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Assam Company India Ltd.

BSE: 500024 Sector: Agri and agri inputs
NSE: ASSAMCO ISIN Code: INE442A01024
BSE LIVE 15:40 | 20 Nov 4.74 0.16
(3.49%)
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NSE 15:29 | 20 Nov 4.70 0.10
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OPEN 4.62
PREVIOUS CLOSE 4.58
VOLUME 166366
52-Week high 9.30
52-Week low 3.91
P/E
Mkt Cap.(Rs cr) 147
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4.62
CLOSE 4.58
VOLUME 166366
52-Week high 9.30
52-Week low 3.91
P/E
Mkt Cap.(Rs cr) 147
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Assam Company India Ltd. (ASSAMCO) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR'S REPORT

To

The Members of Assam Company India Limited Report on the Financial Statements

We have audited the accompanying Standalone Financial Statements of Assam CompanyIndia Limited which comprise the Balance Sheet as at 31st March 2017 the Statementof Profit and Loss the Cash Flow Statement for the Financial Year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Financial Statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection

133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguard of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Financial Statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these Financial Statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the Audit Report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Financial Statements. The procedures selected depend on theAuditor's judgement including the assessment of the risks of material misstatement of theFinancial Statements whether due to fraud or error. In making those risk assessments theAuditor considers internal financial control relevant to the Company's preparation of the

Financial Statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its loss and its cash flows for the Financial Year ended onthat date.

Emphasis of Matter

We draw attention to the following matters in the Notes to the Financial Statements :

a. Attention is drawn to Note No. 12 in relation to the AA-ON/7 Exploration &Production (E&P) Asset appearing in the Capital Work in Progress about which we areunable to express any opinion on the outcome of the project pending execution of the newProduction Sharing Contract (PSC). Our opinion is not qualified respect of this.

b. Attention is drawn to Note No. 30 (j) & 39 which includes the ContingentLiability in relation to the Bilateral Agreement with Oil & Natural Gas CorporationLimited for operationalization of Amguri Field. As the quantum of this ContingentLiability is not ascertainable at present no provision for liability has been made inrespect to this "Onerous Contract". Our opinion is not qualified in respect ofthis.

c. Attention is drawn to Note No. 49 in relation to the interest free loans of Rs.279.07 Crores given to Subsidiaries. According to Section 186(7) of the Act "No loanshall be given under this Section at the rate of interest lower than the prevailing yieldof one year three year five year or ten year Government Security closer to the tenor ofthe loan". The impact of this contravention on the profit / loss and the liability isnot ascertainable readily. Our opinion is not qualified in respect of this.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the Annexure a statement on the matters specified in paragraphs 3 and4 of the Order.

As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profitand Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account and with the returnsreceived from branches not visited by us. (d) In our opinion the aforesaid StandaloneFinancial Statements comply with the Accounting Standards specified under Section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014.

(e) The impact of the matters described in the Emphasis of Matter paragraph above isnot ascertainable and therefore we are unable to express an opinion if these will have anadverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the Directors as on 31stMarch 2017 taken on record by the Board of Directors none of the Directors isdisqualified as on 31 st March 2016 from being appointed as a Director in terms ofSection 164 (2) of the Act.

(g) In our opinion the Company has subject to the reservations stated in"Annexure A" adequate internal financial controls system and such controls areoperating effectively.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended fromtime to time in our opinion and to the best of our information and according to theexplanations given to us :

i. The Company has disclosed the impact of pending litigations on its financialposition in its Financial Statements Refer Note 30 to the Financial Statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company. iv. The Company has providedrequisite disclosures in Note 46 of its Financial Statements as to holdings as well asdealings in Specified Bank Notes during the period from 8th November 2016 to 30thDecember 2016 and these are in accordance with the books of accounts maintained by theCompany.

For De Chakraborty & Sen
Chartered Accountants
FRN: 303029E
(Srijit Chakraborty)
Kolkata (Partner)
30th May 2017 (Membership No. 055317)

Annexure to the Independent Auditor's Report

(Referred to in paragraphs in relation to Report on Other Legal and RegulatoryRequirements of our report of even date to the member of Assam Company India Limited onthe Financial Statements ended on 31st March 2017)

i) a) The Company has maintained proper records showing full particulars includingquantitative 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 Managementperiodically in phased manner which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. In respect of assets physicallyverified the details have been compared with the book records and discrepancies noticedwere not material and have been properly dealt with in the books of account.

c) The conveyance of any immovable property is not pending. ii) Physical verificationof inventory has been conducted at reasonable intervals during the year by the

Management except for Oil and Gas Division. iii) The Company has given interest freeloan to 8 Subsidiaries and 1 Step-down Subsidiary amounting to Rs. 279.07 Crores.

a) In our opinion and according to information and explanations given to us the rateof interest and other terms and conditions of loans given by the Company secured orunsecured are generally not prejudicial to the interest of the Company b) The loans areinterest free and repayable on demand;

c) As the loans are repayable on demand and no call has been made no amount isoverdue;

iv) In respect of loans investments guarantees and security provisions of Section 185and 186 of the Companies Act 2013 have been generally complied with; with the exceptionof interest free loans of Rs. 279.07 Crores given to 8 Subsidiaries and 1 step-downSubsidiary which is in contravention to Section 186(7) of the Act.

v) The Company has not accepted any Deposits from the public.

vi) We have broadly reviewed the accounts maintained by the Company in respect of teaproducts where pursuant to the Rules made by the Central Government of India themaintenance of cost records has been prescribed under sub-section (1) of Section 148 ofthe Act and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however made a detailed examination of the recordswith a view to determine whether they are accurate or complete. No cost record has beenmaintained with respect to its Oil and Gas products. vii) (a) The Company is regular indepositing undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Service Tax Duty of Customs Duty of Excise Cess and any otherstatutory dues with the appropriate authorities except Central Sales Tax amounting toRs.9753672 VAT amounting to Rs. 3107266 Income Tax Rs. 5521355 Service Tax Rs.3700812 and

Provident Fund Rs. 164206352 as on the last day of the Financial Year concerned fora period of more than six months from the date they became payable.

