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Auditor Report of Gujarat Terce Laboratories Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Gujarat Terce Laboratories 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

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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating for ensuring 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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 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 the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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, 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 133 of the Act;

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

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

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements;– Refer Note -1.22 to the financial statements;

ii. the Company has made provision as required under the applicable law or accounting standards on long–term contracts including derivative contracts;

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

ANNEXURE TO THE AUDITORS' REPORT

The Annexure referred to in our report to the members of Gujarat Terce Laboratories Limited for the year ended on 31/03/2015. We report that:

(i) (a) whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets; Yes

(b) whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account; No material discrepancies were noticed on such verification.

(ii) (a) whether physical verification of inventory has been conducted at reasonable intervals by the management; Yes

(b) Are the procedures of physical verification of inventory followed by the management reasonable and adequate in relation to the size of the company and the nature of its business? If not, the inadequacies in such procedures should be reported; Yes

(c) whether the company is maintaining proper records of inventory and whether any material discrepancies were noticed on physical verification and if so, whether the same have been properly dealt with in the books of account; Yes, Discrepancies if any noticed on physical verification of inventory as compared to book records, have been properly dealt with in the books of account.

(iii) Whether the company has granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. If so, No

(a) whether receipt of the principal amount and interest are also regular; and NA

(b) if overdue amount is more than rupees one lakh, whether reasonable steps have been taken by the company for recovery of the principal and interest; NA

(iv) Is there an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of

inventory and fixed assets and for the sale of goods and services? Whether there is a continuing failure to correct major weaknesses in internal control system. During the course of our audit, no major weakness in internal control has come to our notice.

(v) in case the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, where applicable, have been complied with? If not, the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not? Company has not accepted deposits.

Not Applicable Not Applicable

(vi) where maintenance of cost records has been specified by the Central Government under sub- section (1) of section 148 of the Companies Act, whether such accounts and records have been made and maintained; Not Applicable

(vii) (a) is the company regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales -tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor. Yes

(b) in case dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not constitute a dispute). Refer Annexure -A

(c) whether the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time. Not Applicable

(viii) whether in case of a company which has been registered for a period not less than five years, its accumulated losses at the end of the financial year are not less than fifty per cent of its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year; Not Applicable

(ix) Whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders? If yes, the period and amount of default to be reported; No

(x) whether the company has given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company; No

(xi) whether term loans were applied for the purpose for which the loans were obtained; Yes

(xii) whether any fraud on or by the company has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated. No

Annexure – A

Name of Statute Nature of dues Disputed Tax Amount

Gujarat Sales Tax Regular Assesment Rs. 466886/-

Gujarat Sales Tax Regular Assesment Rs. 1068607/-

Income Tax Regular Assessment Rs 429282/-

Income Tax Regular Assesment Rs 4192640/-

Income Tax Regular Assessment 19409860/-

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

Gujrat Sales Tax F.Y.2003-04 Dep. Comm of Sales Tax (Appeals)

Gujrat Sales Tax F.Y.2004-05 Dep.Comm of Sales Tax (Appeals)

Income Tax F.Y. 2004-05 Commissioner of Income Tax.(Appeal)

Income Tax F.Y. 2010-11 Commissioner of Income Tax.(Appeal)

Income Tax F.Y 2011-12 Commissioner of Income Tax. ( Appeal)



For, U S S & ASSOCIATES

Chartered Accountants

(Ujal Mehta)

Partner

Place : Ahmedabad. M. No. 112337

Date : 29/05/2015 F.R.N. 122634W


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the AccountingStandards notified under the Companies Act 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 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

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 misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion

Balances of trade & other payables are subject to confirmation, reconciliation and consequential adjustments thereof. The company is not having any system of obtaining balance confirmation in respect of trade and other payables. In the absence of sufficient and appropriate audit evidence, the impact on profit or loss for the year and on the carrying value of these balances is not ascertainable.

Qualified Opinion

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 described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India 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 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, 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 in this Report comply with the Accounting Standards notified under The Companies Act, 1956 read with the General circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of The Companies Act, 2013 .;

e. On the basis of the written representations received from the directors as on March 31, 2014, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO INDEPENDENT AUDITOR''S REPORT (Referred to inparagraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our report of even date.)

