1.  We have audited the attached balance sheet of Mohan Meakin Limited
 (the Company) as at March 31, 2010 the Profit and Loss Account for
 the year ended on that date, annexed thereto, in both of which are
 incorporated the returns from the Lucknow Distillery Branch audited by
 other auditors and the 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.
 
 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 misstatements. 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 the Management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  We did not audit the financial statements of the Lucknow Distillery
 Branch of the Company, whose financial statements reflect total assets
 of Rs.  8,28,36,881 as at March 31,2010, and total revenues of Rs.
 1,14,25,730 for the year ended on that date.  These financial
 statements have been audited by other auditors.
 
 4.  As required by the Companies (Auditors Report) Order, 2003 issued
 by the Central Government in terms of Section 227 (4A) of the Companies
 Act, 1956, we give in the 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 report that:
 
 (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 it appears from our examination of
 those books and proper returns adequate for the purposes of our audit
 have been received from the Lucknow Distillery Branch audited by other
 auditors;
 
 (iii) the reports on the accounts of the Lucknow Distillery Branch
 audited by other auditors has been forwarded to us and has been dealt
 with by us in preparing this report;
 
 (iv) the Balance Sheet, the Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account and the audited Branch Returns;
 
 (v) in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in sub-Section 211(3C) of the
 Companies Act, 1956;
 
 (vi) 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 March 31, 2010;
 
 (b) in the case of the Profit and Loss Account, of the loss of the
 Company for the year ended on that date; and
 
 (c) in the case of Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 6. On the basis of the written representations received from the
 Directors as on March 31, 2010 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 March 31, 2010 from being appointed as a director in terms, of Section
 274 (1) (g) of the Companies Act, 1956
 
 ANNEXURE TO THE AUDITORSREPORT
 (Referred to in paragraph 4 of our report of even date)
 
 Having regard to the nature of the Companys business/activities and
 results for the year, clauses 4 (xiii) and (xiv) of Companies
 (Auditors Report) Order, 2003 (hereinafter referred to as the Order)
 are not applicable.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of the fixed
 assets.
 
 (b) The Management has carried out a physical verification of most of
 its fixed assets during the year. In our opinion, the frequency of
 physical verification is reasonable having regard to the size of the
 Company and the nature of its fixed assets. The discrepancies noticed
 on such verification were not material and have been properly dealt
 with in the books of account.
 
 (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) (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, the procedures of physical verification of inventories
 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 records of inventories, we
 are of the opinion that, the Company has maintained proper records of
 inventories. The discrepancies noticed on physical verification of
 inventories as compared to book records were not material and have been
 properly dealt with in the books of account.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has, during the year, not granted any loan, secured or
 unsecured to companies, firms and other parties covered in the register
 maintained under Section 301 of the Companies Act, 1956. Accordingly,
 paragraphs 4 (iii) (b), (c) and (d) of the Order are not applicable.
 
 (b) According to the information and explanations given to us, the
 Company has, not taken any loan, secured or unsecured from companies,
 firms and other parties covered in the register maintained under
 Section 301 of the Companies Act, 1956, other than unsecured loans
 aggregating Rs.115.35 lacs taken from directors covered in the register
 maintained under Section 301 oftheCompaniesAct, 1956. The maximum
 amount due during the year was Rs.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 unsecured loans taken by the Company are, prima facie, not
 prejudicial to the interest of the Company.
 
 (d) According to the information and explanations given to us, the
 Company is regular in 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 nature and suitable alternative sources are
 not readily available for obtaining comparable quotations, there is an
 adequate internal control system commensurate with the size of the
 Company and the nature of its business with regard to purchases of
 inventory and fixed assets and the sale of goods and services. During
 the course of our audit, we have not observed any major weakness in
 such internal control system.
 
 (v) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to Section
 301 that needed to be 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 regard to the prevailing market
 prices at the relevant time except in the case of items stated to be of
 specialized nature for which as informed there are no alternate sources
 of suppply to enable a comparison of the prices paid / charged.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of section
 58A, section 58AA or any other relevant 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 sections has
 been passed by the Company Law Board or Reserve Bank of India or any
 Court or any other Tribunal on the Company
 
 (vii) In our opinion, the internal audit function carried out during
 the year by firms of Chartered Accountants appointed by the Management
 have been commensurate with the size of the Company and the nature of
 its business.
 
 (viii) Pursuant to the Rules made by the Central Government, the
 maintenance of cost records has been prescribed under section 209(1
 )(d) of the Companies Act, 1956 in respect of manufacture of industrial
 alcohol at one of the branches of the Company i.e. Lucknow Distillery.
 The Branch Auditors have reported that they have broadly reviewed the
 cost records being maintained and are of the opinion that prima-facie
 the cost accounts and records have been maintained but they have not
 made a detailed examination of the records with a view to determine
 whether they are accurate or complete.
 
