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Auditor Report of Lincoln Pharmaceuticals Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of Lincoln Pharmaceuticals Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 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's 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 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 effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

5. 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.

6. 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.

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

Opinion

8. 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, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by "the companies (Auditor's Report) Order 2015" issued by the Central Government of India in term of sub section (11) of section 143 of the Act (hereinafter referred to as the "Order") and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us we give in an annexure the statement on the matter specified in the paragraph 3 and 4 of the order.

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

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

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

c. The Balance Sheet, the 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 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

ii. The Company does did have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

Annexure to Auditors' Report

Refer to the Paragraph 9 of the independent auditor's report of even date to the members of Lincoln Pharmaceuticals Limited. On the financial statements for the year ended on 31st March 2015.

1. Fixed Asset

(i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed asset. The records are not updated since last two years.

(ii) The fixed assets have been physically verified by the management at reasonable intervals; No material discrepancies were noticed on such verification.

2. Inventory

(i) Physical verification of inventory has been conducted at reasonable intervals by the management.

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

(iii) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification were not material.

3. Unsecured Loan

The company has granted unsecured loans to companies, covered in the register maintained under section 189 of the Companies Act.

The parties have repaid the principal amount as stipulated and have been regular in the payment of interest.

There is no overdue amount of loans granted to companies, firm or other parties covered in the register maintained under section 189 of the Companies Act.

4. Internal Controls

In our opinion and according to the information and explanations given to us, the control system needs to be strengthened to make it 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. We neither have come across nor are we informed of any continuing failure to correct major weakness in the internal control.

5. Acceptance of Depots

The company has not accepted any deposit from the public within the meaning of section 73 to section 76 of the act and the rules made there under during the period under audit.

6. Costing Records

We have broadly reviewed the cost record maintained by the company under the maintenance of cost records rules specified by the Central Government under sub section (1) of section 148 of the Act, as we are of the opinion that, prima facie, the prescribed cost records have been made and maintained.

7. Statutory dues

(i) The company is regular in depositing undisputed statutory dues including sales-tax, duty of customs, duty of excise, value added tax. The company is also regular except in some cases, in depositing provident fund, employees' state insurance and any other statutory dues, TDS, wealth tax and service tax with the appropriate authorities.

(ii) According to the information and explanation given to us and as per the records of the company examined by us, the details of income tax, sales tax, wealth tax , service tax , duty of customs , duty of excise , value added tax etc, not deposited on account of dispute are as under.

Name of Nautre of Amount Amount not Financial year Statute dues of Demand deposited to which it relate

Service Tax Service Tax 12,89,227 12,89,227 2008-09

Name of Authority/forum Statute where the dispute is pending

Service Tax Custom, Excise & Service Tax Appellate Tribunal, Western Zonal B

(iii) The amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Act and rules made there under has been transferred to such fund within time.

8. Cash Losses

The company has no accumulated losses at the end of the financial year and it has not incurred cash losses in this financial year and in the immediately preceding financial year.

9. Default in Repayments

In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to a bank or financial institution. The company has not issued any debenture.

10. Guarantee for loans taken by others

The company has given a guarantee on the loan obtained by its partly owned subsidiary company. According to the information and explanation given to us, we are of the opinion that the terms and condition thereof are not prima facie prejudicial to the interest of the company.

11. Application of term loan

Based on the information and explanations given by the management, term loans obtained by the company, were applied for the purpose for which loans were obtained.

12. Fraud

During the course of our examination of the books of the company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us we have neither come across to any material fraud on or by the company nor we are informed of any such cases by the management.

For Chandulal M. Shah & Co. Chartered Accountants (FRN 101698W)

(B.M. Zinzuvadia) Place : Ahmedabad Partner Date : 30th May, 2015 M. NO. 109606


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956, 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.

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of the Statement of Profit and Loss 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.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

Annexure to Auditors'' Report

Referred to in paragraph 1 of "Report on Other Legal and Regulatory Requirements" of our report on the accounts of Lincoln Pharmaceuticals Limited for the year ended on 31st March, 2014

(i) Fixed assets

a) The Company has not maintained updated records showing full particulars including quantitative details and situation of fixed assets.

b) All the assets have been physically verified by the management in accordance with a phased programme of verification, which in our opinion is reasonable, considering the size and the nature of business. The frequency of verification is reasonable. As the fixed asset register is under preparation, discrepancies if any on physical verification could not be ascertained.

c) The company has not disposed off substantial part of fixed assets during the year.

