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Auditor Report of Bal Pharma Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of M/s BAL PHARMA LIMITED, which comprise the balance sheet as at 31 March 2015, 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 standalone financial statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these 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 misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial 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 Company's management and Board of 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.

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 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31 March 2015, its profits and its cash flows for the year ended on that date.

Report on other legal and regulatory requirements

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

2. As required by section 143(3) of the Act, we further report that:

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

(b) In our opinion proper books of account as required by law have been kept by the company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

(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 and with the returns received from branches not visited by us;

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

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

(f) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,2014;

i. The Company has disclosed the impact, if any, of pending litigations as at 31 March 20l5,on its financial position in its financial statements - Refer Note 36 to the financial statements;

ii. The Company has not entered into any long-term contracts including derivative contracts requiring provision under the applicable law or accounting standards, for material foreseeable losses;

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

Annexure to the Independent Auditor's Report

(The annexure referred to in paragraph I under the heading "Report on other legal and regulatory requirements" of our report of even date to the members of Bal Pharma Limited for the year ended 31 March 2015)

i. 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 informed to us by the management the Company has a policy of physically verifying fixed assets in a phased manner over a period which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informed that there was no material discrepancies noticed on such verification.

ii. In respect of its inventories

(a) As explained to us, the inventories were physically verified by the Management at reasonable intervals during the year. In our opinion the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and the discrepancies noticed on such physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account.

iii. (a) The company has granted loans to two bodies corporate covered in the register maintained under section 189 of the Companies Act, 2013 ('the act').

(b) In the case of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act, the borrowers have been regular in the payment of the interest as stipulated. The terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, paragraph 3(iii) (b) of the order is not applicable to the company in respect of repayment of the principle amount.

(c) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, there exist an adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchases of inventory, fixed assets and for the 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 system.

v. The Company has not accepted any deposit from public. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under 148(1) of the Companies Act, 2013 in relation to products manufactured, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not made a detailed examination of the records with a view to determine whether they are accurate and complete.

vii. According to the information and explanation given to us:

(a) The company has been regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it have generally been regularly deposited with the appropriate authorities. There are no undisputed amounts payable in respect of aforesaid material statutory dues as at 31 March 2015, which were in arrears for a period of more than six months from the date they became payable.

(b) On the basis of our examination of the documents and records of the company, there are no amounts in respect of Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise duty and Cess that have not been deposited with appropriate authorities on account of any dispute except as enumerated herein below which are pending before respective authorities as mentioned there against:

Name of the Statute Nature of dues "Amount in

Chapter V of Finance Act, 1994 Service Tax and equivalent 1,08,36,228 penalty

The Central Excise Act, 1944 Central Excise Duty and Penalty 1,69,03,646

The Central Excise Act,l944 Central Excise Penalty 24,91,506

The Central Excise Act, 1944 Central Excise Duty and Penalty 8,38,598

The Central Excise Act, 1944 Central Excise Duty and Penalty 12,09,387

The Central Excise Act,l944 Central Excise Duty and Penalty 2,16,694

The Central Excise Act, 1944 Central Excise Duty and Penalty 3,16,719

The Central Excise Act, 1944 Central Excise Duty and Penalty 2,24,679

The Maharashtra Value Added Central Sales Tax and tax 2002 Penalty 7,78,314

The Kerala General Sales Tax Local Sales Tax 4,95,991 act 1963

The Central Excise Act, 1944 Central Excise Duty and Penalty 21,82,891

lncome Tax Act,l96l Income tax 89,50,439

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

Chapter V of Finance Act 1994 Nov 2007 to July 2011 Commissioner of Central Excise ( Appeals), Bangalore

The Central Excise Act, 1944 Nov 2007 to July 2011 Commissioner of Central Excise ( Appeals), Bangalore

The Central Excise Act, 1944 Apr 2005 to Nov 2009 Customs Excise Service Tax Appellate Tribunal, Bangalore

