Annexure to the Auditors' Report
(Referred to in paragraph C of our report of even date attached)

1.

a

At Jagatdal units proper records showing full particulars including quantitative details and situation of fixed assets have been maintained from the year 1970-1971. As explained to us that the Company has also identified fixed assets acquired in earlier periods, upto the year 1962-1963, and has built up records with aggregate value showing quantitative details and locations of the same but not the individual cost, and consequently such aggregate values could not be reconciled with the values of individual items acquired prior to 1970-1971 and recorded in the fixed assets register.

At other units the company has maintained proper records showing full particulars including original and revalued costs, quantitative details and situation of fixed assets except for certain items of fixed assets acquired prior to 1 April 1962, which have been recorded on the basis of physical verification conducted during the year ended 31 March 1978 and values as estimated by the Management in the absence of original cost.

b

We have been informed that the Fixed Assets of the Company other than certain items of underground electrical installations have been physically verified during the year by the management, and in respect of items for which proper records have been maintained, no material discrepancies have been noticed.

c

No substantial part of the fixed assets except land of Alipore has been disposed off during the year.

2.

a

Inventory of the Company at all its locations have been physically verified by the management at reasonable intervals during the year. In the case of stocks lying with third parties, certificates confirming stocks held by them have been received. In our opinion, the frequency of verification is reasonable.

b

In our opinion the procedures for 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

In our opinion the inventory records are being properly maintained by the Company. Discrepancies between the physical and book stocks, which were not significant, have been properly dealt with in the books of accounts.

3.

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. Accordingly, clauses 4(iii)(b) to (d) of the order are not applicable.

4.

In our opinion and according to the information and explanations given to us, taking into consideration the explanation that some purchases are special in nature for which comparative quotations from suitable alternative sources is not available, there are adequate internal control procedures 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. During the course of our audit no major weakness has been noticed in the internal control system.

5.

In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956 have been duly entered in the register required to be maintained in pursuance of Sec. 301 of the Companies Act 1956. The transaction made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices of such goods, or prices of which transactions for similar items have been made with other parties.

6.

The Company has not accepted any deposits from the public falling within the purview of Section 58A and 58AA or any other relevant provisions of the Act.

7.

The Company has an internal audit system commensurate with its size and nature of its business.

8.

Cost records and accounts as prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act, prima-facie is being maintained by the company. Though we have examined such books and records, we have not made any detailed examination with a view to determine whether they are accurate or complete.

9.

a

According to the information and explanations given to us and as per the records of the company examined by us, we are of the opinion that the company is regular in depositing undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, custom duty, cess, service tax and any other material statutory dues with the appropriate authorities. There are no outstanding undisputed amounts in respect of such statutory dues as at 31st March, 2010 for a period of more than six months from the date they became payable. As explained to us the company has no over due liability towards investor education and protection fund, wealth tax and excise duty.

b

The disputed statutory dues have not been deposited on account of matters pending before appropriate authorities are as under:

Name of the Statute	Nature of the dues	Amount(Rs.lakhs)	Forum where dispute is pending
Bhatpara Municipality	Municipal Taxes Land & Revenue Tax	82.80 82.46	REVIEW BOARD
ESI Act.	ESI Dues	184.73	ESI COURT
Income Tax Act, 1961	Income Tax	160.84 343.30	DG IT ITAT
Central Sales Tax 1956 & W.B. Sales Tax Act, 1994	Sales Tax	14.38	ACCT
		0.52	HIGH COURT
		4.68	DCCT
		568.60	WBCTA & RB
		290.19	SJCCT

10.

The company has no accumulated loss and has not incurred any cash loss during the financial year covered by our audit and the immediately preceding financial year.

11.

According to explanations and information obtained and based on our examination of the records the company has not defaulted in repayment of dues to any financial institution, bank or debenture holders.