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Auditor Report of Aarey Drugs & Pharmaceuticals Ltd.

Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying financial statements of AAREY DRUGS & PHARMACEUTICALS LIMITED("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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

The Board of Directors is responsible for the matters stated in section 134(5) of the companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting principal generally accepted specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.This responsibility also includes the 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 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 standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) 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 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 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 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act 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 31,2015, and its profit and its cash flows for the year ended on that date.

OTHER MATTERS

Report on Other Legal and Regulatory Requirements

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

d) In our opinion, the aforesaid standalone 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 March 31, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) 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 as referred to in Note No. vii (b) for Annexure to this report to the financial statements.

II. The Company has made provision, as required under the applicable law or accounting Standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts- Refer Note 8 to the financial statements;

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

Referred to 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 we considered appropriate and in terms of the information and explanations given to us, we state that: -

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

b) We have been informed that the fixed assets of the Company have been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

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

b) In our opinion and according to the information and explanation given to us, the procedure of physical verification of Inventories referred to in 2(a) above 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 and according to the information and explanation given to us, the company has maintained proper records of inventories. As per the information and explanation provided to us and having regard to the size of the company, no material discrepancies were noticed on physical verification of inventory as compared to book records.

iii. a) According to the information and explanations given to us and on the basis of examination of the books of account by us, the company has not granted loan to parties covered in the Register maintained under section 189of the Companies Act, 2013.

b) The Company has not granted any loan, accordingly, the clause (iii) (b) of the order is not applicable to the company for the year.

iv. 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 regards to the purchase of inventory, fixed assets and sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. The Company has not accepted any Deposits from any party, therefore following provisions of Companies Act Sec 73to76 and rules made there under and permission of Reserve Bank of India, the question does not arise.

vi. The maintenance of cost records is not prescribed for the company by the central government under sub-section (1) of sec 148 of the Companies Act, 2013. Therefore the company has not maintained any cost records during the year.

vii a) According to the information and explanation given to us the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including income tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable Except in case of deduction and depositing of Professional tax of Company.

b) According to the information and explanation given to us, no undisputed amount payable in respect of income tax, customs duty, wealth tax, service tax, excise duty and cess were in arrears, as at 31st March,2015 for a period of more than six months from the date they became payable other than following:-

Name of the statute Nature of Amount (Rs.) Period to which the Forum where the dues amount related dispute pending

Income Tax Act, 1961 Income Tax Rs.40,89,668/- A.Y.2000-01 ITAT Mumbai

Income Tax Act, 1961 Income Tax Rs. 8,25,618/- A.Y.2001-02 ITAT Mumbai

Income Tax Act, 1961 Income Tax Rs. 2,11,548/- A.Y.2002-03 ITAT Mumbai

Income Tax Act, 1961 Income Tax Rs.67,41,220/- A.Y.2007-08 CIT(A) Mumbai

Income Tax Act, 1961 Income Tax Rs.32,89,260/- A.Y.2008-09 CIT(A) Mumbai

Income Tax Act, 1961 Income Tax Rs. 2,63,960/- A.Y.2009-10 CIT(A) Mumbai

Income Tax Act, 1961 Income Tax Rs.16,03,320/- A.Y.2010-11 CIT(A) Mumbai

Income Tax Act, 1961 Income Tax Rs.25,56,440/- A.Y.2011-12 ITAT Mumbai

c) The amounts required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956(1 of 1956) and rules made there under has been transferred to such fund within time.

viii. The Company does not have any accumulated loss during the financial year covered by our audit.

ix The Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

x. According to the information given to us, the company has not given any guarantee for others for loans taken by them from banks and financial institutions.

xi. There are no term loans taken by the company, therefore the question of applying the loans for the purpose for which loans taken does not arise.

xii Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For DMKH & Co.

