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Auditor Report of Gufic BioSciences Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of Gufic Biosciences Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management Responsibility for the Financial Statements

2. 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 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 referred 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; and 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.

Auditors Responsibility

3. 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.

4. 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 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 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 the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.

Basis for Qualified Opinion

6. We refer to Note No 53 of the Financial Statements in respect of misappropriation by one of the marketing employee of the company. The amount of misappropriation of Rs.. 123.80 lacs (net of recovery of Rs.. 22.50 lacs) has been shown as recoverable under the head other noncurrent assets (other). However no provision has been In our opinion the recovery of the amount is doubtful. Consequently profit is overstated by Rs.. 123.80 lacs with consequential impact on Reserves and Surplus and Loans and Advances (other), which areover stated by the said amount.

7. We are unable to express our opinion on recoverability of debts of Rs.. 151.48 lakhs (2013 – 2014 Rs.. 326.69 lakhs) which are outstanding for more than one year and advances of Rs.. 23.08 lakhs shown under the head long term loans and advances as at Balance sheet date (2013 - 2014: Rs.. 40.14 lakhs), which are outstanding for more than 2 years. In the absence of appropriate evidences we are unable to ascertain its recoverability and its impact on the accounts of the company. However in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature (Refer Note 51).

Qualified Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter specified in para 6 and possible effects of the matter specified in para 7 in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements, read together with notes to the accounts thereon, 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 Profit and Loss Account, 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.

Emphasis of Matter

10. In the absence of information, we have relied upon the segment wise report prepared by the management based on the nature of product, risk and returns and organization structure. The figures have been regrouped and reclassified wherever necessary by the management.

11. We did not participate in physical counting of the Inventory and its valuation. The Company has appointed an internal auditor, an independent firm of Chartered Accountants to carry out physical verification and valuation of inven to ri e s and also to conduct audit of stock records maintained by the company. We have relied upon certificate issued by them in this regard. (Refer Note No.49)

Report on Other Legal and Regulatory Requirements

12. As required by the Companies (Auditors' Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

(a) We have sought and, except for the matters described in the para 7 of the Basis for Qualified Opinion paragraph, 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, 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 aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) The matter described in the Basis for Qualified Opinion paragraph 6 & 7 above in our opinion, may have an adverse effect on the functioning ofthe Company.

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

(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

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

(I) The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 34 to the financial statements.

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-termcontracts including derivative contracts.

(iii) We have observed delay in transferring unpaid dividend of Rs. 2 laks credited to said account in FY 2006-07 pertaining to Financial Year 2005-2006, required to be transferred to the Investors Education and Protection Fund by the company as at Balance Sheet date

(ANNEXURE REFERRED TO IN PARAGRAPH 11 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015 OF GUFIC BIOSCIENCES LIMITED)

I. (a) The Company has updated its records showing quantitative details and situation of fixed assets;

(b) According to information and explanations provided to us, the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of five years which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year. We have been informed that necessary adjustments in respect of discrepancies if any between physical asset and book record have already be made in the books upon reconciliation.

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

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

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that, the Company is maintaining proper records of its inventory. Discrepancies which were noticed on physical verification of inventory as compared to book records have been properly dealt with in the books of account.

iii. According to the information and explanations given to us, the Company has granted unsecured loans to parties covered in the register maintained u/s 189 of the Companies Act, 2013, the recovery of principal and interest thereon, wherever stipulated, is regular. (Other than interest free security deposits or advances given for its business purpose. Refer note no 52).

iv. According to the information and explanations given to us, the company is in process of strengthening its internal control procedures in respect of purchase of inventory and fixed assets and for the sale of goods and services so as to commensurate with the size of the company.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 73 to 76 or any other relevant provision of the Companies Act and the rule framed there under during the year. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal.

vi. We have broadly reviewed the cost records pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 143 (1) of the Companies Act, 2013 and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made detailed examination of records with a view to determine whether they are accurate.

vii. (a) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing undisputed statutory due in respect of Excise Duty and Custom Duty with appropriate authorities. However, we have observed delays in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Service Ta x and Professional Ta x applicable to it with the appropriate authorities. According to information and explanations given to us, there are no statutory dues outstanding as at the last day of financial year for a period of more than six months from the date they became payable, except: Income Tax: Rs.. 235.66 lacs Sales tax of Rs.. 19.14 lacs, Profession Tax of Rs.. 10.60 lacs, Employee State Insurance Corporation of Rs.. 16.61 lacs Provident Fund of Rs.. 56.37 lacs.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax, Service Tax, Excise Duty, Customs Duty or Cess outstanding on account of any dispute except following dues have not been deposited with appropriate authorities on account of dispute :

