1.  We have audited the attached Balance Sheet of Assam Company India
 Limited as at 31st December, 2011 and the related Profit & Loss Account
 and also the Cash Flow Statement of the Company for the year ended on
 that date annexed thereto. The said Balance Sheet, Profit & Loss
 Account and the Cash Flow Statement have been signed by us under
 reference to this report. These financial statements are the
 responsibility of the Company’s Management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with Auditing Standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements.  An audit also includes
 assessing the accounting principles used and significant estimates made
 by Management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor’s Report) Order, 2003 (as
 amended by the Companies Auditor’ Report) Amendment Order, 2004 (the
 Order), issued by the Central Government of India in terms of
 sub-section 4(A) of Section 227 of ‘The Companies Act, 1956’ (the Act)
 and on the basis of such checks and records as we considered
 appropriate and according to the information and explanations given to
 us, we give in the Annexure hereto, a statement on the matters
 specified in paragraphs 4 and 5 of the said Order.
 
 4.  Attention is drawn to Note No. 31 relating to overdue Export
 Debtors balance of Rs.15.26 crores from certain customers who has
 assured the Company of payment of such balance. However, the Management
 could not provide sufficient and appropriate evidences to confirm the
 realisability of the aforesaid overdue outstanding payment for our
 examination and we are unable to express any opinion on the
 Management’s assertion in this respect that adequate consideration has
 been given to the concept of prudence set out in Accounting Standard 1–
 Disclosure of Accounting Policies. The amount of overdue debts that may
 require suitable provision, impact thereof on the reported Profit
 Before Tax for the year, Sundry Debtors Balance and Reserves and
 Surplus Balance at the year end, could not be ascertained.
 
 5.  Without qualifying our opinion, we draw your attention to Note
 No.17(l) of Schedule No.13 in relation to rate of depreciation on
 certain oil and gas producing assets of the Company whose net book
 value at the year end aggregate to Rs. 5,175.76 lakhs that are being
 depreciated on consistent basis in accordance with the “Unit of
 Production” method as per guidance note on “Accounting for Oil & Gas
 Producing Activities” issued by The Institute of Chartered Accountants
 of India in February 2003 because no rates have been specified for the
 aforesaid class of fixed assets under Schedule XIV to the Act. The
 depreciation on the balance oil and gas producing assets, whose net
 book value aggregating to Rs.277.00 lakhs has been provided as per
 Schedule XIV to the Act.  The Company is still awaiting the response to
 application to Central Government pursuant to Section 205 of the Act
 seeking approval to depreciate the aforesaid assets in accordance with
 the “Unit of Production” method. This financial statement does not
 include any adjustments on consequential impact should the Central
 Government direct the Company to adopt any other method on rate of
 depreciation other than “Unit of Production” method.
 
 6.  Further to our comments in the Annexure referred to above, we
 report that :
 
 (a) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the Company, so far as it appears from our examination of
 those books and proper returns adequate for the purpose of our audit
 have been received from the places not visited by us;
 
 (c) The Balance Sheet, the Profit & Loss Account and the Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account;
 
 (d) In our opinion, the Balance Sheet, the Profit & Loss Account and
 the Cash Flow Statement read with Notes on Accounts in Schedule No.13
 including Significant Accounting Policies respectively comply with the
 Accounting Standards referred to in sub- section (3C) of Section 211 of
 the Act.
 
 (e) On the basis of written representations from the Directors as on
 31st December, 2011 and taken on record by the Board of Directors, none
 of the Director is disqualified on 31st December, 2011 from being
 appointed as a Director in terms of sub-section (1) (g) of Section 274
 of the Act.
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and attached thereto and including Significant
 Accounting Policies give, in the prescribed manner, the information
 required by the Act, and, except for the effects of the matter referred
 to in paragraph 4 above, give a true and fair view in conformity with
 the accounting principles generally accepted in India:
 
 (a) in the case of Balance Sheet, of the state of affairs of the
 Company as at 31st December, 2011;
 
 (b) in the case the Profit & Loss Account, of the profit for the year
 ended on that date; and
 
 (c) in the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO THE AUDITORS’ REPORT (Referred to in paragraph 3 of our
 Report of even date to the Member of Assam Company India Limited on the
 financial statements ended on 31st December, 2011 )
 
 i. (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of Fixed
 Assets other than Oil and Gas Division. However, a list of fixed assets
 acquired for Oil & Gas Operation is maintained.
 
 (b) The Fixed Assets of the Company, has been physically verified by
 the Management periodically in phased manner, which, in our opinion, is
 reasonable having regard to the size of the Company and the nature of
 its assets. In respect of assets physically verified, the details have
 been compared with the book records and discrepancies noticed were not
 material and have been properly dealt with in the books of account.
 
 (c) In our opinion and according to information and explanations given
 to us , no substantial part of fixed assets have been disposed of
 during the year.
 
 ii. (a) Physical verification of inventory has been conducted at
 reasonable intervals during the year by the Management except for Oil
 and Gas Division.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the Management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) The Company has maintained proper records of inventory. No material
 discrepancies were noticed on physical verification.
 
 iii. (a) The Company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under Section 301 of The Companies Act, 1956.
 