(i) In respect of its fixed assets:

a. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, Majority of the fixed assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion , is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c. In our opinion the Company has not disposed off any substantial part of its fixed assets during the year, and therefore, do not affect the going concern status.

(ii) In respect of its Inventories:

a. The inventories have been physically verified during the year by the management, except for inventories lying with outside parties, which have, however, been confirmed by them. 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. The Company has maintained proper records of inventories. 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. During the year the Company has not given any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence, clauses (iii)(b),(c) and (d) are not applicable to the Company. b. The Company has taken interest free unsecured loans from the one Director which is not prejudicial to the interest of the company. Maximum balance outstanding during the year is Rs. 3.07 lacs while the year end balance is Rs. 3.07 lacs. (iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system. (v) In respect of contracts or arrangements referred to in section 301 of the Companies Act, 1956 :

a. Based on the audit procedures applied by us, and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us and on the basis of our examination of the books of accounts, the company has not entered into any transactions exceeding the value of Five Lacs Rupees in respect of any party during the year that need to be entered in the Register in pursuance of Section 301 of the Companies Act, 1956.

(vi) In our opinion and according to the information and explanations given to us the Company has not accepted any deposits from the public and thus, paragraph 4(vi) of the said order is not applicable

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the Cost records maintained by the Company 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 are of the opinion that the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the Cost records with a view to determine whether they are accurate or complete.

(ix) In respect of Statutory dues:

a. According to the records of the Company, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, Investor Education and Protection Fund, Employees'' state insurance, Income tax, Sales tax, Wealth tax, Custom duty, Excise duty, cess and other material statutory dues applicable to it, except in few cases there has been delay in depositing such dues. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid Statutory dues were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

b. The disputed Statutory dues aggregating to Rs 57,28,133 that have not been deposited on account of disputed statutory matters pending before appropriate authorities are as under:

Name of Statute Nature of dues Amount of relates disallowance (Rs. in lacs)

Gujarat Sales Tax Reg Assesment Rs. 466886/-

Gujarat Sales Tax Reg Assesment Rs. 1068607/-

Income Tax Reg Assesment Rs. 4192640/-

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

Gujarat Sales Tax A.Y.2003-04 Dep. Comm of Sales Tax (Appeals)

Gujarat Sales Tax A.Y.2004-05 Dep. Comm Of Sales Tax (Appeals)

Income Tax A.Y. 2011-12 Commissioner of Income Tax.(Appeal)

(x) The Company does not have any accumulated losses at the end of the financial year. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) 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 the banks.

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

(xiii) The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order are not applicable to the company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order are not applicable to the company.

(xv) In our opinion the Company has not given guarantees 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 explanation given to us, the term loans were applied for the purpose for which it was obtained.

(xvii) Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that no funds raised on short-term basis have been used for long-term investment by the Company. No long-term funds have been used to finance short-term assets except permanent working capital.

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

(xix) During the year covered by our audit report, The company has not issued any debentures. Accordingly, the provisions of clause (xix) of paragraph 4 of the order are not applicable to the company.

(xx) The Company has not raised any money by way of public issue during the year and therefore paragraph 4(xx) of the Order is not applicable.

(xxi) Based on management representation and our discussion with the management, during the year one of the managing director jointly with director disposed off metal division undertaking by transfer of land, other assets as well as other inventory pertaining to metal division in the month of May 2013, without any authority from Board as well as shareholders and committed a breach of trust amounting to fraud on the company, its board and share holders. The amount of alleged fraud according to management is Rs. 7,10,31,008/- (based on value determined by the management and in various records filed by the company against the fraud to various authorities). As informed to us these directors are also alleged to have filed their resignations on MCA website on September 23, 2013 after transfer of assets. According to information given to us the company then filed petition with Company Law Board, Mumbai against these directors of the company for alleged violation of section 397and 398 read with sections 399, 402, 192(A), 209, 293(1)(A), 297,299 and 630 of The Companies Act, 1956. The Honorable Company Law Board, Mumbai has passed an order on 3/4/2014 on the basis of consent terms and as per the consent terms the records, documents, registers, books and other valuable documents and assets pertaining to Metal division were handed over to the company. Except above no material fraud on or by the company is reported to us by the management.

