Warren Tea

1.  We have audited the attached Balance Sheet of Warren Tea Limited as
 at 31st March, 2009 and the related Profit and Loss Account and Cash
 Flow Statement for the year ended on that date annexed thereto, which
 we have signed under reference to this report. These financial
 statements are the responsibility of the Management of the Company. Our
 responsibility is to express an opinion on these financial statements
 based on our audit.
 
 2.  The report on the audit of Travels Division of the Company by
 Messrs. B. M. Chatrath A Co.  under Section 228 of the Companies Act,
 1956 of India, (the Act) has been forwarded to us as required by
 clause (c) of sub-section (3) of that Section which has been considered
 in preparing our report.
 
 3.  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.
 
 4.  As required by the Companies (Auditors Report) Order, 2003 as
 amended by the Companies (Auditors 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 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 report that:
 
 (i) (a) The Company has maintained proper records to show full
 particulars including quantitative details and situation of its fixed
 assets.
 
 (b) The fixed assets of the Company have been physically verified by
 the Management during the year and no material discrepancies between
 the book records and the physical inventory have been noticed. In our
 opinion, the frequency of verification is reasonable.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the Company during the year.
 
 (ii) (a) The inventory of the Company i.e. stock of stores and finished
 goods lying at all locations, other than items lying with the agents
 (confirmed by them), have been physically verified by the Management
 during the year. In our opinion, the frequency of verification is
 reasonable.
 
 4. (ii) (b) In our opinion, the procedures of physical verification of
 stocks 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 has maintained proper records of inventory and the
 discrepancies between the physical inventory and the book records
 noticed on physical verification, where applicable, are not material.
 
 (iii) (a) The Company has not granted any loans, secured or unsecured,
 to companies, firms or other parties covered in the register maintained
 under Section 301 of the Act.
 
 (b) The Company has not taken any loans, secured or unsecured from
 companies, firms or other 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 is an adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory, fixed assess 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 we been
 informed of any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 (v) (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 that need to be entered into the register in pursuance of Section 301
 of the Act have been so entered.
 
 (b) Where each of such transactions is in excess of Rs. 5 lakhs in
 respect of each party, having regard to the explanation that some of
 the transactions of service entered into are of a special nature for
 which comparable prices are not available, the transactions have been
 made at prices which are prima facie reasonable having regard to the
 prevailing market prices at relevant time.
 
 (vi) The Company has not accepted any deposits under the provisions of
 Sections 58A, 58AA or any other relevant provisions of the Act and the
 rules framed thereunder.
 
 (vii) In our opinion, the Companys internal audit system commensurate
 with its size and nature of its business.
 
 (viii) On the basis of the records produced, we are of the opinion
 that, prima facie, the cost records and accounts prescribed by the
 Central Government of India under Section 209(lXd) of the Act have been
 maintained in respect of Tea. However, we are neither required to nor
 have we carried out any detailed examination of such accounts and
 records.
 
 (ix) (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, during the
 year, the Company has generally been regular in depositing the
 undisputed statutory dues including Provident Fund, Investor Education
 and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax,
 Customs Duty, Excise Duty, Cess and other material statutory dues, as
 applicable, with the appropriate authorities.
 
 As explained by the Management, the Employees State Insurance Scheme
 is not applicable to the Company.
 
 4. (ix) (b) According to the information and explanations given to us
 and the records of the Company examined by us, as at 31st March, 2009,
 there have been no dues in respect of Customs Duty, Wealth Tax, Service
 Tax, Excise Duty and Cess which have not been deposited on account of
 dispute other than certain disputed Income Tax and Sales Tax dues, in
 respect of which amounts involved and forums at which dispute is
 pending are indicated in Note 10 on Schedule 18 to the Accounts.
 
 (x) As per the books of account, the Company has no accumulated losses
 as at 31st March, 2009.  It has not incurred any cash loss during the
 financial year ended on that date and in the immediately preceding
 financial year.
 
 (xi) According to the records of the Company, examined by us and the
 information and explanations given to us, the Company has not defaulted
 in repayment of its dues to any financial institution or bank during
 the year. The Company has not issued any debenture.
 
 (xii) The Company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) In our opinion, considering the nature of activities carried on
 by the Company during the year, the provisions of any special statute
 applicable to chit f und/nidhi/mutual benefit fund/societies are not
 applicable to it.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the Company is not a dealer or trader in shares,
 securities, debenture and other investments.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantees for loans taken by others from
 banks or financial institutions during the year.
 
 (xvi) 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.
 
 (xvii) 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.
 
 (xviii) 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.
 
 (xix) The Company has not issued any debenture and accordingly the
 question of creation of securities there against does not arise.
 
 (xx) The Company has not raised any money by public issue during the
 year.
 
 (xxi) 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.
 
 5.  Further to our comments in paragraph 4 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 as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (d) In our opinion, the Balance Sheet, the Profit and Loss Account and
 the 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 Act;
 
 (e) On the basis of written representations received from the
 directors, and taken on record by the Board of Directors, none of the
 directors is disqualified as on 31st March, 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 financial statements together
 with the notes thereon and attached thereto give in the prescribed
 manner subject to Note 14(a)(viii) on Schedule 18 to Accounts regarding
 non-ascertainment of value of Green Leaf consumed to the extent
 indicated therein, the information required by the Act and also 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, 2009;
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
                                                             P. Law
                                                            Partner
                                             (Membership No. 51790)
 
                                               For and on behalf of
                                               PRICE WATERHOUSE
 Kolkata , 24th June, 2009                     Chartered Accountants