The Central Excise Act, 1944 May 2000 to Nov 2001 Customs Excise Service Tax Appellate Tribunal, Mumbai

The Central Excise Act, 1944 Jul 2012 to Jan 2013 Commissioner of Central Excise (Appeal), Bangalore

The Central Excise Act, 1944 Mar-12 Commissioner of Central Excise (Appeal), Bangalore

The Central Excise Act, 1944 Jan-12 Commissioner of Central Excise (Appeal), Bangalore

The Central Excise Act 1944 Jul 2011 to Nov 2011 Commissioner of Central Excise (Appeal), Bangalore

The Maharashtra Value Added FY 2004-2005 The Deputy tax 2002 Commissioner (Appeals), Pune

The Kerala General Sales FY 2002 - 03 The Deputy Tax Act 1963 Commissioner (Appeals), Ernakulam

The Central Excise Act 1944 FY 2010-11 to 2012-13 Commissioner of Central Excise, Bangalore

Income Tax Act 1961 FY 2003-04 to 2007-08 High Court of Karnataka

* Net of amounts paid under protest or otherwise. Amount as per demand order including interest and penalty wherever quantified.

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

viii. The Company does not have any accumulated losses as at the end of the financial year. The Company has not incurred cash losses during the current and in the immediately preceding financial year.

ix. Based on our audit procedures, information and explanations given to us, in our opinion the Company has not defaulted in repayment of dues to financial institutions and banks. The Company does not have any outstanding debentures during the year.

x. In our opinion and according to the information and the explanations given to us, the company has not given any guarantee for the loans taken by others from banks or financial institutions.

xi. In our opinion and according to the information and explanations given to us, the term loans taken by the company during the

year have been applied for the purposes for which they were obtained.

xii. To the best of our knowledge and 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 M/s T D JAIN AND D I SAKARIA Chartered Accountants Firm registration no: 002491S

T D JAIN Partner M. No.: 012034

Bangalore 29 May 2015


Mar 31, 2014

We have audited the accompanying financial statements of M/s BAL PHARMA LIMITED, which comprise the balance sheet as at 31 March 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 principles generally accepted in India, including Accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards on auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and 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 explanation given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair

INDEPENDENT AUDITORS'' REPORT

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 31 March 2014;

(b) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

(b) In our opinion proper books of account as required by law have been kept by the company so far as it appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us.

(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 and with the returns received from branches not visited by us.

(d) In our opinion, the balance Sheet, statement of profit and loss and cash flow statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(e) On the basis of written representation received from the directors, as on 31 March 2014 and taken on record by Board of Directors, we report that none of the directors are disqualified as on 31 March 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 THE AUDITOR''S REPORT

The Annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of the auditor''s report of even date.

1. The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. These fixed assets were physically verified by management according to a phased programme designed to cover all items over a period of three years. Pursuant to the programme, physical verification of certain assets was carried out during the year and we have been informed that no material discrepancies were noticed on such physical verification. Substantial part of fixed assets have not been disposed off during the year, which will affect its status as going concern.

2. The stock of inventory has been physically verified during the year by the management at reasonable intervals. In our opinion, the procedures 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. The Company is maintaining proper records of inventory. The discrepancies noticed during the physical verification of stocks as compared to book records were not material; however, the same has been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the company has not granted any loans to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of Clause 4(iii)(a) to (d) of the order are not applicable to the Company and hence not commented upon.

(b) The Company has taken interest free unsecured loans, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. The Company has taken interest free unsecured loan from its Managing Director. The maximum balance outstanding during the year was Rs. 2,757,700/- and the year end balance of the loan was Rs. Nil.

(c) In our opinion and according to the explanations given to us, the rate of interest wherever applicable, and other terms and conditions on which such loans have been taken from the companies, firms or other 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.

(d) The Company is regular in repayment of demand loans.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control systems.

5. (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs.500,000 have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Act and the rules framed there under are not applicable to the Company.

