1.  We have audited the attached Balance Sheet of Assam Company India
 Limited as at 31 December, 2010 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 Company''s
 Management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and 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''s Report) (Amendment) Order, 2004,
 (together the ''Order1), 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.  We draw your attention to Note no. 30 on Schedule no. 13, regarding
 overdue amounts, aggregating to Rs 2,777.64 lacs at the year end, due
 from certain customers which, according to the Management, are
 recoverable. However, the Management could not provide sufficient and
 appropriate evidence as to the realisability of the aforesaid overdue
 amounts for our examination and we are unable to concur with 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 be required to be provided for, and impact thereof on the reported
 profit before tax for the year, debtors'' balance and Reserves and
 Surplus balance at the year-end, could not be determined.
 
 5.  Without qualifying our opinion, we draw your attention to Note no.
 31 (b) on Schedule no. 13, in relation to certain Oil and Gas producing
 properties of the Company, whose net book value at the year-end
 aggregated Rs. 5,193.06 lacs, that are being depreciated on consistent
 basis in accordance with the ''Unit of Production'' method recommended in
 the Guidance Note on Accounting for Oil and Gas Producing Activities
 issued by the Institute of Chartered Accountants of India in February,
 2003 because no rates have been prescribed for the aforesaid fixed
 assets in Schedule XIV to the Act. The Company is awaiting response to
 its application to the Central Government pursuant to Section 205 of
 the Act seeking approval to depreciate the aforesaid assets in
 accordance with the Unit of Production method. These financial
 statements do not include any adjustments, should the Central
 Government direct the Company to adopt a method/ rate of depreciation
 for the aforesaid assets other than the Unit of Production method.
 
 6.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) Except for the matter referred to in paragraph 4 above, 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, except for the indeterminate effects of the matter
 referred to in paragraph 4 above, 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, except for the matter referred to in paragraph 4
 above, 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 December, 2010 and taken on record by the Board of
 Directors, none of the directors is disqualified as on 31 December,
 2010 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 financial statements, together with
 the notes thereon and attached thereto, give, in the prescribed manner,
 the information required by the Act, and, except for the indeterminate
 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:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31 December, 2010;
 
 (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 THE AUDITORS'' REPORT [Referred to in paragraph 3 of our
 report of even date to the members of Assam Company India Limited on
 the financial statements for the year ended 31 December, 2010]
 
 1.  (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets other than Oil and Gas Division. However, a list of fixed asset
 acquired for Oil & Gas operation is maintained.
 
 (b) The fixed assets of the Company, except assets pertaining to Oil
 and Gas operations, have been physically verified by the management
 during the year, 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 thereof were not material and
 have been properly dealt with in the books of account.
 
 (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 except in respect of stocks lying with third parties
 for which certificates have been obtained. Stock in transit at the year
 end has 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 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 and have been properly dealt with in
 the books of account.
 
 3.  (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 Act.
 
 (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 Act.
 
 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.  On the basis of our examination of the books of account, the
 Company has not entered into any contracts or arrangements with any
 party durinc the financial year that need to be entered in the register
 pursuant to the Section 301 of the Act except remuneration paid to a
 relative of a directoi which has been approved by the Central
 Government.
 
 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 framec
 there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensuratf with its size and nature of its business.
 
 8.  We have broadly reviewed the books of account maintained by thi
 Company in respect of tea products where, pursuant to the Rules madi by
 the Central Government of India, the maintenance of cost records ha
 been prescribed under clause (d) of sub-section (1) of Section 209 of
 tin Act and are of the opinion that prima facie, the prescribed
 accounts an records have been made and maintained. We have not,
 however, mad a detailed examination of the records with a view to
 determine whetht they are accurate or complete. No cost record has been
 maintained im''I respect to its oil and gas products.
 
 9.  (a) According to the information and explanations given to us and
 records of the Company examined by us, in our opinion, th Company is
 regular in depositing provident fund, made tea cess an other material
 statutory dues as applicable with the appropriat authorities except
 that Company is not regular in depositing incorr tax, value added tax,
 central sales tax, land revenue, corpora dividend tax and family
 pension fund contribution. Howeve according to the information and
 explanations given to us and tt records of the Company examined by us,
 there are no undisputc amounts payable in respect of statutory dues
 which were in arrear as at 31 December, 2010 for a period of more than
 six months fro the date they became payable.
 
 (b) According to the information and explanations given to us and tl
 records of the Company examined by us, there are no dues service tax,
 customs duty, wealth tax, excise duty and cess wh» have not been
 deposited on account of any dispute. The particula of dues of
 income-tax and sales-tax as at 31 December, 2010 whi have not been
 deposited on account of a dispute, are as follows:
 
                                             Amount    Period to which 
 Name of the Statute    Nature of the Dues   (inRs)    the amount relates
 
 West Bengal Sales 
 Tax Act, 1994        West Bengal Sales Tax  29,333,466    2003-04
 
                                                           2004-05
                                                           2006-07
 
                                             19,370,205    2002-03
 
                                              8,608,490    2005-06
 
                                                           2007-08
 
 Assam General    
 Sales Tax Act, 1993     Assam Sales Tax      4,902,623    1996-97
 
                                                           2000-01
                                                           2001-02
                                                           2005-06
 
 Central Sales Tax 
 Act, 1956              Central Sales Tax    20,235,373    1996-97
 
                                                           2003-04
                                                           2004-05
                                                           2006-07
 
                                                639,644    2005-06
 
                                                           2007-08
 
                                             34,760,848    1997-98
 
                                                           1999-00
                                                           2000-01
                                                           2001-02
                                                           2005-06
 
                                                168,552    2002-03
 
 Income Tax Act, 1961         Income Tax     20,824,240    2008-09
 
 
 
 Name of the Statue                   Forum where the
                                      dispute is pending
 
 West Bengal Sales Tax Act, 1994      Appellate and Revisional Board 
                                      of Commercial Taxes
 
                                      Joint Commissioner of Commercial 
                                      Taxes
 
                                      Senior Joint Commissioner of
                                      Commercial Taxes
 
 Assam General Sales Tax Act, 1993    Commissioner of Taxes
 
 Central Sales Tax Act, 1956          Appellate and Revisional Board 
                                      of Commercial Taxes
 
                                      Sr Joint Commissioner of
                                      Commercial Taxes
 
                                      Commissioner of Taxes
 
                                      Joint Commissioner of Commercial
                                      Taxes
 
 Income Tax Act, 1961                 Commissioner of Income Tax
                                      (Appeals)
 
 10.  The Company has no accumulated losses as at 31 December, 2010 and
 it has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding 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 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 is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 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.
 
 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.
 
                                                     Partha Mitra
                                                          Partner
 
                                          Membership Number 50553
 
                                             For Lovelock & Lewes
 
                               Firm Registration Number - 301056E
 
 Kolkata, 5th September, 2011               Chartered Accountants