1.  We have audited the attached Balance Sheet of INDAGE VINTNERS
 LIMITED (The Company) formerly known as CHAMPAGNE INDAGE LIMITED, as
 at 31st March 2010, the Profit and Loss Account and the Cash Flow
 Statement for the year ended on that date both annexed thereto. 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.
 
 2.  We conducted our audit in accordance with the 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.
 
 3.  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,we enclose in the Annexure, a
 statement on the matters specified 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 as follows:
 
 i) 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;
 
 ii) In our opinion, proper books of account as required by law have
 been kept by the company so far as appears from our examination of
 those books and proper returns adequate for the purposes of our audit
 have been received from the branches not visited by us;
 
 iii) The accounts of the various branches of the Company have been
 audited by other firms of Chartered Accountants appointed by the
 Company under Sec. 228 of the Companies Act, 1956, and their reports
 have been considered and appropriately dealt with while preparing our
 report.
 
 iv) The Balance Sheet and Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 v) In our opinion, the Balance Sheet and Profit and Loss Account and
 Cash Flow Statement dealt with by this report comply with the
 applicable accounting standards referred to in sub-section (3C) of
 section 211 of the Companies Act, 1956; except AS-2 Valuation of
 Inventories, AS-11 The Effects of Changes in Foreign Exchange Rates,
 AS- 13 Accounting for Investments and AS- 15 Employee Benefits and.
 
 vi) Attention is invited to the following:
 
 a.  Note no 2.14 of Schedule 18 explaining the amount written off as
 Exceptional items in respect of Advances against Retail Initiative
 amounting to Rs. 1,369,932,889.
 
 b.  We are unable to opine on the fall in the value of Investments in
 subsidiary companies costing Rs. 94,48,03,718 as the necessary
 information was not available for our audit. (AS - 13)
 
 c.  Note no. 1.6 of Schedule 18 - Accounting Policy on Foreign Currency
 Transactions according to which the Exchange Difference pertaining to
 Investments in International Operations is transferred to a Foreign
 Currency Translation Reserve, which is not in accordance with AS-11.
 
 d.  Loans and Advances of Rs. 33,46,32,330 considered good by the
 Management includes Rs. 1,30,73,067 old deposits given to certain
 parties. In the absence of confirmations for the same, we are unable to
 opine on the recoverability of these deposits. The balance amount of
 Rs.32,15,59,263 includes advances made to employees, subsidiary
 companies and sister concerns. We are unable to opine on the
 recoverability of the said entire amount.
 
 e.  No confirmation of balances have been received for Secured Loans
 amounting to Rs. 2,66,30,72,663 and Unsecured Loans amounting to Rs.
 1,21,48,18,895 taken from Banks, Financial institutions and others.
 Under the circumstances we are unable to ascertain the correctness of
 the balances shown.
 
 f.  The Company has not obtained acturial valuation for the gratuity
 liability as required under AS -15 Employee Benefits. The liability
 for Gratuity is provided on adhoc basis amounting to Rs. 32,00,000 for
 the year ended 31st March, 2010.
 
 g.  Sundry Debtors (Unsecured) considered good by the Management
 includes old outstandings over 6 months aggregating to Rs.66,94,48,625.
 In the absence of bill wise details we are unable to comment on the
 recoverability of the said amount.
 
 h. We are unable to opine on the recoverability of dues from certain
 subsidiary Companies on account of Interest Receivable from them
 amounting to Rs. 4,19,83,794 which is included in Loans and Advances.
 
 i. We are unable to opine on the recoverability of Stocks lying with
 third parties as confirmations for the same have not been received.
 
 j. Bank statements and confirmations from certain banks have not been
 received by the Company. Under the circumstances we are unable to
 ascertain the correctness of the balances shown under Cash and Bank
 balances.
 
