Auditor Report of Ultramarine & Pigments Ltd.

Mar 31, 2019

INDEPENDENT AUDITOR''S REPORT

To

The Members of Ultramarine & Pigments Limited

Report on the Financial Statements

1. Opinion

1.1 We have audited the financial statements of Ultramarine & Pigments Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2019, and the Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and Notes to the Financial Statements, including a Summary of Significant Accounting Policies and other explanatory information ( "the financial statements").

1.2 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, of the state of affairs of the Company as at March 31, 2019, and Profit, changes in equity and its cash flows for the year ended on that date

2 Basis for Opinion

2.1 We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

3 Key Audit Matters

3.1 Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined that there are no other key audit matters to be communicated in our report

4 Information Other than the Financial Statements and Auditor''s Report Thereon

4.1 The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in Board''s Report including Annexures to Board''s Report and Shareholder''s Information, but does not include the financial statements and our auditor''s report thereon.

4.2 Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

4.3 In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

4.4 If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

5 Responsibilities of Management and Those Charged with Governance for the Financial Statements

5.1 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, changes in equity 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

5.2 In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

5.3 Those Board of Directors are also responsible for overseeing the Company''s financial reporting process 6 Auditor''s Responsibilities for the Audit of the Financial Statements

6.1 Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

6.2 As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also

a. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

b. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

c. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

d. Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

e. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation

6.3 We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

6.4 We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

6.5 From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication

7 Report on Other Legal and Regulatory Requirements

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

7.2 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 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 it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, Statement of Changes in Equity 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 Indian Accounting Standards prescribed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting; and

g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirement of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) 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 does not have any pending litigations which would impact its financial position - Refer Note 37 to the financial statements.

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For Brahmayya & Co.
Chartered Accountants Firm''s registration number: 000511S
R. Nagendra Prasad
Place: Chennai Partner
Date: 15th May, 2019 Membership number: 203377

Annexure - ''A'' to Independent Auditors'' Report

[Referred to in paragraph 7.1 under ''Report on Other Legal and Regulatory requirements'' of our Report of even date]

On the basis of such checks as considered appropriate and in terms of the information and explanation furnished to us, we state as under:

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

(b) As explained to us, the company has a program of verification to cover all items of fixed assets in a phased manner which, in our opinion, is reasonable. Pursuant to the program, the management carried out the physical verification of the fixed assets during the year. The discrepancies noticed on such verification were not material;

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except in one case wherein a portion of land costing Rs 28,750/- for which the title of property in the name of the company as per revenue records and in occupation of a third party claiming the title and the company has taken steps to protect its title and the case is pending disposal.

(ii) As explained to us, the inventories have been physically verified during the year by the management. The discrepancies noticed on physical verification of the same were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account;

(iii) In our opinion and according to the information and explanations given to us, the company has not granted any loans secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, clauses (iiia), (iiib) and (iiic) of paragraph 3 of the Order are not applicable to the company for the year;

(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees and securities granted in respect of which the provisions of section 185 and 186 of the Act are applicable.

(v) The Company has not accepted any deposit to which the provisions of Sections 73 to 76 of the Act and The Companies (Acceptance of Deposits) Rules, 2014 would apply. As informed to us, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal related to compliance with above provisions.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under section 148(1) of the Act and are of the opinion that prima-facie, the prescribed accounts and cost records have been made and maintained. We have not, however, made a detailed examination of the cost records with a view to determining whether they are accurate or complete;

(vii) (a) According to the information and explanations given to us and the 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, Goods and Services Tax, duty of customs, duty of excise, value added tax, cess and other statutory dues and there are no undisputed statutory dues outstanding as at 31st March 2019, for a period of more than six months from the date they became payable.

(b) According to the records of the company and information and explanations given to us, there are no outstanding amounts in respect of service tax, goods and services tax that have not been deposited with the appropriate authorities on account of any dispute. Disputed income tax, value added tax, duty of customs, duty of excise that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the Statute	Nature of Dues	Amount in Rs Lakhs	Year to which it relates	Forum where dispute is pending
Income Tax Act, 1961	Income tax	0.51	Financial Year 2005-06	Commissioner of Income Tax (Appeals), Mumbai
Income Tax Act, 1961	Income tax	30.36	Financial Year 2009-10	Commissioner of Income Tax (Appeals), Mumbai
Income Tax Act, 1961	Income tax	106.80	Financial Year 2011-12	Commissioner of Income Tax (Appeals), Mumbai
Tamil Nadu Value Added Tax Act, 2006	Tamil Nadu Value Added Tax	12.60	Financial Year 2012-13, 2013-14 and 2015-16	Appellate Deputy Commissioner of Commercial Taxes, Chennai
Tamil Nadu Value Added Tax Act, 2006	Tamil Nadu Value Added Tax	8.41	Financial Year 2013-14 & 2014-15	Joint Commissioner of Commercial Taxes, Chennai

Amounts paid under protest and not charged to Statement of Profit and Loss has not been included above. [Refer Note 37 to the financial statements].

(viii) According to the information and explanations given to us, the company did not avail any loan or borrowings from banks or financial institutions and also did not have any debentures outstanding during the year under report. Accordingly, the provisions of clause 3(viii) of the Order are not applicable;

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and the company has not availed any term loans during the year and accordingly, the provisions of clause 3(ix) of the Order are not applicable.

