ఆడిటర్ నివేదిక Marvel Vinyls Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of MARVEL VINYLS LIMITED, 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 presentation 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 1S56, 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 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 misstatements.

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 risks of material misstatements of financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, out not for the purpose of expressing an opinion on the effectiveness of the entity''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 provxfe a basis for our opinion.

Opinion

In our opinion and to the best of our information end 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 end fair view in conformity with the accounting principles generally accepted in India.

[a] In case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;

[b] In case of the Statement Profit and Loss Account, of the profii, for the year ended on that date:

[c] In case of the Cash Row Statement, of the cesh 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. issued by the Central Government of India in terms of sub -section [4A] of section 227 of the Companies Act. 1956. we give in Annexure a statement on the matters specified in paragraph 4 and 5 of the said order

2. As required by section 227(3] of the Act. we report that:

[e] We have obtained all the infcrmation and explanations, which to the best of our knowledge and betief were necessary for the purpose of our audit;

[b] in our opinion proper books of accounts as required by law have been kept by the company so far as appears from our examination of those books;

[c] the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in arrangement with the books of accounts;

[d] in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Row 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, 2014. and taken on record by the Board of Directors, rone of the director is dsqualified as on March 31, 2014. from being appointed as a director m terms of clause (g] of sub-section [1] of section 274 of the Companies Act, 1956,

[f] Since the Centra) Government has not issued any notification as to the rate at which the cess is to be paid under sect»on 441A of the Companies Act 1956 nor has it issued any Rules under the said section, prescribing the manner in which cess Is to be paid. no cess is due and payable by the Company.

ANNEXURE REFERRED TO IM PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:

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

b] As explained to us, the management during the year has physically verified all the fixed assets and we are informed that no material discrepancies were noticed on such verification.

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

2. In respect of its inventories:

a] As explained to us, the Inventory has been physicaHy verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b] The procedure of physical verification of inventory fallowed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c] The company is maintaining proper records of inventory. As explained co us, there were no material discrepancies noticed on physical verification of inventories as compared to the book record.

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

a) The company has not granted any fresh unsecured advance to any person covered in the registers maintained under Section 301 of the Companies Act. 1956.

b) Since the company has granted any loan to parties listed in the register maintained under section 301 of the Companies Act. 1956, so clause 5 [iii] [b), [c], and [d) of CARO 2003 are not applicable on the Company

e) The company has taken unsecured loans from two directors, two relative of directors, three HUF concerns and one associate company covered in the register maintained under section 301 of the Companies Act. 1956. The maximum amount involved during the year was Fte. 1043.83 lakhs and the year-end balance of loan taken from such parties was Rs. 1043.83 lakhs.

f) The company has taken these loans free of interest. In our opinion, other terms and conditions on which loans have been taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

g) The principal amounts are recoverable on demand and there is no repayment schedule. The parties are regular in repaying the principal amounts as stipulated and have been regular in payment of interest wherever applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale Df goods. There is no continued lailure to correct maior weaknesses rn internal contra) system,

5 a] According to the information and explanations given to us. we are of the opinion that the particulars of contracts or arrangoments referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under thet section.

b] In our opinion and according to information and explanations given to us, the transactions made e pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act. 1956 end exceeding the value of rupees five lakhs h respect of each party during the year have been made at a price wtich appear reasonable as per information available with the Company

6. In our opinion and according to the information and explanations given to us. the provisions of Section 5GA, 59AA or any other relevant provisions of the Companies Act, 1 956 and Companies (Acceptance of Deposit) Rules, 1975 with regard to the deposits accepted from the public are not applicable on the Company as the company hos not accepted any deposits from public and only unsecured loans from the directors, their relatives and associates have been accepted due to condition imposed by the bai.xers of the company from whom loans have been raised

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

8. The company has maintained cost records as prescribed by Central Government under clause (d) of sub-section [1] of Section 909 of the Companies Act, 1956.

