Auditor Report of Paramount Cosmetics (I) Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Paramount Cosmetics (India) Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, 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 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 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 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 the 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.

Auditor's Responsibility

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) 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.

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 financial controls relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 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 financial statements.

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:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2015

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 purpose of our audit.

b. In our opinion proper books of account 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, Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of written representations received from the Directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

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), 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,

(ii) In our opinion and as per the information and explanations provides to us, the Company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses, and

(iii) The company is not required to transfer amount to investor education and protection fund therefore there is no delay in transferring the amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditors' Report

(Referred to in Paragraph 1 under section (Report on Other Legal and Regulatory Requirements, of our report of even date)

1.1. The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. However the addition made during the year are not updated.

1.2. Some of the fixed assets were physically verified during the year by the management in accordance with a program of verification of fixed assets at reasonable intervals. According to the information and explanation given to us no material discrepancy were noticed on such verification.

2.1. According to the information and explanation given to us , physical verification of inventory has been conducted by the management at reasonable interval.

2.2. 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 the nature of its business.

2.3. In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on such physical verification.

3. As informed to us, the company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventories, fixed assets and for the sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weaknesses, if any, in internal control system.

5. According to the information and explanations given to us, the Company has not accepted any deposits from public within the meaning of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under during the year under review.

6. The Central Government has not prescribed maintenance of Cost Records under sub-section (1) of Section 148 of the Companies Act, 2013 in respect of products dealt with by the Company.

7.1 In our opinion and according to the information and explanation given to us the company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities and we have been informed that there are no arrears of outstanding statutory dues as at the last day of the financial year under audit for a period of more than six months from the date they became payable.

7.2 According to the information and explanations given to us and records examined by us the particulars of dues of Vat as on 31st march 2015 which have not been deposited on account of dispute is as follows:

Name of the Nature of Amount Period to Forum where statute dues which the the dispute involve Rs is pending (In Lakh) amount Relates

Gujarat sales Vat Dues 576.40 AY 2005-2006 The Commissioner tax- sales tax commercial department Taxes Surat, Gujarat

According to information and explanations given to us and the records of the company examined by us no dues of vat, duty of custom, duty of excise, wealth tax, service tax which have not been deposited on account of any dispute.

7.3 In our opinion and according to the information and explanations given to us, the company is not required to transfer amounts required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under.

8. The Company has no accumulated losses at the end of the financial year under audit. The company has not incurred cash losses during the financial year covered by audit and in the immediately preceding financial year.

9. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank.

10. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

11. According to the information and explanations given to us, term loans were obtained during the year under audit and applied for the purpose for which it has taken the loan.

12. Based upon the audit procedures performed and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year of our audit.

For S.S. Jain & Associates Chartered Accountants Firm Registration No. 103970W

Sd/- S. K.Jain Proprietor Membership Number: 038664

Place: Bangalore Dated: 30th May 2015

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Mar 31, 2014

We have audited the accompanying financial statements of Paramount Cosmetics (India) Ltd. (''the Company'') which comprise the Balance Sheet as at 31st March 2014, 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 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 notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material 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 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, subject to

a) Provision of Gratuity for Rs. 5,60,533/-is made for those employees who have completed five year of their services,

b) Balances of Debtors and creditors are subject to confirmation & reconciliation, any loss on account of this is undeterminable

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 Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, 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 and 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 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 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 notified under the Act read with the general circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate affairs in respect of Section 133 of the Companies Act, 2013 and

e. on the basis of 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 31stMarch 2014, from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in our report to the members of Paramount Cosmetics (India) Ltd. (''the Company'') for the year ended 31st March 2014. We report that:

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c) In our opinion, the Company has not disposed off substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a) As explained to us, inventories have been physically verified by the management at regular intervals during the year, in our opinion the frequency of verification is adequate.

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 the nature of its business.

c) The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. The company has not given any loans, secured or unsecured, to the companies, firm or other parties covered in the register maintained under section 301 of the Act. Hence clauses (iii)(b), (c) & (d) of the order, are not applicable.