Chartered Accountants,

FRN. No. 116886W

CA. MANISH KANKANI

Partner

M.No. 158020

Place: Mumbai

Date: 30/05/2015


Mar 31, 2014

We have audited the accompanying financial statements of Aarey Drugs & Pharmaceuticals 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 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 ("theAct"), read with general circular No.15/2013 dated 13th September, 2013 of Ministry of Company Affairs in respect section 133 of the Companies Act, 2013 ("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 31,2014;

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

i. As required by the Companies (Auditor''s Report) Order, 2003 ("theOrder") 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.

ii. As required by section 227(3) of the Act, we report that:

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

b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with general circular No.15/2013 dated 13th September, 2013 of Ministry of Company Affairs in respect section 133 of the Companies Act, 2013 ("the Act"). Except Note No.29 and 30

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, none of the directors is disqualified as on March 31, 2014, 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 AUDITORS'' REPORT

Referred to 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 we considered appropriate and in terms of the information and explanations given to us, we state that: -

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

(ii) (a) As explained to us, inventories at site have been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

(iii) (a) According to the information and explanations given to us, The Company had given unsecured loans (Interest Free) to three Parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year was Rs 1,972,364 and Closing Balance is Rs 1,472,364.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given by the Company, are not prima facie prejudicial to the interest of the Company

(c) As explained to us, receipt of principal amount in respect of such loans during the year has been regular/as perstipulation.

(d) In respect of the said loans, there are no overdue amounts.

(e) According to the information and explanations given to us, the Company has received unsecured loans(Interest free) from Six Parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum principal amount involved during the year was Rs. 3,633,655 and the balance outstanding at the end of the financial year from such Parties was Rs. 364,180 Other than the above, 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 Companies Act, 1956.

(f) In our opinion, the rate of interest and other terms and conditions of the loans taken by the Company, are prima-facie not prejudicial to the interest of the Company;

(g) The Payments of principal amounts in respect of such loans during the year has been regular/as per stipulation.

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

(v) (a) On the basis of the audit procedures performed by us, and according to the information, explanations and representations made to us, we are of the opinion that, the transactions in which directors were interested as contemplated under Section 297 and Section 299 of the Companies Act, 1956 and which were required to be entered in the register maintained unden Section 301 of the said Act, have been so entered.

(b) In our opinion and according to the 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 exceeding the value of Rupees five lacs in respect of any party during the year, have been made at prices which are reasonable having regard to market prices prevailing at that time.

(vi) The Company has not accepted any deposits during the year under the provisions of section 58Aand 58AAof the Companies Act, 1956, and the rules framed there under are not applicable.

(vii) As explained to us, there is no formal internal audit system. However, the Company has adequate internal control procedure involving internal checking of its financial record.

(viii) As per information & explanation given by the management, maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and the rules framed there under

(ix) In Respect of statutory dues:

(a) According to the records of the Company, it has been generally regular in depositing, wherever applicable, undisputed statutory dues including Investor Education and Protection Fund, Wealth Tax, Custom Duty, Cess and other statutory dues with the appropriate authorities. There have been delays during certain months in depositing Income Tax Deducted at Source, Service Tax and Value Added Tax dues. However, there were no amounts outstanding at the last day of the financial year for a period exceeding six months from the date they became payable Except in case of deduction and depositing of Professional tax of Company and Service tax payment

(b) On the basis of our examination of documents and records of the Company, and explanation provided to us, there were no disputed dues in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty or Cess, other than the following

Name of the statute Nature of Amount (Rs.) Period to which the the dues amount related

