Management's Responsibility For The Financial Statements

The Company's Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, and financial performance of the company in accordance with the Accounting Standards notified under the Companies Act ,1956 ("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 and in accordance with the accounting principles generally accepted in India. 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 of 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 auditing standards 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 of 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 statement, 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.

Basis for Qualified Opinion: -

i. Note12.4 regarding, non-provision / non-ascertainment of diminution in value of shares held as stock in trade, the eventual shortfall that may arise there from cannot be commented upon by us.

ii. Note 12.5 regarding non-availability of shares held as stock in trade for physical verification.

iii. Note 13.1 regarding sundry receivables, aggregating to Rs. 2,00,069/-/- (Previous year Rs. 1,21,393/-), the eventual recovery of which and extent of provision there against, if any, cannot be ascertained.

iv. Note 29 regarding non-provision and basis of ascertainment of gratuity liability on the management's estimate, which may be different if ascertained on the basis of actuarial valuation and the impact of which is not ascertainable. This is not in consonance with Accounting Standard-15 on Accounting of Retirement benefits issued by the Institute of Chartered Accountants of India (ICAI) due to which loss for the year is lower by Rs 4,12,128/- Previous year Rs. 6,28,517/-), Reserve and Surplus are higher and current liabilities at the year end are lower by Rs.1,16,79,382/- (Previous year Rs.1,06,50,382/-) (to the extent ascertained).

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, the Financial Statements give the information required by 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: -

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

ii. in the case of the statement of Profit & Loss, of the loss of the Company for the year ended on that date and

iii. in the case of the Cash Flow Statement, of the Cash Flows of the Company 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 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956 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 :

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

iii. 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 the books,

iv In our opinion the Statement of Profit & Loss and the Balance Sheet of the Company dealt with by this report comply with the Accounting Standards notified under 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 to the extent applicable.

v. On the basis of written representations received from the directors 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

(Referred to in paragraph 1 of our report of even date)

Re: ARCUTTIPORE TEA COMPANY LIMITED

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, we state that:

i. (a) Proper updated records showing full particulars including quantitative details and situation of its fixed assets are being updated by the Company.

(b) As explained to us, the fixed assets of the Company have been physically verified by the management during the year .No material discrepancies between the book records and the physical inventory were noticed.

(c) The company has not disposed any fixed assets during the year.

ii. (a) As explained to us, physical verification of inventory of finished stock of Tea and shares has been conducted at reasonable intervals by the management. There is inventory of finished stock of tea at the year end with third parties and confirmations for the same have not been obtained from the concerned parties.

(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 nature of its business.

(c) As informed, the Company is maintaining proper records of its inventories and no discrepancies were noticed on verification of stocks with book record

iii. (a) The company has taken/granted certain unsecured loan and /or advances in the nature of loans from/to the companies, firms, parties covered under the register maintained under Section 301 of the Companies Act 1956. In the absence of relevant information and related documents, we are unable to quantify the number of companies and amount involved in the transactions. There are however, interest free loan of Rs.1,58,00,000/- taken by the company from a company other than the aforesaid companies. The maximum amount outstanding at any time during the year was Rs.1,58,00,000/- ,and at the year end balance is Rs.1,58,00,000/-. The company has also taken interest bearing unsecured loans amounting Rs1,71,55,003/- in aggregate .( previous year Rs 96,00,000/-) from several companies other than the aforesaid companies and the said loan amounts are outstanding at the year end and repayable on demand. Moreover, the company has given an interest free advance in the nature of unsecured loan of Rs. 25,00,000/- to a company and the same is receivable on demand.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the said loans taken and given by the company, are not prima facie prejudicial to the interest of the company.

(c) In respect of the said loans and interest thereon , there are no overdue amounts and the principal loan amounts are repayable on demand, except for the interest free long term loan Rs.1,58,00,000/- which is repayable over a period of 5 years.

(d) In case of other loans taken and or given, there is no stipulation for payment of principal and interest amount except as stated in Para iii(a) and iii(c). As such, we are unable to ascertain whether such terms are prejudicial to the interest of the company and whether said loan is overdue for repayment.

iv. In our opinion and according to the information and explanations given to us, the prevailing internal control system needs to be strengthened, to commensurate with the size of the company and the nature of its business for purchases/inventory and fixed assets, and for sale of goods.

v. (a) In our opinion and according to information and explanation given to us, the particulars of contracts or transactions referred to in Section 301 of the Companies act 1956 ,if any, are yet to be recorded in the register required to be maintained under that section.

