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Auditor Report of Dishman Pharmaceuticals & Chemicals Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Dishman Pharmaceuticals and Chemicals Limited ("the Company"), which comprise the Balance Sheet as at March 31, 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

Management is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 thereunder. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone financial statements that give true and fair view 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 Company's Directors, as well as evaluating the overall presentation of the standalone 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 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

(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 section 143(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 specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014;

e. on the basis of written representations received from the directors as on March 31, 2015, and 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 adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in annexure.

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

i. The Company has disclosed the impact of pending litigations on its standalone financial position in its financial statements .

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any.

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

The Annexure referred to in paragraph 1 of the our Report of even date to the members of Dishman Pharmaceuticals and Chemicals Limited on the accounts of the company for the year ended 31st March, 2015.

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

1. (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.

2. (a) As explained to us, inventories 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.

3. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has granted loan to a subsidiary company covered in the register maintained under Section 189 of the Companies Act, 2013. In respect of loans granted, repayment of the principal amount is not yet stipulated and payment of interest has been regular.

4. 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. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. Based on the audit procedures applied by us and according to the information and explanations provided by the management, the company has not accepted any deposit under section 73 to 76 of the Act or any other relevant provisions of the Companies Act, 2013.

6. We have broadly reviewed the books of accounts maintained by the company pursuant to the notification by the central government for maintenance of cost records under sub-section 1 of section 148 of the Companies Act 2013 and on the basis of information received, we are of the opinion that prima-facie the prescribed accounts and records have been made and maintained as per the requirement. We have, however, not carried out a detailed examination or audit of the cost records with a view to determine whether they are accurate or complete.

7. (a) According to the records of the company, 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 to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2015 for a period of more than six months from the date they became payable.

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

Statute Nature of dues Forum where dispute is pending

The Income Income Tax Income Tax Appellate Tax Act, 1961

Hon. High Court of Gujarat

Commissioner of income tax (Appeals)

Central Sales Tax Sales Tax Gujarat VAT Tribunal

Joint Commissioner,

Commercial Tax Gujarat Sales Tax Act Sales Tax Gujarat VAT Tribunal

Joint Commissioner, Commercial Tax

Central Excise Excise Duties and Hon. High Court Act, 1944 Service Tax of Gujarat

Central Excise and Service Tax Appellate Tribunal

The Commissioner (Appeals) Central Excise

Statute Period for which Amount involved the amount related (Rs. Lacs)

The Income Tax Act, 1961 2001-2002,2002-2003, 4106.99 2003-2004,2005, 2005-2006, 2006-2007, 2007-2008, 2008-2009

2002-2003,2003-2004, 729.26 2004-2005

2008-2009, 2010-2011 1472.73

Central Sales Tax 2006-2007 118.81

2001-2002 24.42

Gujarat Sales Tax Act 2006-2007 146.97

2001-2002, 2007-2008, 269.36 2008-2009

Central Excise Act, 1944 2003-2004 13.84

2006-2007, 2008-2009, 154.25 2009-2010, 2012-13

2006-2007, 2008-2009, 272.97 2009-2010, 2010-2011, 2011-2012, 2013-14

8. The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and not in the immediately preceding financial year.

9. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution or bank.

10. According to the information and explanations given to us, the Company has given corporate guarantee for loan taken by other from bank or financial institutions.

11. According to the information and explanation given to us, the term loan taken by the company has been utilised for the purpose for which the loans were obtained.

12. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For V. D. Shukla & Co.

Chartered Accountants

FRN: 110240W

Vimal D. Shukla

Place : Ahmedabad Proprietor

Date : 22nd August, 2015 (Membership No.: 036416)


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of DISHMAN PHARMACEUTICALS AND CHEMICALS LIMITED (''the Company”), which comprise the Balance Sheet as at 31st March , 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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 Section 211(3C) of the Companies Act, 1956 (''the Act”) and in accordance with accounting principles generally accepted in India.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.

Auditors'' 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 withethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 the accounting policies used and the reasonableness of the accounting estimates made by the 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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

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

(c) in the case of the Cash Flow Statement, of the cash flows of the Company 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 in terms of Section 227(4A) 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 purposes of our audit.

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

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

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

(e) On the basis of the written representations received from the directors as on 31stMarch, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of Section 274(1) (g) of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph on ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) Having regard to the nature of the Company''s activities, clauses (xiii) and (xiv) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) As explained to us, the fixed assets were physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies noticed in such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) As explained to us, the inventories were 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 were 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 no material discrepancies were noticed on physical verification.

(iv) (a) The Company has granted unsecured loan to a company listed in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs. 3,800 lacs. The maximum amount involved during the year and the year end balance of the loan granted was Rs. 3,800 lacs.

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

(c) In respect of the loan given by the Company, the terms of repayment of principal and interest have not been stipulated and hence the question of overdue amount does not arise.