9. In respect of statutory dues:

a] According to the records of the Company, it is regular in depositing with appropriate authorities undispiJted statutory dues including provident fund, investor education 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. According to the information and explanations given to us, no undisputed amount payable in respect of income tax. wealth tax. service tax. sales tax, custom duty, excise duty and cess were in arrears, as at 31 st March, 2014. for a penod of more than six months from the date they become payable.

b] Triere is disputed excise duty demand of Rs, 322.49 lacs for the earlier years, which is under appeal. According to the information and explanations given to us, there is no other disputed amount in respect of sales tax, income tax, custom duty, wealth tax, service tax. excise duty or cess, which has not been deposited on account of any dispute.

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

11. In our opinion and according to the information and explanations given to us. the company has not defaulted in repayment of dues to banks

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

13. The company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the Provisions of clause 4[xiit) of the Companies [Auditor''s Report) Order. 2003 (as amended] are not applicable to the Company.

14. In our opinion, the Company is not dealing in or trading in snares, securities, debentures and other investments. Accordingly, the provisions of clause 4[xtv) of the Companies [Auditor''s Report] Order, 2003 [as amended] are not applicable to the company.

15. As informed to us. the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The company has availed fresh Term Loans of Rs. 179.24 lacs [secured against the current assets and fixed assets of the company) during the financial year covered by our audit.

17. According to the information and explanations given to us and on an overall examination of the balance sheet Df the company, we report that no funds raised on short-term basis have been used for long-term investments. No long-term funds have been used to finance short- term assets except permanent working capital.

18. The Company has not made any preferent>el allotment of shares during the financial year covered by our audit.

19. The Company has not issued any debentures.

20. The Company has not raised any money by public issue during the financial year covered by our audit.

21. According to che information and explanations given to us. no fraud on or by the company has been noticed or reported during the course of our audit.

For SHANTI PRASKAO & COMPANY CHARTERED ACCOUNTANTS

Place New Delhi ASHISH KUMAR AGGARWAL Dated : 30.05.2014 PARTNER M.No. 522443

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Mar 31, 2013

Report on Financial Statements

We have audited the accompanying financial statements of MARVEL VINYLS LIMITED, 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 presentation 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. 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 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 misstatements.

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 risks of material misstatements of financial statements, whether due to fraud of error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 case of the Balance Sheet, of the state of affairs of the Company as at March 31,2013;

[b] In case of the Statement Profit and Loss Account, of the profit for the year ended on tiat date;

[c] In 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, issued by the Central Government of India in terms of sub -section [4A] of section 227 of the Companies Act, 1956, we give in Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

2. As required by section 227[3] of the Act, we report that:

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

[b] in our opinion proper books of accounts as required by law have been kept by the company so far as appears from our examination of those books;

[c] the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in arrangement with the books of accounts;

[d] in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in Sub-section [3C] of section 211 of the Companies Act, 1 956;

[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 director 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.

[f] Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act 1956 nor has it issued any Rules under the said section, prescribing the manner in which cess is to be paid, no cess is due and payable by the Company.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

1. In respect of its fixed assets:

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

b] As explained to us, the management during the year has physically verified all the fixed assets and we are informed that no material discrepancies were noticed on such verification.

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

2. In respect of its inventories:

a] As explained to us, the Inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b] The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c] The company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book record.

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

a] The company has not granted any fresh unsecured advance to any person covered in the registers maintained under Section 301 of the Companies Act, 1956.

b) Since the company has granted any loan to parties listed in the register maintained under section 301 of the Companies Act, 1956, so clause 5 [iii] [b], [c], and [d] of CARO 2003 are not applicable on the Company

e] The company has taken unsecured loans from two directors, two relative of directors, three HUF concerns and one associate company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 628.32 lakhs and the year-end balance of loan taken from such parties was Rs. 628.32 lakhs.

f] The company has taken these loans free of interest. In our opinion, other terms and conditions on which loans have been taken from the parties listed in the register maintained under section 301 of the Companies Act, 1958 are not prima facie, prejudicial to the interest of the company.

g] The principal amounts are recoverable on demand and there is no repayment schedule. The parties are regular in repaying the principal amounts as stipulated and have been regular in payment of interest wherever applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. There is no continued failure to correct major weaknesses in internal control system.