(x) To the best of our knowledge and belief and according to the information and explanations given to us, there have been no cases of fraud by the company or on the company by its officers or employees has been noticed or reported during the year under report.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

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

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

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

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

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

	For Brahmayya & Co.
	Chartered Accountants
	Firm''s registration number: 000511S
	R. Nagendra Prasad
Place: Chennai	Partner
Date: 15th May, 2019	Membership number: 203377

ANNEXURE - "B" TO AUDITORS'' REPORT

Referred to in paragraph 7.2(f) of our report of even date

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

1. We have audited the internal financial controls over financial reporting of Ultramarine & Pigments Limited ("the Company") as of 31 March 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

	For Brahmayya & Co.
	Chartered Accountants
	Firm''s registration number: 000511S
	R. Nagendra Prasad
	Partner
Date: 15th May, 2019	Membership number: 203377

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Mar 31, 2018

Report on the Financial Statements

1. We have audited the accompanying financial statements of Ultramarine & Pigments Limited (“the Company”), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss, Statement of Changes in Equity and the Statement of Cash Flows 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 Board of Directors is responsible for the matters stated in Section 134(5) of the Act (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

4. 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.

5. 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 internal financial control 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

6. 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

7. 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, of the state of affairs of the Company as at 31 March 2018 and its profits, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

(b) In our opinion proper books of 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, the Statement of Profit and Loss, Statement of Changes in Equity and the Statement of Cash Flow 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 Companies (Indian Accounting Standards) Rules, 2015;

(e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164 (2) of the Act; and

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure - “B”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting; and

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

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 37 to the financial statements;

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

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

Annexure - ‘A’ to Independent Auditors’ Report

[Referred to in paragraph 8 under ‘Report on Other Legal and Regulatory requirements’ of our Report of even date]

On the basis of such checks as considered appropriate and in terms of the information and explanation furnished to us, we state as under:

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

(b) As explained to us, the company has a program of verification to cover all items of fixed assets in a phased manner which, in our opinion, is reasonable. Pursuant to the program, the management carried out the physical verification of the fixed assets during the year. The discrepancies noticed on such verification were not material;

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except in one case wherein a portion of land costing Rs. 28,750/- for which the title of property in the name of the company as per revenue records and in occupation of a third party claiming the title and the company has taken steps to protect its title and the case is pending disposal.

Immovable properties of land whose title deeds have been pledged with banks as security for term loans, are held in the name of the company based on the Mortgage deed executed between the Bank and the Company for which confirmations have been obtained from respective bankers.

(ii) As explained to us, the inventories have been physically verified during the year by the management. The discrepancies noticed on physical verification of the same were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account;

(iii) In our opinion and according to the information and explanations given to us, the company has not granted any loans secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, clauses (iiia), (iiib) and (iiic) of paragraph 3 of the Order are not applicable to the company for the year;

(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees and securities granted in respect of which the provisions of section 185 and 186 of the Act are applicable.

(v) The Company has not accepted any deposit to which the provisions of Sections 73 to 76 of the Act and The Companies (Acceptance of Deposits) Rules, 2014 would apply. As informed to us, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal related to compliance with above provisions.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under section 148(1) of the Act and are of the opinion that prima-facie, the prescribed accounts and cost records have been made and maintained. We have not, however, made a detailed examination of the cost records with a view to determining whether they are accurate or complete;

(vii) (a) According to the information and explanations given to us and the 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, Goods and Services Tax, duty of customs, duty of excise, value added tax, cess and other statutory dues and there are no undisputed statutory dues outstanding as at 31st March 2018, for a period of more than six months from the date they became payable.

(b) According to the records of the company and information and explanations given to us, there are no outstanding amounts in respect of service tax, goods and services tax that have not been deposited with the appropriate authorities on account of any dispute. Disputed income tax, value added tax, duty of customs, duty of excise that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the Statute	Nature of Dues	Amount in Rs.Lakhs	Year to which it relates	Forum where dispute is pending
Income Tax Act, 1961	Income tax	0.51	Financial Year 2005-06	Commissioner of Income Tax (Appeals), Mumbai
Income Tax Act, 1961	Income tax	30.36	Financial Year 2009-10	Commissioner of Income Tax (Appeals), Mumbai
Income Tax Act, 1961	Income tax	106.80	Financial Year 2011-12	Commissioner of Income Tax (Appeals), Mumbai
Tamil Nadu Value Added Tax Act, 2006	Tamil Nadu Value Added Tax	8.41	Financial Years 2013-14 and 2014-15	Joint Commissioner of Commercial Taxes, Chennai
Tamil Nadu Value Added Tax Act, 2006	Tamil Nadu Value Added Tax	15.46	Financial Year 2012-13, 2013-14 and 2015-16	Appellate Deputy Commissioner of Commercial Taxes, Chennai
Central Excise Act, 1944	Excise Duty	29.37	Financial Year 2007-08	Customs, Excise and Service Tax Appellate Tribunal, Chennai

Amounts paid under protest and not charged to Statement of Profit and Loss has not been included above. [Refer Note 37] to the financial statements].

(viii) According to the information and explanations given to us, the company did not avail any loan or borrowings from banks or financial institutions and also did not have any debentures outstanding during the year under report. Accordingly, the provisions of clause 3(viii) of the Order are not applicable;

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and the company has not availed any term loans during the year and accordingly, the provisions of clause 3(ix) of the Order are not applicable.

