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Auditor Report of Globus Spirits Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of GLOBUS SPIRITS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement, and a summary of the significant accounting policies and other explanatory information for the year then ended.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 statements, whether due to fraud or error. In making those risk assessments, the auditor 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 procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, 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 qualified audit opinion on the standalone financial statements.

Basis for Qualified Opinion

As on March 31, 2015, Fixed Assets include Intangible Assets aggregating to Rs. 2,164.95 Lacs (March 31, 2014 – Rs. 2,886.60 Lacs) under the head "Knowhow and New Brand Development" representing intangibles internally generated by the Company through expenditure on advertisement and promotional expenses. Such recognition is not in accordance with Accounting Standard – 26 "Intangible Assets". Had the Company complied with requirements of AS-26, Fixed Assets as at March 31, 2015 would have been lower by Rs. 2,164.95 Lacs (March 31, 2014 – Rs. 2,886.60 Lacs), Depreciation and amortisation expense for the year would be lower by Rs. 721.65 Lacs, Net profit after taxes for the year would be converted into net losses after tax of Rs. 709.00 Lacs and Reserves and Surplus would be lower by Rs. 1,415.70 Lacs.

Qualified 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 matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 best of our knowledge and belief were necessary for the purposes of our audit.

(b) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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 those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 26.1 to the financial statements;

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

Having regard to the nature of the Company's business / activities / results during the year, clauses (v) and (x) of paragraph 3 of the Order are not applicable to the Company.

(i) In respect of the Company's fixed assets:

(a) The Company has maintained records showing particulars, including situation of fixed assets, however, with respect to quantitative details the same is in process of being updated. For the assets acquired during the year, such particulars have been maintained.

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanation given to us, the Company is in process of reconciling the same with fixed assets register, accordingly discrepancies, if any, has not been identified on such verification.

(ii) In respect of the Company's inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals except in case of inventories lying with third parties, where confirmations has been obtained from third parties in respect of such inventories.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. In respect of such loans:

(a) The Company has granted loan amounting to Rs. 31.14 lacs to a wholly owned subsidiary during the year. At the year- end, the outstanding balances of such loans granted was Rs. 31.14 lacs and the maximum amount involved during the year was Rs. 31.14 lacs.

(b) According to the information and explanation given to us, the above loans are receivable on demand, which as informed to us, have not been recalled by the Company. Accordingly para 3(iii)(b) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. However, for purchase of fixed assets certain controls need to be strengthened and the weakness is a continuing failure to correct major weaknesses in such internal control system.

(v) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vi) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax and Excise Duty which have not been deposited as at March 31, 2015 on account of disputes are given below:

Name of Nature of Forum where Dispute is Statute Dues Pending

Central Excise Excise Duty High Court Laws

Appellate authority upto Commissioners' level

Income Tax Income tax Appellate authority upto Act, 1961 Commissioners' level

Name of Statute Period to which Amount Involved (Rs.*) the Amount Relates

Central Excise Laws 1995-96, 19,739,456 2004-10

1996-97 1,111,279

Income Tax Act, 1961 2010-11 636,239

2011-12 20,907,840

* Amount as per demand orders including interest and penalty wherever indicated in the Order.

The following matters, which have been excluded from the table above, have been decided in favour of the Company but the department has preferred appeals at higher levels. The details are given below:

Name of Nature of Forum where Dispute is Statute Dues Pending

Sales Tax Sales tax High Court Laws

Name of Statute Period to which Amount Involved (Rs.*) the Amount Relates

Sales Tax Laws 2004 – 07 77,100,339

*Amount as per demand orders including interest and penalty wherever indicated in the Order.

There were no dues of Sales Tax, Wealth Tax, Service Tax, Customs Duty, Value Added Tax and Cess which have not been deposited as at March 31, 2015 on account of disputes.

(d) There are no amounts that are due to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder.

(vii) After considering the effect of our audit qualification reported in the Basis of Qualified Opinion of our Audit Report, The Company does not have accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution; however, during the year there are delays in repayment of dues to banks for a maximum period of 22 days with a maximum amount involved was Rs. 5,079,961. There was no defaults at the year end. The Company has not issued any debentures.