5 a] According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

b] In our opinion and according to information and explanations given to us, the transactions 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 rupees five lakhs in respect of each party during the year have been made at a price which appear reasonable as per information available with the Company.

6. In our opinion and according to the information and explanations given to us, the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and Companies [Acceptance of Deposit] Rules, 1975 with regard to the deposits accepted from the public are not applicable on the Company as the company has not accepted any deposits from public and only unsecured loans from the directors, their relatives and associates have been accepted in earlier years due to condition imposed by the bankers of the company from whom loans have been raised.

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

8. The company has maintained cost records as prescribed by Central Government under clause [d] of sub-section [1] of Section 209 of the Companies Act, 1956.

9. In respect of statutory dues:

a) According to the records of the Company, it is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education 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. According to the information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, service tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31 st March, 2013, for a period of more than six months from the date they become payable.

b) There is disputed excise duty demand of Rs. 240.95 lacs and disputed Trade/Sales tax demand of Rs. 1.42 lacs for the earlier years, which is under appeal. According to the information and explanations given to us, there is no other disputed amount in respect of sales tax, income tax, custom duty, wealth tax, service tax, excise duty or cess, which has not been deposited on account of any dispute.

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

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks.

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

13. The company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the Provisions of clause 4[xiii] of the Companies [Auditor''s Report] Order, 2003 (as amended) are not applicable to the Company.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv] of the Companies (Auditor''s Report] Order, 2003 [as amended] are not applicable to the company.

15. As informed to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The company has availed fresh Term Loans of Rs. 129.36/- lacs (secured against the current assets and fixed assets of the company] during the financial year covered by our audit.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investments. No long-term funds have been used to finance short- term assets except permanent working capital.

18. The Company has not made any preferential allotment of shares during the financial year covered by our audit.

19. The Company has not issued any debentures.

20. The Company has not raised any money by public issue during the financial year covered by our audit.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.



For SHANTI PRASHAD & COMPANY

CHARTERED ACCOUNTANTS

Place : New Delhi (ASHISH KUMAR AGGARWAL]

Dated : 30.05.2013 PARTNER

M.No. 522443

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Mar 31, 2012

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

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 (as amended) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph 1 above, we report that:

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

(b) In our opinion, the company has kept proper books of accounts as required by law so far, as appears from our examination of such 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 dealt with by this report 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 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 of the company in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon in Schedule 18 give the information required by the Companies Act, 1956 in the manner so required, give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

1. In respect of fixed assets

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 during the year has physically verified all the fixed assets and we are informed that no material discrepancies were noticed on such verification.

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

2. In respect of its inventories:

a) As explained to us, the Inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book record.

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

a) The company has not granted any fresh unsecured advance to any person covered in the registers maintained under Section 301 of the Companies Act, 1956.

b) Since the company has granted any loan to parties listed in the register maintained under section 301 of the Companies Act, 1956, so clause 5 (iii) (b), (c), and (d) of CARO 2003 are not applicable on the Company

c) The company has taken unsecured loans from two directors, three HUF concerns and one associate company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 533.94 lakhs and the year-end balance of loan taken from such parties was Rs. 533.94 lakhs.

d) The company has taken these loans free of interest. In our opinion, other terms and conditions on which loans have been taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

e) The principal amounts are recoverable on demand and there is no repayment schedule. The parties are regular in repaying the principal amounts as stipulated and have been regular in payment of interest wherever applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. There is no continued failure to correct major weaknesses in internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

b) In our opinion and according to information and explanations given to us, the transactions 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 rupees five lakhs in respect of each party during the year have been made at a price which appear reasonable as per information available with the Company.

6. In our opinion and according to the information and explanations given to us, the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and Companies (Acceptance of Deposit) Rules, 1975 with regard to the deposits accepted from the public are not applicable on the Company as the company has not accepted any deposits from public and only unsecured loans from the directors, their relatives and associates have been accepted in earlier years due to condition imposed by the bankers of the company from whom loans have been raised.

