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Auditor Report of Emami Ltd.

Mar 31, 2017

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of EMAMI LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes In Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as "standalone Ind AS financial statements).

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cashflows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Act read with relevant Rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS 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 standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs (financial position) of the Company as at 31st March, 2017, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

I. As required by the Companies (Auditor’s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order.

II. As required by Section 143 (3) of the Act, we report that:

a. We have sought and 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 accounts as required by law have been kept by the Company so far as it appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with relevant Rules issued thereunder.

e. On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B";

g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements (Refer Note No. 3.36 & 3.39 to the standalone Ind AS financial statements).

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of accounts maintained by the Company. [Refer Note 3.42 to the standalone Ind AS financial statements].

Annexure -A to the Independent Auditors’ Report

The Annexure referred to in our Independent Auditor’s Report to the members of EMAMI LIMITED (the Company’) on the standalone Ind AS financial statements for the year ended on 31st March 2017. We report that:

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

ii. The inventories have been physically verified during the year by the management at regular intervals. In our opinion and according to the information and explanations given to us, no material discrepancies were noticed on physical verification.

iii. The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’). Accordingly, paragraph 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order is not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees and securities made.

v. The Company has not accepted any deposits from the public.

vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 148 (1) of the Act, and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

vii. According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Sales Tax, Value Added Tax, duty of Custom, duty of Excise, Cess and other statutory dues with the appropriate authorities during the year. 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, 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no material dues of duty of customs and service tax which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of income tax, Sales tax, duty of excise and value added tax have not been deposited by the Company on account of disputes:

Name of the Statute

Nature of Dues

Amount under dispute not yet deposited (Rs. In Lacs)

Financial year to which the amount relates

Forum where the dispute is pending

14.27

2005-06

ADC

185 64

1996-2001,

2009-11,

2012-13,

2014-15,

2016-17

AC(A), DC(A), JC(A) & Addl CCT

Sales Tax Act and Local Sales Tax Act

Sales Tax

509.34

1990-91,

2000-06,

2010-12,

2013-14,

2015-17

Tribunal/Boarc of Revenue

264.4

1999-2000,

2004-07

High Court

113.5

1989-90,

1993-97

Supreme Court

The Central Excise Act, 1934

Excise Duty

28.33

2009-13,

2014-15

Commissioner (Appeals)

5 48

1993-96,

2009-10

CESTAT

Income Tax Act, 1961

Income Tax

70.68

2008-09 & 2010-11

CIT (A)

viii. In our opinion and according to information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institution, banks, government and debenture holders.

ix. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were applied by the Company for the purposes for which the loans were obtained. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year.

x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi. According to the information and explanations given to us, the Company has paid/provided for managerial remunerations in accordance with the requisite approvals mandated by the provisions of Sec 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations give to us and based on our examination of the records, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For, S. K. AGRAWAL & CO.

Chartered Accountants

Firm’s Registration Number- 306033E

S.K.Agrawal

Place: Kolkata Partner

Dated: May 4, 2017 Membership No: 9067


Mar 31, 2014

We have audited the accompanying financial statements of Emami Limited ("the Company") which comprise the Balance Sheet as at 31st March, 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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 flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") (which continues to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) 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 of material misstatement.

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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. 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 31st March, 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 Requirement

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the annexure a statement on the matters specified in paragraphs 4 & 5 of the order.

2. As required by section 227(3) 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 purpose of our audit.

b) In our opinion proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books.

c) The Balance Sheet, Statement of Profit & Loss & Cash Flow Statement referred to in this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

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 clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

1. a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. Fixed assets disposed of during the year were not substantial and therefore, do not affect the going concern assumption.

2. a. As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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 nature of its business.

c. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory. The discrepancies noted on physical verification of stocks as compared to book records were not significant and the same has been properly dealt with in the books of accounts.

3. The Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(b), (iii)(c), (iii)(d), (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, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in the internal control system.

