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Auditor Report of Poddar Pigments Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of PODDAR PIGMENT LIMITED ("the Company"), which comprise the Balance Sheet as at 3181 March,2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information which we have signed under reference to this report.

Management's responsibility forthe Financial Statements

2. 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 and presentation of these standalone 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 principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these 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 there under. We conducted our audit 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 financial statements are free from material misstatement.

4. 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 the 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 reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. 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,2015;

(ii) in the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows of the Company forthe year ended on that date.

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor's Report) Order, 2015 ('Order'), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we enclose in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.

8. As required by section 143(3)oftheAct, 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 purpose of our audit;

b. in ouropinion proper books of accounts as required by the law have been kept by the Company, so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in section 133 of the Companies Act, 2013;

e. on the basis of written representations received from the directors as on 31 stMarch 2015, and taken on record, by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2015 from being appointed as director in terms of section 164 (2) of the Companies Act, 2013 and

f. 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 financial statements - Refer Note No. 29 & 29Ato the financial statements;

ii. The Company did not have any foreseeable losses on long term contracts and had no derivative contracts outstanding as at 31st March 2015; and

iii. The Company did not have any dues on account of Investor Education and Protection Fund.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT (Referred to in paragraph 7 of our report of even date to the members of Poddar Pigment Limited on the financial statements for the year ended 31st March, 2015)

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

(b) As explained to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company and no material discrepancies were noticed on such verification. In our opinion the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

ii) (a) The inventories have been 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 inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. In our opinion discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company.

iii) According to the information and explanations given to us, the Company has, during the year, not granted any loans, secured or unsecured (except advances in the ordinary course of business) to companies, firms or other parties covered in the register maintained under section 189 of the companies Act, 2013. Accordingly, paragraph 3 (iii) of the Order is not applicable.

iv) In our opinion and according to the information and explanations given to us, there are internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v) The Company has not accepted public deposits during the year.

vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government of India for the maintenance of cost records of the Company under clause (d) of Sub Section (1) of Section 148 of. the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and records have been maintained. We are, however, not required to and have not carried out any detailed examination of such accounts and records with a view to determining whether they are accurate or complete.

vii) (a) According to the records examined by us , the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31s1 March, 2015 for a period of more than six months from the date they became payable.

(b) According to the records of the company, the details of dues in respect of income tax and service tax which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

Sl. No. Name of the Statute Nature of the Dues Amount (Rs. in lacs)

1. Income Tax Act Disallowance 5.96 of Expenses

2. Service Tax Act Disallowance of 35.43 Cenvat credit on services in connection with transport/ insurance sales commission



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

Income Tax Act AY 2012-13 Commissioner of Income tax (Appeals)

Service Tax Act FY 2013-14 & Asstt. 2014-15 Commissioner/ Commissioner (Appeal)/Addl. Commissioner

Note: There was no dues in respect of Sales Tax, duty of customs, duty of excise, value added tax and Wealth Tax which were under disputes as at 31 st March, 2015.

(c) The Company did not have any dues on account of Investor Education and Protection Fund.

viii) There are no accumulated losses of the Company as at 31st March, 2015. The Company has not incurred cash losses during the financial year covered by our audit, as well as in the immediately preceding financial year of the Company.

ix) Based on our audit procedures and the information given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution or bank.

x) According to the information and explanations given to us, Company has not given any guarantee during the year for loans taken by others from banks or financial institution.

xi) According to the information and explanations given to us, no term loan has been taken by the Company during the year.

xii) Based upon the audit procedures performed and to the best of our knowledge and according to the information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

FOR K.N. GUTGUTIA & COMPANY CHARTERED ACCOUNTANTS FRN 304153E

PLACE : JAIPUR (Camp) (B.R. GOYAL)

PARTNER

DATE : 25th MAY, 2015 M.NO. 12172


Mar 31, 2014

1. We have audited the accompanying financial statements of Poddar Pigments Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. 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 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

3. 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 misstatement.

4. 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 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. 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:- (a) In the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2014;

(b) In the case of Statement of Profit and Loss, of the Profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

7. 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 Companies Act 1956 (the Act), we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. 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

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, Statement of Profit & Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profit & 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 the written representations received from the Directors as on 31st March, 2014, and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2014 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 7 of our report of even date to the members of Poddar Pigments Limited ("the Company") on the financial statements for the year ended March 31, 2014)

i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed

assets.

(b) As per the information and explanation given to us physical verification of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given no material discrepancies were noticed on such verification.