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

8. The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the products of the Company.

9. In respect of statutory dues:

a) According to the records of the Company, it is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education 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. According to the information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, service tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31st March, 2012, for a period of more than six months from the date they become payable.

b) There is disputed excise duty demand of Rs. 2.91 lacs and disputed Trade/Sales tax demand of Rs. 2.38 lacs for the earlier years, which is under appeal. According to the information and explanations given to us, there is no other disputed amount in respect of sales tax, income tax, custom duty, wealth tax, service tax, excise duty or cess, which has not been deposited on account of any dispute.

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

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks.

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

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

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the company.

15. As informed to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The company has availed fresh Term Loans of Rs. 435.11/- lacs (secured against the current assets and fixed assets of the company) during the financial year covered by our audit.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investments. No long-term funds have been used to finance short- term assets except permanent working capital.

18. The Company has not made any preferential allotment of shares during the financial year covered by our audit.

19. The Company has not issued any debentures.

20. The Company has not raised any money by public issue during the financial year covered by our audit.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For SHANTI PRASHAD & COMPANY CHARTERED ACCOUNTANTS

(SATISH AGRAWAL) PARTNER M. No. 505969/FRN 019923N

Place : New Delhi

Dated : 30.05.2012

---

Mar 31, 2011

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

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

1. As required by the Companies (Auditor's Report) order, 2003 (as amended) issued by the Central Government of India in terms of sub -section (4A) of section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that:

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

(b) In our opinion, the company has kept proper books of accounts as required by law so far, as appears from our examination of such books;

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

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

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

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon in Schedule 19 give the information required by the Companies Act, 1956 in the manner so required, give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011 ;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

1. In respect of fixed assets

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 during the year has physically verified all the fixed assets and we are informed that no material discrepancies were noticed on such verification.

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

2. In respect of its inventories:

a) As explained to us, the Inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book record.

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

a) The company has not granted any unsecured advance to persons covered in the registers maintained under Section 301 of the Companies Act, 1956.

b) Since the Company has not granted any loans to parties covered under section 301 of the Companies Act, 1956, so clause 5(iii) (b),(c) and (d) of CARO 2003 are not applicable on the Company.

c) The company has taken unsecured loans from two directors, three HUF concerns, two relatives of directors and one associate company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 344.25 lakhs and the year-end balance of loan taken from such parties was Rs. 344.25 lakhs.

d) The company has taken these loans free of interest. In our opinion, other terms and conditions on which loans have been taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

e) The principal amounts are recoverable on demand and there is no repayment schedule. The parties are regular in repaying the principal amounts as stipulated and have been regular in payment of interest wherever applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. There is no continued failure to correct major weaknesses in internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

b) In our opinion and according to information and explanations given to us, the transactions 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 rupees five lakhs in respect of each party during the year have been made at a price which appear reasonable as per information available with the Company.

6. In our opinion and according to the information and explanations given to us, the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and Companies (Acceptance of Deposit) Rules, 1975 with regard to the deposits accepted from the public are not applicable on the Company as the company has not accepted any deposits from public and only unsecured loans from the directors, their relatives and associates have been accepted in earlier years due to condition imposed by the bankers of the company from whom loans have been raised.

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

8. The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the products of the Company.

9. In respect of statutory dues:

a) According to the records of the Company, it is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education 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. According to the information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, service tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31st March, 2011, for a period of more than six months from the date they become payable.

b) There is disputed excise duty demand of Rs. 8.11 lacs and disputed Trade/Sales tax demand of Rs. 9.17 lacs for the earlier years, which is under appeal. According to the information and explanations given to us, there is no other disputed amount in respect of sales tax, income tax, custom duty, wealth tax, service tax, excise duty or cess, which has not been deposited on account of any dispute.

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

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks.

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

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

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the company.

15. As informed to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The company has availed fresh Term Loans of Rs. 537.71 lacs (secured against the current assets and fixed assets of the company) during the financial year covered by our audit.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investments. No long-term funds have been used to finance short- term assets except permanent working capital.