For, P A R Y & Co. Chartered Accountants FRN - 007288C

(Sushil Goenka) Date:30/05/2013 Partner Place: Ahmedabad M.No. 115465


Mar 31, 2012

We have audited the attached Balance Sheet of Gujarat Terce Laboratories Limited as at 31st March 2012 and also the Statement of Profit & Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial Statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors'Report) Order 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 we enclose in the Annexure A Statement on the matters specified in paragraph 4 & 5 of the said order.

Further to our comments in the Annexure referred to above, we report that:

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

ii) In our opinion, proper books of accounts, as required by law, have been kept by the Company so far as appears from our examination of such books.

iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the Books of Account.

iv) In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement read in conjunction with the notes on accounts, comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

v) On the basis of the written representations received from the Directors, as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 3Tst March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon, give the information as 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 31st March, 2012

ii) in the case of the Statement of Profit & 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 for the year ended on that date.

Annexure to Auditor's Report of even date on the accounts for the year ended 31st March, 2012 of Gujarat Terce Laboratories Limited

1. a. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. As explained to us, fixed assets, according to the practice of the Company, are physically verified by the management at reasonable intervals, in a phased verification program which, in our opinion, is reasonable looking to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c. The Company has not disposed off any substantial part of its fixed assets during the year so as to affect its going concern status.

2. a. As explained to us, inventories have been physically verified during the year by the management, except for inventories

lying with outside parties, which have, however, been confirmed by them. In our opinion, the frequency of verification is reasonable.

b. The procedures explained to us, which were followed by the management for physical verification of inventories, 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 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.

3. a. The Company has not given any loans, secured or unsecured to the companies, firms or other parties covered in the

register maintained under section 301 of the Companies Act, 1956. Hence, clauses (iii)(b),(c) and (d) of the Order are not applicable.

b. The Company has taken interest free unsecured loans from the one Director which is not prejudicial to the interest of the company. Maximum balance outstanding during the year is Rs. 993.20 lacs while the year end balance is Rs. 816.03 lacs.

4. In our opinion and according to the information and explanations given to us, there are generally adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods. During the course of our audit, no major weakness in internal control has come to our notice.

5. a.' On the basis of the audit procedures performed by us, and according to the information, explanations and representations

given to us, we are of the opinion that the transactions in which directors were interested and which were required to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. According to the information and explanations given to us and on the basis of our examination of the books of accounts, the company has not entered into any transactions exceeding the value of Five Lacs Rupees in respect of any party during the year that need to be entered in the Register in pursuance of Section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public and thus, paragraph 4(vi) of the said order is not applicable

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(l)(d) of the Companies Act, 1956 in respect of the Company's products to which the said rules are made applicable, and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

9. a. The company has been generally regular in depositing with appropriate authorities undisputed statutory dues including

provident fund, employees' state insurance, income tax, sales tax, custom duty, excise duty, cess and other material statutory dues applicable to it, except in few cases there has been delay in depositing such dues. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, 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 explanation given to us, the dues outstanding of sales tax, income tax, customs duty, wealth tax, excise duty and cess on any account of any dispute, are as follows:

10. The Company has neither accumulated losses at the end of the financial year nor has incurred cash losses in the financial year under report and in the immediately preceding financial year.

11. On the basis of the records examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank.

12. As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and any other securities.

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

14. The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order are not applicable to the company.

15. According to information and explanations given to us and the representations m&de by the management, the Company has not given guarantees for loans taken by others from banks or financial institutions.

16. In our opinion, the term loans raised during the year have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

18. The Company has not made any preferential allotment of shares to the parties and companies covered in the register maintained in the Companies Act u/s 301 during the year.

19. The company has not issued any secured debentures during the year.

20. The Company has not raised any money by way of public issue during the year and therefore paragraph 4(xx) of the Order is not applicable.

21. According to the information and explanations given to us, and to the best of our knowledge and belief, no fraud on or by the company has been noticed or reported during the course of our audit during the year.

22. As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided in the Notes on accounts.

For, P A R Y & Co. Chartered Accountants FRN - 007288C

(Sushil Goenka)

Date : 30.07.2012 Partner

Place : Ahmedabad M.No. 115465


Mar 31, 2010

We have audited the attached Balance Sheet of Gujarat Terce Laboratories Limited as at 31st March 2010 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial Statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 we enclose in the Annexure a Statement on the matters specified in paragraph 4 & 5 of the said order.

