designed to cover all
 the assets once in three years, which in our opinion, is reasonable
 having regard to the size of the Company and the nature of its assets.
 Pursuant to the programme, certain fixed assets were physically
 verified by the management during the year and no material
 discrepancies between the book records and the physical inventory have
 been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 2.  (a) The inventories have been physically verified by the management
 during the year. Stocks in transit at the year end have been verified
 by the management with reference to subsequent receipt and /or relevant
 documents. In our opinion, the frequency of such verification is
 reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the management are reasonable and adequate in
 relation to the size of the
 
 j Company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  The Company has neither granted nor taken any loans, secured or
 unsecured, to/from companies, firms or other parties covered in the
 register maintained under Section 301 of the Act. Consequently, clauses
 (iii)(b), (iii)(c), (iii)(d), (iii)(f) and (iii)(g) of paragraph 4 of
 the Order are not applicable.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory, fixed assets and for the sale of goods and
 services. Further, on the basis of our examination of the books and
 records of the Company, and according to the information and
 explanations given to us, we have neither come across nor have been
 informed of any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 5.  (a) In our opinion and according to the information and
 
 explanations given to us, the particulars of contracts or arrangements
 referred to in Section 301 of the Act have been entered in the register
 required to be maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, there are no transactions made in pursuance of such
 contracts or arrangements and exceeding Rupees five lakhs in respect of
 any party during the year, which have been made at prices which are not
 reasonable having regard to the prevailing market prices at the
 relevant time.
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  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.
 
 9.  (a) Other than in respect of provident fund, income tax,
 
 sales-tax, wealth tax, cess, deposit linked insurance, family pension
 fund, labour welfare fund, land revenue, professional tax and
 undisputed statutory dues in respect of investor education and
 protection fund where the Company is not regular in depositing dues,
 according to the information and explanations given to us and the
 records of the Company examined by us, in our opinion, the Company is
 regular in depositing service tax and other material statutory dues as
 applicable with the appropriate authorities.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess under section 441A of the Act, we are not in a position
 to comment upon the regularity or otherwise of the Company in
 depositing the same.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of undisputed
 amounts payable in respect of statutory dues which were in arrears, as
 at 31 st December, 2008 for a period of more than six months from the
 date they became payable, are as follows -
 
 Name of the statute                 Amount (Rs.)
 
 Central Sales Tax                   2,17,367
 
 Labour Welfare Fund                   18,863
 
 (c) According to the information and explanations given to us and the
 records of the Company examined by us, there are no dues of service
 tax, customs duty, wealth tax, excise duty and cess which have not been
 deposited on account of any dispute. The particulars of dues of
 income-tax and sales-tax as at 31st December,2008 which have not been
 deposited on account of a dispute, are as follows -
 
 Name of the statute          Amount            Forum where the
                               (Rs.)           dispute is pending
 
 West Bengal Sales Tax Act   95,011,631       Dy. Commissioner of
                                              Commercial Taxes
 
 Central Sales Tax Act       11,066,223       Dy. Commissioner of
                                              Commercial Taxes
 
                             33,659,292       Commissioner of Taxes
 
 Income Tax Act              11,208,122       Commissioner of
                                              Income Taxes
 
 Assam Sales Tax Act          3,745,636       Commissioner of Taxes
 
 10.  The Company has no accumulated losses as at 31st December, 2008
 and it has not incurred any cash losses in the financial year ended on
 that date or in the immediately preceeding financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank as at the
 balance sheet date.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund/societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company has maintained proper records of
 transactions and contracts relating to dealing or trading in shares,
 securities, and other investments during the year and timely entries
 have been made therein.  Further, where applicable, such shares and
 other securities have been held in its own name.
 
 15.  In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company, for loans taken by others from banks or financial institutions
 during the year, are not prejudicial to the interest of the Company.
 
 16.  In our opinion and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained other than Foreign Currency
 Convertible Bonds (FCCBs) amounting to Rs.2,165,715,000/- as at the
 year-end, a part of which has not been applied prima facie for the
 purpose for which it has been obtained.
 
 17.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18 The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  The Company has not issued any debentures during the year.
 
 20. The Company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
                                                 Prabal Kr. Sekar 
                                                          Partner
 
                                          Membership Number 52340
 
                                             For and on behalf of
 
                                                Lovelock & Lewes
 
 Kolkata, 7th September, 2009              Chartered Accountants