1.  We have audited the attached Balance Sheet of Marvel Industries
 Limited, (the ''Company'') as at March 31, 2010, and also the Profit and
 Loss Account and the Cash Flow Statement for the year ended on that
 date annexed thereto (collectively referred as the financial
 statements''). 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 the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 ''Order) (as amended), issued by the Central Government of India in
 terms of sub-section (4A) of section 227 of the Companies Act, 1956
 (the ''Act''), we enclose in the Annexure a statement on the matters
 specified in paragraphs 4 and 5 of the Order.
 
 4.  We report that
 
 (a) No provision is made for the amount of cumulative dividend of
 Rs.478.72 Lacs on overdue Preference Share Capital and interest payable
 on the same, the amount in respect of which is not determinable.
 Consequently, the Accumulated loss is lower by Rs.478.72 Lacs.
 
 (b) No provision for interest payable aggregating to Rs.4.92 lacs on
 unsecured loan has been made in the current year and Rs.36.27 Lacs in
 the earlier years. Consequently, loss for the current year is lower by
 Rs.4.92 lacs and the balance of the Profit and Loss Account is lower by
 Rs.41.19 Lacs.
 
 (c) The Company is incurring losses since 1997-98 and its net worth is
 completely eroded. In our opinion at the present bonqwings the
 operations of the company are not viable and the company would not be
 able to pay ail its liabilities.  The company''s application for revival
 scheme is pending with Hon. AAIFR for its approval (Refer Note No. B
 (8) of Schedule R and Company expects sanction of the revival scheme,
 hence the accounts are prepared on going concern basis.
 
 5.  Without qualifying our report, we draw attention to Note No. B (6)
 of Schedule R regarding revoking of settlement with Asset
 Reconstruction Company India Limited (ARCIL) and reinstatement of loans
 and overdue interest payable thereon.
 
 6.  Subject to our comments in paragraph 4 above and further to our
 comments in the Annexure referred to above, we report that:
 
 a.  We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 b.  In our opinion, 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 financial statements dealt with by this report are in agreement
 with the books of account;
 
 d.  In our opinion the financial statements dealt with by this report
 comply with the accounting standards referred to in sub section (3C) of
 section 211 of the Companies Act, 1956 and the Rules framed there under
 except for our comments in paragraph 4 above;
 
 e.  On the basis of written representations received from the
 directors, as on March 31, 2010 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2010 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Act;
 
 f.  In our opinion and to the best of our information and according to
 the explanations given to us, said accounts read together with
 significant accounting policies and other notes to accounts of schedule
 R 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, in the case of:
 
 i) . the Balance Sheet, of the state of affairs of the Company as at
 March 31, 2010;
 
 ii) the Profit and Loss Account, of the loss for the year ended on that
 date; and
 
 iii) the Cash Flow Statement, of the cash flows for the year- ended on
 that date
 
 Annexure to the Auditors'' Report of even date to the members of Marvel
 Industries Limited, on the financial statements for the year ended
 March 31,2010
 
 Based on the audit procedures performed for the purpose of reporting a
 true, and fair view on the financial statements of the Company and
 taking into consideration the information and explanations given to us
 and the books of account and other records examined by us in the normal
 course of audit, we report that:
 
 (i) (a) The Company has updated the record showing full particulars
 including quantitative details and situation of fixed assets, except
 for furniture and Fixtures, Electrical Installation and Equipments for
 which unit wise record of cost and location has not been maintained.
 
 (b) Fixed assets have not been physically verified by the management
 during the year and we are therefore unable to comment on the
 discrepancies, if any, which could have arisen on such verification. In
 our opinion, the frequency of verification of the fixed assets is also
 not reasonable having regard to the size of the Company and nature of
 its assets.
 
 (c) In our opinion, a substantial part of fixed assets has not been
 disposed off during the year.
 
 (ii) (a) The management has not conducted physical verification of
 inventory during the period under audit.
 
 (b) Since the management has not conducted physical verification of
 Inventories, we are unable to comment on the reasonableness of the
 procedures.
 
 (c) Since physical verification of inventory was not carried out during
 the year, we are unable to comment on the maintenance of proper records
 and the discrepancies which could have arisen between physical stocka
 and books records.
 
 (iii) (a) The Company has not granted any loan, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act. Accordingly, the provisions of clauses
 4(iii) (b) to (d) of the Companies (Auditor''s Report) Order 2003 (as
 amended) are not applicable.
 
 (b) The Company has not taken any loans, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act. Accordingly, the provisions of clauses
 4(iii) (f) and 4(iii) (g) of the Companies (Auditor''s Report) Order
 2003 (as amended) are not applicable.
 