Further to our comments in the Annexure referred to above, we report that:

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

ii) In our opinion, proper books of accounts, as required by law, have been kept by the Company so far as appears from our examination of such books.

iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the Books of Account.

iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement read in conjunction with the notes on accounts, comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except for Note No. 1 c & 1 j of Schedule R.

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

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to :

a) Note No. 1 c of Schedule "R" regarding accounting for retirement benefits on cash basis.

b) Note No.l j of Schedule "R" regarding exchange rate fluctuation of foreign currency transactions.

c) The Company has not considered provision for bad & doubtful debts to the tune of Rs. 15,01,563, which are outstanding for more than 10 years from export sales of the company.

d) Note No. 12 of Schedule "R" regarding Not disclosing the total outstanding dues of Small & Micro Enterprises. read together with the notes thereon, give the information as 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 31st March, 2010

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 for the year ended on that date.

Annexure to Auditors Report of even date on the accounts for the year ended 31st March, 2010 of Gujarat Terce Laboratories Limited

1. a. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. As explained to us, fixed assets, according to the practice of the Company, are physically verified by the management at reasonable intervals, in a phased verification programme which, in our opinion, is reasonable looking to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c. The Company has not disposed off any substantial part of its fixed assets during the year so as to affect its going concern status.

2. a. As explained to us, inventories have been physically verified during the year by the management, except for inventories lying with outside parties, which have, however, been confirmed by them. In our opinion, the frequency of verification is reasonable.

b. The procedures explained to us, which were followed by the management for physical verification of inventories, 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 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.

3. a. The Company has not given any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence, clauses (iii)(b),(c) and (d) of the Order are not applicable.

b. The Company has taken interest free unsecured loans from the two Directors which is not prejudicial to the interest of the company. Maximum balance outstanding during the year is Rs. 11.27 lacs while the year end balance is Rs. 4.83 lacs.

4. In our opinion and according to the information and explanations given to us, there are generally adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods. During the course of our audit, no major weakness in internal control, has come to our notice.

5. a. On the basis of the audit procedures performed by us, and according to the information, explanations and representations given to us, we are of the opinion that the transactions in which directors were interested and which were required to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b. According to the information and explanations given to us and on the basis of our examination of the books of accounts, the company has not entered- into any transactions exceeding the value of Five Lacs Rupees in respect of any party during the year that need to be entered in the Register in pursuance of Section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public and thus, paragraph 4(vi) of the said order is not applicable

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(l)(d) of the Companies Act, 1956 in respect of the Companys products to which the said rules are made applicable, and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate.

9. a. The company has been generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, custom duty, excise duty, cess and other material statutory dues applicable to it, except in few cases there has been delay in depositing such dues. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, 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 explanation given to us, the dues outstanding of sales tax, income tax, customs duty, wealth tax, excise duty and cess on any account of any dispute, are as follows:

Name of Statute Nature of dues Amount of Period to Forum where disallowance the amount dispute is (Rs. in lacs) Relates pending

Gujarat Sales Tax Reg Assesment Rs. 466886 A.Y.2003- 04 Dep.CommOf Sales Tax (App eals)

Gujarat Sales Tax Reg Assesment Rs. 1068607 A.Y.2004- 05 Dep.CommOf Sales Tax (App eals)

10. The Company has neither accumulated losses at the end of the financial year nor has incurred cash losses in the financial year under report and in the immediately preceding financial year.

11. On the basis of the records examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank.

12. As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and any other securities.

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

14. The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order are not applicable to the company.

15. According to information and explanations given to us and the representations made by the management, the Company has not given guarantees for loans taken by others from banks or financial institutions.

16. In our opinion, the term loans raised during the year have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year. On the basis of the records and documents examined by us, the company has not issued any secured debentures during the year.

19. The Company has not raised any money by way of public issue during the year and therefore paragraph 4(xx) of the Order is not applicable.

20. According to the information and explanations given to us, and to the best of our knowledge and belief, no fraud on or by the company has been noticed or reported during the course of our audit during the year.



For, PARY & Co.

Chartered Accountants

(Sushil Goenka)

Date : 29.05.2010 Partner

Place : Ahmedabad M.No. 115465

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