Britannia Industries

1.  We have audited the attached Balance Sheet of Britannia Industries
 Limited, as at March 31, 2009, and the related Proft and Loss Account
 and the Cash Flow Statement for the year ended on that date annexed
 thereto, which we have signed under reference to this report. These
 fnancial statements are the responsibility of the Company’s management.
 Our responsibility is to express an opinion on these fnancial
 statements based on our audit.
 
 2.  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
 fnancial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the fnancial statements. An audit also includes
 assessing the accounting principles used and signifcant estimates made
 by management, as well as evaluating the overall fnancial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor’s Report) Order, 2003, as
 amended by the Companies (Auditor’s Report) (Amendment) Order, 2004
 (together the ‘Order’) issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of ‘The Companies Act, 1956’
 of India (the ‘Act’) and on the basis of such checks of the books and
 records of the Company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specifed in paragraphs 4 and 5 of the said
 Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, 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) in our opinion, proper books of account have been kept by the
 Company as required by law
 
 so far as appears from our examination of those books;
 
 (c) the Balance Sheet, Proft and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) in our opinion, the Balance Sheet, Proft and Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in Section 211(3C) of the Act, to the extent
 applicable;
 
 (e) On the basis of written representations received from the
 directors, as on March 31, 2009 and taken on record by the Board of
 Directors, we report that none of the directors is disqualifed as on
 March 31, 2009 from being appointed as a director in terms of clause
 (g) of sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said fnancial statements together
 with the notes thereon and attached thereto, give, in the prescribed
 manner, the information required by the Act 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 March 31, 2009;
 
 (ii) in the case of the Proft and Loss Account, of the proft of the
 Company for the year ended on that date; and
 
 (iii) in the case of Cash Flow Statement, of the cash fows for the year
 ended on that date.
 
  
 ANNEXURE TO THE AUDITORS REPORT
 
 [Referred to in paragraph 3 of our report of even date on the accounts
 for the year ended March 31, 2009 of Britannia Industries Limited]
 
 1.  (a) The Company is maintaining proper records
 
 showing full particulars including quantitative details and situation
 of fxed assets.
 
 (b) The fxed assets are physically verifed by the management according
 to a phased programme designed to cover all the items over a period of
 three years, which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. Pursuant to the
 programme, a portion of the fxed assets has been physically verifed by
 the management during the year and no material discrepancies between
 the book records and the physical inventory have been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fxed assets has not been disposed of
 by the Company during the year.
 
 2.  (a) The inventory (excluding stocks with third
 
 parties) has been physically verifed by the management during the year.
 In respect of inventory lying with third parties, these have
 substantially been confrmed by them. In our opinion, the frequency of
 verifcation is reasonable.
 
 (b) In our opinion, the procedures of physical verifcation 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) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verifcation of inventory as compared
 to book records were not material.
 
 3.  (a) The Company has not granted any loans,
 
 secured or unsecured, to companies, frms or other parties listed in the
 Register maintained under Section 301 of the Act, and accordingly,
 clauses (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of the Order are
 not applicable.
 
 (b) The Company has not taken any loans, secured or unsecured, from
 companies, frms or other parties covered in the register maintained
 under Section 301 of the Act, and accordingly, clauses (iii)(f) and
 (iii)(g) of paragraph 4 of the Order are not applicable.
 
 4.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased are of special nature for which suitable alternative sources
 do not exist for obtaining comparative quotations, 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, fxed assets
 and for the sale of goods and services.  Further, on the basis of our
 examination of the books and records of the Company, and according to
 the information and explanations given to us, we have neither come
 across nor have been informed of any continuing failure to correct
 major weaknesses in the aforesaid internal control system.
 
 5.  (a) 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 Act have been entered in
 the register required to be maintained under that Section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of rupees fve lacs in respect of
 any party during the year have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 (Read with para 4 above).
 
 6.  The Company has not accepted any deposits from the public under the
 provisions of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 7. In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  The Central Government of India has not prescribed the maintenance
 of cost records under clause (d) of sub-section (1) of Section 209 of
 the Act for any of the products of the Company.
 
 9.  (a) According to the information and explanations
 
 given to us and the records of the Company examined by us, in our
 opinion, the Company is generally regular in depositing the undisputed
 statutory dues including 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 as applicable with the appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income tax, sales tax, wealth tax, service tax, customs duty, excise
 duty and cess as at March 31, 2009, which have not been deposited on
 account of a dispute, are as follows:
 
 Statute/ Nature    Period to which of dues the dispute
                                     Relates to
 
 Excise duty               1998-2001
                           1992-1999
                           1980-2007
                           1986-2009
 
 Sales tax                 2007-2009
                           1989-2005
                           1987-2009
 Income tax                1979-1980
                           1986-1997
                           1998-2003
                           2001-2006
 
 Amount and forum where the dispute is pending          (Rs.)
 
 Supreme Court      High Court        Tribunal         Appellate
                                                     Authority Upto
                                                     Commissioners
                                                         level
 12,792,532             -                 -               -
 
 -                23,641,042              -               -
 
 -                                  210,254,942           -
 
 -                     -                   -         111,261,026
 20,789,138            -                   -              -
 
 -            155,860,600             4,275,843           -
 
 -                     -                   -         101,543,626
 1,263,792             -                   -              -
 
 -            50,610,916                   -              -
 
 -                     -            319,026,679           -
 
 -                     -                   -          70,504,586
 
 10.  The Company has no accumulated losses as at March 31, 2009 and it
 has not incurred any cash losses in the fnancial year ended on that
 date or in the immediately preceding fnancial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any fnancial institution or bank or debenture
 holders, as may be applicable, as at the Balance Sheet date.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of special statute applicable to chit fund and
 nidhi/mutual beneft fund/society are not applicable to the Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company, for loans taken by others from banks or fnancial institutions
 during the year, are not prejudicial to the interest of the Company.
 
 16.  In our opinion, and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 17.  On the basis of an overall examination of the Balance Sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18.  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 during the year.
 
 19.  The Company has not issued any debentures during the year.
 
 20.  The Company has not raised any money by way of public issue during
 the year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance 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 and on behalf of
                                                 Lovelock & Lewes
                                            Chartered Accountants
                                                           Usha A 
                                                          Partner
 Date : May 27, 2009                          Membership No.23997