5. a. According to the information and explanations given to us, particulars of contracts or agreements that needed to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. According to the information and explanations given to us, the Company has entered into transactions in pursuance of such contracts or arrangements in respect of parties listed in the register maintained under section 301of the Companies Act, 1956 at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits as defined under section 58A & 58AA or other relevant provisions of the Companies Act, 1956.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. According to the information and explanations given to us in respect of statutory and other dues:

a. The Company has been regular in depositing 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 Statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, there were no undisputed amount payable in respect of these statutory dues which have remained outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable.

b. Contingent dues (excluding penalty and interest as applicable) on account of Sales Tax, Income Tax, Entry Tax, Service Tax, Excise Duty disputed by the Company and not being paid vis-à-vis forums where such disputes are pending are mentioned below:

Name of the Statute Nature of Dues Amount under dispute Financial year to which the amount Forum where the not yet deposited relates dispute is pending (Rs.in Lacs)

2.20 2013-14 JC

25.79 2005-06, 2008-09 & 2010-11 ADC

394.55 2009-10, 2011-12 to 2013-14 AC(A)

181.36 2000-01 to 2005-06 Board of Revenue Central Sales 1990-91, 2000-01, 2002-03 to 2006-07, 222.11 Tribunals Tax Act and 2008-09, 2009-10 & 2012-13 Sales Tax Local Sales Tax

182.42 1999-00, 2004-05 to 2006-07 High Court Act

12.92 2003-04 to 2004-05 JC (A)

0.37 2010-11 DC (A)

14.91 1996-97 to 2000-01 DC

113.50 1989-90, 1993-94 to 1996-97 Supreme Court

Assistant 4.70 2002-03 to 2005-06 Commissioner of Central Excise 241.44 2008-09 to 2010-11 CESTAT

The Central Excise Duty Excise Commiss -ioner Excise Act, 1934 4.98 1993-94, 1995-96 Appeals

Commissioner 0.51 2009-10 (Appeals)Central Excise

9.28 2001-02 Board of Revenue Entry Tax Act, Entry Tax 0.33 2010-11 DC(A)

2008

123.90 2007-08 to 2013-14 CTO

Income Tax Act, 1961 Income Tax 6.22 2005-06 CIT (A)

10. The Company does not have accumulated losses as at the end of the year and the Company has not incurred cash losses during the current and the immediately preceding financial year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institution and banks.

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund and society.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15. According to the information given to us, the Company has given guarantees for loan taken by subsidiaries from banks. Total value of outstanding guarantee amounts to C5,703 lacs.

16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were applied by the Company for the purposes for which the loans were obtained.

17. According to information and explanation given to us and on an overall examination of Balance Sheet, we report that funds raised on short-term basis have not been used during the year 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 Companies Act, 1956 during the year and hence the question of whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

19. The Company has not issued any secured debentures during the year.

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

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For S. K. AGRAWAL & COMPANY

Chartered Accountants

Registration No- 306033E

S. K. AGRAWAL

Kolkata Partner

5th May, 2014 Membership No: 9067


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Emami Limited ("the Company") which comprise the Balance Sheet as at 31st March 2013, and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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 flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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 of material misstatement.

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 judgement, 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 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 31st March, 2013

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.

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the annexure a statement on the matters specified in paragraphs 4 & 5 of the order.

2. As required by section 227(3) 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 purpose of our audit.

b) In our opinion proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books.

c) The Balance Sheet, Statement of Profit & Loss & Cash Flow Statement referred to in this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

1. a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. Fixed assets disposed of during the year were not substantial and therefore, do not affect the going concern assumption.

2. a. As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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 nature of its business.

c. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory. The discrepancies noted on physical verification of stocks as compared to book records were not significant and the same has been properly dealt with in the books of accounts.

3. The Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses (iii) (b), (iii)(c), (iii)(d), (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, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in the internal control system.

5. a. According to the information and explanations given to us, particulars of contracts or agreements that needed to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

b. According to the information and explanations given to us, the Company has entered into a transaction in pursuance of such contracts or arrangements in respect of a party listed in the register maintained under section 301of the Companies Act, 1956 at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits as defined under section 58A & 58AA or other relevant provisions of the Companies Act, 1956.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. According to the information and explanations given to us in respect of statutory and other dues:

a. The Company has been regular in depositing 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 Statutory dues with the appropriate authorities during the year According to the information and explanations given to us, there were no undisputed amount payable in respect of these statutory dues which have remained outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable

b. Contingent dues on account of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty, Cess disputed by the Company and not being paid vis-a-vis forums where such disputes are pending are mentioned below:

10. The Company does not have accumulated losses as at the end of the year and the Company has not incurred cash losses during the current and the immediately preceding financial year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institution and banks.