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

8. We have broadly reviewed the books of accounts maintained by the company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1)

(d) of the Companies Act, 1956; and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not, made a detailed examination of these records with a view to determine whether they are accurate and complete.

9. (a) According to the information and explanations given to us and on the basis of our examination of books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs duty, Excise duty, Cess and any other material statutory dues during the year with the appropriate authorities. However, there have been delays in remitting undisputed statutory dues with these authorities

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues were in arrears as at 31 March 2014 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no amounts in respect of Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise duty and Cess that have not been deposited with appropriate authorities on account of any dispute other than those mentioned in Annexure 1 to this report.

10. The Company has no accumulated losses. The Company has not incurred cash losses in the financial year under report and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to its bankers or to any financial institution. The Company did not have any outstanding debentures during the year.

12. 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, clause 4(xii) of the Order is not applicable.

13. The Company is not a chit fund, nidhi or mutual benefit fund/society. Accordingly, clause 4(xiii) of the Order is not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other securities. Accordingly, clause 4(xiv) of the Order is not applicable.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. Accordingly, clause 4(xv) of the Order is not applicable.

16. In our opinion and according to information and explanations given to us and on the basis of examination of books of accounts, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

17. According to the information and explanations given to us, and on an overall examination of the Balance Sheet and Cash Flow statement of the Company, funds raised by the Company on short-term basis have not been used to finance long term investment.

18. The Company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. In our opinion and according to the information and explanation given to us, the price at which these shares have been allotted is not prima facie prejudicial to the interest of the Company.

19. The Company has not issued any debentures. Hence the requirements of clause (xix) of paragraph 4 of the Order are not applicable to the Company.

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

21. During the course of our examination of the books of account 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.

Annexure 1 as referred to in para 9(c) of annexure to the auditor''s report

Name of the Statute Nature of dues Amount in Period to which Rs. Amount relates

Service Tax under Service Tax 10,836,228 Nov 2007 to Finance Act, 1994 and equivalent July 2011 penalty The Central Excise Central Excise 723,340 F.Y. 2008-09 Act, 1944 Duty and Penalty

The Central Excise Central Excise 2,491,506 Apr 2005 to Act, 1944 Penalty Nov 2009

The Central Excise Central Excise 868,598 May 2000 to Act,1944 Duty and Penalty Nov 2001

The Central Excise Central Excise 1,209,387 Jul 2012 - Act, 1944 Duty and Penalty Jan 2013

The Central Excise Central Excise 216,694 March 2012 Act,1944 Duty and Penalty

The Central Excise Central Excise 541,398 July 2011 - Act, 1944 Duty and Penalty Nov 2011 Jan 2012

Maharashtra Value Central Sales 1,038,314 F.Y. 2004-05 added Tax 2002 Tax and Penalty

The Kerala General Local Sales Tax 749,720 F.Y. 2002-03 Sales Tax Act, 1963

Name of the Statute Forum where dispute is pending

Service Tax under Customs Excise Service Tax Appellate Tribunal, Finance Act, 1994 Bangalore The Central Excise Customs Excise Service Tax Appellate Tribunal, Act, 1944 Bangalore

The Central Excise Customs Excise Service Tax Appellate Tribunal, Act, 1944 Bangalore

The Central Excise Customs Excise Service Tax Appellate Act,1944 Tribunal, Mumbai

The Central Excise Additional Commissioner of Central Exercise, Act, 1944 Bangalore

The Central Excise Assistant Commissioner of Central Exercise, Act,1944 Bangalore

The Central Excise Commissioner of Central Exercise (Appeals), Act, 1944 and Bangalore

Maharashtra Value The Deputy Commissioner (Appeals), Pune added Tax 2002

The Kerala General The Deputy Commissioner (Appeals), Ernakulam Sales Tax Act, 1963

For T D JAIN AND D I SAKARIA Chartered Accountants Firm registration no: 002491S

T D JAIN Bangalore Partner 28th May, 2014 M. No.: 012034


Mar 31, 2013

Report on the financial statements

We have audited the accompanying financial statements of M/s BAL PHARMA LIMITED, which comprise the balance sheet as at 31 March 2013, and the statement of profit and loss and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including Accounting standards referred to in sub-section (3C) of section 21 I of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that ge 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 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and 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 explanation gK,en to us, the financial statements ge 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 3 I March 2013;

(b) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

(b) In our opinion proper books of account as required by law have been kept by the company so far as it appears from our examination of those books.