(a) The Company has taken unsecured loans from three persons covered in the register maintained under section 301 of the Act. The maximum amount involved during the year and the year end balance of such loan aggregate to Rs. 3,34,43,416/- and Rs. 2,85,43,416/- respectively.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(c) In respect of the aforesaid loan, there is no stipulation about repayment of principal however the loans are repaid as and when demanded by the loaner.

(d) The company is regular in payment of interest.

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, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act,1956;

a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been properly entered.

b) According to the information and explanations given to us, the transactions of purchase of goods and materials and sales of goods, material and services, made in pursuance to contracts or arrangement entered in the registers main- tained under Section 301 of the Companies Act, 1956 and aggregating during the year to Rs. 500,000/- (Rupees Five lacs only) or more in respect of each party, have been made at prices which in our opinion are reasonable having regards to prevailing market prices for such goods, material or services or the prices at which similar transaction have been made with other parties as the case may be.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and rules framed there under.

7. In our opinion, the company''s present internal audit system is commensurate with the size of its business.

8. The Central Government has not prescribed maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company.

9. In respect of statutory dues:

a. According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also based on management representations of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales-tax, Wealth Tax, Service tax, Customs Duty, Excise Duty, Cess and other statutory dues as applicable have been generally regularly deposited with the appropriate authorities in India except vat dues, income tax deducted at source,ESIC employees & employers contribution and Dividend Tax amounting to Rs 10,462/- (Annex 1)

b. As at 31st March 2014 there have been no disputed dues which have not been deposited with respective authorities in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Sales-tax, Wealth Tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable except:

Sr Name of the Nature of Amount (Rs. Period Forum where No. Statute the Dues in Lakhs) to which dispute is the amount relates pending

1 Gujarat Commissioner- Sales Tax Commercial Dept. Vat Dues 576.40 2005-06 Taxes Surat, Gujarat

10. The company has not incurred cash loss in the current financial year and there is no cash loss in the immediately preceding financial year.

11. According to the records of the Company, the Company has not defaulted in repayment of its dues of any Bank during the year.

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

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

14. The Company has not dealt in or of trading in shares, securities, debentures and other Investments. Accordingly, the provisions of Clause v(xiv) of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

15. The Company has not given guarantees for loans taken by other from bank. According to the information and explanations given to us, we are of the opinion that the terms and Conditions thereof are not prima-facie prejudicial to the interest of the Company.

16. In our opinion, on the basis of information and explanation given to us, the term loans are applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short term basis which have been used for long term investment.

18. During the year, 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.

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

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

21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

For R. U. JAIN & CO. Chartered Accountants

R. U. JAIN Place: Bangalore Proprietor Dated : 30 May, 2014 Membership No. 031037

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Paramount cosmetics India Ltd. (''the Company'') which comprise the Balance Sheet as at 31 March 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

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 from 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. 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, Subject to

a) Provision of Gratuity for Rs 12,54,171/-is made for those employees who have completed five year of their services,

b) Balances of Debtors and creditors are subject to confirmation & reconciliation any loss on account of this is undeterminable (i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, 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 and 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 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 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 subsection (3C) of section 211 of the Companies Act, 1956; and

e. on the basis of written representations received from the directors as on 31 March 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 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

The Annexure referred to in our report to the members of Paramount cosmetics (India) Ltd. (''the Company'') for the year ended 31 March 2013. We report that:

1 In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c) In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2 In respect of its inventories:

a) As explained to us, inventories have been physically verified by the management at regular intervals during the year, in our opinion the frequency of verification needs to be increased.

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 the nature of its business.

c) The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3 The company has not given any loans, secured or unsecured, to the companies, firm or other parties covered in the register maintained under section 301 of the Act. Hence clauses (iii)(b), (c) & (d) of the order, are not applicable.

(a) The Company has taken unsecured loans from three persons covered in the register maintained under section 301 of the Act. The maximum amount involved during the year and the year end balance of such loan aggregate to Rs. 3,15,43,416 /- and Rs.2,85,43,416/- respectively.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(c) In respect of the aforesaid loan, there is no stipulation about repayment of principal however the loans are repaid as and when demanded by the loaner.

(d) The company is regular in payment of interest.