(ix) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(x) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 015125N)

Sd/-

VIJAY AGARWAL

Partner

New Delhi, May 20, 2015 (Membership No. 094468)


Mar 31, 2014

We have audited the accompanying financial statements of GLOBUS SPIRITS LIMITED ("the Company") which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

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, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) 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 from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing 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 from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 statements, 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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 qualified audit opinion.

Basis for Qualified Opinion

As on March 31, 2014, Fixed Assets include Intangible Assets aggregating to Rs.2,886.60 Lacs (March 31, 2013 – Rs.3,608.25

Lacs) under the head "Knowhow and New Brand Development" representing intangibles internally generated by the Company through expenditure on advertisement and promotional expenses. Such recognition is not in accordance with Accounting Standard – 26 "Intangible Assets". Had the Company complied with requirements of AS-26, Fixed Assets as at March 31, 2014 would have been lower by Rs.2,886.60 Lacs (March 31, 2013 – Rs.3,608.25 Lacs), Depreciation and amortisation expense for the year would be lower by Rs.721.65 Lacs, Net profit after taxes for the year would be converted into net losses after tax of Rs.1,477.82 Lacs and Reserves and Surplus would be lower by Rs.1,905.45 Lacs.

Qualified 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 matter described in the Basis for Qualified Opinion paragraph above, the aforesaid financial statements give the information required by the Act 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, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date and

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

Emphasis of Matter

Attention is invited to note no. 26, which describes that the Company has paid remuneration of Rs.73.90 Lacs to the Relatives of Directors without special resolution in General Meeting during the current year and previous years, including Rs.2.59 Lacs paid without obtaining the approval of the Central Government, which is not in line with provisions of Section 314 of the Companies Act, 1956. The Company has initiated the process for recovering the same and accordingly the balance has been shown as recoverable as on March 31, 2014.

Our opinion is not qualified in respect of this matter.

Other Matters

The financial statements of the Company for the year ended 31st March, 2013, were audited by another auditor who expressed an unmodified opinion on those statements on 20th May, 2013.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government in terms of Section 227(4A) of the Act, 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:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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 those books.

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

(e) On the basis of written representations received from the directors as on 31st March, 2014 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 Section 274(1)(g) of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

"Having regard to the nature of the Company''s business / activities / results during the year, clauses (vi), (xii), (xiii), (xiv), (xv), (xviii), (xix) and (xx) of paragraph 4 of the Order are not applicable to the Company."

(i) In respect of its fixed assets:

(a) The Company has maintained records showing particulars, including situation of fixed assets, however, with respect to quantitative details of the same is in process of being updated. For the assets acquired during the year, such particulars have been maintained.

(b) The fixed assets were physically verified during the year by the Management, in accordance with a regular programme of verification which, in our opinion,

provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, the Company is in process of reconciling the same with fixed assets register, accordingly discrepancies, if any, has not been identified on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial 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 inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) During the year, the Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

Loan of Rs.1,765,976, unsecured, taken during earlier years from a party is outstanding at the year end; the maximum amount outstanding during the year is Rs.1,765,976.

The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the Company.

With respect of repayments, no terms has been stipulated, however, party has not demanded for repayment.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. However, for purchase of fixed assets certain controls need to be strengthened. Being first year of audit, no major weakness reported by earlier auditor, there is no continuing failure to correct major weaknesses in such internal control system.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, there are no contracts or arrangements that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vi) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management has been commensurate with the size of the Company and the nature of its business.

(vii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 and The Cost Accounting Records (Fertilizer Industry) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(viii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues including Sales Tax, Customs Duty, Excise Duty, Wealth Tax and other material statutory dues applicable to it with the s. The

appropriate authorities. The Company is not regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income- tax and Service Tax. The provision of Investor Education and Protection Fund and Cess are not applicable to the Company.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at March 31, 2014 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on March 31, 2014 on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending

Central Excise Laws Excise Duty High Court

Appellate authority upto Commissioners'' level

Income Tax Act, 1961 Income tax CIT (Appeals)



Name of Statute Period to which the Amount Involved Amount Relates (Rs.) *

Central Excise Laws 1995-96, 2004-10 19,739,456

1996-97 1,111,279

Income Tax Act, 1961 2010-11 636,239

2011-12 20,907,840

* Amount as per demand orders including interest and penalty wherever indicated in the Order.