(ii) Inventory

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

b) The procedure of physical verification of the inventories followed by the management is 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 and discrepancies noticed on physical verification of inventories as compared to books records were not material.

(iii) Loans secured and unsecured

a) The Company has granted interest free unsecured loan to three companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 3865.22 Lakh and the yearend balance of the loan granted was Rs. 3,010.60 Lakh.

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

c) Payment of the principal amount is regular.

d) The company has taken unsecured loan from two parties covered in the register maintained under section 301 of the Companies Act, 1956. The Maximum amount outstanding during the year was Rs. 214.84 Lakh. The year ended balance was Rs. 181.35 Lakh.

e) The loan taken by the company from four out of five parties is interest free. The rate of interest in respect of one party and other terms and conditions on which the loans have been taken from all parties are prima facie, not prejudicial to the interest of the company;

f) The said loans are repayable at the end of the term by a bullet payment

g) The loans taken are not overdue loan.

(iv) Internal control

In our opinion and according to the information and explanations given to us, the internal control procedures are commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. Further, there is no continuing failure to correct major weaknesses in internal control.

(v) Register under section 301

(a) The particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section; and

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

(vi) Deposit under section 58A

In our opinion and according to information and explanations given to us, the company has not accepted deposit from the public and therefore provisions of section 58A, 58AA or any other relevant provisions of Companies Act, 1956 and the rules made there under are not applicable.

(vii) Internal audit

In our opinion, the company''s internal audit system is commensurate with the size of the company and nature of its business.

(viii) Cost records

We have broadly reviewed the cost records maintained by the company relating the manufacturing of pharmaceutical products pursuant to the rules made by the central government for the maintenance of cost records under section 209 of the companies Act. We are of opinion that prima facie the said records are made and maintained. We have however, not made a detail examination of those records with a view to determine the accuracy and completeness.

(ix) Statutory dues

(a) According to the information and explanations given to us the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Service Tax, Excise Duty, Cess and any other material statutory dues applicable to it.

(b) According to the information and explanations given to us, there are no disputed dues which are not deposited of sales tax/ income tax/wealth tax/custom duty/excise duty or cess except stated below :

Sr. Department Year Amount Current Status Involved Rs.

1 Service Tax 2008-09 12,89,227 Custom, Excise & Service tax appellant Tribunal. Western Zonal Bench, Ahmedabad,

(x) Cash losses

The company does not have accumulated losses as on 31st March, 2014 Further it has not incurred cash loss during the financial year 2013-14 and in the immediately preceding financial year.

(xi) Repayment of bank dues

In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a bank. The company has not obtained any loans from financial institution or debenture holders.

(xii) Loan or advance on the basis of securities

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, debentures and other securities.

(xiii) Special Statute applicable

The company is not a chit fund or a Nidhi / mutual benefit fund / society. Therefore provisions of clause (xiii) of the Order are not applicable to the company.

(xiv) Dealing or trading in shares

The company is dealing in shares, securities, debentures and other investments, for which, proper records have been maintained of the transactions and contracts have been maintained by the company and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the company, in its own name except to the extent of the exemption, if any, granted under section 49 of the Act.

(xv) Guarantee for loan take by others

The company has not given any guarantee for loan taken by others from banks and financial institutions.

(xvi) Application of fund raised through term loan

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

(xvii) Utilization of fund

On an overall examination the Balance Sheet of the company, we report that no fund raised on short term basis have been used for long term investment.

(xviii) Preferential allotment of shares

The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act during the year under audit.

(xix) Public issue

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

(xx) Fraud

During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, we noticed that a fraud involving an embezzlement of Rs. 20 Lakh was committed by an employee of the company. The company has recovered the loss from the employee.

For Chandulal M. Shah & Co. Chartered Accountants (FRN 101698W) (B.M. Zinzuvadia) Place : Ahmedabad Partner Date : 30th May, 2014 M. NO. 109606


Mar 31, 2011

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

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

3. As required by the Companies (Auditors Report) Order,2003 and amendments thereto issued by the Central Government of India in terms of Sec 227(4A) of The Companies Act 1956, we annex hereto a statement on the matters specified in the paragraphs 4 and 5 of the said order, to the extent applicable to the Company.

4. We further report that:

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

(ii) 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;

(iii) The Balance Sheet, Profit and Loss Account and cash flow statement dealt with by 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 dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on 31st March 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section(1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give 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 2011; and

(ii) in the case of Profit and Loss Account, of the Profit for the year ended on that date.