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, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act,1956;

a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been properly entered.

b) According to the information and explanations given to us, the transactions of purchase of goods and materials and sales of goods, material and services, made in pursuance to contracts or arrangement entered in the registers maintained under Section 301 of the Companies Act, 1956 and aggregating during the year to Rs. 5,00,000/- (Rupees Five lacs only) or more in respect of each party, have been made at prices which in our opinion are reasonable having regards to prevailing market prices for such goods, material or services or the prices at which similar transaction have been made with other parties as the case may be.

6. The Company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Act and rules framed there under.

7. In our opinion, the company''s present internal audit system is commensurate with the size of its business.

8. The Central Government has not prescribed maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company.

9. In respect of statutory dues:

a. According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also based on management representations of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales-tax, Wealth Tax, Service tax, Customs Duty, Excise Duty, Cess and other statutory dues as applicable have been generally regularly deposited with the appropriate authorities in India except vat dues, income tax deducted at source, ESIC employees & employers contribution and Dividend Tax amounting to Rs 3803512/- (Annex 1)

b. As at 31st March, 2013 there have been no disputed dues which have not been deposited with respective authorities in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Sales-tax, Wealth Tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable except:

Sr No.Name of the Nature of Amount (Rs. in Period to which Forum where Statute the Dues Lakhs) the amount relates dispute is pending

1 Gujrat Sales Tax Sales tax Dept. Vat Dues 576.40 2005-06 Commissioner- Commercial Taxes, Surat, Gujarat

10. The company has not incurred cash loss in the current financial year and there is no cash loss in the immediately preceding financial year.

11. According to the records of the Company, the Company has not defaulted in repayment of its dues of any Bank during the year.

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

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

14. The Company has not dealt in or of trading in shares, securities, debentures and other Investments. Accordingly, the provisions of Clause v(xiv) of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

15. The Company has not given guarantees for loans taken by other from bank. According to the information and explanations given to us, we are of the opinion that the terms and Conditions thereof are not prima-facie prejudicial to the interest of the Company.

16. In our opinion, on the basis of information and explanations given to us, the term loans are applied for the purpose for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short term basis which have been used for long term investment.

18. During the year, 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.

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

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

21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

For R. U. JAIN & CO.

Chartered Accountants

R. U. JAIN

Place: Bangalore Proprietor

Dated : 30 May, 2013 Membership No. 031037

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Mar 31, 2012

We have audited the attached Balance sheet of PARAMOUNT COSMETICS INDIA LIMITED as at 31st March 2012 and the Profit and Loss Account for the year ended on that date annexed there to and Cash Flow Statement of the Company for the year ended on that date. 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.

1. We conducted our audit in accordance with Auditing Standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statement. 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 the Management, as well as evaluating the overall financial presentation. We believe that our audit provides reasonable basis for our opinion.

2. As required by the Companies (Auditor's Report) Order 2003 ( as amended ) issued by the Central Government of India in terms of Sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 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 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 those books;

c) The Balance Sheet ,Profit and Loss Account and Cash Flow Statement dealt with by this report are in agree- ment with the Books of Accounts;

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

e) In our opinion, and based on information and expectations given to us, none of the Director are disqualified as on 31st March 2012 from being appointed as directors 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 together with the Significant Accounting Policies and other 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 principle generally accepted in India, subject to :

a) Provision for gratuity for Rs. 6,87,588.73 is made for those employees who have completed five years of their service.

b) Balance of Debtors and Creditors are subject to confirmation & reconciliation, any loss on account of these are undeterminable.

i) In so far as related to the Balance Sheet, of the statement of affairs of the Company as at 31st March, 2012 :

ii) In so far as it relates to the Profit & Loss Account, of the Profit of Company for the period ended on that date; and

iii) In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

Referred to in Paragraph 2 of our report of even date

1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year, in our opinion the frequency of verification is reasonable.