(c) According to the information and explanations given to us and based on the documents and records produced to us, the company has not transferred unpaid dividend of Rs. 2 lacs credited to the said account in the FY 2006 – 2007 (pertaining to FY 2005 – 2006), required to be transferred, to the Investor Education and Protection Fund by the Company, as at the Balance Sheet date, in accordance with the relevant provision of the Companies Act, 1956 and the rules made thereunder have not been so transferred.

Name of the Statute Nature of Amount Period to which Dues (Rs. in Lacs) it relates

Income Tax Act, 1961 Income Tax 43.51 Prior Years - TDS 63.50 2008 – 2009 to 2013 – 14

Income Tax 99.54 1999 – 2000 to 2009 – 2010 & 2012 – 2013

303.03 2010 – 2011 & 2011 – 2012

Central Excise Central 44.27 2004 – 2008 Act, 1944 Excise Duty

14.04 2008 – 2009

Gujarat Value Sales Tax 29.15 2010 – 2011 Added Tax Act, 2003

Name of the Statute Forum where matter is pending

Income Tax Act, 1961 Departmental Authority

Departmental Authority

Departmental Authority

Appeal preferred by the company to the Commissioner of Income Tax (Appeal)

Central Excise Act, 1944 Appeal preferred by the company to the Tribunal

Appeal preferred by the company to the Commissioner Appeal

Gujarat Value Added Tax Act, 2003 Appeal preferred by the company to the Commissioner Appeal

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

ix. According to the information and explanations given to us and based on the documents and records produced to us, the Company has delayed or defaulted in repayment of dues to banks to the tune of Rs.. 1.25 lakhs and the period of default was between 0 to2 months.

x. According to the information and explanations given to us, the Company has given corporate guarantee of Rs.. 450 lakhs for loans taken by a company in which directors are interested from bank, the terms and conditions where of are not prejudicial to the interest of the Company.

xi. According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

xii. As per the information and explanations given, by the management there was a misappropriation of Rs. 123.80 lacs (net of recoveries) by one of the marketing employee of the company. As per the investigation conducted by the management estimated amount of misappropriation is Rs. 123.80 lacs. We have been informed that necessary steps have been taken to recover said amount which has been shown in the Financial Statement under the head other noncurrent assets (others). (Refer Note 53 to the Financial Statements)

For S H R & Co.

Chartered Accountants

FRN : 120491W

Deep N. Shroff

Partner

Membership No. 122592

Mumbai : 29th May, 2015


Mar 31, 2014

1. We have audited the accompanying financial statements of Gufic Biosciences Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management Responsibility for the Financial Statements

2. 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 notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

6. We are unable to express our opinion on recoverability of debts of Rs. 326.69 lakhs (2012 - 2013 Rs. 191.52 lakhs) which are outstanding for more than one year and advances of Rs. 40.14 lakhs shown under the head long term loans and advances as at Balance sheet date (2012-13: Rs. 40.92 lakhs), which are outstanding for more than 2 years. In the absence of appropriate evidences we are unable to ascertain its recoverability and its impact on the accounts of the company. However in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature (Refer Note 53).

Qualified Opinion

7. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis of Qualified Opinion Paragraph, the financial statements, read together with notes to the accounts thereon, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

8. In the absence of information, we have relied upon the segment wise report prepared by the management based on the nature of product, risk and returns and organization structure. The figures have been regrouped and reclassified wherever necessary by the management.

9. We did not participate in physical counting of the Inventory and its valuation. The Company has appointed an internal auditor, an independent firm of Chartered Accountants to carry out physical verification and valuation of inventories and also to conduct audit of stock records maintained by the company. We have relied upon certificate issued by them in this regard.( Refer Note No.49)

10. Certain transactions entered into by the company with certain private companies in which directors are interested, are in violation of section 297 of the Companies Act 1956, which requires the prior approval of Central Government (Refer Note 54).

Report on Other Legal and Regulatory Requirements

11. 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.