(c) During the year the Company has not disposed off any substantial/major part of fixed assets.

ii) (a) As per the information furnished, the inventories have been physically verified during the year by the management. In

our opinion, having regard to the nature and location of stock, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relating to the size of the Company and the nature of its business.

(c) In our opinion and according to the information explanations given, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii) The Company had not taken/granted any loan from / to any Company covered in the register maintained under Section

301 of the Companies Act 1956. Accordingly, paragraph 4 (iii) of the order is not applicable.

iv) 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 with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls systems.

v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered in the register maintained under section 301 have been so entered. (b) In our opinion and according to the information and explanations given to us, there were transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs in each case and the same were, prima facie at comparable rates as available.

vi) In our opinion and according to the information and explanations given to us the company has not accepted any deposits within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits from the public.

vii) In our opinion, as explained to us the company has an in house internal audit system commensurate with the size of the company and the nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a details examination of the records with a view of determine whether they are accurate or complete.

ix) (a) According to the information''s and explanations given to us and records examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales-Tax, Service Tax, Custom Duty, Excise Duty, Cess and other Statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable. (b) According to the records of the Company, the dues of Sales Tax, Income-Tax, Customs, Wealth Tax, Service Tax, Excise Duty, Cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under:-

Name of the Statute Nature of the Dues Amount Rs.

Rajasthan Sales Tax Entry tax on 5,55,021 Act & The Rajasthan HDPE bags Tax on Entry of Goods into local Area Act, 1999

Income Tax Act Disallowance of 16,35,908 expenses Service Tax Act Disallowance of 4,17,309 refund of service tax paid for services in connection with export

Period to which Forum where the amount relates dispute is pending

2007-08 and Deputy 2008-09 Commissioner (Appeals)

A.Y. 2008-09 Commissioner A.Y. 2009-10 of Income Tax A.Y. 2010-11 & (Appeals) A.Y. 2011-12 2007-08 and Custom Excise 2008-09 & Service Tax, Appellant Tribunal

x) There are no accumulated losses of the Company as on 31st March, 2014. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year. xi) Based on our audit procedures and the information given by the management, we are of the opinion that the company has not defaulted in repayment of dues to financial institution or banks. xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities. xiii) The Company is not a chit/nidhi/mutual benefit fund/society.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures, and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company. However whenever shares, as investments, are purchased or sold, records for the same are properly maintained. xv) According to the information and explanations given to us, Company has not given any guarantees for loans taken by other from bank or financial institutions. xvi) According to the information and explanations given to us, no term loans has been raised by the Company during the year.

xvii) According to the information & explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long term investment. xviii) The Company has not made any preferential allotment of shares during the year.

xix) During the year covered by our audit report the Company has not issued secured debentures.

xx) The Company has not raised any money by public issues during the year covered by our report.

xxi) Based upon the audit procedures performed and to the best of our information and according to the explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

FOR K.N. GUTGUTIA & COMPANY CHARTERED ACCOUNTANTS

(B.R. GOYAL) PARTNER Membership No. 12172 Place : JAIPUR (Camp) ICAI''S FRN NO. 304153E Dated : 15th May, 201


Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statement of PODDAR PIGMENTS LIMITED ("the Company"), which comprises the Balance Sheet as at March 31, 2013 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. 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

3. 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 misstatement.

4. 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion

6. 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:-

(a) In the case of the Balance Sheet of the state of affairs of the Company as at 31 st March, 2013;

(b) In the case of Statement of Profit and Loss, of the Profit for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

7. 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 Companies Act 1956 (the Act), we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. 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 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, Statement of Profit & Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

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

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

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 7 of our report of even date to the members of Poddar Pigments Limited on the Financial Statements for the year ended 31 st March, 2013)

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

(b) As per the information and explanation given to us physical verification of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company.