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 the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

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. The Company has not granted secured/unsecured loans to any companies, firm or other parties covered in the register maintained under section 301 of the Companies Act 1956 consequently the requirement of clause (b) (c) & (d) of the paragraph 4 of the order are not applicable.

b. The Company has taken unsecured loans from five parties covered in the register maintained under section 301 of the Act. The maximum amount outstanding at any time during the year and the year-end balance of such loan aggregate to Rs.2,89,54,020/- and Rs. 2,85,43,416/- respectively.

c. In our opinion and according to the information and explanations given to us, the rate of interest, wherever applicable and other terms and conditions are not prima facie prejudicial to the interest of the Company, there is no stipulation about the repayment of five of these loan hence clause (iii) (g) is 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, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956 ;

(a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that needed to be entered into in 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 transactions of purchase of goods and materials and sales of goods, material and services, made in pursuance to contracts or arrangement entered in the registers main- tained under Section 301 of the Companies Act, 1956 and aggregating during the year to Rs.5,00,000/- (Rupees Five lacs only) or more in respect of each party, have been made at prices which in our opinion are reasonable having regard to prevailing market prices for such goods, materials or services or prices at which similar transactions have been made with other parties as the case may be, since the purchases/sales are for branded goods, comparative prices are not available.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8. The Central Government has not prescribed maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company.

9. In respect of statutory dues:

a. According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance dues, Income-Tax, Sales-tax, Wealth Tax, Service Tax , Customs Duty, Excise Duty, Cess, FBT and other material statutory dues have not been regularly deposited with the appropriate authorities. According to the information and explanations given to us, Rs. 23,31,527/- undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2012 for a period of more than six months from the date of becoming payable, as per Annexure 1.

b. As at 31st March, 2012 there have been disputed Sales Tax dues aggregating to Rs.95,580/-, that have not been deposited on account of matters pending before appropriate appellate are as under:

Sr. Name of Nature of the Amount Forum where Period to which No. statute Dues (Rs.) dispute is pending the amount Relates

1 Daman Sales Tax 95,580 Commissioner (Appeals) 92-95

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

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank

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

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

14. The Company has not dealt in or of 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.

15. The Company has not given guarantees for loans taken by others from bank.

16. As explained to us, the Company has not raised any further business loan.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short term basis which have been used for long term investment.

18. During the year, 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.

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

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

21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For R. U. JAIN & CO.

Chartered Accountants

R. U. JAIN

Place: Bangalore, Proprietor

Dated: 29th August, 2012 Membership No. 031037

---

Mar 31, 2010

We have audited the attached Balance sheet of PARAMOUNT COSMETICS (INDIA) LIMITED as at 31st March 2010 and the Profit and Loss Account for the year ended on that date annexed there to and CashFlow Statement of the Company for the year ended on that date. 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.

1. We conducted our audit in accordance with Auditing Standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statement. 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 the Management, as well as evaluating the overall financial presentation. We believe that our audit provides reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order 2003 ( as amended ) issued by the Central Government of India in terms of Sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 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 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 those books;

c) The Balance Sheet ,Profit and Loss Account and Cash Flow Statement dealt with by this report are in agree- ment with the Books of Accounts;

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

e) In our opinion, and based on information and explanations given to us, none of the Director are disqualified as on 31st March 2010 from being appointed as directors 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 together with the Significant Accounting Policies and other 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 principle generally accepted in India, subject to :

a) Provision for gratuity for Rs. 13,01,064/- is made for those employees who have completed five years of their service (Note 4 - Schedule 20).

b) Balance of Debtors and Creditors are subject to confirmation & reconciliation, any loss on account of these are undeterminable.

c) No provision is made for doubtful debts for Rs.13,57,582/- (Schedule 8)

d) Non compliance of Accounting Standard 22 for Deferred Tax, deferred tax assets are under stated by Rs.44,75,364/- (Note 14 Schedule 20)

i) In so far as related to the Balance Sheet, of the statement of affairs of the company as at 31st March 2010;

ii) In so far as it relates to the Profit & Loss Account, of the Profit of Company for the period ended on that date; and

iii) In so far as it relates to the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO AUDITORS REPORT Referred to in Paragraph 2 of our report of even date

1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year, in our opinion the frequency of verification needs to be increased.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inven- tories 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 has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