(x) To the best of our knowledge and belief and according to the information and explanations given to us, there have been no cases of fraud by the company or on the company by its officers or employees has been noticed or reported during the year under report.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

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

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

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

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

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

ANNEXURE - “B” TO AUDITORS’ REPORT

Referred to in paragraph 9 (f) of our report of even date

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

1. We have audited the internal financial controls over financial reporting of Ultramarine & Pigments Limited (“the Company”) as of 31 March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

6. A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Brahmayya & Co.

Chartered Accountants

Firm’s registration number: 000511S

R. Nagendra Prasad

Place: Chennai Partner

Date: 30th May, 2018 Membership number: 203377

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Mar 31, 2015

We have audited the accompanying financial statements of Ultramarine & Pigments Limited ("the Company"), which comprise the Balance Sheet as at 31 March 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 Act ("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 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 thereunder.

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.

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 internal financial control 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the 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 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, of the state of affairs of the Company as at 31 March 2015 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the notes to the financial statements:

We refer to Note 7.6 to the financial statements regarding appointment of and remuneration of Rs.1,33,054 paid to Joint Managing Director during the year as approved by the Board of Directors. The same is subject to ratification and approval by members in ensuing annual general meeting.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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 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 it appears from our examination of those books;

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

d) In our opinion, the 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 the written representations received from the directors as on 31 March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act; 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 4.1 to the financial statements;

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

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

Annexure to Independent Auditor's Report

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory requirements' of our Report of even date]

On the basis of such checks as considered appropriate and in terms of the information and explanation furnished to us, we state as under:

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

(b) As explained to us, the management carries out the physical verification of the fixed assets at reasonable intervals. The discrepancies noticed on such verification were not material;

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

(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) In our opinion, the Company is maintaining proper records of inventory and the discrepancies noticed on physical verification of the same were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account;

(iii) The Company has not granted or accepted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act;

(iv) In our opinion, 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 inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system;

(v) The Company has not accepted any deposit to which the provisions of Sections 73 to 76 of the Act and The Companies (Acceptance of Deposits) Rules, 2014 would apply. As informed to us, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal related to compliance with above provisions.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under section 148(1) of the Act and are of the opinion that prima-facie, the prescribed accounts and cost records have been made and maintained. We have not, however, made a detailed examination of the cost records with a view to determining whether they are accurate or complete;

(vii) (a) According to the information and explanations given to us and the 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, wealth-tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues and there are no undisputed statutory dues outstanding as at 31st March 2015, for a period of more than six months from the date they became payable.

(b) According to the records of the company and information and explanations given to us, there are no outstanding amounts in respect of duty of customs, wealth tax, duty of excise and cess that have not been deposited with the appropriate authorities on account of any dispute. Disputed income tax, value added tax that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the Nature of Amount Statute the dues (Rs.)

Income tax Act, Income-tax 51,434 1961

Income tax Act, Income-tax 30,35,744 1961

Income tax Act, Income-tax 1,54,27,120 1961

Tamilnadu Value Tamilnadu 4,12,758 Added Tax, 2006 Value Added Tax

Tamilnadu Value Tamilnadu 8,40,846 Added Tax, 2006 Value Added Tax

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

Income tax Act, Financial Commissioner of Incometax 1961 Year 2005-06 (Appeal), Mumbai

Income tax Act, Financial Commissioner of Income tax 1961 Year 2009-10 (Appeal), Mumbai

Income tax Act, Financial Commissioner of Income tax 1961 Year 2011-12 (Appeal), Mumbai

Tamilnadu Value Financial Appellate Deputy Commissioner Added Tax, 2006 Year 2012-13 of Commercial Taxes, Chennai

Tamilnadu Value Financial Joint Commissioner of Added Tax, 2006 Year 2013-14 Commercial Taxes, Chennai

Amounts paid under protest and not charged to Statement of Profit and Loss has not been included above. [Refer Note 4.1 (c)(i)] to the financial statements].

(c) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year;

(ix) The Company has not defaulted in repayment of any dues to financial institutions and banks;

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

(xi) In our opinion the term loans have been applied for the purpose for which they were obtained;

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For CNK & Associates LLP For Brahmayya & Co. Chartered Accountants Chartered Accountants Firm's registration Firm's registration number: 101961W number: 000511S

H. V. Kishnadwala R. Nagendra Prasad Partner Partner Membership number: 37391 Membership number: 203377 Mumbai, May 27, 2015 Mumbai, May 27, 2015

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Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Ultramarine & Pigments Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and 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 posit on, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-sect on (3C) of sect on 211 of the Companies Act, 1956 (''the Act'') [which continue to be applicable in respect of sect on 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013, issued by the Ministry of Corporate Affairs]. 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 entry''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:

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

(b) in the case of the 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, 2003 (''the Order'') issued by the Central Government of India in terms of sub-sect on (4A) of sect on 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 sect on 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 sub-sect on (3C) of sect on 211 of the Companies Act, 1956 [which continue to be applicable in respect of sect on 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013, issued by the Ministry of Corporate Affairs];

e) On the basis of writ en representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-sect on (1) of sect on 274 of the Companies Act, 1956.

Annexure to Independent Auditor''s Report

Referred in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.