(b) The Company has made related parties transactions as stated in Note 27 herein.

vi. According to the information and explanation given to us, the company has not accepted any public deposit within the meaning of the Section 58A of the Companies Act, 1956 and rules framed there under.

vii. The Company has not been maintaining the cost records as prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956. No Cost Audit has been conducted during the year.

viii. (a) As given in Note 7.2 & 7.3 and according to the information and explanations, given to us the company is regular during the year in depositing with the appropriate authorities undisputed statutory dues in respect of Provident Fund, Income Tax, Sales-Tax, Cess and Professional Tax. Provident Fund dues and Cess on Green leaf for the year and the old statutory dues on these accounts for the earlier years, as stipulated, are being deposited with the concerned authorities.

(b) According to information and explanations given to us, there are no dues of income tax, sales tax excepting Rs.65,557/- ( previous year Rs14,065/-), wealth tax, service tax, professional tax excepting Rs, 91,562/- (Previous year Rs.89,855/-)., custom duty, excise duty or cess on green leaf excepting Rs.49,57,072/--(Previous year Rs.57,73,033/-), land Revenue tax Rs. 12,18,874/- (previous year Rs.2,04,624/-) as at 31st March, 2014, outstanding on account of any dispute, other than the following:

Name of      Nature of Dues                     Amount Rs.
Statute                                                  

Income tax   Order U/s 154/251/254/143(3)       Refund of 
Act 1961     dated24.12.2013 of the Income      Rs. 
             Tax in respect of regular          13,58,214
             assessment u/s143(3) of the Act    against
             as against total demand for Rs.    demand For
             248.47 lakhs as on 31.03.2013      Rs.
             referred by the Department to      2,00,99,643
             Income Tax Appellate Tribunal
             Notice appeal no 912/ kol/2014
             dated 13/05/2014

             Appeal against Order of regular    39,64,196 
             assessment u/s143(3) of the Act
             as against total demand for Rs.
             63.43 lakhs as on 31.03.2013 as
             per Tax Recovery Certificate no
             223 dated 14.01.2013

Wealth Tax   Demand raised in the Order of      5,370
Act          regular assessment u/s 17&
             16(5)

             Demand raised in the Order of      15,303
             regular assessment u/s 17&
             16(5)

             Demand raised on the Order Of      12,921
             regular assessment u/s 17&
             16(5)

Name of       Period to which the     Forum where
Statute         amount relates        dispute is pending

Income tax    Asst Year 2002-03       Case is referred
Act 1961                              to Appettate
                                      Tribunal

              Asst year 2003-04       CIT (A)
            
Wealth Tax    Asst Year 2002-03
Act         
              Asst Year 2003-04
            
              Asst Year 2004-05
            
ix.  The accumulated losses of the company as at the end of the year
are Rs.12,71,34,103/--. The said amount as shown in the Note 2 are more
than the net worth of the Company. However, the Company has incurred
cash losses during the financial year covered by our audit and in the
immediately preceding financial year.

xii The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company

xiii During the year under audit, the company has not dealt in shares, securities, debentures. The company has shares of other companies held as stock in trade at the year end.

xiv According to information and explanations given to us, we are of the opinion that the company has not given any guarantee for loans taken by others from bank or financial institutions.

xv. As per the information and explanations given to us, loans taken from financial company / bank as obtained/ availed by the company were generally utilised for purpose for which these were obtained/availed.

xvi. During the year under audit, the company has not borrowed any term loan except for an interest free loan of Rs.1,58,00,000/- for 5 years from a body corporate.

xvii. 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.

xviii. The company has not issued any debentures and therefore, the provisions of clause 4(xix) are not applicable to the company.

xix. During the period covered by our audit, the company has not raised any money by public issue therefore, the provision of clause 4(xx) are not applicable to the company.

xx. According to the information and explanations given to us and the audit procedures performed, we have neither come across any instances of fraud on or by the company noticed or reported during the year nor have we been informed of such case by the management.

                                                  For GORA & COMPANY
                                                  Chartered Accountants
                                                  FRN 327183E

                                                  Gora Chand Mukherjee
Place: Kolkata                                    (Partner)
Date: 26th May, 2014                              Membership No. 17630