 (iv) In our opinion, there is an adequate internal control system
 commensurate with the size of the Company and the nature of its
 business for the purchase of inventory and fixed assets and for the
 sale of goods and services.
 
 (v) The Company has not entered into contracts or arrangements referred
 to in section 301 of the Act. Accordingly, the provisions of clause
 4(v) of the Companies (Auditor''s Report) Order 2003 (as amended) are
 not applicable.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of sections 58A and 58AA of the Act and the Companies
 (Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of
 clause 4(vi) of the Companies (Auditor''s Report) Order 2003 (as
 amended) are not applicable.
 
 (vii) The Company did not have an internal audit system during the
 year.
 
 (viii) To the best of our knowledge and belief, the Central Government
 has not prescribed maintenance of cost records under Clause (d) of
 sub-section (1) of section 209 of the Act, in respect of Company''s
 products. Accordingly, the provisions of clause 4(viii) of the
 Companies (Auditor''s Report) Order 2003 (as amended) are not
 applicable.
 
 (ix) (a) The Company is regular in depositing the 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,
 as applicable, with the appropriate authorities. Further, undisputed
 amounts payable in respect thereof were outstanding at the year end for
 a period of more than six months from the date they become payable are
 as follows.
 
 Undisputed Statutory dues          Amount (in lacs)
 
 Professional Tax                         0.54
 
 Gram Panchayat Tax                       5.03
 
 (b) There are no dues in respect of income tax, sales tax, wealth tax,
 service tax, customs duty, excise duty and cess that have not been
 deposited with the appropriate authorities on account of any dispute.
 
 (x) In our opinion, the Company''s accumulated loss at the end of the
 financial year are more than fifty percent of its net worth and has
 incurred cash losses during the year as well as preceding financial
 year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has been declared a sick industrial
 undertaking by the Hon''ble Board for Industrial and Financial
 Reconstruction under section 17 of Sick Industrial Companies (Special
 Provisions) Act, 1985. The detail of overdue outstanding (including
 interest) of Banks, Financial Institutions as on March 31,2010 is given
 here under:
 
 Lender                               Amount of Default (incl. interest)
                                                (Rs. In Lacs)
 
 The State Industrial & Investment 
 Corporation Of Maharashtra Limited                3018.61
 
 Kotak Mahindra Bank Limited *                     5465.00
 
 Assets Reconstruction Company India Ltd           5200.85
 
 * The liabilities shown under bank overdraft belong originally to
 Corporation Bank and The South Indian Bank. The said banks have
 assigned the debts to Kotak Mahindra Bank. However the Company has not
 recognized the said assignment and is contesting against the said
 assignment in various Courts including Honourable Supreme Court of
 India.
 
 (xii) The Company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures and other
 securities. Accordingly, the provisions of clause 4(xii) of the
 Companies (Auditor''s Report) Order 2003 (as amended) are not
 applicable.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi/
 mutual benefit fund/ society. Accordingly, the provisions of clause
 4(xiii) of the Companies (Auditor''s Report) Order 2003 (as amended) are
 not applicable.
 
 (xiv) The company is not an investment company/Accordingly, the
 provisions of clause 4(xv) of the Companies (Auditor''s Report) Order
 2003 (as amended) are not applicable.
 
 (xv) The Company has not given any guarantees for loans taken by others
 from banks or financial institutions. Accordingly, the provisions of
 clause 4(xv) of the Companies (Auditor''s Report) Order 2003 (as
 amended) are not applicable.
 
 (xvi) According to the information and explanations given to us, the
 company has not raised any term loans during the year under audit
 
 (xvii) 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
 investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties or companies covered in the register maintained under
 section 301 of the Act. Accordingly, the provisions of clause 4(xviii)
 of the Companies (Auditor''s Report) Order 2003 (as amended) are not
 applicable.
 
 (xix) The Company has neither issued nor had any outstanding debentures
 during the year. Accordingly, the provisions of clause 4(xix) of the
 Companies (Auditor''s Report) Order 2003 (as amended) are not
 applicable.
 
 (xx) The Company has not raised any money by public issues during the
 year. Accordingly, the provisions of clause 4(xx)
 
 of the Companies (Auditor''s Report) Order 2003 (as amended) are not
 applicable.  (xxi) No fraud on or by the Company has been noticed or
 reported during the year covered by our audit.
 
 For NGS & Co.
 
 Chartered Accountants
 
 Firm Registration No. 119850W
 
 Sanjay Dosi
 
 Partner
 
 Membership No.36024
 
 Place : Mumbai
 Date: 31.05.2010