On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we state as under:

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

1 (b) As explained to us, the management carries out the physical verification of the fixed assets at reasonable intervals. The discrepancies noticed on such verification, which were not material, have been appropriately dealt with in the financial statements;

1 (c) The fixed assets disposed off by the Company during the year were not substantial and therefore does not affect the going concern assumption;

2 (a) As explained to us inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable;

2 (b) In our opinion and as explained 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;

2 (c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on physical verification between physicals stocks and the book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account;

3 (a) As per the information and explanations given to us, the Company has not granted nor accepted any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under sect on 301 of the Companies Act, 1956. Therefore, the provisions of clause 3(b) to 3(g) of the paragraph 4 of the Order are not applicable to the Company.

4 In our opinion and according to information and explanation 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 inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books of account, and as explained to us, no major weakness has been noticed in internal control system in respect of these areas and we have not observed any continuing failure to correct major weakness in the same;

5 (a) 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 the transactions that need to be entered into the register maintained under Sect on 301 of the Companies Act, 1956 have been so entered;

5 (b) To the best of our knowledge and belief and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the Register maintained under sect on 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant t me;

6 The Company has not accepted any deposits from the public accordingly, clause (vi) of paragraph 4 of the Order is not applicable to the Company;

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

8 We have broadly reviewed the books of account maintained by the Company pursuant to the Companies (Cost Account ng Records) Rules, 2011 prescribed by the Central Government under sect on 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima-facie, the prescribed accounts and cost records have been made and maintained. We have not, however, made a detailed examination of the cost records with a view to determining whether they are accurate or complete;

9 (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protect on Fund, Employees'' State Insurance, Income-tax, Sales-tax / VAT, Wealth Tax, Service tax Custom duty, Excise-duty, Cess and other material statutory dues applicable to it and there are no undisputed statutory dues outstanding as at 31st March 2014, for a period of more than six months from the date they became payable;

9 (b) Disputed statutory dues that have not been deposited on account of disputed matters in respect of Income Tax pending before appropriate authorities are as under:

Name of the Statute Nature of the Amount (Rs.) Years to which Forum where dispute is dues the amount pending relates

Income Tax Act, 1961 Income Tax 51,434 Assessment Commissioner of Income Tax, Year 2006-07 Appeals

Income Tax Act, 1961 Income Tax *32,02,733 Assessment Commissioner of Income Tax, Year 2009-10 Appeals

Income Tax Act, 1961 Income Tax *1,22,83,636 Assessment Commissioner of Income Tax, Year 2010-11 Appeals

Tamil Nadu Value Tamil Nadu VAT 10,15,810 Financial Year Appellate Deputy

Added Tax, 2006 2012-13 Commissioner of Commercial Taxes, Chennai

*Amounts paid under protest and not charged to profit and loss statement have not been included above. [Refer Note No. 4.1(c) of Notes forming part of Financial Statements]

10 The Company does not have any accumulated losses as on 31st March 2014 and has not incurred any cash losses during the financial year and in the immediately preceding financial year;

11 According to the books of account examined by us and as explained to us, the Company has not defaulted in repayment of any dues to financial institutions or banks;

12 Based on our examination of the records and as explained 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;

13 In our opinion, and as per information and explanation provided to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of the paragraph 4 of the Order are not applicable to the Company;

14 During the year, the Company does not have any transactions in respect of dealing and trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the Company have been held by the Company in its own name;

15 According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions;

16 According to the information and explanations given to us, term loans taken by the Company, has been applied for the purpose for which loans were obtained;

17 As explained to us and on an overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on short-term basis which have been used for long-term investment by the Company;

18 During the year the Company has not made any preferential allotment of shares to the parties or companies covered in the register maintained under sect on 301 of the Companies Act, 1956;

19 During the year the Company has not issued any debentures accordingly, the clause (xix) of the paragraph 4 of the Order is not applicable to the Company;

20 The Company has not raised any money by way of public issues during the year. Therefore, the provisions of clause (xx) of the paragraph 4 of the Order are not applicable to the Company;

21 As per the information and explanations given by the management to us, we report that no fraud on or by the Company has been noticed or reported during the year.



For and on behalf of

CNK & Associates LLP,

Chartered Accountants

Firm Registration No.: 101961W



H. V. Kishnadwala

Partner

Membership No.: 037391



Chennai

27th May, 2014

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Mar 31, 2013

We have audited the accompanying financial statements of Ultramarine & Pigments Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and 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:

(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 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, 2003 (''the Order'') issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 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 sub-section (3C) of section 211 of the Companies Act, 1956;

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

Annexure to Independent Auditor''s Report

Referred in Paragraph 1 under the heading of "Report on Other LegaL and ReguLatory Requirements" of our report of even date.

On the basis of such checks as considered appropriate and in terms of the information and expLanations given to us, we state as under:

1 (a) The Company has maintained proper records showing fuLL particuLars, incLuding quantitative detaiLs and situation of the fixed assets;

1 (b) As expLained to us, the management at reasonabLe intervaLs carries out the physicaL verification of the fixed assets. The discrepancies noticed on such verification, which were not materiaL, have been appropriateLy deaLt with in the financiaL statements;

1 (c) The fixed assets disposed off by the Company during the year were not substantiaL and therefore does not affect the going concern assumption;

2 (a) As expLained to us inventories have been physicaLLy verified during the year by the management. In our opinion, having regard to the nature and Location of stocks, the frequency of the physicaL verification is reasonabLe;

2 (b) In our opinion and as expLained 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;

2 (c) In our opinion and according to the information and expLanation given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on physicaL verification between physicaLs stocks and the book records were not materiaL in reLation to the operations of the Company and the same have been properLy deaLt with in the books of account;

3 (a) As per the information and expLanations given to us, the Company has granted unsecured Loans to a party covered in the register maintained under section 301 of the Companies Act, 1956. DetaiLs of such unsecured Loan granted is as under:

Balance as on Maximum balance outstanding Name of the Party 31 March 2013 (Rs.) during the year (Rs.)