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

14. According to the information given to us, the Company has given guarantees for loan taken by subsidiaries from banks. Total value of outstanding guarantee amounts to H 51.50 Crores.

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were applied by the Company for the purposes for which the loans were obtained.

16. According to information and explanation given to us and on an overall examination of Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long-term investment.

17. 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, during the year and hence the question of whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

18. The Company has not issued any secured debentures during the year.

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

20. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For, S. K. AGRAWAL & COMPANY

Chartered Accountants

Registration No- 306033E

S. K. AGRAWAL

Kolkata Partner

6th May 2013 Membership No:9067


Mar 31, 2012

We have audited the Balance Sheet of Emami Limited as at 31st March, 2012 and also the Statement of Profit & Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 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. 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.

We further report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit

b) In our opinion proper books of accounts as required by law, have been kept by the company so far as appears from our examination of such books.

c) The Balance Sheet, Statement of Profit & Loss & Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable.

d) On the basis of written representations received and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March, 2012 from being appointed as a Director in terms of Section 274 (1) (g) of the Companies Act, 1956.

e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read 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 Balance Sheet of the State of Affairs of the Company as on 31st March, 2012; ii. In the case of Statement of Profit & Loss of the Profit for the year ended on that date; and

iii. In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b) The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) Fixed assets disposed of during the year were not substantial and therefore, do not affect the going concern assumption.

2. a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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 nature of its business.

c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventory. The discrepancies noted on physical verification of stocks as compared to book records were not significant and the same has been properly dealt with in the books of accounts.

3. The Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(b), (iii)(c), (iii)(d), (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, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in the internal control system.

5. a) According to the information and explanations given to us, particulars of contracts or agreements that needed to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

b) According to the information and explanations given to us, the company has entered into a transaction in pursuance of such contracts or arrangements in respect of a party listed in the register maintained under section 301 of the Companies Act, 1956 at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits as defined under section 58A & 58AA or other relevant provisions of the Companies Act, 1956.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. According to the information and explanations given to us in respect of statutory and other dues:

a) The company has been regular in depositing 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 Statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, there were no disputed amount payable in respect of these statutory dues which have remained outstanding as at 31st March 2012 for the period of more than six months from the date they became payable.

b) Contingent dues on account of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty, Cess disputed by the company and not being paid vis-à-vis forums where such disputes are pending are mentioned below:

Name of the Nature of Dues Amount under dispute Statute not yet deposited (Rs. in lacs)

Central Sales Sales tax including 11.14 Tax Act and interest and penalty 14.27 Local Sales as applicable 181.36 Tax Act 0.81

179.72

85.63

11.34

65.00

14.91

62.25

107.25

The Central Excise Excise Duty including 4.83 Act, 1994 penalty and interest 68.85 as applicable 26.38

15.11

46.16

229.00

42.02

Service Tax Service Tax including 44.33 (Finance Act, 1994) penalty and interest as applicable Entry Tax Act, 2008 Entry Tax 9.28

Income Tax Act, 1961 Income Tax 4.10



Name of the Statue Financial year to which Forum where the the amount relates dispute is pending

Central Sales Tax Act and Local Sales Tax Act 2000-01 & 2004-05 WB Taxation Tribunal

2005-06 ADC

2000-01 to 2005-06 Board of Revenue

1999-2000 High Court

2005-06 & 2006-07 High Court

2001-02 JC

2004-05 JC (A)

2005-06 & 2006-07 DC (A)

1996-97 to 2000-01 DC

1999-2000 to 2004-05 Tribunal

1989-90, 1993-94 to 1996-97 Supreme Court

The Central Excise Act, 1994 1983-84 to 1990-91 Assistant Commissioner of Central Excise

1981-82 to 1986-87, 1989-90 Deputy Commissioner of Excise

2006-07 to 2009-10 Additional Commissioner of Customs

2002-03 to 2005-06 High Court (Mumbai) 2008-09 to 2010-11 Joint Commissioner of (Excise & Customs)

2008-09 to 2009-10 CESTAT

1993-94 to 1995-96 Commissioner

Service Tax (Finance Act, 1994) 2005-2008 CESTAT

Entry Tax Act, 2008 2001-02 Board of Revenue

Income Tax Act, 1961 2007-08 CIT (A)

10. The Company does not have accumulated losses as at the end of the year and the company has not incurred cash losses during the current and the immediately preceding financial year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to financial institution and banks.