 Due to uncertainties involved we are unable to quantify the effect of
 these observations on the accounts.
 
 vii) Without qualifying our opinion we draw attention to:
 
 a.  Note 2.17 of Schedule 18 of the financial statements, wherein as
 explained, the Companys outstanding liabilities are being restructured
 under the aegis of Corporate Debt Restructuring Scheme (CDR) with
 effect from 1st October, 2009 and as required by the Scheme, the Master
 Restructuring Agreement (MRA) has been executed. Other necessary
 documents including security documents are in the process of being
 executed.
 
 b.  Note 2.21 of Schedule 18 of the financial statements, wherein as
 explained, winding up order against the Company has been passed by the
 Honble High Court of Bombay. However a stay has been granted to the
 company by the Honble High Court. The matter is sub judice and outcome
 of the same cannot be currently ascertained.
 
 The Companys ability to continue as a going concern is-dependent on
 the Company being able to successfully implement the actions proposed
 in the CDR Scheme and outcome of winding up petitions in favour of the
 Company.
 
 viii) On the basis of written representations received from the
 Directors, as on 31st March 2010 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st March 2010 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956;
 
 5. Subject to our observations in Para (v) and (vi) above, in our
 opinion and to the best of our information and according to the
 explanations given to us, the said accounts read together with notes
 thereon 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:
 
 i. In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March 2010;
 
 ii. In the case of the Profit & Loss account, of the Loss of the
 Company for the year ended on that date and
 
 iii. In the case of the Cash Flow Statement, of the Cash Flows of the
 Company for the year ended on that date.
 
 
 ANNEXURE TO AUDITORS REPORT TO THE MEMBERS OF INDAGE VINTERS LIMITED
 Referred to in paragraph 3 of our Report of even date.
 
 i.  (a) The Company is maintaining proper records of its fixed assets.
 
 (b) Physical verification of all fixed assets has not been conducted
 during the year.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has not disposed off substantial part of its
 fixed assets during the year.
 
 ii. (a) The inventory has been physically verified during the year by
 the management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedure of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and nature of its business.
 
 (c) On the basis of our examination of the records of inventory, we are
 of the opinion that the Company is maintaining proper records of
 inventory. During the year certain material discrepancies were noticed
 on verification between the physical stocks and the book records. The
 same have been properly dealt with in the books of accounts.
 
 iii. (a) The Company has not granted any loans, secured or unsecured to
 companies, firm or other parties during the year covered in Register
 maintained under Section 301 of the Companies Act, 1956.  Hence clauses
 (b) to (d) are not applicable.
 
 (b) The Company has taken unsecured loans from five companies and two
 firms, covered in Register maintained under Section 301 of the
 Companies Act, 1956, amounting to Rs.3,90,62,625. The year end balance
 of loans taken from parties was Rs. 4,53,85,631.
 
 (c) In our opinion, the terms and conditions on which loans has been
 taken from Companies and Firms covered in the Register maintained under
 Section 301 of the Companies Act, 1956 are not prima facie, prejudicial
 to the interest of the Company.
 
 (d) The payment of Principal and Interest on the Loans taken by the
 Company are as per the agreed terms.
 
 iv. In our opinion and according to the information and explanations
 given to us, the Company requires strengthing of its internal control
 procedures to make it 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 and services. Attention is invited to
 the matters stated in Note 2.15 of Schedule 18.
 
 v. (a) The company has not entered particulars of some of the contracts
 and arrangements referred to in Section 301 of the Act.
 
 (b) In our opinion and according to the information and explanation
 given to us, the transactions made in pursuance of such contracts or
 arrangements have been made at prices which are prima facie reasonable
 having regard to prevailing market price of similar goods and services
 at the relevant time.
 
 vi. In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Section
 58A, 58AA and other relevant provisions of Companies Act 1956 and the
 rules framed there under. No order regarding public deposit has been
 passed by the Company Law Board or National Company Law Tribunal or
 Reserve Bank of India or any Court or any other Tribunal. Public
 deposits amounting to Rs. 390,000 are matured but not claimed.
 
 vii.  Internal audit has not been conducted during the year.
 
 viii. According to the information and explanations given to us, the
 maintenance of cost records has not been prescribed by the Central
 Government under Section 209 (1) (d) of the Companies Act, 1956 for any
 of the Companys products.
 
 ix. (a) According to the information and explanations given to us and
 as per the records of the Company, undisputed statutory dues including
 Income Tax, Provident Fund, Employees State Insurance, Sales Tax,
 Wealth Tax, Service Tax and Customs Duty have not been regularly
 deposited with the appropriate authorities. The undisputed amounts
 outstanding as or. 31st March 2010 for a period of more than six months
 from the date they became payable, are:
 
 Particulars                       Amount (Rs.)
 