12. 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; except for the matter described in para 6 of Basis for Qualified Opinion and para 8 of the Emphasis of Matter.

(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 the books;

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

(d) In our opinion, the Balance Sheet, Profit & Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 to the extent applicable.

(e) On the basis of written representations received from the directors as on March 31, 2014 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2014 from being appointed as a director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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

ANNEXURE TO THE AUDITOR''S REPORT

(ANNEXURE REFERRED TO IN PARAGRAPH 10 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014 OF GUFIC BIOSCIENCES LIMITED)

I. (a) The Company is in process of updating its records showing particulars, including quantitative details and situation of fixed assets;

(b) According to information and explanations provided to us the company has carried out physical verification of its major assets viz. plant and machineries, which in our opinion, is reasonable having regard to the size of the company and nature of its business. We have been informed that the company is in process of updating its fixed assets register and necessary adjustments in respect of discrepancies if any between physical assets and book record will be made in the books on such updation.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii. According to the information and explanation given to us and based on the certificate issued by the internal auditor, who has carried out the audit of stock records maintained by the company which interalia includes physical verification and valuation of inventory, we state that:

(a) Inventory have been physically verified during the year by the management. In our opinion frequency of verification needs to be increased.

(b) The procedures followed by the management for physical verification of inventory, are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) Discrepancies which were noticed on physical verification of inventory as compared to book records have been properly dealt with in the books of account.

iii. (a) According to the information and explanations given to us, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956 except interest free security deposits or advances given for its business purpose.(Refer Note 52).

(b) According to the information and explanations given to us, the Company has taken unsecured loans from Companies and other parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 614.51 lacs and the year-end balance of such loans aggregates to Rs. 436.44 lacs. There are four parties including Companies and other parties covered in the register maintained u/s 301 of the Companies Act, 1956 from whom Company has taken loans.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans have been taken from Companies, firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(d) There is no stipulation as to repayments of principal amount in respect of aforesaid loans. The said loans are interest free in nature.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for sale of services. However internal control procedures in respect of purchase of inventory, fixed assets and for the sale of goods needs to be strengthened so as to commensurate with the size of the company. Other than the above, no major weaknesses have been noticed in the internal controls during the course of our audit.

v. (a) According to the information and explanations given to us, we are of the opinion that during the year, the particulars of contracts/ arrangements that need to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lacs have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58 AA of the Companies Act, 1956, and the rules framed there under during the year. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal.

vii. The company has a formal internal audit system, which needs to be strengthened so as to commensurate with the size of the company and nature of its business.

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

ix. (a) According to the information and explanations given to us and according to records of the company, we have to state that, there have been delays in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection fund, Employees'' State Insurance, Income Tax, Service Tax and Professional Tax applicable to it with the appropriate authorities. According to information and explanations given to us, there are no statutory dues outstanding as at the last day of financial year for a period of more than six months from the date they became payable, except Employers Contribution to Provident Fund of Rs.16.60 lacs, Employers Contribution to ESIC of Rs. 8.27 lacs, Advance Tax of Rs. 61.02 lacs, Income Tax of Rs. 45.23 lacs, Tax Deducted at Source of Rs. 47.18 lacs and Professional Tax of Rs. 2.60 lacs. The company is generally regular in depositing Excise Duty and Custom Duty with appropriate authorities.

(b) According to the information and explanations given to us , there were no disputed dues in respect of Value Added Tax, Wealth Tax, Service Tax, Excise Duty, Customs Duty or Cess outstanding on account of any dispute except following dues have not been deposited with appropriate authorities on account of dispute :

Name of the Statute Financial Year Forum where matter Amount is pending (Rs.in Lacs)

Income Tax Act, 1961 2010 - 2011 Commissioner of 32.87 Income Tax (Appeal)

Central Excise 2004 - 2008 Appeal to the Tribunal 44.27 2008 - 2009 Appeal to the Commissioner Appeal 14.04

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

xi. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

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

xiii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

xiv. The Company does not deal or trade in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi. According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us on an overall examination of Balance Sheet and Cash Flows of the Company, we report that the Company has not utilised funds raised on short-term basis for long term investment.

xviii. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. The Company did not issue any debentures during the year.

xx. The Company has not raised any money through a public issue during the year.

xxi. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S H R & Co. Chartered Accountants FRN : 120491W

Deep N. Shroff Partner Membership No. 122592 Mumbai : 30th May, 2014


Mar 31, 2013

Report on Financial Statements

We have audited the accompanying financial statements of Gufic Bio sciences Limited("the Company"), which comprise the Balance Sheet as at March 31,2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("theAct"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements inorder to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements, give the information required by the Act in the manner so required and on emphasis of matter below, the impact whereof can not be ascertained, 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, 2013;

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

Emphasis of Matter

We draw attention to the following matters repented to in the note nos. 2.29, 2.30, 2.32 and 2.44. forming part of the financial statements.