(c) The balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the balance Sheet, statement of profit and loss and cash flow statement comply with the accounting standards referred to in sub-section (3C) of section 21 I of the Companies Act, 1956.

(e) On the basis of written representation received from the directors, as on 31 March 2013 and taken on record by Board of Directors, we report that none of the directors is disqualified as on 3 I March 2013 from being appointed as a director in terms of clause (g) of sub-section (I) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITOR''S REPORT

The Annexure referred to in paragraph I under the heading

"Report on other legal and regulatory requirements" of the auditor''s report of Bal Pharma Limited for the year ended 31 "March 2013

1. The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. These fixed assets were physically verified by management according to a phased programme designed to cover all items over a period of three years. Pursuant to the programme, physical verification of certain assets was carried out during the year and we have been informed that no material discrepancies were noticed on such physical verification. Substantial part of fixed assets have not been disposed off during the year, which will affect its status as going concern.

2. The stock of inventory has been physically verified during the year by the management at reasonable intervals. In our opinion, the procedures 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. The Company is maintaining proper records of inventory. The discrepancies noticed during the physical verification of stocks as compared to book records were not material; however, the same has been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the

company has not granted any loans to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. According, the provisions of Clause 4(iii)(a) to (d) of the order are not applicable to the Company and hence not commented upon.

(b) The Company has taken interest free unsecured loans, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. The Company has taken interest free unsecured loan from its Managing Director. The maximum balance outstanding during the year was Rs. 46,24,020/- and the yearend balance of the loan was Rs. 21,24,020/-. This loan is repayable on demand.

(c) In our opinion and according to the explanations given to us, the rate of interest wherever applicable, and other terms and conditions on which such loans have been taken from the companies, firms or other 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.

(d) The Company is regular in repayment of demand loans.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control systems.

5. (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rs.500,000 have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Act and the rules framed there under are not applicable to the Company.

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

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

9. (a) According to the information and explanations given to us and on the basis of our examination of books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs duty, Excise duty, Cess and any other material statutory dues during the year with the appropriate authorities. However, there have been delays in remitting undisputed statutory dues with these authorities

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues were in arrears as at 3 I March 2013 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no amounts in respect of Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise duty and Cess that have not been deposited with appropriate authorities on account of any dispute other than those mentioned in Annexure I to this report.

10. The Company has no accumulated losses. The Company has not incurred cash losses in the financial year under report and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to its bankers or to any financial institution. The Company did not have any outstanding debentures during the year.

12. 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, clause 4(xii) of the Order is not applicable.

13. The Company is not a chit fund, nidhi or mutual benefit fund/society. Accordingly, clause 4(xiii) of the Order is not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other securities. Accordingly, clause 4(xiv) of the Order is not applicable.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. Accordingly, clause 4(xv) of the Order is not applicable.

16. In our opinion and according to information and explanations given to us and on the basis of examination of books of accounts, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

17. According to the information and explanations given to us, and on an overall examination of the Balance Sheet and Cash Flow statement of the Company, funds raised by the Company on short- term basis have not been used to finance long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year. Accordingly, clause (xviii) of the Order is not applicable.

19. The Company has not issued any debentures. Hence the requirements of clause (xix) of paragraph 4 of the Order are not applicable to the Company.