18. The Company has not made any preferential allotment of shares during the financial year covered by our audit.

19. The Company has not issued any debentures.

20. The Company has not raised any money by public issue during the financial year covered by our audit.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For SHANTI PRASHAD & COMPANY

CHARTERED ACCOUNTANTS

(SATISH AGRAWAL)

PARTNER M.No. 505969 / FRN 019923N

Place : New Delhi Dated : 10.06.2011

---

Mar 31, 2010

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

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

1. As required by the Companies (Auditors Report) order, 2003 (as amended) issued by the Central Government of India in terms of sub -section (4A) of section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that-

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

(b) In our opinion, the company has kept proper books of accounts as required by law so far, as appears from our examination of such books;

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

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

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

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon in Schedule 18 give the information required by the Companies Act, 1956 in the manner so required, give a true and fair view in conformity with the accounting principles generally accepted in India-

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010 ;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

1. In respect of fixed assets

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 during the year has physically verified all the fixed assets and we are informed that no material discrepancies were noticed on such verification.

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

2. In respect of its inventories-

a) As explained to us, the Inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book record.

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

a) The company has granted an unsecured advance of Rs. 81.03 Lakhs to one associate concern covered in the registers maintained under Section 301 of the Companies Act, 1956.

b) The company has given this loan free of interest. In our opinion, other terms and conditions on which loan has been given to the party listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company as the said interest free advance is advanced against interest free loan of Rs. 198.61 received from two directors, three HUF concerns and one associate company covered in the register maintained under section 301.

c) The principal amount is repayable on demand and there is no repayment schedule.

d) In respect of the said loans, the same are repayable on demand and therefore the question of overdue amounts does not arise. In respect of interest, there are no overdue amounts.

e) The company has taken unsecured loans from two directors, three HUF concerns and one associate company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 198.61 lakhs and the year-end balance of loan taken from such parties was Rs. 198.61 lakhs.

f) The company has taken these loans free of interest. In our opinion, other terms and conditions on which loans have been taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

g) The principal amounts are recoverable on demand and there is no repayment schedule. The parties are regular in repaying the principal amounts as stipulated and have been regular in payment of interest wherever applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. There is no continued failure to correct major weaknesses in internal control system.

5. a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

b) In our opinion and according to information and explanations given to us, the transactions 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 rupees five lakhs in respect of each party during the year have been made at a price which appear reasonable as per information available with the Company.

6. In our opinion and according to the information and explanations given to us, the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and Companies (Acceptance of Deposit) Rules, 1975 with regard to the deposits accepted from the public are not applicable on the Company as the company has not accepted any deposits from public and only unsecured loans from the directors and their associates have been accepted in earlier years due to condition imposed by the bankers of the company from whom loans have been raised.

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

8. The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the products of the Company.

9. In respect of statutory dues-

a) According to the records of the Company, it is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax ,custom duty, excise duty, cess and other material statutoiy dues applicable to it. According to the information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, service tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31st March, 2010, for a period of more than six months from the date they become payable.

b) There is disputed excise duty demand of Rs. 18.24 lacs and disputed Trade/Sales tax demand of Rs. 17.26 lacs for the earlier years, which is under appeal. According to the information and explanations given to us, there is no other disputed amount in respect of sales tax, income tax, custom duty, wealth tax, . service tax, excise duty or cess, which has not been deposited on account of any dispute.

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

11. In our opinion and according to the information and explanations given to us. the company has not defaulted in repayment of dues to banks.

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

11. The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the Provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the company.

15. As informed to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The company has availed fresh Term Loans of Rs. 55.96/- lacs (secured against the current assets and fixed assets of the company) during the financial year covered by our audit.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investments. No long-term funds have been used to finance short- term assets except permanent working capital.

18. The Company has not made any preferential allotment of shares during the financial year covered by our audit.

19. The Company has not issued any debentures.

20. The Company has not raised any money by public issue during the financial year covered by our audit.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For SHANTI PRASHAD & COMPANY

CHARTERED ACCOUNTANTS

Place - New Delhi (SATISH AGRAWAL)

Dated - 31.05.2010 PARTNER

M.No. 505969