Our observation on the said accounts are given below:

(a) We are unable to express our opinion on recoverability of debts of Rs.191.52 Lacs which are overdue for more than one year and of Loans and Advances of Rs. 35.39 Lacs which are outstanding for more than three years. In the absence of appropriate evidences, we are unable to ascertain its recoverability and its impact on the accounts of the Company. However, in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature. (Refer Note No.2.33)

(b) Certain transactions entered into by the Company with companies in which Directors are interested are in violation of Section 297 of the Companies Act, 1956, which requires the prior approval of the Central Government, (Refer Note 2.35)

Report on other Legal & Regulatory Requirements

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

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

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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

ANNEXURE TO THE AUDITOR''S REPORT

(ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2013 OF GUFIC BIOSCIENCES LIMITED)

i. (a) The Company is in the process of updating its records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets of the Company, have been physically verified by the Management during the year. In our opinion, period of verification is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been reported on such verification.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii. According to the information and explanations given to us and based on the certificate issued by the internal auditor, who has conducted physical verification and valuation fixed assets, we state that ;

(a) the Inventory of the Company has been physically verified by the Management during the year. In our opinion frequency of verification needs to be increased.

(b) the procedures of physical verification of inventory followed by the Management, are reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) the Company is maintaining proper records of its inventory and the discrepancies which were noticed on physical verification of Inventory as compared to book records, have been properly dealt with in the books of account.

iii (a) According to the information and explanations given to us, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. except interest free security deposits given (Refer note 2.13)

(b) According to the information and explanations given to us, the Company has taken advances in the nature of loans from three Companies / Parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount of loans taken during the year was Rs 398.90 Lacs and the year end balance wasRs. 380.86 Lacs.

(c) The advances / loans are interest free in nature and other terms and conditions of loans taken by the company, secured or unsecured are prima facie not prejudicial to the interest of the company.

(d) There are no specific stipulations as to repayment of such advances / loans.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for fixed assets and sale of services. However, internal control procedures in respect of purchase of Inventory and sale of goods need to be strengthened so as to commensurate with the size of the company. Other than above, no major weaknesses have been noticed in the internal control systems.

v. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that during the year, the particulars of contracts/arrangements that were required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 have been so entered. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. Five Lacs have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58 AA or any other provisions of the Companies Act, 1956, and the rules framed thereunder during the year. To the best of our knowledge and according to information and explanations given to us, no order has been passed by the Company Law Board or any court or any other Tribunal.

vii. In our opinion, Company has an internal audit system which needs to be strengthened so as to commensurate with the size of the Company and nature of its business.

viii. According to information and explanations provided to us, the Central Government has prescribed under section 209(1)(d) of the Companies Act,1956 the maintenance of cost records in respect of certain products manufactured by the Company viz. Formulations, Bulkdrugs. We have broadly reviewed the books of account maintained by the company and are of the opinion that prima facie, the prescribed accounts and records have been maintained by the company. We have not, however, made a detailed examination of records with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information given to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, for any other products of the company.

ix. (a) According to the information and explanations given to us and according to the records of the Company, we have to state that, the company has not been regular in depositing undisputed statutory dues of Provident fund, Employees'' State Insurance, Income Tax, Dividend Distribution Tax, Income tax deducted at source, Sales tax and Excise Duty. We are informed that there are undisputed demand outstanding, as at 31st March 2013 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are dues in respect of Income Tax, Sales tax, Service Tax, Customs Duty, Excise Duty and Cess, which have not been deposited.

x. The Company does not have accumulated losses at the end of the financial year March 31,2013. Without considering the effect of our observation stated in the Auditor''s Report, the impact where of on the profits can not be ascertained, the Company has not incurred any cash losses during the financial year ended March 31,2013 and in the immediately preceding financial year.

xi. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

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

xiii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund/societies.

xiv. The Company does not deal or trade in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi. According to the information and explanations given to us, the Company has obtained term loan during the year and the proceeds have been utilized for the purpose for which it was obtained.

xvii. According to the information and explanation given to us and on the overall examination of the Balance Sheet and Cash Flow of the Company, we report that the Company has neither raised any long term nor short term funds during the year.

xviii. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix The Company did not issue any debentures during the year.

xx. The Company has not raised any money through a public issue during the year.

xxi. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For Mayur Chokshi & Co.