12. According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

14. According to the information given to us, the company has not given guarantees for loan taken by others from a Bank.

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were applied by the company for the purposes for which the loans were obtained.

16. Based on overall examination of Balance Sheet of the Company as at March 31st 2012, short term funds were applied for the purpose for which they were obtained.

17. 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, during the year and hence the question of whether the price at which shares have been issued is prejudicial to the interest of the company does not arise.

18. The company has not issued any secured debentures during the year.

19. The company had not raised any money by way of public issue during the year.

20. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For S K Agrawal & Company

Chartered Accountants

Firm Registration No.- 306033E

S. K. Agrawal Place: Kolkata Partner

Dated: 8th May, 2012 Membership No. 9067


Mar 31, 2011

We have audited the Balance Sheet of Emami Limited as at 31st March, 2011 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 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. 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.

We further report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion proper books of accounts as required by law have been kept by the company so far as appears from our examination of such books.

c) The Balance Sheet, Profit & Loss Account & Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable.

d) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of Section 274 (1) (g) of the Companies Act, 1956.

e) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with notes on accounts as per schedule 17 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 Balance Sheet of the State of Affairs of the Company as on 31st March, 2011;

ii. In the case of the Profit & Loss Account of the Profit for the year ended on that date; and

iii. In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

1. a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b. The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. Fixed assets disposed off during the year were not substantial and therefore, do not affect the going concern assumption.

2. a. As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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 nature of its business.

c. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventory. The discrepancies noted on physical verification of stocks as compared to book records were not significant and the same has been properly dealt with in the books of accounts.

3. The Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(b), (iii)(c), (iii)(d), (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, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in the internal control system.

5. a. According to the information and explanations given to us, particulars of contracts or agreements that needed to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

b. According to the information and explanations given to us, the company has not entered into any transactions in pursuance of such contracts or arrangements aggregating during the year to Rs. 5,00,000 or more in respect of each party listed in the register maintained under section 301 of the Companies Act, 1956 for purchase of goods, materials and sales of goods.

6. The Company has not accepted any deposits as defined under section 58A & 58AA or other relevant provisions of the Companies Act, 1956.

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. According to the information and explanations given to us in respect of statutory and other dues:

a. The company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, there were no disputed amount payable in respect of these statutory dues which have remained outstanding as at 31st March 2011 for the period of more than six months from the date they became payable.

b. Contingent dues on account of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty, Cess disputed by the company and not being paid vis-à-vis forums where such disputes are pending are mentioned below:

Name of the Nature of Dues Amount under dispute Financial Year to Forum where the Statute not yet deposited which the amount dispute is pending Rs. in Lacs relates

Central Sales Sales tax including 3.54 2004-05 Revisional Board Tax Act and penalty as applicable 14.27 2005-06 ADC

Local Sales 181.36 2000-2001 to 2005-06 Board of revenue Tax Act 0.81 1999-2000 High Court

179.72 2005-06 and 2006-07 High Court

85.63 2001-02 JC

11.34 2004-05 JC (A)

128.98 1998-99, 2005-06 to 2008-09 DC (A)

3.36 2004-05 DC

14.91 1996-97 to 2000-01 DC

89.45 1999-2000 to 2004-05 Tribunal

The Central Excise Duty 4.83 1983-84 to 1990-91 Assistant Commissioner Excise Act, including penalty of Central Exise 1944 as applicable 68.85 1981-82 to 1986-87, Deputy Commiss -ioner 1989-90 of Excise

26.38 2006-07 to 2009-10 Additional Commissioner of Customs

9.40 2002-03 to 2005-06 Commissioner (A)

37.52 2008-09 to 2010-11 Joint Commissioner (Excise and Customs) 452.59 2004-05 to 2007-08 Joint Commissioner (Excise and Customs) 253.74 2008-09 to 2009-10 Commissioner Divisional range