(c) During the year the Company has not disposed off any substantial/ major part of fixed assets.

ii) (a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stock, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. In our opinion, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the book of accounts.

iii) The company had not taken / granted any loan from / to any Company covered in the register maintained under Section 301 of the Companies Act 1956. Accordingly, paragraph 4(iii) of the order is not applicable.

iv) 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 with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls systems.

v) a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered in the register maintained under section 301 have been so entered.

b) In our opinion and according to the information and explanations given to us, there was no transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs.

vi) In our opinion and according to the information and explanations given to us the company has not accepted any deposits within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits from the public.

vii) In our opinion, as explained to us the company has an internal audit system commensurate with the size of the company and the nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a details examination of the record with a view of determine whether they are accurate or complete.

ix) (a) According to the informations and explanations given to us and records examined by us, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, Income Tax, Sales-Tax, Service Tax, Custom Duty, Excise Duty, Cess and other Statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31 st March, 2013 for a period of more than six months from the date they became payable.

x) There are no accumulated losses of the Company as on 31st March, 2013. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and / or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit/nidhi/ mutual benefit fund/ society.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures, and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company. However whenever shares, as investments, are purchased or sold, records for the same are properly maintained.

xv) According to the information and explanations given to us, Company has not given any guarantees for loans taken by others from bank or financial institutions.

xvi) According to the information and explanations given to us, no term loans has been raised by the Company during the year.

xvii) According to the information & explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long term investment.

xviii) The Company has not made any preferential allotment of shares during the year.

xix) During the year covered by our audit report the Company has not issued secured debentures.

xx) The Company has not raised any money by public issues during the year covered by our report.

xxi) Based upon the audit procedures performed and the information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

FOR K.N. GUTGUTIA & COMPANY

CHARTERED ACCOUNTANTS

FRN304153E

(B.R. GOYAL)

PLACE : Mumbai (Camp)

DATED : 22nd May, 2013 M. N0.12172


Mar 31, 2012

1. We have audited the attached Balance Sheet of PODDAR PIGMENTS LIMITED as at 31st March 2012, the related statement of Profit and Loss for the year ended on that date annexed thereto, and the cash flow statement of the Company for the year ended on that date, which we have signed under reference to this report. 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.

2. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks as considered appropriate and according to the information and explanation given to us during the course of our audit, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments mentioned in the Annexure referred to in above paragraph 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 the books of the Company.

c) The Balance Sheet, statement of Profit and Loss and the Cash Flow Statement dealt with by the report are in agreement with the Books of Account of the Company.

d) In our opinion, the statement of Profit & Loss, Balance Sheet and Cash Flow Statement comply with the mandatory Accounting Standards referred to in Sub-Section 3 (c) of Section 211 of the Companies Act, 1956.

e) According to the information and explanation given to us and on the basis of written representations received from the Directors of the Company as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2012, from being appointed as a Director in terms of clause (g) of Sub Section (1) of Section 274 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 financial statement read with the notes and Significant Accounting Policies there on, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2012.

(ii) In the case of the statement of Profit and Loss, of the Profit of the Company for the year ended on that date;

And

(iii) In the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Ref: PODDAR PIGMENTS LIMITED

Referred to in paragraph 3 of our report of even date.

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

(b) As per the information and explanation given to us physical verification of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company.

(c) During the year the Company has not disposed off any substantial/major part of fixed assets.

ii) (a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stock, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. In our opinion, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the book of accounts.

iii) The company had not taken/granted any loan from/to any Company covered in the register maintained under Section 301 of the Companies Act 1956. Accordingly, paragraph 4(iii) of the order is not applicable.

iv) 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 with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls systems.

v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered in the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, there was no transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs.

vi) In our opinion and according to the information and explanations given to us the company has not accepted any deposits within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits from the public.

vii) In our opinion, as explained to us the company has an internal audit system commensurate with the size of the company and the nature of its business.

viii) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a details examination of the record with a view of determine whether they are accurate or complete.

ix) (a) According to the information's and explanations given to us and records examined by us, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, Income Tax, Sales-Tax, Service Tax, Custom Duty, Excise Duty, Cess and other Statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable

(b) According to the records of the Company, the dues of Sales Tax, Income-Tax, Customs, Wealth Tax, Service Tax, Excise Duty, Cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under: -

Name of the Statute Nature of the Dues Amount Period to which Rs. the amount relates

Rajasthan Sales Tax Sales Tax on sale 839868 2003-04,2007-08 Act & The Rajasthan of fixed assets,on and 2008-09 Tax-Goods Act discount allowed & Entry tax on HDPE bags

Income Tax Act Disallowance of 780059 A.Y. 2008-09 & expenses A.Y. 2009-10

Name of the Statute Forum where dispute is pending

Rajasthan Sales Tax Deputy Commissioner Act & The Rajasthan (Appeals) Entry Tax-Goods Act

Income Tax Act Commissioner of Income Tax (Appeals)

x) There are no accumulated losses of the Company as on 31st March, 2012. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and / or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit/nidhi/mutual benefit fund/society.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures, and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. However whenever shares, as investments, are purchased or sold, records for the same are properly maintained.

xv) According to the information and explanations given to us, Company has not given any guarantees for loans taken by others from bank or financial institutions.

xvi) According to the information and explanations given to us, no term loans has been raised by the Company during the year.

xvii) According to the information & explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long term investment.

xviii) The Company has not made any preferential allotment of shares during the year.

xix) During the year covered by our audit report the Company has not issued secured debentures.

xx) The Company has not raised any money by public issues during the year covered by our report.

xxi) Based upon the audit procedures performed and the information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.