Chartered Accountants

Mayur Chokshi

Proprietor

Firm Registration No. 106116W

Membership No.33936

Mumbai : 30th May, 2013


Mar 31, 2012

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

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

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to above, we report that:

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

b) In our opinion proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of the books;

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

d) On the basis of written representation received from the Directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as at March 31, 2012 from being appointed as Director in term of Clause (g) of sub-section (I) of Section 274 of the Companies Act, 1956;

e) Attention is invited to the fact that we have relied upon the Board's/ Management's assertions, opinion, view, representation and various other certificates produced before us, inter-alia, in respect of and as detailed in the note nos. 2.29, 2.30, 2.32 and 2.44.

f) Our observation on the said accounts are given below:

(i) We are unable to express our opinion on recoverability of debts of Rs. 174.48 Lacs which are overdue for more than one year and of Loans and Advances ofRs. 37.76 Lacs which are outstanding for more than three years. In the absence of appropriate evidences, we are unable to ascertain its recoverability and its impact on the accounts of the Company. However, in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature. (Refer Note No.2.33)

(ii) Certain transactions entered into by the Company with companies in which Directors are interested are in violation of Section 297 of the Companies Act, 1956, which requires the prior approval of the Central Government, (Refer Note 2.35)

g) In our opinion ,and to the best of our information and according to the explanations given to us, the Balance Sheet , Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

h) In our opinion and to the best of our information and according to the explanations given to us, the said accounts with notes thereon when read in conjunction with the para (e) above, give the information required by the Companies Act,I956, in the manner so required and subject to para 4(f) above, the impact whereof can not be ascertained, 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 Profit and Loss Account, of the profit for the year ended on that date and

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

i. (a) The Company is in the process of updating its records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets of the Company, have been physically verified by the Management during the year. In our opinion, period of verification is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been reported on such verification.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii. According to the information and explanations given to us and based on the certificate issued by the internal auditor, who has conducted physical verification and valuation fixed assets, we state that ;

(a) the Inventory of the Company has been physically verified by the Management during the year. In our opinion frequency of verification needs to be increased.

(b) the procedures of physical verification of inventory followed by the Management, are reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) the Company is maintaining proper records of its inventory and the discrepancies which were noticed on physical verification of Inventory as compared to book records, have been properly dealt with in the books of account.

iii (a) According to the information and explanations given to us, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. except interest free security deposits given (Refer note 2.13)

(b) According to the information and explanations given to us, the Company has taken advances in the nature of loans from four Companies / Parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount of loans taken during the year was Rs. 312.08 Lacs and the year end balance was Rs. 266.90 Lacs.

(c) The advances / loans are interest free in nature and other terms and conditions of loans taken by the company, secured or unsecured are prima facie not prejudicial to the interest of the company.

(d) There are no specific stipulations as to repayment of such advances / loans.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for fixed assets and sale of services. However, internal control procedures in respect of purchase of Inventory and sale of goods need to be strengthened so as to commensurate with the size of the company. Other than above, no major weaknesses have been noticed in the internal control systems.

v. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that during the year, the particulars of contracts/arrangements that were required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. Five Lacs have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58 AA or any other provisions of the Companies Act, 1956, and the rules framed thereunder during the year. To the best of our knowledge and according to information and explanations given to us, no order has been passed by the Company Law Board or any court or any other Tribunal.

vii. In our opinion, Company has an internal audit system which needs to be strengthened so as to commensurate with the size of the Company and nature of its business.

viii. According to information and explanations provided to us, the Central Government has prescribed under section 209(l)(d) of the Companies Act,I956 the maintenance of cost records in respect of certain products manufactured by the Company viz. Formulations, Bulkdrugs. We have broadly reviewed the books of account maintained by the company and are of the opinion that prima facie, the prescribed accounts and records have been maintained by the company. We have not, however, made a detailed examination of records with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information given to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, for any other products of the company.