 (ix) (a) According to the information and explanations given to us and
 records of the Company examined by us, the Company has generally been
 regular in depositing undisputed statutory dues including provident
 fund, investor education and protection fund, employees state
 insurance, wealth tax, income-tax, sales tax service tax, customs duty,
 excise duty, cess and other applicable material statutoty dues. We are
 informed that there are no undisputed statutory dues as at the year end
 outstanding for a period of more than six months from the date they
 became payable.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, there are no disputed dues of
 wealth tax, and cess.
 
 According to the information 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:
 
 
 
 Name of          Nature of 
                  the         Forum where dispute is       Amount*    
 the Statute      dues        pending                      (Rs.lacs) 
                                                
 Sales tax        Sales tax   Appellate authority up to    50.76 
 to 1979,
 laws                         Commissioners level     
 
 
                              Sales tax Appellate 
                              Tribunal                     14.76 
 
 
                              High Court                   11.29 
 
                  Trade tax - Appellate authority up to    79.47 
 
                              Commissioners level
 
                              Appellate Tribunal            0.17 
 
                              High Court                   20.40 
 
 State Excise     Excise 
                  duty        High Court                  149.30 
 laws 
 
 Central Excise   Excise 
                  duty        Appellate authority up to    26.53 
 laws                         Commissioners level
 
 Service tax      Service tax Appellate authority up to   100.92
 
 laws                         Commissioners level
 
 Custom laws      Custom 
                  duty        CESTAT                       61.03
  
 Income tax       Income 
                  tax         Income tax Appellate        423.95 
 
 laws                         Tribunal
 
 
 
 Name of              Amount paid       Period to which
 the Statute          under protest     amount relates
                      (Rs.lacs)
 
 Sales tax            1.10              1975-76, 1977 to 1979
 
 laws                                   1987 to 1989, 1999-2000,
  
                                        2007-2008, 2008-2009
 
                      -                 1991 to 1993,
 
                                        1994 to 1996,
  
                                        1997 to 1999
 
 
                      -                 1984 to 1986
 
 
 Trade tax            -                 2005 to 2008
 
                      -                 1994 to 1996
 
                      -                 1984 to 1986,
 
                                        1987 to 1989,
 
                                        1990 to 1993
 
 State Excise        31.31              1978 to 1981,
 Excise duty
 
 laws                                   1983 to 1986,                         
                                         
 
                                        1988 to 2002
 
 Central Excise       -                 2005 to 2007 
 Excise duty 
 laws                              
 
 
 Service taxS         -                 2004 to 2008             
 ervice tax
 laws                              
 
   
 Custom laws          -                 1994 to 2004
 Custom duty
 
 Income tax          389.95             2002 to 2006
 Income tax 
 laws
 
          
 
 - Amount as per demand orders, including interest and penalty wherever
 quantified in the order.
 
 The following matters, which have been excluded from the table above,
 have been decided in favour of the Company but the concerned
 authorities have preferred appeals at higher levels:
 
 
 
 Name of the       Nature    Forum where 
                             pending         Amount     Period to
                                                        which the
 Statute                                    (Rs. lacs)  amount relates
 
 Sales tax laws    Sales 
                   tax       Sales tax 
                             appellate 
                             Tribunal        358.08     1987 to 1989, 
 
                                                        1990 to 1993
 
 State Excise      Excise 
                   duty      Supreme Court   118.61     1988 to 2002
 laws
 
 Central Excise    Excise
                   duty      Supreme Court    39.06        2003-2004
 laws
 
 
 
 (x) The Company does not have accumulated losses at the end of the
 financial year March 31, 2010. Further, the Company has not incurred
 any cash losses during the financial year ended March 31, 2010 and in
 the immediately preceding financial year ended March 31, 2009.
 
 (xi) According to the records of the Company examined by us and on the
 basis information and explanations given to us, the Company has not
 defaulted in repayment of dues to banks during the year. The Company
 has not taken any loans from financial institutions and has not issued
 debentures during the year.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the Company has not granted any loans and advances during
 the year on the basis of security by way of pledge of shares,
 debentures and other securities.
 
 (xiii) According to the information and explanations given to us, the
 Company has not given any guarantees during the year for loans taken by
 others from banks or financial institutions.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the term 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 overall examination of the balance sheet of the Company, we report
 that short term funds have not been used to finance long term
 investments.
 
 (xvi) The Company has not made any preferential allotment of shares
 during the year, paragraph 4 (xviii) of the Order is not applicable.
 
 (xvii) As the Company has not issued any debentures during the year,
 paragraph 4 (xix) of the Order is not applicable.
 
 (xviii) Since the Company has not raised any money by way of public
 issue during the year, paragraph 4 (xx) of the Order is not applicable.
 
 (xix) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no fraud on the
 Company has been noticed or reported during the year.
 
 
                                          For A. F. FERGUSON & CO.
 
                                            Chartered Accountants
 
                                       (Registration No. 112066 W)
 
                                                 Jitendra Agarwal
 
 Place : New Delhi                                        Partner
 
 Date  : 29 May, 2010                       Membership No.: 87104