Income TaxAct, 1961 Income Tax Rs79,83,821/- A.Y.2000-2001

Income TaxAct, 1961 Income Tax Rs.592,527/- A.Y.2001-2002

Income TaxAct, 1961 Income Tax Rs.3,40,729/- A.Y.2002-2003

Income Tax Act, 1961 Income Tax Rs.58,94,180/- A.Y.2003-2004

Income Tax Act, 1961 Income Tax Rs.44,09,110/- A.Y.2004-2005

Name of the statute Forum dispute pending

Income TaxAct, 1961 ITAT Mumbai

Income TaxAct, 1961 ITAT Mumbai

Income TaxAct, 1961 ITAT Mumbai

Income Tax Act, 1961 ITAT Mumbai

Income Tax Act, 1961 ITAT Mumbai

(x) The Company does not have any accumulated losses as at 31st March, 2014. The company has not incurred cash losses during the financial year covered by our audit and immediately preceding financial year

(xi) According to the records of the Company examined by us and the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders as at the Balance sheet date

(xii) On the basis of the records examined by us and the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefor the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company;

(xiv) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company;

xv) According to the information and explanations given to us, and the representations made by the management, the Company has not given any guarantee for loans taken by others from banks or financial institutions;

(xvi) The Company has not raise term loans during the year. The term loans outstanding at the beginning of the year have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the Company has not raised any funds on short-term basis. Accordingly clause 4(xvii) of the order is not applicable;

(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 Companies Act, 1956;

(xix) On the basis of the records examined by us, we have to state that, the Company has not issued any debentures;

(xx) The Company has not raised any money through a public issue during the year;

(xxi) According to the information and explanations given to us, and to the best of our knowledge and belief, no fraud on or by the Company, has been noticed or reported by the Company during the year.

For DMKH & Co. Chartered Accountants, FRN.No. 116886W

CA. MANISH KANKANI Partner M.No. 158020

Place: Mumbai Date: 30/05/2014


Mar 31, 2012

1. We have audited the attached Balance Sheet of AAREY DRUGS & PHARMACEUTICALS LIMITED as at 31st March 2012, the statement of Profit & 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 misstatements. An audit includes examining, on test basis, evidence supporting the amounts and disclosure 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 reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by Companies (Auditor's Report) (Amendment) Order, 2004, issued by Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure 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 above, we state that:

i. We have obtained all the information and explanation which, to the best of our knowledge and belief, were necessary for the purpose of our audit.

ii. 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.

iii. The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

iv. In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in subsection (3C)of section 211 of the Companies Act, 1956.

v. On the basis of written representation received from the directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give true and fair view in conformity with the accounting principles generally accepted in India.

(i) In the case of Balance Sheet, of the state of affairs of the company as at 31st March, 2012,

(ii) In the case of the Statement of Profit & Loss, of the profit for the year ended on that date, and

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

ANNEXURE TO THEAUDITORS' REPORT

(Referred to in paragraph 3 of Auditors' Report of even date on the financial statements as at and for the year ended 31st March,2012)

On the basis of such checks as were considered appropriate and according to the information and explanation given to us during the course of audit, we state that:-

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

b. The assets have been physically verified by the management in accordance with the phased programme of verification adopted by the Company. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and nature of fixed assets, no material discrepancies have been noticed in respect of assets physically verified during the year.

c. No substantial part of the fixed assets has been disposed off during the year.

ii. a. The inventory has been physically verified by the management at reasonable intervals during the year.

b. In our opinion, the procedures for 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. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material.

iii. a. The Company had given unsecured loans to Four Parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum principal amount involved during the year was 106.62 Lacs and Closing Balance is 59.52 Lacs

b. In Our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions on which the loans have been granted to companies covered in the register maintained under section 301 of the companies act, 1956 are not prima facie prejudicial to the interest of the company, at the time when loans were granted.

c. As explained to us, principal amount and interest are also regular.

d. According to the information and explanation given to us, there is no overdue amount for more than rupees one lakh.

e. The Company has taken unsecured loan from one parties and Two Companies covered in register maintained under section 301 of the Companies Act, 1956. The maximum amount involved was 0.95 Lacs and the Closing balance is 0.95 Lacs

f. In our opinion the rate of interest and other term and conditions of loan taken by the company are not prima facie prejudicial to the interest of the Company.