Service Tax Service Tax including 5.13 2005-06 CESTAT (Finance Act, penalty as applicable 30.78 2004-05 to 2007-08 Joint Commiss -ioner (CBEC) 1994)

The Assam Entry Tax 9.28 2001-02 Board of Revenue Entry Tax Act, 2008 314.02 2006-07 to 2010-11 Supreme Court

Income Tax Income Tax 5.22 2007-08 CIT (A) Act, 1961

10. The Company does not have accumulated losses as at the end of the year and the company has not incurred cash losses during the current and the immediately preceding financial year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to financial institution and banks.

12. According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

14. According to the information given to us, the company has given guarantees for loan taken by others from a Bank. As explained the terms and conditions thereof are not prejudicial to the interest of the company.

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were applied by the company for the purposes for which the loans were obtained.

16. Based on overall examination of Balance Sheet of the Company as at March 31st 2011, short term funds were applied for the purpose for which they were obtained.

17. 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, during the year and hence the question of whether the price at which shares have been issued is prejudicial to the interest of the company does not arise.

18. The company had not raised any money by way of public issue during the year.

19. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For S. K. Agrawal & Company

Chartered Accountants

Registration No. 306033E

S. K. Agrawal Kolkata Partner

May 19, 2011 Membership No. 9067


Mar 31, 2010

We have audited the Balance Sheet of Emami Limited as at March 31, 2010 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date 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.

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 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. 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.

We further report that:

a) The accounts of Units at Pantnagar, Masat, Dongri and Vapi have been audited by the Unit Auditors and their reports have been considered by us in preparing our report.

b) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

c) In our opinion proper books of accounts as required by law have been kept by the company so far as appears from our examination of such books.

d) The Balance Sheet, Profit & Loss Account & Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable.

e) On the basis of written representations received from the Directors 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.

f) As stated in Note B-20 of Schedule 17, based on experts report, useful life of goodwill has been reviewed leading to the increase in the amount of amortisation of goodwill.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with notes on accounts as per schedule 17 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 Balance Sheet of the State of Affairs of the Company as on March 31, 2010;

ii. In the case of the Profit & Loss Account of the Profit for the year ended on that date; and

iii. In the case of Cash Flow Statement,of the Cash Flows for the year ended on that date.

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

1) a) The Company has maintained proper records

showing full particulars including quantitative details and situation of Fixed Assets.

b) The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) Fixed assets disposed of during the year were not substantial and therefore, do not affect the going concern assumption.

2) a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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 nature of its business.

c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventory. The discrepancies noted on physical verification of stocks as compared to book records were not significant and the same has been properly dealt with in the books of accounts.

3) a) The Company has granted unsecured loans to two parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding amounts to Rs.21436.54 Lacs and the year end balance is Rs.1695.62 Lacs.

b) The company has not taken unsecured loans from any company covered in the register maintained under section 301 of the Companies Act, 1956.

c) The rate of interest and other terms and conditions in respect of above loans are prima facie not prejudicial to the interest of company.

d) The payment of the principal amount and interest are also regular.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in the internal control system.

5) a) According to the information and explanations

given to us, particulars of contracts or agreements that needed to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

b) According to the information and explanations given to us, the company has not entered into any transactions in pursuance of such contracts or arrangements aggregating during the year to Rs 5,00,000 or more in respect of each party listed in the register maintained under section 301 of the Companies Act, 1956 for purchase of goods, materials and sales of goods.

6) The Company has not accepted any deposits as

defined under section 58A & 58AA or other relevant provisions of the Companies Act, 1956.