Thirumalai Chemicals Limited Nil 13,642,774

3 (b) In case of the aforesaid unsecured Loans granted to a company covered in the register maintained under Section 301 of the Companies Act, 1956, the rate of interest and the other terms and conditions are not prima-facie prejudiciaL to the interests of the Company;

3 (c) In case of the aforesaid unsecured Loans granted to a company covered in the register maintained under Section 301 of the Companies Act, 1956, the repayment of principaL amount and interest is reguLar;

3 (d) There is no overdue amount of Loans, incLuding interest, granted to a company covered in the register maintained under Section 301 of the Companies Act, 1956;

3 (e) As per the information and expLanations given to us, the Company has not accepted secured or unsecured Loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of cLause 3(f) and 3(g) of the paragraph 4 of the Order are not appLicabLe to the Company

4 In our opinion and according to information and explanation 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 inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books of account, and as explained to us, no major weaknesses has been noticed in internal control system in respect of these areas and we have not observed any continuing failure to correct major weakness in the same;

5 (a) 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 the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered;

5 (b) To the best of our knowledge and belief and according to the information and explanation given to us, the trans actions made in pursuance of contracts or arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time;

6 The Company has not accepted any deposits from the public accordingly, clause (vi) of paragraph 4 of the Order is not applicable to the Company;

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

8 We have broadly reviewed the books of account maintained by the Company pursuant to the Companies (Cost Ac- counting Records) Rules, 2011 prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima-facie, the prescribed accounts and cost records have been made and maintained. We have not, however, made a detailed examination of the cost records with a view to determining whether they are accurate or complete;

9 (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service tax Custom duty, Excise-duty, Cess and other material statutory dues applicable to it and there are no undisputed statutory dues outstanding as at 31st March 2013, for a period of more than six months from the date they became payable;

9 (b) Disputed statutory dues that have not been deposited on account of disputed matters in respect of Income Tax pending before appropriate authorities are as under:

Nature of Amount Years to which the Forum where dispute Name of the Statute the dues (Rs.) amount relates is pending

Assessment Year Commissioner of Income Tax, Income Tax Act, 1961 Income Tax *51,434 2006-07 Appeals

Assessment Year Commissioner of Income Tax, Income Tax Act, 1961 Income Tax *30,35,774 2010-11 Appeals

*Amounts paid under protest and not charged to profit and loss statement have not been included above.

[Refer Note No. 4.1(c) of Notes forming part of Financial Statements]

10 The Company does not have any accumulated losses as on 31st March 2013 and has not incurred any cash losses during the financial year and in the immediately preceding financial year;

11 According to the books of account examined by us and as explained to us, the Company has not defaulted in repayment of any dues to financial institutions or banks;

12 Based on our examination of the records and as explained 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;

13 In our opinion, and as per information and explanation provided to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of the paragraph 4 of the Order are not applicable to the Company;

14 During the year, the Company does not have any transactions in respect of dealing and trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the Company have been held by the Company in its own name;

15 According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions;

16 According to the information and explanations given to us, term loans taken by the Company, has been applied for the purpose for which loans were obtained;

17 As explained to us and on an overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on short-term basis which have been used for long-term investment by the Company;

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

19 During the year the Company has not issued any debentures; Accordingly clause (xix) of the paragraph 4 of the Order is not applicable to the Company;

20 The Company has not raised any money by way of public issues during the year. Therefore, the provisions of clause (xx) of the paragraph 4 of the Order are not applicable to the Company;

21 As per the information and explanations given by the management to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of

CONTRACTOR NAYAK & KISHNADWALA

Chartered Accountants

Firm Registration No. : 101961W

H. V. Kishnadwala

Partner, Membership No. 037391

Mumbai, 24th May, 2013

---

Mar 31, 2012

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

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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in 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 (Auditor's Report) Order, 2003 (hereinafter referred to as "the Order"), 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 explanations given to us during the course of the audit, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments 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 Statement 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 Balance Sheet, Profit and Loss Statement and the Cash Flow Statement comply with the mandatory Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

e) 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 Section 274(1)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with the Notes to Financial Statements in Schedule 19, 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:

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

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

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

Statement referred to in paragraph 3 of the Auditors' Report of even date to the members of Ultramarine & Pigments Limited on the accounts for the year ended 31st March 2012

On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we state as under:

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

1 (b) As explained to us, the management at reasonable intervals carries out the physical verification of the fixed assets. The discrepancies noticed on such verification, which were not material, have been appropriately dealt with in the financial statements;

1 (c) The fixed assets disposed off by the company during the year were not substantial and therefore does not affect the going concern assumption;

2 (a) As explained to us, inventories except Stock lying with third parties, confirmation for which have been obtained,

have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable;

2 (b) In our opinion and as explained 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;