The following matters, which have been excluded from the table above, have been decided in favour of the Company but the department has preferred appeals at higher levels. The details are given below:

Name of Statute Nature of Forum where Dispute Period to which the Dues is Pending Amount Relates

Sales Tax Laws Sales tax High Court 2004 - 07



Name of Statute Amount Involved (Rs.) *

Sales Tax Laws 77,100,339



* Amount as per demand orders including interest and penalty wherever indicated in the Order.

(ix) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(x) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions; however, during the year there are defaults in the repayment of dues to banks for a maximum period of 67 days with the maximum amount in default was Rs.6,250,000. There was no such default as at the year end. The Company has not issued any debentures.

(xi) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company, during the year, for the purposes for which they were obtained, other than temporary deployment pending application.

(xii) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, been used during the year for to finance capital expenditure of Rs.4,634.64 Lacs.

(xiii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS Chartered Accountants

Sd/- New Delhi Vijay Agarwal May 29, 2014 (Partner) (Membership No. 094468)


Mar 31, 2011

We have audited the attached Balance Sheet of M/s. GLOBUS SPIRITS LIMITED as at 31st March 2011 and also the Profit & Loss Account for the year ended on that date annexed thereto and Cash Flow Statement for the year ended on that date. Since the scheme of arrangement provided for demerger of demerged undertaking of Associated Distilleries Limited into Globus Spirits Limited and consequent issue of equity shares by Globus Spirits Limited to the shareholders of Associated Distilleries Limited, pursuant to Sections 391 to 394 and other relevant provisions of the Companies Act, 1956, has been approved by the Hon'ble High Court of Delhi w.e.f. Appointed Date 01st April 2010 vide dated 24.08.2011 & accordingly the scheme has been given effect while preparing these Financial Statements. These Financial Statement are the responsibility of the Company's management. Our responsibility is to express an opinion on 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 amounts and disclosures in the financial statements. An Audit also includes assessing the accounting principles used and significant estimates made by 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 (Auditor's Report) order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and according to information and explanation given to us during the course of audit and on the basis of such checks as we consider appropriate, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order, to the extent applicable.

2. Further to our comments in the annexure referred to 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.

(iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

(iv) These Financial Statements as on 31st March 2011 are prepared on the basis of Audited Balance Sheet, Profit & Loss A/c, Cash Flow Statement & Notes to Accounts as on 31st March, 2011 of Globus Spirits Limited (signed on 16th May, 2011) and Associated Distilleries Limited (signed on 16th May, 2011).

(v) In our opinion, the Balance Sheet, Profit & 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.

(vi) On the basis of the written representation received from the directors as on 31/03/2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31/03/2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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

(b)In the h cas1e 11 of Profit & Loss Account, of the Profit for the year ended on that date and;

(c) In the case of Cash Flow Statement of the cash flow of the company for the year ended

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in Paragraph 3 of our Report of even date of accounts of Globus Spirits Limited, for the year ended 31st March 2011)

i) (a) The Company has maintained reasonable proper records showing particulars including quantitative details and situation of fixed assets.

(b) As explained to us, these fixed assets have been physically verified by the management during the year at reasonable intervals and no material discrepancies were noticed.

(c) According to information and explanation given to us, since the company has not disposed off a substantial part of the fixed assets during the period, paragraph 4(1) (c) of the companies (Auditor's Report) order, 2003 is not applicable.

ii. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The 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, Discrepancies noticed on verification between physical stocks and the book records were not material.

iii. In our opinion and according to the information and explanations give to us, the Company has not granted or taken unsecured loan to and from parties covered in the register maintained under section 301 of the Act.

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 purchases of inventory and fixed assets and for the sale of goods. During the course of our audit we have not observed any continuing failure to correct major weakness in internal controls.

v. No transactions have been entered during the year in the register maintained in pursuance of section 301 of the Companies Act, 1956 and based on the audit procedures applied by us and according to the information & explanation given to us, we have not come across any transactions that need to be entered into the register maintained in pursuance of section 301 of the Companies Act,1956. Accordingly sub clause (b) is not applicable.

vi. In our opinion and according to the information & explanations given to us, the company has not accepted any deposit from public during the year under the provisions of section 58A, 58AA or any other relevant provisions of the companies Act 1956 and the companies (Acceptance of Deposit) Rules, 1975.

vii. In our opinion and according to the information and explanation given to us, the company has an internal audit system commensurate with the size and nature of its business.

viii. According to the information and explanation given to us the company has maintained cost records prescribed by the Central Government under clause(d) of sub section (1) of the section 209 of the Act.

ix. (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including the Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Cess and any other statutory dues applicable to it.