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

21. During the course of our examination of the books of account 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.

Anncxurc I as referred to in para 9(c) of annexure to the auditor''s report

Name of the Statute Nature of dues Amount in

Service Tax under Finance Act, 1994 Service Tax and equivalent 1,08,36,228 penalty

The Central Excise Act, 1944 Central Excise Duty and Penalty 7,23,340

The Central Excise Act, 1944 Central Excise Penalty 25,02,256

The Central Excise Act, 1944 Central Excise Duty and Penalty 8,68,598

The Kerala General Sales Tax Act, Local Sales Tax 7,49,720 1963

Period to which Forum where dispute is pending Amount relate

Nov 2007 to Customs Excise Service Tax Appellate Tribunal, July 201 Bangalore

FY 2008 - 09 Customs Excise Service Tax Appellate Tribunal, Bangalore

Apr 2005 to Customs Excise Service Tax Appellate Tribunal, Nov 2009 Bangalore

May 2000 to Customs Excise Service Tax Appellate Tribunal, Nov 2001 Mumbai

FY 2002 - 03 The Deputy Commissioner (Appeals), Ernakulam



For TDJAINAND DISAKARIA

Chartered Accountants

Firm registration no: 00249IS

TDJAIN

Bangalore Partner

27th May, 2013 M. No, 012034


Mar 31, 2012

We have audited the attached balance sheet of Bal Pharma Limited as at 3I March 2012, the statement of profit and loss for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date, which we have signed under reference to this report. 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 have 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 Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report)(Amendment) order, 2004 issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, I956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 2II of the Companies Act, I956 to the extent applicable;

(v) On the basis of the written representations received from the directors, as on 3I March 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 3I March 2012 from being appointed as a Director in terms of clause (g) of sub-section (I) of section 274 of the Companies Act, I956 ; and

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, together with the notes thereon and attached thereto and subject to Note no.43 regarding non-confirmation of balances in parties accounts and pending review of old balances, give in the prescribed manner the information required by the Act 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 3I March 2012;

(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.

ANNEXURE TO THE AUDITOR'S REPORT

Annexure referred to in Paragraph 3 of the report of the Auditors to the members of Bal Pharma Limited for the year ended 3I March 2012:

1. The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. These fixed assets were physically verified by management according to a phased programme designed to cover all the items over a period of three years. Pursuant to the programme, physical verification of certain assets was carried out during the year and we have been informed that no material discrepancies were noticed on such physical verification. Substantial part of fixed assets have not been disposed off during the year, which will affect its status as going concern.

2. The stock of inventory has been physically verified during the year by the management at reasonable intervals. In our opinion, the procedures 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. The Company is maintaining proper records of inventory. The discrepancies noticed during the physical verification of stocks as compared to book records were not material; however, the same has been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the company has not granted any loans to companies, firms or other parties covered in the register maintained under Section 30I of the Companies Act, I956. Accordingly, the provisions of clause 4(iii)(a) to (d) of the order are not applicable to the company and hence not commented upon.

(b) The company has taken interest free unsecured loans, from companies, firms or other parties covered in the register maintained under Section 30I of the Companies Act, I956. The company has taken interest free unsecured loan from its Managing director. The maximum balance outstanding during the year was Rs. 63,95,700/- and the yearend balance of the loan was Rs. 33,80,700/-. This loan is repayable on demand.

(c) In our opinion and according to the explanations given to us, the rate of interest, wherever applicable, and other terms and conditions on which such loans have been taken from the companies, firms or other parties listed in the register maintained under section 30I of the Companies Act, I956 are not prima facie prejudicial to the interest of the company.

(d) The company is regular in repayment of demand loans.

4. In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control system during the course of our audit.

5. In our opinion, and according to the information and explanations given by the management, we are of the opinion that contracts and arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section and such transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Act and the rules framed there under are not applicable to the Company

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central government for maintenance of cost records under Section 209(1)

(d) of the Act and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not however made a detailed examination of records with a view to determining whether they are accurate and complete.