2 (c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on physical verification between physicals stocks and the book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account;

3 (a) As per the information and explanations given to us, the Company has granted unsecured loans to a Company covered in the register maintained under section 301 of the Companies Act, 1956. Details of such unsecured loan granted is as under:

Balance as on Maximum balance outstanding Name of the Party 31 March 2012(Rs) during the year (Rs)

Thirumalai Chemicals Limited Nil 131,149,352

3 (b) In case of the aforesaid unsecured loans granted to a Company covered in the register maintained under Section 301 of the Companies Act, 1956, the rate of interest and the other terms and conditions are not prima-facie prejudicial to the interests of the Company;

3 (c) In case of the aforesaid unsecured loans granted to a Company covered in the register maintained under Section 301 of the Companies Act, 1956, the repayment of principal amount and interest is regular;

3 (d) There is no overdue amount of loans, including interest, granted to a Company covered in the register maintained under Section 301 of the Companies Act, 1956;

3 (e) As per the information and explanations given to us, the Company has not accepted secured or unsecured loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 3(f) and 3 (g) of the paragraph 4 of the Order are not applicable to the Company

4 In our opinion and according to information and explanation 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 inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books of account, and as explained to us, no major weaknesses has been noticed in internal control system in respect of these areas and we have not observed any continuing failure to correct major weakness in the same;

5 (a) 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 the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered;

5 (b) To the best of our knowledge and belief and according to the information and explanation given to us, the trans actions made in pursuance of contracts or arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs 5,00,000 in respect of each party during the year have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time;

6 The Company has not accepted any deposits from the public accordingly, Clause (vi) of paragraph 4 of the Order are not applicable to the company for the current year;

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

8 We have broadly reviewed the books of account maintained by the company in respect of manufacture of detergents pursuant to the Order made by the Central Government for the maintenance of cost records prescribed under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete;

9 (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service tax Custom duty, Excise-duty, Cess and other material statutory dues applicable to it and there are no undisputed statutory dues outstanding as at 31st March 2012, for a period of more than six months from the date they became payable;

9 (b) Disputed statutory dues that have not been deposited on account of disputed matters in respect of Income Tax and Excise-duty pending before appropriate authorities are as under:

Nature of Amount Years to which the Name of the Statute Forum where dispute is the dues (Rs) amount relates Income Assessment Year Commissioner of Income Income Tax Act, 1961 *51,434 Tax 2006-2007 Tax, Appeals

Income Assessment Year Commissioner of Income Income Tax Act, 1961 Income *13,764 ,095 Tax 2008-2009 Tax, Appeals

*Amounts paid under protest and not charged to profit and loss statement have not been included above.

[Refer Note No. 4.1(c) of Notes forming part of Financial Statements]

The Central Excise Excise 2,118, 944 2007-2008 The Commissioner (Appeals), Act,1944 Duty 2007-2008 Central Excise

The Central Excise The Commissioner (Appeals), Act, 1944 Penalty 3,437, 170 Central Excise

10 The company does not have any accumulated losses as on 31st March 2012 and has not incurred any cash losses during the financial year and in the immediately preceding financial year;

11 According to the books of account examined by us and as explained to us, the Company has not defaulted in repayment of any dues to financial institutions or banks;

12 Based on our examination of the records and as explained 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;

13 In our opinion, and as per information and explanation provided to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of the paragraph 4 of the Order are not applicable to the Company;

14 During the year, the Company does not have any transactions in respect of dealing and trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the Company have been held by the Company in its own name;

15 According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions;

16 According to the information and explanations given to us, term loans taken by the Company during the year, has been applied for the purpose for which loans were obtained;

17 As explained to us and on an overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on short-term basis which have been used for long-term investment by the Company;

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

19 During the year the Company has not issued any debentures; Accordingly clause (xix) of the paragraph 4 of the Order is not applicable to the Company;

20 The Company has not raised any money by way of public issues during the year. Therefore, the provisions of clause (xx) of the paragraph 4 of the Order is not applicable to the Company;

21 As per the information and explanations given by the management to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of

CONTRACTOR NAYAK & KISHNADWALA

Chartered Accountants

Firm Registration No. : 101961W

H. V. Kishnadwala

Partner, Membership No. 37391

Mumbai, May 30, 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Ultramarine & Pigments Limited as at 31st March 2011 (hereinafter referred to as “the Company"), the related Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in 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 (hereinafter referred to as “the Order"), 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 explanations given to us during the course of the audit, we enclose in the Annexure hereto a statement on the matters specified in Paragraphs 4 and 5 of the Order.

4. Further to our comments 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 Balance Sheet, Profit and Loss Account and the Cash Flow Statement comply with the mandatory Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

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

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 Notes to Accounts in Schedule 19, 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:

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

b. In the case of the Profit and Loss Account, of the Profit for the year ended on that date,

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

Statement referred to in paragraph 3 of the Auditors Report of even date to the members of Ultramarine & Pigments Limited on the accounts for the year ended 31st March 2011

On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we state as under:

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

1 (b) As explained to us, the management at reasonable intervals carries out the physical verification of the fixed assets. The discrepancies noticed on such verification, which were not material, have been appropriately dealt with in the accounts;

1 (c) The fixed assets disposed off by the company during the year were not substantial and therefore does not affect the

going concern assumption;

2 (a) As explained to us, inventories except goods in transit, and Stock lying with third parties, confirmation for which

have been obtained, have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable;

2 (b) In our opinion and as explained to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of tie Company and the nature of its business;

2 (c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper

records of inventory and the discrepancies noticed on physical verification between physicals stocks and the book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account;

3 (a) As per the information and explanations given to us, the Company has granted unsecured loans to a Company

covered in the register maintained under section 301 of the Companies Act, 1956. Details of such unsecured loan granted is as under:

Name of Party Balance as on Maximum balance outstanding 31 March 2011 during the year (Rs.) (Rs.)