(b) According to the information and explanation given to us no undisputed amount payable in respect of Income Tax, Sales Tax and Cess were in arrears as at 31st March 2011 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us no there are no dues of Sales Tax, Income Tax and Cess which have not been deposited on account of any dispute.

x. The company does not have accumulated losses as at 31st March 2011. The company has not incurred cash losses during the year covered by our audit and the immediately preceding financial year.

xi. In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to a financial institution or bank and or debenture holders.

xii. In our opinion and according to the information and explanation given to us, the company has not granted any loan and advances on the basis of security by way of pledge of shares, debentures and others securities.

xiii. In our opinion and according to the information and explanation given to us, the company is not a Chit Fund or a Nidhi Mutual Benefit Fund/ Society therefore the provisions of clause 4 (xiii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the company.

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 In our opinion & according to the information and explanation given by the management to us, the company has not given any guarantee for loan taken by others from bank or financial institutions, accordingly the provisions of clause 4 (xv) of the Companies (Auditors' Report) Order, 2003 are not applicable to the company.

xvi. In our opinion & according to the information and explanation given by the management to us, on an overall basis, the term loan have been applied for the purpose for which they were raised.

xvii. According to the information and explanation given to us the funds raised on short term basis have not been utilized for long term investment.

xviii. According to the information and explanations given to us, during the year the company has not made any preferential allotment of shares to the parties and companies covered intheregistermaintainedunder section 301 of the Act.

xix. The company has not issued any debentures during the year and therefore clause (xix) of paragraph4oftheorderis not applicable to the company for the current year.

xx. According to the information and explanations given to us, the company has not raised money by public issue.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed orreported during the period.

For B. M. Chatrath & Co.,

Chartered Accountants

Sd/-

UMESH C. PANDEY

Place : New Delhi Partner

Dated :03rd October, 2011 M. No. 55252


Mar 31, 2010

We have audited the attached Balance Sheet of M/s. GLOBUS SPIRITS LIMITED as at 31 st March 2010 and also the Profit & Loss Account for the year ended on that date annexed thereto and Cash Flow Statement for the year ended on that date. 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 amounts and disclosures in the financial statements. An Audit also includes assessing the accounting principles used and significant estimates made by 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 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and according to information and explanation given to us during the course of audit and on the basis of such checks as we consider appropriate, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order, to the extent applicable.

2. The company has been charging depreciation on pro rata basis under written down value method at the rates prescribed in schedule XIV of the Companies Act till the FY 2008-09. From 1 st April 2009, the management of the company has decided to change the method of charging depreciation to Straight line method as in its opinion it would result in more appropriate presentation of financial statements. The change of method has resulted in charging of excess depreciation of Rs.11,66,76,618/-till the start of this FY and has been written back in the profit and loss account and profit for the financial year 2009-10 has been overstated by the same amount.

3. Further to our comments in the annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledgeand belief were necessary for the purpose of our audit.

(ii) In ouropinion, proper books of accounts as required by law have been kept by the company, so far as appears from our examination of those books. (iii)The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by thisreport are in agreement with the books of accounts.

(iv) In our opinion, the Balance Sheet, Profit & Loss Account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) ofsection 211 of the Companies Act, 1956. (v) On the basis of the written representationreceived from the directors as on 31/03/2010,and taken on record by the Board of Directors, we report that none of the directors isdisqualified as on 31/03/2010 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 ouropinion and to the best of our information and according to the explanations given tous, the said accounts give the information required by the companies act, 1956, in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2010;

(b) In the case of Profits Loss Account, of the Profit for the year ended on that date and;

(c) In the case of Cash Flow Statement of the cash flow of the company for the year ended on that date. ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 3 of our Report of even date of accounts of Globus Spirits Limited, for the year ended 31st March 2010)

i) (a) The Company has maintained reasonable proper records showing particulars including quantitative details and situation of fixed assets.