9. a) According to the information and explanations given to us and on the basis of our examination of books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs duty, Excise duty, Cess and any other material statutory dues during the year with the appropriate authorities. However, there have been delays in remitting undisputed statutory dues with these authorities. Further, an amount of Rs. 184,828/- required to be deposited during the year in Investor Education and Protection fund towards unclaimed dividend of financial year 2003-04 has not been deposited as at 31 March 2012.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues were in arrears as at 31 March 2012 for a period of more than six months from the date they became payable. However an amount of Rs. 184,828/- required to be deposited in Investor Education and Protection fund towards unclaimed dividend of financial year 2003-04 was in arrears as at 31 March 2012 for a period of more than six months from the date it became payable.

c) According to the information and explanations given to us, there are no amounts in respect of Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise duty and Cess that have not been deposited with appropriate authorities on account of any dispute other than those mentioned in Annexure I to this report.

10. The Company has no accumulated losses. The Company has not incurred cash losses in the financial year under report and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to its bankers or to any financial institution. The Company did not have any outstanding debentures during the year.

12. 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, clause 4(xii) of the Order is not applicable.

13. The Company is not a chit fund, nidhi or mutual benefit fund/ society. Accordingly, clause 4(xiii) of the Order is not applicable.

14. Accordingly to the information and explanations given to us, the Company is not dealing or trading in Shares, securities, debentures and other investments. Accordingly clause 4(xiv) of the Order is not applicable

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

16. In our opinion and according to information and explanations given to us and on the basis of examination of books of accounts, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

17. According to the information and explanations given to us, and on an overall examination of balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investments.

18. The Company has not made any preferential allotment of Shares to parties and companies covered in the register maintained under section 30I of the Act during the year. Accordingly, clause (xviii) of the Order is not applicable.

19. The Company has not issued any debentures. Hence the requirements of clause (xix) of paragraph 4 of the Order are not applicable to the Company.

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

21. During the course of our examination of the books of account 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.

Annexure 1 as referred to para 9 of annexure to the Auditor's Report

Name of the Statute Nature of dues Amount in Period to which Forum where dispute is pending Rs. Amount relates

The Central Excise Act, I944 Central Excise Duty and penalty 8,68,598 2000-01 Customs, Excise, Service Tax Appellate, Mumbai

The Kerala General Sales Tax Local Sales tax 7,49,720 2002-03 The Deputy Commissioner Act,1963 (Appeals), Ernakulam



For T D JAIN AND D I SAKARIA

Chartered Accountants

Firm registration no: 00249IS

T D JAIN

Bangalore Partner

10th August, 2012 M. No.: 12034


Mar 31, 2010

We have audited the attached Balance Sheet of Bal Pharma Limited as at 31 March 2010, the Profit and Loss Account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date, which we have signed under reference to this report. 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 have 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 Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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 section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, the Profit and Loss Account and the 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 to the extent applicable;

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, together with the notes thereon and attached thereto and subject to Note no.13

regarding non-confirmation of balances in parties accounts and pending review of old balances, give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) in the case of the Profit and Loss Account, of the Loss 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.

ANNEXURE TO THE AUDITORS REPORT

Annexure referred to in Paragraph 3 of the report of the Auditors to the members of Bal Pharma Limited for the year ended 31st March 2010:

1. The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. These fixed assets were physically verified by management according to a phased programme designed to cover all the items over a period of three years. Pursuant to the programme, physical verification of certain assets was carried out during the year and we have been informed that no material discrepancies were noticed on such physical verification. Substantial part of fixed assets have not been disposed off during the year, which will affect its status as going concern.

2. The stock of inventory has been physically verified during the year by the management at reasonable intervals. In our opinion, the procedures 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. The Company is maintaining proper records of inventory. The discrepancies noticed during the physical verification of stocks as compared to book records were not material; however, the same has been properly dealt with in the books of account.

3. (a) As per the records of the Company, it had granted interest

free unsecured loan to Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has granted interest free unsecured advance to its subsidiary companies. The maximum amount involved Rs 64, 86,537/- and the year end balance of loan was Rs 64, 60,000/-.

(b) Based on the information received and the explanations given, the terms and conditions of the advance are prima facie not prejudicial to the interest of the Company.

(c) As informed to us, no repayment was due during the year.