(b) Details of amounts involved and the forum where dispute is pending is mentionedbelow for cases where dues of Income Tax or Sales Tax or Service Tax or Duty of Customs orDuty of Excise or Value

Added Tax or cess have not been deposited on account of any dispute.

Srl. No. Name of the Statute Nature of dues Amount Rs. Period to which relates Forum where dispute is pending
Commissioner of
1. Income Tax Act 1961 Income Tax 102357960 2010-11
Income Tax (Appeals)
Do Do 52309314 2011-12 -Do-
Do Do 35469510 2012-13 -Do-
Do Do 82581806 2013-14 -Do-
Do Do 87193850 2014-15 -Do-
2. Agricultural Income Hon'ble Guwahati High
Do 49982364 2013-14
Tax Court
Agricultural Income
Do 45182296 2014-15 -Do-
Tax
3. The West Bengal West Bengal Sr. Jt. Comm. of
19370205 2002-03
Sales tax Act 1994 Sales Tax Commercial Taxes
Appellate & Revisional
Do Do 1536066 2003-04
Board of Commercial Taxes
Do Do 8724464 2004-05 -Do-
Do Do 19072936 2006-07 -Do-
Do Do 61832474 2008-09 -Do-
Do Do 1555430 2013-14
4. The Central Sales Tax Central Sales Sr. Jt. Comm. of
168552 2002-03
Act 1956 Tax Commercial Taxes
Appellate & Revisional
Do Do 6183248 2003-04
Board of Commercial Taxes
Do Do 237701 2004-05 -Do-
Do Do 13456558 2006-07 -Do-
Do Do 3444736 2008-09 -Do-
Do Do 1556162 2013-14
Office of the Commissioner
5. Service Tax 1225527 2013-14
of Service Tax-II
Do 26379459 Oct 2009- Dec 13 -Do-
Do 7986535 Oct 2009- Dec 13 -Do-
Do 37771996 Oct 2009- Sept 15 -Do-

viii) According to the records of the Company examined by us and the information andexplanations made available to us at the Balance Sheet date the Company hasdefaulted in repayment of Bank Term Loans of Rs.158.63 Crores fell due on various datesduring the year ending on 31st March 2017. The Company has also defaulted in repayment ofprincipal part of the matured Foreign Currency Convertible Bonds amounting to USD 3.1Million (Rs.20.10 Crores) details of the same is given in Note 40 forming part of theFinancial Statements.

Loans Over due
Allahabad Bank 48500000
State Bank of Hyderabad 224500000
State Bank of Bikaner & Jaipur 1019407927
Central Bank of India 11890000
Bank of Baroda 282047910
Total 1586345837

ix) No moneys were raised during the year by way of initial public offer or furtherpublic offer (including debt instruments). Term Loans taken during (by way ofrestructuring) the year were applied for the purpose for which those are raised.

x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or on the Company by its officers or employees noticedor reported during the year nor have we been informed of such case by the Management.

xi) The Managerial Remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii) The provisions of any special statute applicable to Nidhi Company are notapplicable to the Company.

xiii) All transactions with the Related Parties are in compliance with Section 177 and188 of the Companies Act 2013 where applicable and the details have been disclosed inthe Financial Statements etc. as required by the applicable Accounting Standards.

xiv) The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review.

xv) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us the Company has not enteredinto any non-cash transactions with Directors or persons connected with such Director.

xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For De Chakraborty & Sen
Chartered Accountants
FRN: 303029E
(Srijit Chakraborty)
Kolkata (Partner)

"Annexure A" in respect to reservations on adequacy of Internal FinancialControls system and operating effectiveness of such controls

[Referred to in paragraph (h) under the heading "Report on Other Legal andRegulatory Requirements" of our Report of even date to the member of Assam CompanyIndia Limited on the Financial Statements ended on 31st March 2017]

Area of Control Weakness
Control Environment Policy on Internal Financial Control and documentation of the Standard Operating Processes has been prepared and are in the process of implementation.
Risk Assessment Risk Assessment and identification of mitigants is in progress.
As the documented policy and procedures on Internal Financial Control are yet to be fully implemented we are unable to evaluate the effectiveness of communication and dissemination of information on the same across the organization. However the informal system of oral communication and electronic communication is existing which at times is complemented by documented communication of information on the various aspects of Internal Controls.
Information and Communication The evaluation of procurement process conducted by the Management reveals that the system of tender / multiple quotations to ensure unbiased decision is absent.
Procurement Process
Petty Cash Recording of transactions in petty-cash book in a timely manner.
Compliance of Law and Regulations The process of ensuring compliance to law and regulatory requirements needs improvement.