(b) As explained to us, these fixed assets have been physically verified by the management during the year at reasonable intervals and no material discrepancies were noticed.

(c) According to information and explanation given to us, since the company has not disposed off a substantial part of the fixed assets during the period, paragraph 4(1) (c) of the companies (Auditors Report) order,2003 is not applicable.

ii. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The 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, Discrepancies noticed on verification between physical stocks and the book records were not material.

iii. In our opinion and according to the information and explanations give to us, the Company has not granted or taken unsecured loan to and from parties covered in the register maintained under section 301 of the Act.

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 purchases of inventory and fixed assets and for the sale of goods. During the course of our audit we have not observed any continuing failure to correct major weakness in internal controls.

v. No transactions have been entered during the year in the registered maintained in pursuance of section 301 of the Companies Act, 1956 and based on the audit procedures applied by us and according to the information & explanation given to us, we have not come across any transactions that need to be entered into the register maintained in pursuance of section 301 of the Companies Act, 1956. Accordingly sub clause (b) is not applicable.

vi. In our opinion and according to the information & explanations given to us, the company has not accepted any deposit from public during the year under the provisions of section 58A, 58AAor any other relevant provisions of the companies Act 1956 and the companies (Acceptance of Deposit) Rules, 1975.

vii. In our opinion and according to the information and explanation given to us, the company has an internal audit system commensurate with the size and nature of its business.

viii. According to the information and explanation given to us the company has maintained cost records prescribed by the Central Government under clause (d) of sub section (1) of the section 209 of the Act.

ix. (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including the Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Cess and any other statutory dues applicable to it except income tax of Rs.1,50,00,000/- has been paid till date out of the total Income Tax provision of Rs.6,20,00,000/- for the year ending 31 st March 2010 and in case of any delayed payment the company has paid proper interest thereon.

(b) According to the information and explanation given to us no undisputed amount payable in respect of Income Tax, Sales Tax and Cess were in arrears as at 31 st March 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us no there are no dues of Sales Tax, Income Tax and Cess which have not been deposited on account of any dispute.

x. The company does not have accumulated losses as at 31st March 2010. Thecompany has not incurred cash losses during the year covered by our audit and the immediately preceding financial year. xi. In our opinion and according to the information and explanation given to us, thecompany has not defaulted in repayment of dues to a financial institution or bankand or debenture holders. xii. In our opinion andaccording to the information and explanation given to us, thecompany has not granted any loan and advances on the basis of security by wayof pledge of shares, debentures and others securities. xiii. In our opinion and according to the information and explanation given to us, thecompany is not a Chit Fund or a Nidhi Mutual Benefit Fund/ Society therefore theprovisions of clause 4

(xiii)of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xiv. In our opinion, the company is notdealing in or trading in shares, securities debentures and other investments. Accordingly the provisions of clause 4

(xiv) ofthe Companies (Auditors Report) Order, 2003 are not applicable to the company.

xv. In our opinion & according to the information and explanation given by the management to us, the company has not given any guarantee for loan taken by others from bank or financial institutions, accordingly the provisions of clause 4 (xv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xvi. In our opinion & according to the information and explanation given by themanagement to us, on an overall basis, the term loan have been applied for thepurpose for which they were raised. xvii. According to the information and explanation given to us the funds raised onshort term basis have not been utilized for long term investment. xviii. According to the information and explanations given to us, during the year thecompany has not made any preferential allotment of shares to the parties andcompanies covered in the register maintained under section 301 of the Act.

xix. The company has not issued any debentures during the year and therefore clause (xix) of paragraph 4 of the order is not applicable to the company for the current year.

xx. According to the information and explanations given to us, the company has raised Rs.75crores through its initial public issue of 75,00,000 equity shares of Rs.10/- each issued at a premium of Rs.90/- per equity share for the purpose of expansion & modernization of its existing distilleries. And the said amount is being utilized for the aforesaid purpose.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the period.

For B. M. Chatrath & Co., Chartered Accountants

Sd/-

UMESH C. PANDEY Partner M.No.55252

Place : New Delhi Dated: 15th May, 2010

 
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