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

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9) According to the information and explanations given to us in respect of statutory and other dues:

a) The company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, there were undisputed amount payable in respect of these statutory dues which have remained outstanding as at March 31, 2010 for the period of more than six months from the date they became payable are mentioned below:

Name of the Statute Nature of Dues Amount (Rs. in Lacs)

Maharashtra Value Added Tax, 2002 Value added Tax 0.22 The Central Sales Tax Act, 1956 Central Sale 0.02 Tax 0.06

Name of the Statute Period to it Due Date Date of relates Payment

Maharashtra Value Added Tax, 2002 21.05.2009

The Central Sales Tax Act, 1956 2009-10 21.04.2009 27.05.2010

21.06.2009

b) Contingent dues on account of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty, Cess disputed by the company and not being paid vis-à-vis forums where such disputes are pending are mentioned below:

Name of the Nature of Dues Amount under dispute Statute not yet deposited Rs. in Lacs

Central Sales Sales tax including 3.54

Tax and State penalty as applicable 8.26

Sales Tax 14.27 181.36

0.81

183.64

101.79

85.63

3.00

80.72

3.36

14.91

104.43

Name of the Financial Year to Forum where the Statute which the amount dispute is pending relates

Central Sales 2004-05 Revisional Board

Tax and State 2006-07 Additional Commissioner

Sales Tax 2005-06 ADC

2000-2001 to 2005-06 Board of revenue

1999-2000 High Court

2005-06 and 2006-07

1993-94 to 1996-97 2001-2002 JC

2002-2003 JC (A) 1998-99, 2005-06 to

2006-07 and 2008-09 DC (A)

2004-2005 DC

1996-1997 to 2000-01 DC

1999-2000 to 2005-2006 Tribunal

Name of the Nature of Dues Amount under dispute Statute not yet deposited Rs. in Lacs

Excise duty Excise Duty including 4.83 penalty as applicable

68.85 9.40 462.51 Service Tax Service Tax including 5.13 penalty as applicable 30.78

122.92

Entry Tax Entry Tax 9.28 223.13

Name of the Financial Year to I Forum where the Statute which the amount dispute is pending relates

Excise duty 1983-84 to 1990-91 Assistant Commissioner of Central Excis

1981-82 to 1986-87, Deputy Commissioner

1989-90 of Excise

2002-03 to 2004-05 Commissioner (A)

2004-05 to 2007-08 Joint Commissioner (Excise and Customs)

Service Tax 2005-06 CESTAT

2004-05 to 2007-08 Joint Commissioner (CBEC)

2008-09 to 2009-10 Commissioner Divisional range

Entry Tax 2001-02 Board of Revenue 2006-07 to 2009-10 Supreme Court

10) The Company does not have accumulated losses as at the end of the year and the company has not incurred cash losses during the current and the immediately preceding financial year.

11) Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to financial institution and banks.

12) According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

14) According to the information given to us, the company has given guarantees for loan taken by others from a Bank. As explained the terms and conditions thereof are not prejudicial to the interest of the company.

15) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were applied by the company for the purposes for which the loans were obtained.

16) Based on overall examination of Balance Sheet of the Company as at March 31, 2010, short term funds were applied for the purpose for which they were obtained.

17) 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, during the year and hence the question of whether the price at which shares have been issued is prejudicial to the interest of the company does not arise.

18) During the year, the company had raised money by way of placement of equity shares to Qualified Institutional Buyers (QIBs). We have verified the end use of the money raised as disclosed by the Management in the Notes to accounts.

19) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For S. K. Agrawal & Company Chartered Accountants Registration No. 306033E

S. K. Agrawal Partner Membership No. 9067

Kolkata May 28, 2010


Mar 31, 2009

We have audited the Balance Sheet of Emami Limited as at March 31, 2009 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date 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.

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 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. 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.

We further report that:

a) The accounts of Zandu FMCG undertaking with effect from appointed date have been audited by the Statutory Auditors of The Zandu Pharmaceuticals Works Ltd and their report have been considered by us in preparing our report.

b) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

c) In our opinion proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books.

d) The Balance Sheet, Profit & Loss Account & Cash Flow Statement referred to in this report are in agreement with the books of accounts and comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956 to the extent applicable.

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2009 from being appointed as a director in terms of Section 274 (1) (g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to, Note B-17 regarding change in accounting of foreign exchange differences and Note B-21 regarding change in accounting policy of government grants and reference is invited to Note B-20(e) regarding transfers from General Reserve to Profit & Loss Account equivalent to the amount of Goodwill amortised, read with other notes on accounts as per schedule 17 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 Balance Sheet of the State of Affairs of the Company as on March 31, 2009;

ii. In the case of the Profit & Loss Account of the Profit for the year ended on that date; and

iii. In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

As required by the Companies (Auditors Report) order, 2003 issued by the Central Government and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that: 1) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) The fixed assets were physically verified during the year by the management in accordance with a program of verification, covering all fixed assets over a period of three years, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed of during the year were not substantial and therefore, do not effect the going concern assumption.