ix. (a) According to the information and explanations given to us and according to the records of the Company, we have to state that, the company has not been regular in depositing undisputed statutory dues of Provident fund, Employees' State Insurance, Income Tax, Dividend Distribution Tax, Income tax deducted at source, Sales tax and Excise Duty We are informed that there are undisputed demand outstanding, as at 31st March 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are dues in respect of Income Tax, Sales tax, Service Tax, Customs Duty, Excise Duty and Cess, which have not been deposited.

x. The Company does not have accumulated losses at the end of the financial year March 31,2012. Without considering the effect of our observation stated in the Auditor's Report, the impact where of on the profits can not be ascertained, the Company has not incurred any cash losses during the financial year ended March 31,2012 and in the immediately preceding financial year.

xi. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

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

xiii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund/societies.

xiv. The Company does not deal or trade in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

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

xvii. According to the information and explanation given to us and on the overall examination of the Balance Sheet and Cash Flow of the Company, we report that the Company has neither raised any long term nor short term funds during the year.

xviii. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix The Company did not issue any debentures during the year.

xx. The Company has not raised any money through a public issue during the year.

xxi. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For Mayur Chokshi & Co.

Chartered Accountants

Mayur Chokshi

Proprietor

Firm Registration No. 106116W

Membership No.33936

Mumbai : 10th July, 2012


Mar 31, 2011

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

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

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to above, we report that:

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

b) In our opinion proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of the books;

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

d) On the basis of written representation received from the Directors, as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as at March 31, 2011 from being appointed as Director in term of Clause (g) of sub-section (I) of Section 274 of the Companies Act, 1956;

e) Attention is invited to the fact that we have relied upon the Board's / Management's assertions, opinion, view, representation and various other certificates produced before us, inter-alia, in respect of and as detailed in the note nos. 1, 2, 4, and 14 to the Schedule 19.11.

f) Our observation on the said accounts are given below:

(i) Non adherence to the revised accounting standards 15 issued by the ICAI on Employees Benefits in relation to provision for compensated leave benefits, impact unascertained (Refer Note I to schedule 19 (I))

(ii) We are unable to express our opinion on recoverability of debts of Rs. 10469 thousand which are outstanding for more than one year and of Loans and Advances of Rs. 4099 thousand which are outstanding for more than three years. In the absence of appropriate evidences, we are unable to ascertain its recoverability and its impact on the accounts of the Company. However, in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature. (Refer Note No. 9 and 32 to schedule 19(11)).

(iii) Certain transactions entered into by the Company with companies in which Directors are interested in violation of Section 297 of the Companies Act, /956, which requires the prior approval of the Central Government,. (Refer Note 31 to Schedule 19(H))

g) In our opinion ,and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

h) In our opinion and to the best of our information - and according to the explanations given to us, the said accounts with notes thereon when read in conjunction with the para (e) above, give the information required by the Companies Act, 1956, in the manner so required and subject to para 4(f) above, the impact whereof can not be ascertained, 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 for the year ended on that date and

iii] In the case of 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 2 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2011 OF GUFICBIOSCIENCES LIMITED)

i. (a) The Company is in the process of updating its records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets of the Company, have been physically verified by the Management during the year. In our opinion, period of verification is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been reported on such verification.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii. (a) According to the information and explanations given to us and based on the certificate issued bythe internal auditor, who has conducted physical verification and valuation fixed assets, we state that;

(a) the Inventory of the Company has been physically verified by the Management during the year. In our opinion frequency of verification needs to be increased.

(b) the procedures of physical verification of inventory followed by the Management, are reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) the Company is maintaining proper records of its inventory and the discrepancies which were noticed on physical verification of Inventory as compared to book records, have been properly dealt with in the books of account.

iii (a) According to the information and explanations given to us, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. except interest free security deposits given (Refer note 17 of schedule 1911)

(b) According to the information and explanations given to us ,the Company has taken advances in the nature of loans from four Companies / Parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount of loans taken during the year was Rs. 31908 thousands and the year end balance was Rs. 31208 thousand.

(c) The advances / loans are interest free in nature and other terms and conditions of loans taken by the company , secured or unsecured are prima facie not prejudicial to the interest of the company.

