Texmaco

We have audited the attached Balance Sheet of TEXMACO LIMITED as at
 31st March 2009, 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. 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.
 
 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 amount 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.
 
 1.  As required by the Companies (Auditors Report) Order, 2003 (as
 amended) issued by the Central Government of India in terms of section
 227 (4A) of the Companies Act, 1956 and on the basis of such checks as
 considered appropriate and according to the information and explanation
 given to us during the course of our audit we enclose in the Annexure
 hereto a statement on the matters specified in paragraphs 4 and 5 of
 the said Order.
 
 2.  Further to our comments as stated above, we report that: (i) 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.
 
 (ii) In our opinion, proper books of accounts as required by law have
 been kept by the Company, so far as appears from our examination of
 those books and proper returns adequate for the purpose of our audit
 have been received from branches/site offices not visited by us;
 
 (iii) The Balance Sheet and Profit and Loss Account dealt with by this
 report are in agreement with the books of account.
 
 (iv) 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 Companies Act, 1956.
 
 (v) On the basis of the written representation received from the
 Directors as on 31st March 2009 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st March 2009 from being appointed as a Director in terms of clause
 (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said Accounts together with the
 Accounting Policies and Notes thereon and Schedules annexed thereto
 give the information required by the Companies Act, 1956, in the manner
 so required and give a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March 2009;
 
 (b) in the case of the Profit & Loss Account, of the Profit for the
 year ended on that date, and
 
 (c) in the case of the Cash flow Statement, of the Cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 (Referred to in Paragraph (1) of our Report of even date)
 
 i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of Fixed
 Assets.
 
 (b) As explained to us, the Company has a system of verifying all its
 major fixed assets over a period of three years. The fixed assets so
 scheduled for verification during this year have been physically
 verified. The discrepancies noticed on such verification were not
 material and have been properly dealt with in the books of accounts.
 
 (c) During the year the Company has not disposed off any substantial /
 major part of fixed assets.
 
 ii) (a) As per the information furnished, the inventories have been
 physically verified during the year by the management. In our opinion,
 having regard to the nature and location of stock, the frequency of the
 physical verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, 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 is maintaining proper records of inventory. In our
 opinion, discrepancies noticed on physical verification of stocks were
 not material in relation to the operations of the Company and the same
 have been properly dealt with in the books of account.
 
 iii) (a) The Company has neither granted nor taken any loan secured/
 unsecured from Companies covered in the register maintained under
 section 301 of the Companies Act, 1956 (1 of 1956).
 
 (b) As stated above sub-clause (b) to (g) of Clause (iii) of the
 Companies (Auditors Report) Order, 2003 are not applicable.
 
 iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal
 
 control procedures commensurate with the size of the Company and the
 nature of its business with regard to purchase of inventory and fixed
 assets and for the sale of goods and services. During the course of our
 audit, we have not observed any continuing failure to correct major
 weakness in internal controls system.
 
 v) Based on the audit procedures applied by us and according to the
 information and explanations provided by the management, we are of the
 opinion that, sub clause(a) & (b) of Clause (v) of the Companies
 (Auditors Report) Order, 2003, is not applicable since no contracts or
 arrangements referred to in Section 301 of the Companies Act, 1956 have
 been entered into by the Company during the year.
 
 vi) In the case of Fixed Deposits received from its
 employees/ex-employees by the Company, the directives issued by the
 Reserve Bank of India and the provisions of section 58A & 58AA of the
 Companies Act, and the Companies (Acceptance of Deposits) Rules, 1975
 have been complied with. No order has been passed by the Company Law
 Board.
 
 vii) In our opinion, the Company has an internal audit system
 commensurate with its size and the nature of its business.
 
 viii) The Central Government has not prescribed maintenance of cost
 records under section 209(1) (d) of the Companies Act, 1956 for any of
 the products of the Company except for generation of hydro-electric
 power in respect of its unit Neora Hydro. We have broadly reviewed the
 books of account and records maintained by the Company pursuant to the
 rules prescribed by the central government for the maintenance of cost
 records and are of the opinion that prima facie the prescribed accounts
 and records have been made and maintained. The contents of these
 accounts and records have not been examined by us.
 
 ix) (a) According to the information and explanations given to us and
 records examined by us, the Company is regular in depositing with
 appropriate authorities undisputed statutory dues including provident
 fund,
 
  investors education and protection fund, employees state insurance,
 income tax, sales tax, wealth tax, service tax, custom duty, excise
 duty, cess and other statutory dues wherever applicable. According to
 the information and explanations given to us, no undisputed arrears of
 statutory dues were outstanding as at 31st March 2009 for a period of
 more than six months from the date they became payable.
 
 (b) According to the records of the Company, the dues of sales tax,
 income tax, customs, wealth tax, service tax, excise duty, cess, which
 have not been deposited on account of disputes and the forum where the
 dispute is pending, are as under:
 
 Name of                     Nature of                Amount
 the statute                 the dues                 (Rs. in Lakhs)
 
 Central Excise Act      Excise Duty /               111.67
 Custom Duty
 
 Period to which             Forum where
 the amount relates       dispute is pending.
 
 1990-2004                commissioner of Central Excise,
 Kolkata-lll              Commissionerate, Kolkata
 
 x) There are no accumulated losses of the Company as on 31st March
 2009. The Company has not incurred any cash losses during the financial
 year covered by our audit and the immediately preceding financial year.
 
 xi) Based on our audit procedures and the information given by the
 management, we are of the opinion that the Company has not defaulted in
 repayment of dues to any financial institution, bank or debenture
 holders.
 
 xii) Based on our examination of the records and the information and
 explanations given to us, the Company has not granted any loans and /
 or advances on the basis of security by way of pledge of shares,
 debentures and other securities.
 
 xiii) Clause (xiii) of the Order is not applicable to the Company as
 the Company is not a chit fund company or nidhi / mutual benefit fund /
 society.
 
 xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4 (xiv) of the Companies (Auditors Report) Order,
 2003 are not applicable to the Company.
 
 xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from a
 bank or financial institution.
 
 xvi) According to the information and explanations given to us, the
 term loans were applied for the purposes for which they were raised.
 
 xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that no funds raised on short-term basis have been used for long-term
 investment.
 
 xviii) The Company has not made any preferential allotment of shares
 during the year.
 
 xix) During the year covered by our Audit Report, the Company has not
 issued secured debentures.
 
 xx) The Company has not raised any money by public issues during the
 year covered by our Report.
 
 xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanation given by the management, we report that
 no fraud on or by the Company has been noticed or reported during the
 course of our audit.
 
                                            For K. N. Gutgutia & Co.
                                               Chartered Accountants
 6C, Middleton Street,                                P. K. Gutgutia
 Kolkata - 700 071                                           Partner
 Dated: 19th May 2009                            Membership No. 6994