 (b) The Company has not taken any loans, secured or unsecured, from
 companies, firms or other parties covered in the register maintained
 under Section 301 of The Companies Act, 1956.
 
 iv. In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory, fixed assets and for the sale of goods and
 services. Further, on the basis of our examination of the books and
 records of the Company, and according to the information and
 explanations given to us, we have neither come across nor we have been
 informed of any continuing or habitual failure to correct major
 weaknesses in the aforesaid internal control system.
 
 v. On the basis of our examination of the books of account, the Company
 has not entered into any contracts or arrangements with any party
 during the financial year that need to be entered in the register
 pursuant to the Section 301 of the Companies Act, 1956.
 
 vi. The Company has not accepted any deposits from the public within
 the meaning of Section 58A and 58AA of the Act and the rules framed
 there under.
 
 vii. The Company has an internal audit system commensurate with the
 size and nature of its business. However, there is scope of improving
 the effectiveness of Internal Audit system.
 
 viii. We have broadly reviewed the accounts maintained by the Company
 in respect of tea products where, pursuant to the Rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause (d) of sub-section (1) of Section 209 of the
 Act and are of the opinion prima facie, the prescribed accounts and
 records have been made and maintained. We have not, however, made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.  No cost record has been maintained with
 respect to its oil and gas products.
 
 ix. (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is regular in depositing provident fund, made tea cess and other
 material statutory dues as applicable with the appropriate authorities
 except that the Company is not regular in depositing income tax, value
 added tax, central sales tax, land revenue, corporate dividend tax and
 family pension fund contribution. However, according to the information
 and explanations given to us and the records of the Company examined by
 us, there are no undisputed amounts payable in respect of statutory
 dues which were in arrears, as at 31st December, 2011 for a period of
 more than six months from the date they became payable.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, there are no dues of service
 tax, customs duty, wealth tax, excise duty and cess which have not been
 deposited on account of any dispute. The particulars of dues of
 income-tax and sales-tax as at 31st December, 2011 which have not been
 deposited on account of disputes, are as follows:
 
 Particulars of Income Tax Sales Tax which have not been deposited on
 account of dispute :-
 
                                                         Amount
 Sl  Name of the Statute       Nature of the Dues        (in Rs.)
 No.
 
 1   Income Tax Act,1961       Income Tax                 Nil
 
 2   The West Bengal Sales
     tax Act,1994              West Bengal Sales         19,370,205
                               Tax,1994
 
       Do                         Do                      1,536,066
 
       Do                         Do                      8,724,464
 
       Do                         Do                     19,072,936
 
 3   Central Sales Tax,1956    Central Sales Tax           2,37,701
       Do                         Do                     13,456,558
 
 4   Assam General Sales Tax
     Act,1993                  Assam Sales Tax               87,127
 
 
 
 Name of the Statue         Period to which       Forum where the
                            the amount relates    dispute is pending
 
 Income Tax Act,1961             N.A.                    N.A.
 
 The West Bengal Sales 
 tax Act,1994                  2002-03            Sr. Jt. Comm. of
                                                  Commercial Taxes.
 
 Do                            2003-04            Appellate & Revis
                                                  -ional Board of
                                                  Commercial Taxes
 
 Do                            2004-05                  Do
 
 Do                            2006-07                  Do
 
 Central Sales Tax,1956        2004-05            Appellate Authority
 
 Do                            2006-07          Sr.Jt.Comm.,South Circle
 
 Assam General Sales Tax 
 Act,1993                      2006-07            Commissioner of Taxes
 
 x . The Company has no accumulated losses as at 31st December, 2011 and
 it has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 xi. According to the records of the Company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank at the
 Balance Sheet date.
 
 xii. The Company has not granted any loans and advances on the basis of
 security by way pledge of shares, debentures and other securities.
 
 xiii. The provisions of any special statute applicable to chit fund/
 nidhi/ mutual benefit fund/ society are not applicable to the Company.
 
 xiv. In our opinion , the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 xv. In our opinion and according to information and explanations given
 to us, the terms and conditions of the guarantees given by the Company,
 for loans taken by others from banks or financial institutions during
 the year are not prejudicial to the interest of the Company
 
 xvi. In our opinion and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 xvii. On the basis of an overall examination of the Balance Sheet of
 the Company, in our opinion and according to the information and
 explanations, given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 xviii. The Company has not made any preferential allotment to parties
 and Companies covered in the register maintained under Section 301 of
 the Act.
 
 xix.  The Company has not issued any debentures during the year.
 
 xx.  The Company has not raised any money by public issues during the
 year.
 
 xxi. During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the Management.
 
                                                         A. Deb 
                                                        Partner
 
                                       Membership Number 051845
 
                                       For De Chakraborty & Sen
 
                             Firm Registration Number – 303029E
 Kolkata, 31st August, 2012               Chartered Accountants