Mohan Meakin Ltd

MOHAN MEAKIN LIMITED

1. We have audited the attached Balance Sheet of MOHAN MEAKIN LIMITED ("theCompany") as at March 31, 2012, the Statement of Profit and Loss for the year endedon that date, annexed thereto, in both of which are incorporated the Returns from theLucknow Distillery Branch audited by other auditors and the Cash Flow Statement for theyear ended on that date. These financial statements are the responsibility of theCompany’s Management. Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally acceptedin India. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts and thedisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and the significant estimates made by the Management, as well asevaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. We did not audit the financial statements of the Lucknow Distillery Branch of theCompany, whose financial statements reflect total assets of Rs. 537.43 lacs as at March31, 2012 and total revenues of Rs.40.89 lacs for the year ended on that date. Thesefinancial statements have been audited by other auditors.

4. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued bythe Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give inthe Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

5. Further to our comments in the Annexure referred to in paragraph 4 above, we reportthat:

(i) we have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purposes of our audit;

(ii) 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 and proper returnsadequate for the purposes of our audit have been received from the Lucknow DistilleryBranch audited by other auditors;

(iii) the reports on the accounts of the Lucknow Distillery Branch audited by otherauditors have been forwarded to us and have been dealt with by us in preparing thisreport;

(iv) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statementdealt with by this report are in agreement with the books of account and the auditedBranch Returns;

(v) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the CashFlow Statement dealt with by this report are in compliance with the Accounting Standardsreferred to in Section 211(3C) of the Companies Act, 1956;

(vi) in our opinion and to the best of our information and according to theexplanations given to us, the said accounts give the information required by the CompaniesAct, 1956 in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as atMarch 31, 2012;

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for theyear ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for theyear ended on that date.

6. On the basis of the written representations received from the Directors as on March31, 2012 and taken on record by the Board of Directors, we report that none of theDirectors is disqualified as on March 31, 2012 from being appointed as a director in termsof Section 274(1)(g) of the Companies Act, 1956.

(Referred to in paragraph 4 of our report of even date)

Having regard to the nature of the Company’s business/activities and results forthe year, clauses 4 (xiii) and (xiv) of the Companies (Auditor’s Report) Order, 2003are not applicable.

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of the fixed assets.

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which, in our opinion, provides forphysical verification of all the fixed assets at reasonable intervals. The discrepanciesnoticed on such verification were not material and have been properly dealt with in thebooks of account.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute asubstantial part of the fixed assets of the Company and such disposal has, in our opinion,not affected the going concern status of the Company.

(ii) In respect of its inventory:

(a) During the year, the inventories have been physically verified by the management.In our opinion, the frequency of the verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) On the basis of our examination of the records of inventories, we are of theopinion that, the Company has maintained proper records of inventories. The discrepanciesnoticed on physical verification of inventories as compared to book records were notmaterial and have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us, the Companyhas,during the year, not granted any loan, secured or unsecured to companies, firms andother parties covered in the register maintained under Section 301 of the Companies Act,1956. Accordingly, paragraphs 4 (iii) (b),(c) and (d) of CARO are not applicable.

(b) According to the information and explanations given to us, the Company has, nottaken any loan, secured or unsecured from companies, firms and other parties covered inthe register maintained under Section 301 of the Companies Act, 1956, other than unsecuredloans aggregating Rs.115.35 lacs taken from directors covered in the register maintainedunder Section 301 of the Companies Act, 1956. The maximum amount due during the year wasRs.115.35 lacs and the year-end balance of loans taken was Rs.115.35 lacs.

(c) In our opinion, the rate of interest and other terms and conditions of unsecuredloans taken by the Company are, prima facie, not prejudicial to the interest of theCompany.

(d) According to the information and explanations given to us, the Company is regularin payment of the principal amount and interest thereon.

(iv) In our opinion and according to the information and explanations given to us,having regard to the explanations that some of the items purchased are of special natureand suitable alternative sources are not readily available for obtaining comparablequotations, there is an adequate internal control system commensurate with the size of theCompany and the nature of its business with regard to purchases of inventory and fixedassets and the sale of goods and services. During the course of our audit, we have notobserved any major weakness in such internal control system.

(v) In respect of contracts or arrangements entered in the Register maintained inpursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge andbelief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed tobe entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs.5 lakhs in respect of any party,the transactions have been made at prices which are prima facie reasonable having regardto the prevailing market prices at the relevant time except in the case of items stated tobe of specialized nature for which as informed there are no alternate sources of supply toenable a comparison of the prices paid/ charged.

(vi) In our opinion and according to the information and explanations given to us, theCompany has complied with the provisions of section 58A, section 58AA or any otherrelevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits)Rules, 1975 with regard to the deposits accepted from the public.

As per information and explanations given to us, no order under the aforesaid sectionshas been passed by the Company Law Board or Reserve Bank of India or any Court or anyother Tribunal on the Company.

(vii) In our opinion, the internal audit function carried out during the year by firmsof Chartered Accountants appointed by the Management have been commensurate with the sizeof the Company and the nature of its business. (viii) We have broadly reviewed the costrecords maintained by the Company pursuant to the Companies (Cost Accounting Records)Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the CompaniesAct, 1956 and are of the opinion that prima facie the prescribed cost records have beenmaintained.

We have, however, not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and records of theCompany examined by us, the Company has generally been regular in depositing undisputedstatutory dues including provident fund, investor education and protection fund,employees’ state insurance, wealth tax, income-tax, sales tax, service tax, customsduty, excise duty, cess and other applicable material statutory dues. We are informed thatthere are no undisputed statutory dues as at the year end outstanding for a period of morethan six months from the date they became payable.

(b) According to the information and explanations given to us and the records of theCompany examined by us, there are no disputed dues of wealth tax and cess.According to theinformation and explanations given to us and the records of the Company examined by us,the details of disputed dues not deposited/ deposited under protest of sales/ trade tax,customs duty, service tax, excise duty and income tax dues are as follows:

* Amount as per demand orders including interest and penalty wherever quantified in theorder.

The following matters, which have been excluded from the table above, have been decidedin favour of the Company but the concerned authorities have preferred appeals at higherlevels:

(x) The Company does not have accumulated losses at the end of the financial year March31, 2012. Further, the Company has incurred cash losses only during the current financialyear ended March 31, 2012 but has not incurred any cash losses in the immediatelypreceding financial year ended March 31, 2011.

(xi) According to the records of the Company examined by us and on the basis ofinformation and explanations given to us, the Company has not defaulted in repayment ofdues to banks and financial institutions during the year. The Company has not issued anydebentures during the year.

(xii) In our opinion and according to the information and explanations given to us, theCompany has not granted any loans and advances during the year on the basis of security byway of pledge of shares, debentures and other securities.

(xiii) According to the information and explanations given to us, the Company has notgiven any guarantees during the year for loans taken by others from banks or financialinstitutions.

(xiv) In our opinion and according to the information and explanations given to us, theterm loans have been applied for the purposes for which they were obtained.

(xv) According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company, we report that short term funds have notbeen used to finance long term investments.

(xvi) The Company has not made any preferential allotment of shares during the year,paragraph 4 (xviii) of CARO is not applicable.

(xvii) As the Company has not issued any debentures during the year, paragraph 4 (xix)of CARO is not applicable.

(xviii) Since, the Company has not raised any money by way of public issue during theyear, paragraph 4 (xx) of CARO is not applicable.

(xix) To the best of our knowledge and according to the information and explanationsgiven to us, no fraud by the Company and no fraud on the Company has been noticed orreported during the year.