Thirumalai Chemicals Limited Nil 211,287,864

3 (b) In case of the aforesaid unsecured loans granted to a Company covered in the register maintained under Section 301 of the Companies Act, 1956, the rate of interest and the other terms and conditions are not prima-facie prejudicial to the interests of the Company;

3 (c) In case of the aforesaid unsecured loans granted to a Company covered in the register maintained under Section 301 of the Companies Act, 1956, the repayment of principal amount and interest is regular;

3 (d) In case of the aforesaid unsecured loans granted to a Company covered in the register maintained under Section 301 of the Companies Act, 1956, the company is taking reasonable steps for the timely recovery of the principal and interest;

3 (e) As per the information and explanations given to us, the Company has not accepted unsecured loans from companies,

firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 3(f) and 3(g) of the paragraph 4 of the Order are not applicable to the Company.

4 In our opinion and according to information and explanation 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 inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books of account, and as explained to us, no major weaknesses has been noticed in internal control system in respect of these areas and we have not observed any continuing failure to correct major weakness in the same;

5 (a) 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 the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered;

5 (b) In respect of contractual arrangements entered in the Register maintained in pursuance of section 301 of the Companies

Act, 1956 and to the best of our knowledge and belief and according to the information and explanation given to us, where each of such transactions made in pursuance of contracts or arrangements, is in excess of Rs.5,00,000 in respect of each party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time;

6 The Company has not accepted any deposits from the public Accordingly, Clause (vi) of paragraph 4 of the Order are not applicable to the company for the current year;

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

8 We have broadly reviewed the books of account maintained by the company in respect of manufacture of detergents pursuant to the Order made by the Central Government for the maintenance of cost records prescribed under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete;

9 (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund,Employees State Insurance,Income-tax, Sales-tax, Wealth Tax, Service tax, Custom duty, Excise-duty, Cess and any other statutory dues and there are no undisputed statutory dues outstanding as at 31st March 2011, for a period of more than six months from the date they became payable;

9 (b) Disputed statutory dues that have not been deposited on account of disputed matters in respect of Income Tax and

Excise-duty pending before appropriate authorities are as under:

Name of Nature of Amount Year to which Forum where dispute is the Statute the dues (Rs.) the amount relates

Income Tax Act, Income Tax *51,434 Assessment Year Commissioner of Income Tax, 1961 2006-2007 Appeals

Income Tax Act, Income Tax *29,764,095 Assessment Year Commissioner of Income Tax, 1961 2008-2009 Appeals

*Amounts paid under protest and not charged to profit and loss account have not been included above. [Refer Notes 2(i) of Schedule 19]

The Central Excise Excise Duty 3,437,170 2007-2008 The Commissioner (Appeals), Act, 1944 Penalty Central Excise

The Central Excise Penalty 3,437,170 2007-2008 The Commissioner (Appeals), Act, 1944 Central Excise

10 The company does not have any accumulated losses as on 31st March 2011 and has not incurred any cash losses during the financial year and in the immediately preceding financial year;

11 According to the books of account examined by us and as explained to us, the Company has not defaulted in repayment of any dues to financial institutions, or banks;

12 Based on our examination of the records and as explained 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;

13 In our opinion, and as per information and explanation provided to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of the paragraph 4 of the Order are not applicable to the Company;

14 During the year, the Company does not have any in transactions respect of dealing and trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the Company have been held by the Company in its own name;

15 According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions;

16 According to the information and explanations given to us, term loans taken by the Company during the year, has been applied for the purpose for which loans were obtained;

17 As explained to us and on an overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on short-term basis which have been used for long-term investment by the Company;

18 The Company has not made any preferential allotment of shares to the parties or companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year;

19 During the year the Company has not issued any debentures; Therefore the provisions of clause (xix) of the paragraph 4 of the Order are not applicable to the Company;

20 The Company has not raised any money by way of public issues during the year. Therefore, the provisions of clause (xx) of the paragraph 4 of the Order are not applicable to the Company;

21 As per the information and explanations given by the management to us, except for one instance of fraud on the Company by its employees involving misappropriation of stock that resulted in a loss of Rs. 666,214 and out of which Rs. 350,000 has been recovered, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of Contractor, Nayak & Kishnadwala Chartered Accountants Firm Registration No. : 101961W

H. V. Kishnadwala Partner, Membership No. 37391

Mumbai, May 26, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Ultramarine & Pigments Limited as at 31st March 2010, the related Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in 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 explanations given to us during the course of the audit, we enclose in the Annexure hereto a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

4. Attention is drawn to Note 27 of Schedule 19, wherein it is mentioned that the Company has pursuant to the order of the Honble High Court of Bombay adjusted the value of investment in shares of TCL Industries (Malaysia) Sdn Bhd Rs. 89,800,000 against the balance in General Reserve and other Capital Reserves;