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

ANNEXURE TO THE REPORT OF THE AUDITORS

Annexure referred to in paragraph 3 of the auditors' report to the members of Lincoln Pharmaceuticals Limited for the year ended 31st March, 2011

(i) Fixed assets

a) As inform to us the fixed assets register is under preparation by the Company.

b) All the assets have been physically verified by the management in accordance with a phased programme of verification, which in our opinion is reasonable, considering the size and the nature of business. The frequency of verification is reasonable. As the fixed asset register is under preparation, discrepancies if any on physical verification could not be ascertained.

c) The company has not disposed off substantial part of fixed assets during the year. (ii) Inventory

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

b) The procedure of physical verification of the inventories followed by the management is 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 and discrepancies noticed on physical verification of inventories as compared to books records were not material.

(iii) Loans secured and unsecured

a) The Company has granted unsecured loan to two companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs.102.12 Lakh and the yearend balance of the loan granted was Rs.93.65 Lakh.

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

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

d) The company has taken unsecured loan from two party covered in the register maintained under section 301 of the Companies Act, 1956. The Maximum amount outstanding during the year was Rs.111 Lakh. The year ended balance was Rs.70 Lakh.

e) The rate of interest and other terms and conditions on which the loans have been taken are prima facie, not prejudicial to the interest of the company;

f) The said loan is a demand loan and therefore, repayment is on demand and not in installments.

g) As the loan taken is a demand loan, there is no question of overdue loan.

(iv) Internal control

In our opinion and according to the information and explanations given to us, the internal control procedures are commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. Further, there is no continuing failure to correct major weaknesses in internal control.

(v) Register under section 301

(a) The particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section; and

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

(vi) Deposit under section 58A

In our opinion and according to information and explanations given to us, the company has not accepted deposit from the public and therefore provisions of section 58A, 58AA or any other relevant provisions of Companies Act, 1956 and the rules made there under are not applicable.

(vii) Internal audit

In our opinion, the company's internal audit system is commensurate with the size of the company and nature of its business.

(viii) Cost records

We have broadly reviewed the cost records maintained by the company relating the manufacturing of pharmaceutical products pursuant to the rules made by the central government for the maintenance of cost records under section 209 of the companies Act. We are of opinion that prima facie the said records are made and maintained. We have however, not made a detail examination of those records with a view to determine the accuracy and completeness.

(ix) Statutory dues

(a) According to the information and explanations given to us the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Service Tax, Excise Duty, Cess and any other material statutory dues applicable to it.

(b) According to the information and explanations given to us, there are no disputed dues which are not deposited of sales tax/ income tax/wealth tax/custom duty/excise duty or cess except stated below :

Name of the Statute Nature of Dues Amount Period to which Forum where dispute (Rs.in Lacs)amount relates is pending

Income Tax Regular tax 6.60 1999-00 CIT Appeal

Income Tax Regular tax 4.48 2001-02 CIT Appeal

Income Tax Regular tax 2.81 2008-09 CIT Appeal

Service tax Regular tax 0.21 2009-10 CESTAT-WZB

(x) Cash losses

The company does not have accumulated losses as on 31st March, 2011 Further it has not incurred cash loss during the financial year 2010-2011 and in the immediately preceding financial year.

(xi) Repayment of bank dues

In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a bank. The company has not obtained any loans from financial institution or debenture holders.

(xii) Loan or advance on the basis of securities

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, debentures and other securities.

(xiii) Special Statute applicable

The company is not a chit fund or a Nidhi / mutual benefit fund / society. Therefore provisions of clause (xiii) of the Order are not applicable to the company.

(xiv) Dealing or trading in shares

The company is dealing in shares, securities, debentures and other investments, for which, proper records have been maintained of the transactions and contracts have been maintained by the company and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the company, in its own name except to the extent of the exemption, if any, granted under section 49 of the Act.

(xv) Guarantee for loan take by others

The company has not given any guarantee for loan taken by others from banks and financial institutions.

(xvi) Application of fund raised through term loan In our opinion, the term loans have been applied for the purpose for which they were raised.

(xvii) Utilization of fund

On an overall examination the Balance Sheet of the company, we report that no fund raised on short term basis have been used for long term investment.

(xviii) Preferential allotment of shares

The company has made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act during the year under audit. The price at which shares have been issued is not prejudicial to the interest of the company.

(xix) Public issue

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

(xx) Fraud

During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year.

For Chandulal M. Shah & Co.