 Provident Fund                      21,14,799
 
 ESIC                                   81,923
 
 Wealth Tax                           1,53,298
 
 Central Sales Tax                   12,71,252
 
 Value Added Tax                   1,68,73,803
 
 Maharashtra Value Added Tax         34,23,742
 
 Service Tax                          1,94,576
 
 Professional Tax                     7,84,570
 
 Works Contract Tax                     41,252
 
 Cess Payable                         1,51,750
 
 Maharashtra Labour Welfare Fund         7,606
 
 Dividend Distribution Tax           5,452,296
 
 
 (b) According to the information and explanation given to us and as per
 the records of the Company as at 31st March 2010, the following are the
 particulars of disputed dues on account of Sales Tax and Income Tax
 matters, which have not been deposited by the Company:
 
 Name of the      Nature of Dues    Period to     Amount      Forum 
                                    which                     where
 Statute                            amount        (Rs.)       dispute is
                                    relates                   Pending 
 
 Income Tax Act,                  1998-99;2004-    27 91,895   ITAT 
 1961               Income Tax    2005;2005,06
 
 
 x. In our opinion, the accumulated losses at the end of the financial
 year are more than 50 % of its net worth.
 
 The Company has incurred cash losses both in the present financial
 year, and in the immediately preceding financial year.
 
 xi. In our opinion and according to the information and explanations
 given to us, during the year the Company has defaulted in the repayment
 of its dues to financial institutions and banks. The period and the
 amounts could not be ascertained due to lack of data availability.
 
 xii. In our opinion and according to the information and explanations
 given to us, the Company has not granted any loans and advances on the
 basis of security by way of pledge of Shares, Debentures or any other
 securities.
 
 xiii. The Company is not a chit fund or a nidhi / mutual benefit fund /
 society. Therefore, the provisions of clause 4 (xiii) of the Order are
 not applicable.
 
 xiv. In our opinion the Company is not dealing in or trading in shares,
 securities, debentures and other investments. Therefore, the provisions
 of clause 4(xiv) of the Order are not applicable.
 
 xv. In our opinion and according to the information and explanations
 given by the Management, the Company has given corporate guarantees for
 loans taken by others from banks and financial institutions. We are
 unable to ascertain whether the terms and conditions on which these
 guarantees have been given are prejudicial to the interest of the
 company.
 
 xvi.  On the basis of the records examined by us, and relying on the
 information compiled by the Company for co-relating the funds raised to
 the end use of term loans, we state that the Company has, prima facie,
 applied the term loans for the purposes for which they were obtained.
 
 xvii. According to the information and explanations given to us, and on
 an overall examination of the financial statements and after placing
 reliance on the reasonable assumptions made by the Company for
 classification of short term and long term usage of the funds, we are
 of the opinion that, prima facie, no funds raised on short term basis
 have been utilized for long term investment.
 
 xviii. According to information and explanations given to us, the
 Company has not made any preferential allotment of shares to parties
 and companies covered in the Register maintained under Section 301 of
 the Companies Act, 1956. However the Company has allotted 1,000,000
 equity share warrants to Arsh Advisors & Owners Ltd.
 
 xix. According to information and explanations given to us the Company
 has not issued any secured debentures during the year.
 
 xx.  The Company has not raised any money by way of public issue during
 the year.
 
 xxi. Based upon the audit procedures performed and the information and
 explanations given by the management, we report that no fraud on or by
 the Company has been noticed or reported during the year.
 
 
                                          For Sorab S. Engineer and Co.
 
                                                 Chartered Accountants 
 
                                               Firm Regn. No.: 110417W
 
                                                                  Sd/- 
 
                                                        CA. M.P. ANTIA
 
                                                               Partner
 
 Place: Mumbai
 
                                               Membership Number: 7825
 
 Date: 7th October, 2010