5. Further to our comments 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 Balance Sheet, Profit and Loss Account and the Cash Flow Statement comply with the mandatory Accounting Standards referred to in Section 211 (3C) of the Companies Act. 1956.

e) 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 31st March 2010, from being appointed as a director in terms of Section 274(l)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Notes to Accounts in Schedule 19 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:

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

b. In the case of the Profit and Loss Account, of the Profit for the year ended on that date,

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

Statement referred to in. paragraph 3 of the Auditors Report of even date to the Members of Ultramarine & Pigments Limited on the accounts for the year ended 31st March 2010

On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we state as under:

1. (a) The company is maintaining proper records showing full particulars including quantitative details and situation

of the fixed assets;

(b) As explained to us, the management at reasonable intervals carries out the physical verification of the fixed assets. The discrepancies noticed on such verification, which were not material, have been appropriately dealt with in the accounts;

(c) The fixed assets disposed off by the company during the year were not substantial and therefore does not affect the going concern assumption;

2. (a) As explained to us, the inventories have been physically verified during the year by the management. In our

opinion, having* regard to the nature and location of stocks, the frequency of the physical verification is reasonable;

Os) In our opinion and as explained to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of tie Company and the nature of its business;

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

3. (a) As per the information and explanations given to us, the Company had granted unsecured loans to a Company

covered in the register maintained under section 301 of the Companies Act, 1956. The details of such unsecured loans granted are as under:

Name of Party Balance as on Maximum balance outstanding 31 March, 2010 during the year (Rs.) (RsJ

Thirumalai Chemicals Limited NIL 106,796,775







(b) In case of the aforesaid unsecured loans granted to a Company covered in the register maintained under Section 301 of the Companies Act, 1956, the rate of interest and the other terms and conditions are not prtma-facie prejudicial to the interests of the Company;

(c) In case of the aforesaid unsecured loans granted to a Company covered in the register maintained under Section 301 of the Companies Act, 1956, the repayment of principal amount and interest is regular;

(d) In case of the aforesaid unsecured loans granted to a Company covered in the register maintained under Section 301 of the Companies Act, 1956, the company had taken reasonable steps for the timely recovery of the principal and interest;

(e) As per the information and explanations given to us, the Company had accepted unsecured loans from Companies covered in the register maintained under section 301 of the Companies Act, 1956. The details of such unsecured loans granted are as under:

Name of Party Balance as on Maximum balance outstanding 31 March, 2010 during the year (Rs) (Rs) Lapiz Online Private Limited Nil 44,60,380





(f) In our opinion, other terms and conditions of aforesaid interest free unsecured loans taken from a Company covered in the register maintained under Section 301 are prima facie not prejudicial to the interests of the company.

(g) In case of the aforesaid unsecured loan taken from a Company covered in the register maintained under Section 301 of the Companies Act, 1956, the company had taken reasonable steps for the payment of the principal and interest, where applicable;

4. In our opinion and as explained 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 and services. Further, on the basis of our examination of the books of account, and as explained to us, no major weaknesses in the internal control systems have been noticed and there is no continuing failure in the same:

5. (a) 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 the transactions that need to be entered into the register maintained under Section 301 have been so entered;

(b) In our opinion and as explained to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under" Section 301 are reasonable having regard to the prevailing market prices at the relevant time;

6. The company has not accepted any deposits from the public during the year nor are there any outstanding deposits. Accordingly, Clause 6 of paragraph 4 of the Order are not applicable to the company for the current year;

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

8. We have broadly reviewed the books of account maintained by the company in respect of manufacture of detergents pursuant to the order made by the Central Government for the maintenance of cost records prescribed under section 209(l)(d) of the Companies Act, 1956 and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete;

9. (a) According to the information and explanations given to us and the records examined by us, the Company is regular

in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, custom duty, excise-duty, cess and other statutory dues and there are no undisputed statutory dues outstanding as at 31st March 2010, for a period of more than six months from the date they became payable;

(b) Disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under:



Name of Nature of Amount Year/s to which Forum where dispute is the Statute the dues (Rs.) the amount relates

Income Tax Act Income Tax 51,434 2006-07 Commissioner of Income Tax (Appeals)

Amounts paid under protest and not charged to profit and loss account have not been included above. (Refer Notes 1 and 2 of Schedule 19)

10. The company does not have any accumulated losses as on 31st March 2010 and has not incurred any cash losses during the financial year and in the immediately preceding financial year;

11. According to the books of account examined by us and as explained to us, the Company has not defaulted in repayment of any dues to financial institutions and banks;

12. Based on our examination of the records and as explained 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;

13. The Company is not a chit fund, nidhi, mutual benefit fund or a society;

14. During the year, the Company does not have any in transactions in respect of dealing and trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the company have been held by the Company in its own name;

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

16. According to the information and explanations given to us, term loans taken by the company during the year has been applied to use for which loans were taken;

17. As explained to us and on an overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on short-term basis which have been used for long-term investment by the Company;

18. The Company has not made any preferential allotment of shares during the year;

19. During the year covered by our audit report the Company has not issued any secured debentures;

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

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

For and on behalf of

Contractor, Nayak & Kishnadwala

Chartered Accountants

H. V. Kishnadwala

Partner

Membership No. 37391

Firm Registration Number 101961W

Mumbai

May 28. 2010