Chartered Accountants

(FRN 101698W)

(B.M. Zinzuvadia)

Place:Ahmedabad Partner

Date :30th May, 2011 M. NO. 109606


Mar 31, 2010

We have audited the attached Balance Sheet of Lincoln Pharmaceuticals Limited, as at 31st March 2010 and also the Profit and 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 have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) order,2004, (together order) 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 paragraph 4 and 5 of the said order.

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 account as required by law have been kept by the Company so far as appears from our examination of such books;

c. The Balance Sheet and 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 and Profit and Loss Account dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representation received for 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.

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

g. i) In the case of the Balance Sheet, of the state of affairs of .the Company as at 31st March 2010 and

ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date.

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



ANNEXURE TO THE REPORT OF THE AUDITORS

(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and Situation of fixed assets.

(b) Fixed assets have been physically verified by the management at. reasonable intervals. We have been informed that no discrepancies between fixed assets and book records have been noticed in respect of the assets physically verified during the year under report.

(c) The company has not disposed off substantial part of fixed assets during the year.

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

(b) 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.

(c) The company is maintaining proper records of inventory. Discrepancies noticed on physical verification have been properly dealt with in the books of account;

(iii) In respect of the loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

(a) The company has not granted any loans to the firms or companies covered in the register maintained under section 301 of The Companies Act 1956 hence clause (b),(c) and (d) are not applicable.

(e) The company has taken unsecured loan from one party covered in the register maintained under section 301 of The Companies Act 1956. The Maximum Outstanding balance is 2,17,46,200 and Closing Balance is 1,50,41,453.

(f) In our opinion the rate of interest and other terms and conditions on which the loan has been taken from the company listed under section 301 of The Companies Act 1956 are not prime facie prejudicial to the interest of the company.

(g) In respect of the said loans, the same are repayable on demand and therefore the question of overdue amounts does not arise. In respect of interest, there are no overdue amounts.

(iv) In our opinion and according to explanations given to us, there is 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. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company.

(v) (a) In our opinion and according to explanations given to us, transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

(b) In our opinion and according to explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s. 301 of companies act, 1956 and exceeding Rs. Five lacs in resptct of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the informations and explanations given to us the company has not accepted deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

(vii) Internal audit is carried out by the firm of Chartered Accountants. On the basis of reports made by them to the management, we are of the opinion that the company has an internal audit system commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the company relating the manufacture of Pharmaceuticals product pursuant to the Rule made by the Central Government for the maintenance of Cost Records under Section 209 (1) (d) of the company Act, 1956 and are of the opinion that prime-facie the prescribed accounts and records has been made and maintained. We have however, not made a detailed examination of the said records with a view of determine whether they are accurate and complete.

(ix) On the basis of information and explanations given to us in respect of statutory and other dues, we state that

(a) the company is regular in depositing with statutory 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, Service tax, cess and any other Statutory dues with the appropriate authorities during the year.

(b) According to information and explanations given to us, dues outstanding of income tax , sales tax , wealth tax, service tax, custom duty, excise duty and cess on account of any disputes, are as follows :

Name of Statue Income Tax Act 1961

Nature of dues Additions made by the Additional (CIT)

Amount (Rs.) Rs. 34,95,435/-

Period for which Amount relates Assessment year 1999-2000 to 2007-08

Forum where Dispute is pending CIT (Appeals) & APPELATE TRIBUNAL.

(x) There are no 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 financial year immediately preceding such financial year also.

(xi) According to information and explanations given to us the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(xii) During this year, the company has not granted any loans and advances on the basis of security or by way of pledge of shares, debentures or other securities.

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

(xiv) The company is not in dealing or trading in shares, securities, debentures or other investments.

(xv) According to information and explanations given to us the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) In our opinion & According to the information & explanation given to us, on an overall basis The term loan have been applied for the purpose for which they were obtained.

(xvii) According to information and explanations given to us and on overall examination of the balance sheet of the company, we report that the funds raised on short term basis have not been used for long term investment by the company.

(xviii) The company has made preferential allotment of shares to parties and companies covered in the registered maintained under section 301 of the Companies Act 1956. In our opinion prices at which shares have been issued is not prejudicial to the interest of the company.

(xix) No debenture has been issued by the company and hence the question of creating securities in respect thereof does not arise.

(xx) During the year, the company has not raised any monies by way of public issues.

(xxi) According to information and explanations given to us, any fraud on or by the company has not been noticed or reported during the year.