(d) There are no specific stipulation as to repayment of such advances/loans.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for fixed assets and sale of services. However, internal control procedures in respect of purchase of Inventory and sale of goods need to be strengthened so as to commensurate with the size of the company. Other than above, no major weaknesses have been noticed in the internal control systems.

v. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that during the year , the particulars of contracts/arrangements that were required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b)ln our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58 AA or any other provisions of the Companies Act, 1956, and the rules framed the reunder during the year . lb the best of our knowledge and according to information and explanations given to us, no order has been passed by the Company Law Board or any courtor any other Tribunal.

vii. In our opinion , Company has an internal audit system which needs to be strengthened so as to commensurate with the size of the Company and nature of its business.

viii. According to information and explanations provided to us , the Central Government has prescribed under section 209(l)(d) of the Companies Act, 1956 the maintenance of cost records in respect of certain products manufactured by the Company viz. Formulations, Bulkdrugs. We have broadly reviewed the books of account maintained by the company and are of the opinion that prima facie, the prescribed accounts and records have been maintained by the company. We have not, however ,made a detailed examination of records with a view to determine whether they are accurate or complete. To the best our knowledge and according to the information given to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, for any other products of the company.

(a) According to the information and explanations given to us and according to the records of the Company , we have to state that, the company has not been regular in depositing undisputed statutory dues of Provident fund, Employees' State Insurance, Income Tax, Service Tax, Income tax deducted at source, Sales tax and Excise Duty. We are i n f o r m e d that there are undisputed demand outstanding, as at 31 st March 20II for a period of more than six months from the date they became payable.

(b)According to the information and explanations given to us, there are dues in respect of Income Tax, Sales tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess, which have not been deposited.

ix. The Company does not have accumulated losses at the end of the financial year March 31,2011 . Without considering the effect of our observation stated in the Auditor's Report the impact where of on the profits can not be ascertained, the Company has not incurred any cash losses during the financial year ended March 2II ,2011 and in the immediately preceding financial year.

x. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

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

xii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutuai benefit fund/societies.

xiii. The Company does not deal or trade in shares, securities, debentures and other investments.

xiv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xv. According to the information and explanations given to us, the Company has not obtained any term loan during the year.

Xvi. According to the information and explanation given to us and on the overall examination of the Balance Sheet and Cash Flow of the Company, we report that the Company has neither raised any long term nor short term funds during the year.

xvii The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.,

xyiii The Company did not issue any debentures during the year.

xix. The Company has not raised any money through a public issue during the year.

xx. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For Mayur Chokshi & Co.

Chartered Accountants

Mayur Chokshi

Proprietor

Firm Registration No. 106116W Mumbai

Membership No. 33936 31 st August, 2011


Mar 31, 2010

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

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

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we 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 above, we report that :

a) Subject to our comments in paragraph 4e & 4f below, we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit ;

b) In our opinion proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of the books;

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

d) On the basis of written representation received from the Directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as at March 31, 2010 from being appointed as Director in term of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 ;

e) Attention is invited to the fact that we have relied upon the Boards / Managements assertions, opinion, view, representation and various other certificates produced before us, inter-alia, in respect of and as detailed in the note nos.1, 2, 4, and 14 to the Schedule 19.II.

f) Our observation on the said accounts are given below:

(i) Non adherence to the revised accounting standards 15 issued by the ICAI on Employees Benefits in relation to provision for compensated leave benefits, impact unascertained (Refer Note I to schedule 19 (1) )

(ii) We are unable to express our opinion on recoverability of debts of ` 25560 thousand which are outstanding for more than one year and of Loans and Advances of ` 2529 thousand which are outstanding for more than three years. In the absence of appropriate evidences, we are unable to ascertain its recoverability and its impact on the accounts of the Company. However, in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature. (Refer Note No. 9 and 32 to schedule 19(II) ).