2 (a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

(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 nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory. The discrepancies noted on physical verification of stocks as compared to book records were not significant and the same has been properly dealt with in the books of accounts.

3) (a) The Company has not granted any loans, secured or unsecured, to companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

b) The Company has taken unsecured loans from one company covered in the register maintained under section 301 of the Companies Act, 1956, against whom the maximum amount outstanding at any time during the year is Rs. 3,545 lacs and the year end balance is Rs. 32.63 lacs.

c) The rate of interest and other terms and conditions in respect of above loans are prima facie not prejudicial to the interest of company.

d) The payment of the principal amount and interest are also regular.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in the internal control system.

5) (a) According to the information and explanations given to us, particulars of contracts or agreements that needed to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

(b) According to the information and explanations given to us, the Company has not entered into any transactions in pursuance of such contracts or arrangements aggregating during the year to Rs. 5,00,000 or more in respect of each party listed in the register maintained under section 301 of the Companies Act, 1956 for purchase of goods, materials and sales of goods.

6) The Company has not accepted any deposits as defined under section 58A & 58AA or other relevant provisions of the Companies Act, 1956.

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

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9) According to the information and explanations given to us in respect of statutory and other dues:

a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, there were no undisputed amount payable in respect of these statutory dues which have remained outstanding as at March 31, 2009 for the period of more than six months from the date they became payable.

b) Contingent dues on account of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty, Cess disputed by the Company and not being paid vis- à-vis forums where such disputes are pending are mentioned below:

Name of the Nature of Dues Amount under dispute Statute not yet deposited (Rs. in lacs)

Central Sales Tax Sales tax including 34.66 and State Sales Tax interest and penalty 14.27 as applicable 95.34 68.4 0.81 209.08 85.63 0.14 192.42 297.95 111.12 113.42 14.91 Excise duty Excise Duty 4.83 68.85 16.14

Entry Tax Entry Tax 17.05

Trade Tax Unnao Sales Tax 3.36

Name of the Statue Financial Year to which Forum where the dispute the amount relates is pending

Central Sales Tax and State Sales Tax 2004-05 AC 2005-06 ADC 2000-01 to 2003-04 Board of Revenue 2004-05 to 2005-06 DC (A) 1999-00 High Court 2005-06 & 2006-07 2001-02 JC 2000-01 Sr. DC (A) 2001-02 to 2002-03 2004-05 to 2005-06 JC (A) 2007-08 1997-98, 1999-00, Tribunal 2000-01 to 2004-05 1996-97 to 2000-2001 DC (A) 1983-84 to 1990-91 Assistant Commissioner of Central Excise 1981-82 to 1986-87, Deputy Commissioner 1989-90 of Excise 2000-2001 to 2005-06 Commissioner of Central Excise (Appeals) 2001-02 to 2002-03 Board of Revenue 2004-05 Deputy Commissioner of sales tax (Assessment)

10) The Company does not have accumulated losses as at the end of the year and the Company has not incurred cash losses during the current and the immediately preceding financial year.

11) Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institution and banks.

12) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

14) According to the information given to us, the Company has given guarantees for loan taken by others from a Bank. As explained the terms and conditions thereof are not prejudicial to the interest of the Company.

15) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were applied by the Company for the purposes for which the loans were obtained.

16) Based on overall examination of Balance Sheet of the Company as at March 31, 2009, short term funds of Rs. 9,700 lacs have been utilised for long term application. As per the information and explanation given to us, the same is attributable to the then turbulent economic scenario. Further, company has informed that sufficient long term fund have been augmented by raising funds through placement with QIBs in the financial year 2009-10.

17) 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, during the year and hence the question of whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

18) The Company concluded its public offering during the financial year 2004-05. Out of Rs. 3,500 lacs raised, the amount has been used as per the details given in Note no. B-4 of Schedule 17.

19) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For S K Agrawal & Company Chartered Accountants S K Agrawal Place: Kolkata Partner Dated: December 03, 2009 Membership No. 9067

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