Auditor Report of Avon Corporation Ltd.

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Avon Corporation Limited ("the Company"), which comprise the Balance Sheet as at March 31,2013, 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

The 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 Section 211 (3C) of the Companies Act, 1956 ("the Act") 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 misstatements, whether due to fraud or error.

Auditors'' 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 the 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 provideabasis for ouraudit opinion.

Basis for Qualified Opinion

a) In respect of search operation carried bythe Income Tax departmentthe company has admitted as under: Withdrawal of deduction u/s. 80IC Rs. 18,25,82,248/-

Unexplained cash transaction Rs. 10,00,00,000/-

The assessment proceeding are on and special audit u/s. 142(2A) of the Income Tax act 1961 has been ordered in respect of Assessment Year 2005 - 06 to 2011 -12. Tax liability on account of above is unascertained

b) Debtors, creditors, loans, Loans & advances are subjectto confirmations

Opinion

Subjectto above 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 March 31,2013;

(b) in the case of the Statement of Profit and Loss, of the loss of the Company forthe year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

2. As required by Section 227(3) of the Act, we reportthat:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary forthe purposes of ouraudit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears.

(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, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Act.

(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 Section 274(1 )(g) of the Act.

For AtulB.Shah & Co.

Chartered Accountants F.R.NO.130818W

AtulShah Proprietor Memb.No.:033137

Mumbai



Dated: 30/05/2013

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Mar 31, 2010

We have audited the attached Balance Sheet of AVON CORPORATION LTD as on 31 st March, 2010 together with Profit & Loss Account and the Cash Flow Statement for the year ended 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 have 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors 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 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order. Further to our comments in the Annexure referred to in paragraph 3 above, we report that;

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

b. In our opinion, the Company has kept proper books of accounts as required by Law, so far as appears from our examination of those books;

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

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

e. On the basis of the written representations received from Directors of the Companies, as on 31 st 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 the terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon given in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

1. In the case of Balance Sheet, of the State of Affairs of the Company as on 31 st March, 2010;

2. In the case of Profit And Loss Account, of the Profit of the Company for the year ended on that date; and

3. In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

Referred to in paragraph 3 of our report of even date on the accounts for the year ended 31 st March, 2010 of Avon Corporation Limited.

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

(b) The Company has a program for phased physical verification of all its fixed assets which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) The company has not disposed off any substantial part of fixed assets during the year.

2 (a) As explained to us, the physical verification of the inventory has been conducted by the management at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed during physical verification of inventories as compared to book records were not material having regard to the size of the operations of the Company and have been dealt with in the books of account.

3. In respect of the loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

(a) Based on the information received and the explanation given, the rate of interest and the terms and condition of loan taken is prima facie not prejudicial to the interest of the Company.

(b) Based on the information received and the explanation given to us, the repayment of principal amount is generally regular.

(c) Based on the information received and the explanation given to us, there is no overdue repayment of principal amount.

4. In our opinion, and according to the information and explanations given to us, there exists adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of trading goods, raw materials Including components, packing materials, plant and machinery, equipment and other assets and with regard to sale of goods and service. During the course of audit, we have not observed any continuing failure to correct major weakness in the internal controls.

5. (a) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in to the register maintained under Section 301 of the Companies Act, 1956, forthe year have been so entered.

(b) There is no transaction of loan given to the party covered in the Register Maintained Under Section 301 of the Companies Act, 1956.

6. The company has accepted Fixed Deposits of Two Crores Fifty Eight Lacs Thirty One Thousand from the public, the directives issued by Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules framed thereunder are applicable. We are informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any othertribunal.

7. To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under Clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

8. In our opinion and according to the information and explanations given to us the company is regular in depositing

undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Service tax, Custom Duty, Excise Duty, cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31 st March 2010 for a period of more than six months from the date they became payable.

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

10. As perthe information and explanations given to us by the management as at the balance sheet date, the Company has not defaulted in repayment of dues to banks orfinancial institutions or debenture holders.

11. In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The Company is not a Chit Fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the Companies Order are not applicable to the Company.

13. As the Company is not dealing or trading in shares, securities, debentures, and other investments, the provision of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 is not applicable to the company.

14. As per the information and explanation given to us, the Company has not given any guarantee for loans taken from financial institutions and / or banks by others.

15. In our opinion and according to the information and explanations given to us, and on overall examination of the balance Sheet and the Cash flow of the Company, we report that no funds raised on short-term basis have been used for long- term investments

16. According to the information and explanations given to us, 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.

17. The Company has not issued any debentures. Accordingly clause 4 (xix) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

18. The Company has raised money through a public issue (Global Depository Receipts) amounting to Rs. 48,00,00,000/- during the year.

19. On the basis of our examination and according to the information and explanations given to us, no fraud on or by the Company, has been noticed or reported during the course of our audit

ForATUL.B.SHAH&CO.

(Chartered Accountants)

Atul Shah

(Proprietor)

Membership No. 033137

Registration No. 130818W

Place: Mumbai.

Date: 30th June, 2010