(iii) Certain transactions entered into by the Company with companies in which Directors are interested in violation of Section 297 of the Companies Act, 1956, which requires the prior approval of the Central Government,. (Refer Note 31 to Schedule 19 (II) )

g) In our opinion ,and to the best of our information and according to the explanations given to us, the Balance Sheet , Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

h) In our opinion and to the best of our information and according to the explanations given to us, the said accounts with notes thereon when read in conjunction with the para (e) above, give the information required by the Companies Act,1956, in the manner so required and subject to para 4(f) above, the impact whereof can not be ascertained , 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, 2010 ;

ii] In the case of the Profit & Loss Account, of the profit for the year ended on that date and

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

ANNEXURE TO THE AUDITORS REPORT (ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2010 OF GUFIC BIOSCIENCES LIMITED)

i. (a) The Company is in the process of updating its records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets of the Company , have been physically verified by the Management during the year. In our opinion, period of verification is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been reported on such verification.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii.(a) According to the information and explanations given to us and based on the certificate issued by the internal auditor, who has conducted physical verification and valuation fixed assets, we state that ;

(a) the Inventory of the Company has been physically verified by the Management during the year. In our opinion frequency of verification needs to be increased.

(b)the procedures of physical verification of inventory followed by the Management, are reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) the Company is maintaining proper records of its inventory and the discrepancies which were noticed on physical verification of Inventory as

compared to book records, have been properly dealt with in the books of account.

iii (a) According to the information and explanations given to us, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. except interest free security deposits given (Refer note 17 of schedule 19 II)

(b) According to the information and explanations given to us ,the Company has taken advances in the nature of loans from four Companies / Parties covered in the register maintained u/s 301 of the Companies Act,1956. The maximum amount of loans taken during the year was ` 12860 thousands and the year end balance was ` 10294 thousand.

(c) The advances / loans are interest free in nature and other terms and conditions of loans taken by the company , secured or unsecured are prima facie not prejudicial to the interest of the company.

(d) There are no specific stipulation as to repayment of such advances / loans.

iv. In our opinion and according to the information and

explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for fixed assets and sale of services. However, internal control procedures in respect of purchase of Inventory and sale of goods need to be strengthened so as to commensurate with the size of the company. Other than above, no major weaknesses have been noticed in the internal control systems.

v. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that during the year , the particulars of contracts/arrangements that were required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b)In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of ` 5,00,000 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and

explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58 AA or any other provisions of the Companies Act, 1956, and the rules framed thereunder during the year . To the best of our knowledge and according to information and explanations given to us , no order has been passed by the Company Law Board or any court or any other Tribunal.

vii. In our opinion , Company has an internal audit system which needs to be strengthened so as to commensurate with the size of the Company and nature of its business.

viii. According to information and explanations provided to us , the Central Government has prescribed under section 2 0 9 ( 1 ) ( d ) o f t h e Companies Act,1956 the maintenance of cost records in respect of certain products manufactured by the Company viz. Formulations, Bulkdrugs. We have broadly reviewed the books of account maintained by the company and are of the opinion that prima facie, the prescribed accounts and records have been maintained by the company. We have not, however ,made a detailed examination of records with a view to determine whether they are accurate or complete. To the best our knowledge and according to the information given to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act , 1956 , for any other products of the company.

(a) According to the information and explanations given to us and according to the records of the Company , we have to state that, the company has not been regular in depositing undisputed statutory dues of Provident fund, Employees State Insurance, Income Tax, Service Tax, Income tax deducted at source, Sales tax and Excise Duty. We are informed that there are undisputed demand outstanding, as at 31st March 2010 for a period of more than six months from the date they became payable.

(b)According to the information and explanations given to us, there are dues in respect of Income Tax, Sales tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess, which have not been deposited.

ix. The Company does not have accumulated losses at

the end of the financial year March 31,2010 . Without considering the effect of our observation stated in the Auditors Report the impact where of on the profits can not be ascertained, the Company has not incurred any cash losses during the financial year ended March 31,2010 and in the immediately preceding financial year.

x. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

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

xii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

xiii. The Company does not deal or trade in shares, securities, debentures and other investments.

xiv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xv. According to the information and explanations given to us, the Company has not obtained any term loan during the year.

Xvi. According to the information and explanation given to us and on the overall examination of the Balance Sheet and Cash Flow of the Company, we report that the Company has neither raised any long term nor short term funds during the year.

xvii The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xviii The Company did not issue any debentures during the year.

xix. The Company has not raised any money through a public issue during the year.

xx. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.





For Mayur Chokshi & Co.

Chartered Accountants



Mayur Chokshi

Proprietor

Firm Registration No. 106116W Mumbai

Membership No. 33936 30th August, 2010