FOR K.N. GUTGUTIA & COMPANY CHARTERED ACCOUNTANTS ICAI'S FRN NO. 304153E

(B.R. GOYAL) PARTNER M. No.12172

Place : JAIPUR (Camp) Dated : 7th August, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of PODDAR PIGMENTS LIMITED as at 31 st March, 2011, the related Profit and Loss Account for the year ended on that date annexed thereto, and the cash flow statement of the Company for the year ended on that date, which we have signed under reference to this report. 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.

2. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks as considered appropriate and according to the information and explanation given to us during the course of our audit, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments mentioned in the Annexure referred to in above paragraph 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 the books of the Company.

c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by the report are in agreement with the Books of Account of the Company.

d) In our opinion, the Profit & Loss Account, Balance Sheet and Cash Flow Statement comply with the mandatory Accounting Standards referred to in Sub-Section 3 (c) of Section 211 of the Companies Act, 1956.

e) According to the information and explanation given to us and on the basis of written representations received from the Directors of the Company as on 31 st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31 st March, 2011, from being appointed as a Director in terms of clause (g) of Sub Section (1) of Section 274 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 read with the notes and Significant Accounting Policies there on, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31 st March, 2011.

(ii) In the case of the Profit and Loss Account, of the Profit of the Company for the year ended on that date;

And

(iii) In the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT Re: PODDAR PIGMENTS LIMITED Referred to in paragraph 3 of our report of even date.

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

(b) As per the information and explanation given to us Physical verification of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company.

(c) During the year the Company has not disposed off any substantial/ major part of fixed assets.

ii) (a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stock, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. In our opinion, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the book of accounts.

iii) The company had not taken / granted any loan from / to any Company covered in the register maintained under Section 301 of the Companies Act 1956. Accordingly, paragraph 4(iii) of the order is not applicable.

iv) 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 with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls.

v) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that there was no transaction that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956.

vi) In our opinion and according to the information and explanations given to us the company has not accepted any deposits within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public.

vii) In our opinion, as explained to us the company has an internal audit system commensurate with the size of the company and the nature of its business.

viii) The Central Government has ordered for audit of cost records of the Company required to be maintained u/s 209(1)(d) of the Companies Act, 1956. We have been informed by the management that representation has been made by the Company to the Central Government that the audit provisions and related records rules are not applicable to the products of the company. We have been informed that the matter has been referred by the Department of Company Affairs to the Technical Committee and the same is still under their consideration and no further communication has been received from the department.

ix) (a) According to the information's and explanations given to us and records examined by us, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales-tax, service tax, custom duty, excise duty, cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2011 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues of sales tax, Entry tax income-tax, customs, wealth tax, service tax, excise duty, cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under: -

Name of the Nature of Amount Statute the Dues Rs.

Rajasthan Sales Sales Tax on sale of 789234 Tax Act & The fixed assets , on Rajasthan Entry discount allowed & Entry Tax -Goods Act tax on HDPE bags

Income Tax Act Disallowance of 153830 expenses

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

Rajasthan Sales Tax Act & The Rajasthan Entry Tax -Goods Act 2003-04, 2007-08 Deputy Commissioner and 2008-09 (Appeals)

Income Tax Act AY 2008-09 Commissioner of Income Tax (Appeals)

x) There are no accumulated losses of the Company as on 31st March, 2011. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit/nidhi/ mutual benefit fund/ society.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures, and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. However whenever shares, as investments, are purchased or sold, records for the same are properly maintained.

xv) According to the information and explanations given to us, Company has not given any guarantees for loans taken by others from bank or financial institutions.

xvi) The term loan availed during the year was used for the purpose for which it was obtained.

xvii) According to the information & explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long term investment.

xviii) The Company has not made any preferential allotment of shares during the year.

xix) During the year covered by our audit report the Company has not issued secured debentures.

xx) The Company has not raised any money by public issues during the year covered by our report.

xxi) Based upon the audit procedures performed and the information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