(d) The company has not taken any unsecured loan from the company, firm or party listed in the register maintained under section 301 of the Companies Act, 1956. Hence the paragraphs (iv)(iii)(f) and (iv) (iii)(g) of the Order are not applicable to the Company.

(v) 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 purchases of inventory and fixed assets and for the sale of goods and services. During the course of audit, no major weakness has been noticed in the internal controls in respect of these areas.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs.5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore the provisions of clause (vi) of paragraph (iv) of the Order are not applicable to the company.

(viii) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(ix) We have broadly reviewed the cost records maintained by the company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable.

(xi) There are no accumulated losses of the Company as at 31st March, 2013. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. (xii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions. (xiii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks and financial institutions. (xv) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained. (xvi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xvii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956. (xviii) According to the information and explanations given to us, during the year covered by our audit report, the Company has not issued any debentures.

(xix) The Company has not raised any money by way of public issue during the year. (xx) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Registration No.117365W)

Gaurav J. Shah

Partner

AHMEDABAD, May 28, 2013 (Membership No. 35701)


Mar 31, 2012

1. We have audited the attached balance sheet of DISHMAN PHARMACEUTICALS AND CHEMICALS LIMITED ("the Company") as at March 31, 2012, the statement of profit and loss and the cash flow statement of the Company for the year ended on that date, both 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) 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 as follows:

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

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

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

(d) in our opinion, the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(e) 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 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 March 31, 2012;

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

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

5. On the basis of the written representations received from the Directors as on March 31, 2012 and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2012 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

(Referred to in paragraph 3 of our report of even date on the accounts of Dishman Pharmaceuticals and Chemicals Limited for the year ended on March 31, 2012)

1. The nature of the Company's activities and other relevant facts are such that item (xiii) and (xiv) of paragraph 4 of the Order are not applicable to the Company.

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

(b) As explained to us, the fixed assets were physically verified by the management in a phased periodical manner, 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 physical verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

3. (a) As informed to us, the inventories have 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 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 physical verification of the inventories between the physical stocks and the book records were not material.

4. (a) The Company has granted unsecured loan to a company listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year-end balance of the loan granted was Rs. 3800 lacs.

(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 loan are not prima facie prejudicial to the interest of the Company.

(c) In respect of the loan given by the Company, the terms of repayment of principal and interest have not been stipulated and hence the question of overdue amount does not arise.

(d) The Company has not taken any unsecured loan from company, firm or party listed in the register maintained under section 301 of the Companies Act, 1956. Hence, the paragraphs 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the Company.

5. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for purchase of inventory and fixed assets and for sale of goods and services. We have not observed any continuing failure to correct major weaknesses in such internal control system.

6. In respect of contracts or arrangements required to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) Particulars of contracts or arrangements have been so entered.

(b) The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

7. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

9. We have broadly reviewed the books of account maintained by the Company pursuant to the notification of the Central Government for maintenance of the cost records under section 209(1) (d) of the Companies Act, 1956 and on the basis of such review, we are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, carried out a detailed examination of the same.

10. In respect of statutory dues:

(a) According to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues, including provident fund, employees' state insurance, income tax, wealth tax, service tax, custom duty, cess and other material statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2012 for a period of more than six months from the date of becoming payable.

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

Sr. Name of the statue Nature of dues Amount Period to which Forum where the No. (Rs. in lacs) the amount relates dispute is pending

1 The Income Tax Act, 1961 Income Tax 3352.80 F.Y. 1999-00, Income Tax Appellate Tribunal

F.Y. 2000-01,

F.Y. 2001-02

F.Y. 2004-05,

F.Y. 2005-06

F.Y. 2006-07

75.24 F.Y. 2002-03, Hon. High Court of Gujarat F.Y. 2003-04

1186.51 F.Y. 2002-03, The Commissi oner of Income Tax (Appeals)

F.Y. 2003-04,

F.Y. 2007-08

2 The Central Excise Excise duties 10.01 F.Y. 2003-04 Hon. High Court of Gujarat Act, 1944 and service tax 143.48 F.Y. 2005-06, Central Excise F.Y. 2006-07, and Service Tax F.Y. 2008-09, Appellate Tribunal

F.Y. 2009-10,

F.Y. 2010-11,

F.Y. 2011-12

2.40 F.Y. 2008-09, The Commissi oner (appeals) F.Y. 2009-10, Central Excise F.Y. 2011-12

244.69 F.Y. 2006-07, Assistant Commissi oner F.Y. 2009-10 Central Excise

3 Central Sales Tax Sales Tax 24.42 F.Y. 2001-02 Joint Commissi oner, Act, 1956 Commercial Tax

118.81 F.Y. 2006-07 Gujarat VAT Tribunal

4 Gujarat Sales Tax, Act Sales Tax 6.89 F.Y. 2001-02 Joint Commissi oner, Commercial Tax

283.84 F.Y. 2006-07, Gujarat VAT Tribunal

F.Y. 2007-08

11. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

12. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution or bank or to the debenture holders except for delay in cases mentioned below :

Amount (Rs. In Lacs) Delay in number of days

From a Bank 999.38 6

33.48 46

1467.14 75

1000.00 17

13. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

14. The Company has given guarantees for loans taken by others from banks and financial institutions. In our opinion and according to the information and explanations given to us, the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

15. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were raised.

16. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long term investment.

17. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

18. In our opinion and according to the information and explanations given to us, as the Company has not issued any debentures during the year, the provisions of paragraph 4 (xix) of CARO are not applicable to the Company.

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

20. To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No.117365W)

Gaurav J. Shah

Partner

AHMEDABAD, July 31, 2012 (Membership No. 35701)


Mar 31, 2011

1. We have audited the attached balance sheet of DISHMAN PHARMACEUTICALS AND CHEMICALS LIMITED ("the Company") as at March 31, 2011, the profit and loss account and the cash flow statement of the Company for the year ended on that date, both 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) 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 as follows:

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

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

(c) 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;

(d) in our opinion, the balance sheet, the profit and loss account and the cash flow statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(e) 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 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 March 31, 2011;

(ii) in the case of the profit and loss account, of the profit of the Company for the year ended on that date; and

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date on the accounts of Dishman Pharmaceuticals and Chemicals Limited for the year ended on March 31, 2011)

1. The nature of the Companys activities and other relevant facts are such that item (xiii) and (xiv) of paragraph 4 of the Order are not applicable to the Company.

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

(b) As explained to us, the fixed assets were physically verified by the management in a phased periodical manner, 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 physical verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

3. (a) As informed to us, the inventories have 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 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 physical verification of the inventories between the physical stocks and the book records were not material.

4. (a) The Company has granted unsecured loan to a company listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year-end balance of the loan granted was Rs.3800 lacs.

(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 loan are not prima facie prejudicial to the interest of the Company.

(c) In respect of the loan given by the Company, the terms of repayment of principal and interest have not been stipulated and hence the question of overdue amount does not arise.

(d) The Company has not taken any unsecured loan from company, firm or party listed in the register maintained under section 301 of the Companies Act, 1956. Hence, the paragraphs 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the Company.

5. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for purchase of inventory and fixed assets and for sale of goods and services. We have not observed any continuing failure to correct major weaknesses in such internal control system.

6. In respect of contracts or arrangements required to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) Particulars of contracts or arrangements have been so entered.

(b) The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

7. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

9. We have broadly reviewed the books of account maintained by the Company pursuant to the notification of the Central Government for maintenance of the cost records under section 209(1) (d) of the Companies Act, 1956 and on the basis of such review, we are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, carried out a detailed examination of the same.

10. In respect of statutory dues:

(a) According to the information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues, including provident fund, employees state insurance, income tax, wealth tax, service tax, custom duty, cess and other material statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2011 for a period of more than six months from the date of becoming payable.

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

Sr. Name of the Nature of Amount Period to which Forum where the No statute dues (Rs. in lacs) the amount dispute is pending relates

1 The Income Tax Income Tax 1858.73 F.Y. 1999-00, The Commissioner of Income Tax (Appeals) Act, 1961 F.Y. 2000-01, F.Y. 2004-05, F.Y. 2006-07 957.79 F.Y. 2005-06 Income Tax Appellate Tribunal

2 The Central Excise duties 293.46 F.Y. 2003-04, Central Excise and Service Tax Appellate Excise and service F.Y. 2006-07, Tribunal Act, 1944 tax F.Y. 2007-08 45.43 F.Y. 2009-10 The Commissioner (appeals) Central Excise 58.55 F.Y. 2009-10, Assistant Commissioner Central Excise F.Y. 2010-11

3 Central Sales Sales Tax 41.73 F.Y. 2001-02 and Joint Commissioner Commercial Tax Tax Act, 1956 F.Y. 2002-03 118.81 F.Y. 2006-07 Gujarat VAT Tribunal

4 Gujarat Sales Sales Tax 114.95 F.Y. 2001-02 and Joint Commissioner, Commercial Tax Tax, Act F.Y. 2002-03 146.97 F.Y. 2006-07 Gujarat VAT Tribunal

11. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

12. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution or bank or to the debenture holders.

13. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

14. The Company has given guarantees for loans taken by others from banks and financial institutions. In our opinion and according to the information and explanations given to us, the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

15. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were raised.

16. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long term investment.

17. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

18. The Company has issued secured redeemable non convertible debentures of Rs. 750,000,000. The Company has created security in respect of the debentures issued.

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

20. To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants

(Registration No. 117365W)

Gaurav J. Shah

Partner

Ahmedabad, 26th May, 2011 (Membership No.35701)



 
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