We have audited the accompanying financial statements of Varun Mercantile Limited, ("the Company") which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statements for the year then ended and a summary of 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 flow of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) the Companies Act, 1956 ("the Act") read with General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 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.

Auditor's 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 misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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 audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(ii) in the case of the Statement of Profit and Loss, 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.

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 of India 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 sub-section (3) of section 227 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. 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 and 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. In our opinion, the Balance Sheet and the Statement of Profit and Loss & the cash Flow statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of section 274(1) (g) of the Act.

ANNEXURE TO AUDITORS' REPORT

(Referred to in paragraph 1 under the "Report on other Legal and Regulatory Requirements" section of our report of even date of Varun Mercantile Limited for the year ended March 31, 2014)

1. In respect of its fixed assets :

(a) Since the Company does not have any Fixed assets during the year, therefore the clause 4(i) of the Companies (Auditor's Report) Order, 2003 is not applicable to the company.

2. Since the Company does not have any inventories during the year under report, clause 4 (ii) of the Companies (Auditor Report) Order, 2003 is not applicable.

3. (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 Companies Act, 1956, therefore clause (iii) (a) to (d) of paragraph 4 of the order are not applicable to the company.

(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 Companies Act, 1956. Therefore, the provisions of clause (iii) (e), (f) and (g) of paragraph 4 of the Order is not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control procedure commensurate with the size of the Company and nature of its business. During the course of audit, we have not observed any major weaknesses in internal controls. However during the year there is no purchase of Inventories and Fixed Assets and sales of goods and services.

5. According to the information and explanations given to us, there are no contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act,1956

6. The company has not accepted any deposits from the public and consequently the provisions of section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under and the directives issued by the Reserve Bank of India are not applicable.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. To the best of our knowledge and according to the information and explanations given to us Central Government has not prescribed maintenance of Cost records under section 209 (1) (d) of the Companies Act,1956.

9. (i) According to records of the Company undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues, wherever applicable, have been regularly deposited with the appropriate authorities. According to the information and explanations given to us , no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March,2014 for a period of more than six months from the date they became payable.

(ii) According to the information and explanation given to us, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have not been deposited on account of dispute.

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

11. The Company has not borrowed any amounts from financial institutions, banks or by way of debentures during the year under audit.

12. In our opinion and according to the explanations given to us and based on the information available no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund / society. Therefore, clause (xiii) of paragraph 4 of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.

14. The Company has maintained proper records of transaction and contracts and made timely entries therein in respects of investments made by the Company. The Company's investments are held in its own name.

15. The Company has not given any guarantees for loans taken by others from banks or financial institutions.

16. The Company has not taken any term loans during the year.

17. According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that the Company has not raised short-term funds during the year.

18. During the year, the Company has not made any preferential allotment of shares to a parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. During the period covered by our report, the company has neither issued any debentures nor created security in respect of debentures.

20. The Company has not raised any money by way of public issue during the year.

21. As per the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year.

For A. T. JAIN & CO. Chartered Accountants (Registration No.l03886W)

S.T.JAIN Partner Membership No.33809

PLACE : MUMBAI DATED : 30.05.2014