g. The Payments of principal amounts and interest in respect of such loans during the year has been regular / as per stipulation.

iv. In our opinion and according to the information and explanations given to us, there is 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. During the course of our audit, no major weakness has been noticed in the internal control system

v. In respect of the contracts and arrangements referred to in Section 301 of the Companies Act 1956:

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

b. In our opinion, and according to the information and explanations given tous,these contracts or arrangements refened to in (a) above have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

vii. The Company does not have a formal system of Internal Audit, but there are adequate checks & controls at all level established by the management.

viii. According to the information and explanation given to us the maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act,1956 for any of the activities of the company.

ix. a. The Company is generally regular in depositing 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 the company with the appropriate authorities. According to the information and explanation given to us, there are no undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at the last day of the financial year for a period of more than six months from the date they became payable.

b. According to the records of the Company, there are no dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty, Cess which have not been deposited on account of any dispute except the following:-

Name of the statute Nature of the dues Amount (Rs.) Period to which the amount related Forum where dispute pending

Income Tax Act,1961 Income Tax Rs. 79,83,821/- A.Y.2000-2001 ITAT Mumbai

Income Tax Act,1961 Income Tax Rs. 592,527/- A.Y.2001-2002 ITAT Mumbai

Income Tax Act,1961 Income Tax Rs. 3,40,729/- A.Y.2002-2003 ITAT Mumbai

Income Tax Act,1961 Income Tax Rs. 58,94,180/- A.Y.2003-2004 ITAT Mumbai

Income Tax Act,1961 Income Tax Rs. 44,09,110/- A.Y.2004-2005 ITAT Mumbai

x. The Company does not have any accumulated losses as at 31st March, 2012. The company has not incurred cash losses during the financial year covered by our audit and immediately preceding financial year.

xi. According to the records of the Company examined by us and the information and explanation given to us,we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders as at the Balance sheet date.

xii. Based on our examination of documents and records and according to the information and explanation given to us, we are of the opinion that 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.

xiii. In our opinion, the company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv. The Company has maintained proper records of the transactions and contracts for dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, securities, debentures and other investment have been held by the company, in its own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956, and save for certain shares which are either lodged for transfer or held with transfer forms.

xv. In our Opinion, and according to the information and explanations given to us,the Company has not given any guarantee for loans taken by others from Banks or Financial Institutions during the year.

xvi. In our Opinion, and according to the information and explanations given to us, the Company did not have any term loans out standing during the year.

xvii. According to the information and explanations given to us and on an overall examination of the cash flow statements and balance sheet of the company, in our opinion, the funds raised on short-term basis have, prima facie, not been used for long-term investment.

xviii. During the year the Company has not made any preferential allotment of shares to the parties covered and recorded in the register maintained under section 301 of the Companies Act 1956.

xix. According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures.

xx. The Company has raised money of Rs. 22.53 Crore on account of right issue during the period.

xxi. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For DMKH & Co.

Chartered Accountants

Firm Regn.No. :116886W

Place: Mumbai. CA. Om Prakash Somani -Partner

Date: 6th September,2012 Membership No.:123830


Mar 31, 2010

1. We have audited the attached Balance Sheet of AAREY DRUGS & PHARMACEUTICALS LIMITED ("the company") E-34, MIDC TRAPORE BOISAR,, THANE, MAHARASTRA. as at 31 st March,2010, the Profit and Loss Account of the Company and the Cash flow statement (Financial 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.

2. We conducted our audit in accordance with auditing and assurance 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 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 (Auditors Report) Order, 2003 [as amended by the Companies (Auditors report) (Amendment) Order, 2004] issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act. 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in Paragraph 3 above, we report that:

(i) 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 ;

(ii) 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 ;

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

(iv) In our opinion, the aforesaid 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.

It has been observed that as per the provisions of Accounting Standard and the Guidance Notes issued by the Institute of Chartered Accountants of India the Company has to follow the exclusive method of Accounting for taxes, duties, cess and fees. However, the Company follows the inclusive method. However, there is no impact on the profitability of the Company due to this.