(d) As per records of the Company, it 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. Accordingly sub-clauses (f) and (g) of clause 4(iii) of the order is not applicable.

4. In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control system during the course of our audit.

5. In our opinion, and according to the information and explanations given by the management, we are of the opinion that contracts and arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section and such transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Act and the rules framed there under are not applicable to the Company.

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central government for maintenance of cost records under Section 209(1) (d) of the Act; and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not however made a detailed examination of records with a view to determining whether they are accurate and complete.

9. a) According to the information and explanations given to us

and on the basis of our examination of books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs duty, Excise duty, Cess and any other material statutory dues during the year with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues were in arrears as at 31 March 2010 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, there are no amounts in respect of Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise duty and Cess that have not been deposited with appropriate authorities on account of any dispute other than those mentioned in Annexure 1 to this report.

10. The Company has no accumulated losses. The Company has not incurred cash losses in the financial year under report and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to its bankers or to any financial institution. The Company did not have any outstanding debentures during the year.

12. 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, clause 4(xii) of the Order is not applicable.

13. The Company is not a chit fund, nidhi or mutual benefit fund/ society. Accordingly, clause 4(xiii) of the Order is not applicable.

14. Accordingly to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly clause 4(xiv) of the Order is not applicable.

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

16. In our opinion and according to information and explanations given to us and on the basis of examination of books of accounts, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

17. According to the information and explanations given to us, and on an overall examination of balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year. Accordingly, clause (xviii) of the Order is not applicable.

19. The Company has not issued any debentures. Hence the requirements of clause (xix) of paragraph 4 of the Order are not applicable to the Company.

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

21. During the course of our examination of the books of account 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.



Name of the Statue Nature of dues Amount in Period to which Forum where dispute is Rs Amount re lates pending

The Central Excise Act, 1944 Central Excise Duty and penalty 8,68,598 2000-01 Customs, Excise, Ser vice Tax Appellate, Mumbai

The Kerala General sales Tax Local Sales Tax 7,49,720 2002-03 The Deputy Commissio ner (Ap- Act,1963 peals), Ernakulam

The Central Excise Act, 1944 Central Excise Duty 10,34,757 1996-97 Supreme court of India

The Central Excise Act, 1944 Central Excise Duty 8,98,929 1997-98 Supreme court of India

The Income Tax Act 1961 TDS 89,50,429 2004-05 to 2008-09 Commiss ioner of Income Tax Appeals

On the Consolidated Financial statements of M/s. BAL PHARMA LTD., and its subsidiaries

We have examined the attached Consolidated Balance Sheet of M/s. Bal Pharma Ltd., (“the company”) and its subsidiaries (collectively referred to as the “Bal Pharmas Group”) as at 31 March 2010 and also the Consolidated profit and loss account and Consolidated cash flow statement for the year ended on that date annexed thereto. These Consolidated financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these Consolidated financial statements based on our audit.

We have 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 consolidated financial statements are free of material misstatement. An audit includes, examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The consolidated financial statements have been prepared by the companys management in accordance with the requirements of Accounting Standard (AS) ‘21-consolidated financial statements, issued by the Institute of Chartered Accountants Of India and on the basis of the separate audited financial statements of M/s. Bal Pharma Ltd., and its subsidiary M/s. Basav Chem Ltd included in the consolidated financial statements.

In our opinion and to the best of our information and according to the explanations given to us and on the consideration of the separate audit reports on individual audited financial statements of M/s. Bal Pharma Ltd., and its aforesaid subsidiaries, the Consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Consolidated Balance sheet of the consolidated state of affaires of Bal Pharmas Group as at 31 March 2010;

(ii) in the case of Consolidated Profit and Loss Account, of the consolidated results of operations of Bal Pharmas Group for the year ended on that date; and

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

For Ostawal & Jain

ICAI FRN NO. 002491S

Chartered Accountants

Bangalore T. D. JAIN

Date: 09.08.2010 Partner

M.M.No: 12034