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. The Company has granted unsecured loans to one company covered in the register maintained under section 301 of the Companies Act 1956. In respect of the said loan, the maximum amount outstanding at any time during the year was Rs. 6,05,602/- and the year end balance of such loans aggregate to Rs. 6,05,602/-.

b. In our opinion and according to the information and explanations given to us, no interest is charged on the loan and other terms and conditions are not prima facie prejudicial to the interest of the Company.

c. In respect of the aforesaid loan, There is no stipulation about the repayment hence the clause iii (d) is not applicable. The said Loan is repayable on demand and there is no repayment Schedule.

d. In respect of the Loan given by the Company, the same is repayable on demand and therefore the question of overdue amount does not arise.

e. The Company has taken unsecured loans from two parties covered in the register maintained under section 301 of the Act. The maximum amount outstanding at any time during the year and the year-end balance of such loan aggregate to Rs.60,74,372/ - and Rs. 4,70,122/- respectively.

f. In our opinion and according to the information and explanations given to us, the rate of interest, wherever applicable and other terms and conditions are not prima facie prejudicial to the interest of the Company, there is no stipulation about the repayment of two of these loan hence clause (iii) (g) is 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, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956.

(a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been properly entered.

(b) According to the information and explanations given to us, the transactions of purchase of goods and materials and sales of goods, material and services, made in pursuance to contracts or arrangement entered in the registers maintained under Section 301 of the Companies Act, 1956 and aggregating during the year to Rs.5,00,000/- (Rupees Five lacs only) or more in respect of each party, have been made at prices which in our opinion are reasonable having regard to prevailing market prices for such goods, materials or services or prices at which similar transactions have been made with other parties as the case may be, since the purchases/sales are for branded goods, comparative prices are not available.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act and rules framed there under.

7. In our opinion, the companys present internal audit system needs to be strengthened having regard to the nature and size of its business.

8. The Central Government has not prescribed maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company.

9. In respect of statutory dues:

a. According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protec-

tion Fund, Employees State Insurance dues, Income-Tax, Sales-tax, Wealth Tax, Service Tax , Customs Duty, Excise Duty, Cess, FBT and other material statutory dues have not been regularly deposited with the appropriate authorities. According to the information and explanations given to us, Rs. 27,14,887/- undisputed amounts payable in respect of the aforesaid dues

were outstanding as at 31st March 2010 for a period of more than six months from the date of becoming payable, as per Annexure 1.

b. As at March,31,2010 there have been disputed Sales Tax dues aggregating to Rs.9,45,477/-, that have not been deposited on

account of matters pending before appropriate appellate are as under:

Sr. Name of Nature of the Amount Forum where Period to which

No. statute Dues Rs.) dispute is pending the amount

Sales Tax- relates

1. Daman Sales Tax 95,580 Commissioner (Appeals) 92-95

2. Guwahati - 1,23,192 Board of Revenue 99-00

3. Guwahati - 1,75,708 -do- 98-99

4. Guwahati - 2,50,797 -do- 97-98

5. Guwahati - 3,00,000 -do- 96-97

Total: 9,45,477

10. The Company has not incurred cash loss during the financial year covered by our audit and the immediately preceding financial year.

11. According to the records of the Company, the Company has settled loan account with G.S.F.C., and no outstanding balance.

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

13. In our opinion, the Company is not a chit fund or a niche/mutual benefit fund/ society. Therefore, clause 4(xiii) of the Compa- nies (Auditors Report) Order 2003 as amended is not applicable to the Company.

14. The Company has not dealt in or of trading in shares, securities, debentures and other investments. Accordingly, the provi- sions of Clause v(xiv) of the Companies (Auditors Report) order, 2003 are not applicable to the Company.

15. The Company has given guarantees for loans taken by others from bank. The same was cancelled on 12th May, 2009.

16. As explained to us, the Company has raised business loan for the purpose of products development and launching and it has been used for the said purpose.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short term basis which have been used for long term investment.

18. During the year, 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.

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

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

21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For R. U. JAIN & CO.

Chartered Accountants

R. U. JAIN Place : Bangalore, Proprietor

Dated: 30th August, 2010 Membership No. 031037