FOR K.N. GUTGUTIA & COMPANY CHARTERED ACCOUNTANTS

(B.R. GOYAL) PARTNER Membership No. 12172 ICAI'S FRN NO. 304153E

Place : Mumbai(Camp) Dated : 28th May, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of PODDAR PIGMENTS LIMITED as at 31st March, 2010, the related Profit and Loss Account for the year ended on that date annexed thereto, and the cash flow statement of the Company for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An Audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks as considered appropriate and according to the information and explanation given to us during the course of our audit, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments mentioned in the Annexure referred to in above paragraph 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 the books of the Company.

c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by the report are in agreement with the Books of Account of the Company.

d) In our opinion, the Profit & Loss Account, Balance Sheet and Cash Flow Statement comply with the mandatory Accounting Standards referred to in Sub-Section 3 (c) of Section 211 of the Companies Act, 1956.

e) According to the information and explanation given to us and on the basis of written representations received from the Directors of the Company as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31 st March, 2010, from being appointed as a Director in terms of clause (g) of Sub Section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts read with the notes and Significant Accounting Policies there on, 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) ln the case of the Balance Sheet of the state of affairs of the company as at 31st March, 2010.

(ii) In the case of the Profit and Loss Account of the Profit of the Company for the year ended on that date; And

(iii) In the case of the Cash Flow statement, of the cash flows of the Company for the year ended on that date.



ANNEXURE TO THE AUDITORS REPORT

Re: PODDAR PIGMENTS LIMITED

Referred to in paragraph 3 of our report of even date.

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

(b) As per the information and explanation given to us Physical verification of fixed assets has been carried out terms of the phased programme of verification of its fixed assets adopted by the Company.

(c) During the year the Company has not disposed off any substantial/ major part of fixed assets.

ii) (a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stock, the frequency of the physical verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. In our opinion, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the book of accounts.

iii) The company had not taken / granted any loan from / to any Company covered in the register maintained under Section 301 of the Companies Act, 1956.Accordingly,paragraph 4{iii) of the order is not applicable.

iv) 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 with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed and continuing failure to correct major weakness in internal controls.

v) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that there was no transaction that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956.

vi) In our opinion and according to the information and explanations given to us the company has not accepted any deposits within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1959 and the Companies (Acceptance of Deposits) Rules,1975 with regard to the deposits accepted from the public.

vii) In our opinion, as explained to us the company has an internal audit system commensurate with the size of the company and the nature of its business.

viii) The Central Government has ordered for audit of cost records of the Company required to be maintained u/s 209(1 )(d) of the Companies Act, 1956. We have been informed by the management that representation has been made by the Company to the Central Government that the audit provisions and. related records rules are not applicable to the products of the company. We have been informed that the matter has been referred by the Department of Company Affairs to the Technical Committee and the same is still under their consideration and no further communication has been received from the department.

ix) (a) According to the informations and explanations given to us and records examined by us, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales-tax, service tax, custom duty, excise duty, cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues of sales tax, income-tax, customs, wealth tax, service tax, excise duty, cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under: -

Name of Nature of Amount Period to which Forum where the Statute the Dues Rs. the amount relates dispute is pending

Rajsthan Sales Sales Tax on sale 59 847 2003-04 Deputy Commissioner

Tax Act of fixed assets (Appeals)

Income Tax Disallowance of 12 80 404 AY 2007-08 Deputy Commissioner Act expenses etc (Appeals)

x) There are no accumulated losses of the Company as on 31 st March, 2010. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

xii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not a chit/nidhi/ mutual benefit fund/ society.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures, and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. However whenever shares, as investments, are purchased or sold, records for the same are properly maintained,

xv) According to the information and explanations given to us, Company has not given any guarantees for loans taken by others from bank or financial institutions,

xvi) Noterm loan was availed by the Company during the year under report.

xvii) Accordinq to the information & explanation given to us and on an overall examination of the balance sheet of the company to the informantion & explanation given that no funds raised on short-term basis have been used for long term investment

xvlii) The Company has not made any preferential allotment of shares during the year.

xiii) During the year covered by our audit report the Company has not issued secured debentures.

xx) The Company has not raised any money by public issues during the year covered by our report.



FOR K.N. GUTGUTIA & COMPANY

CHARTERED ACCOUNTANTS

(B.R.GOYAL)

PARTNER

Membership No. 12172

ICAI-SFRNNO.304153E

Place: Jaipur (Camp)

Date : 19th May, 2010