(v) On the basis of written representations received from the directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the directors is prima facie disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of the section 274 of the Companies Act, 1956 ;

(vi) In our opinion, and to the best of our information and according to the explanations given to us, and subject to clause no 4 above, the aforesaid financial statements read with the statement on significant accounting policies and notes to the accounts 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 :

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

(ii) in the case of the Profit and Loss Account, of the Profit for the Period from 1st | April, 2009 till 31st March, 2010.

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





Annexure referred to in paragraph 3 of our Report of even date to the Members of AAREY DRUGS & PHARMACEUTICALS LIMITED

i. (a) In our opinion and according to the information and explanation given to us, The Company is maintaining proper records showing lull particulars including quantitative details and situation of fixed assets

(b) In our opinion and according to the information and explanation given to us, the fixed assets were physically verified by the management during the year which in our opinion is reasonable having regard to the size of the company and nature of its assets No material discrepancies were noticed on such verification as per management opinion.

(c) in our opinion and according to the information and explanation given to us, a substantial part of fixed assets has not been disposed off by the company during the year.

ii (a) In our opinion and according to the information and explanation given to us, The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanation given to us, The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material

iii. (a) According to the information and explanations given to us, the company has during the year, not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956

(b) In view of clause (iii)(a) above, the clause (iii) (b), (iii)(c) and (iii)(d) of the order, are not applicable

(c) The Company has taken interest free unsecured loan from six parties covered in the register maintained under section 301 of the Companies Act, 1956, totaling to Rs. 4,37,40,918/- and since the terms of repayment are not available we are unable to comment on the same.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regards to purchase of inventory, fixed assets and with regard to the sale of goods and services. Further on the basis of our examination of the books and records of the Company, we have neither come across nor have been informed of any continuing failure to correct the major weaknesses in the aforesaid internal control system

v. (a) To the best of our knowledge there are no contracts or arrangements referred to in section 301 of the Act which need to be entered in the register maintained under the said section.

(b) In our opinion, and according to the information and explanations given to us, these contracts or arrangements relerred to in (a) above have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. vi. The Company has accepted Deposits from public as defined In the Acceptance of Deposits Rules, however, to the best of our knowledge the Company has not followed the directives issued by the Reserve Bank of India and the provisions of Sec 58 A, 58 AA of the Companies Act, 1956 has not been complied with.

vii. In our opinion, the Company has no internal audit system commensurate with its size and nature of its business.

viii. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 in respect of business activity being carried out by the Company.

ix. (a) In our opinion and according to the information and explanation given to us, the Company is regular in depositing with appropriate authorities undisputed statutuory 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 statutory dues applicable to it however, i as at March 31,2010 the company has not paid the income tax liability amounting to Rs.66,54,546 37

(b) According to the information and explanations given to us, there are no dues of sales fax, service tax, income tax. custom duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

x. The Company does not have any accumulated loss as at 31* March, 2010 and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding previous financial year.

xi Based on our audit procedure and on the information and explanations given by the management, in our opinion, the Company has not defaulted in repayment of dues to any financial institution or bank.

xii As per information and explanation produced before me, The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The Company is not a chit fund/ or a nidhi/ mutual benefit fund/ society.

xiv. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments. I

xv. Based on the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. Based on the information and explanations given to us, The Company has not obtained any term loan during the year.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment.

xviii. According to the information and explanations given to us, The Company has not made a preferential allotment of shares covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

xix. The Company has not issued any debentures which have remained outstanding at the year end.

xx. According to the information and explanations given to us, The Company has not raised any money by public issue during the year

xxi. 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 Atul Dave & Co.,

Chartered Accountants

Registration No.: 117880W

Place : Mumbai CA VIPUL R DAVE

Date : 27th August, 2010 Partner

M. No.117242





 
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