FOR, RAJENDRA NATVERLAL SHAH & COMPANY

CHARTERED ACCOUNTANTS

(Registration No.:130209W)

PLACE : AHMEDABAD (RAJENDRA N. SHAH)

DATE : 19-08-2010 PROPRIETOR

Membership No.8733


Mar 31, 2009

We have audited the attached Balance Sheet of Lincoln Pharmaceuticals Limited, as at 31st March 2009 and also the Profit and 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 have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies(Auditors Report) (Amendment) order,2004, (together order) 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 paragraph 4 and 5 of the said order.

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 account as required by law have been kept by the Company so far as appears from our examination of such books;

c. The Balance Sheet and 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 and Profit and Loss Account dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representation received for the Directors, as on 31st March 2009 and taken on record by the Board of Directors. We report that none of the directors is disqualified as on 31st March 2009 from being appointed as a director in terms of clause (g) of sub-Section (1) of section 274 of the Companies Act, 1956.

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

g. i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2009 and ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date.

iii) In the case of the Cash Flow statement, of the cash flows for the year ended on that date:



ANNEXURE TO THE REPORT OF THE AUDITORS

(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and Situation of fixed assets.

(b) Fixed assets have been physically verified by the management at reasonable intervals. We have been informed that no discrepancies between fixed assets and book records have been noticed in respect of the assets physically verified during the year under report.

(c) The company has not disposed off substantial part of fixed assets during the year.

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

(b) 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.

(c) The company is maintaining proper records of inventory. Discrepancies noticed on physical verification have been properly dealt with in the books of account;

(iii) (a) The company has not taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of Act, 1956. Accordingly paragraphs (iii) (b), (c) and (d) of the Companies (Auditors Report) order, 2003 are not applicable.

The company has not given loans to any parties covered in the register maintained under 301 of the Companies Act, 1956.

(iv) In our opinion and according to explanations given to us, there is an adequate internal control procedure 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. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control.

(v) (a) In our opinion and according to explanations given to us, transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

(b) In our opinion and according to explanations given to us, each of these transactions made in pursuance of contracts or arrangements entered in register maintained u/s. 301 of companies act, 1956 and exceeding Rs. Five lacs.

(c) in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

(vii) Internal audit is carried out by the firm of Chartered Accountants. On the basis of reports made by them to the management, we are of the opinion that the company has an internal audit system commensurate with its size and nature of its business.

(viii) We have broadly reviewed the. bocks of account maintained by the company relating the manufacture of Pharmaceuticals product pursuant to the Rule made by the Central Government for the maintenance of Cost Records under Section 209 (1) (d) of the company Act, 1956 and are of the opinion that prime-facie the prescribed accounts and records has been made and maintained. We have however, not made a detailed examination of the said records with a view of determine whether they are accurate and complete.

(ix) On the basis of information and explanations given to us in respect of statutory and other dues, we state that

(a) the company is regular in depositing with statutory 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 any other Statutory dues with the appropriate authorities during the year.

(b) According to information and explanations given to us, due outstanding of income tax , sales tax , wealth tax , service tax , custom duty, excise duty and cess on account of any disputes, are as follows :

Name of Statue Income Tax Act 1961

Nature of dues Additions made by the Additional (CIT)

Amount (Rs.) Rs. 34,95,435/-

Period for which Amount relates Assessment year 1999-2000 to 2006-07

Forum where Dispute is pending CIT (Appeals) & APPELATE TRIBUNAL

(x) There are no 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 financial year immediately preceding such financial year also.

(xi) According to information and explanations given to us the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(xii) During this year, the company has not granted any loans and advances on the basis of security or by way of pledge of shares, debentures or other securities.

(xiii) The provisions of Special Statues applicable to Chit fund, Nidhi or Mutual Benefit Fund/Societies are not applicable to the company.

(xiv) The company is in dealing or trading in shares, securities, debentures or other investments.

(xv) According to information and explanations given to us the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) In cur opinion & According to the information & explanation given to us", on an overall basis, the term loan have been applied for the purpose for which they were obtained.

(xvii) According to information and explanations given to us and on overall examination of the balance sheet of the company, we report the funds raised on short term basis have not been used for long term investment by the company.

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the registered maintained under section 301 of the Companies Act 1956.

(xix) No debenture has been issued by the company and hence the question of creating securities in respect thereof does not arise.

(xx) During the year, the company has not raised money by public issue.

(xxi) According to information and explanations given to us, any fraud on or by the company has not been noticed or reported during the year.

FOR, RAJENDRA N. SHAH & CO.

CHARTERED ACCOUNTANTS

PLACE : AHMEDABAD (R. N. SHAH)

DATE : 31.08-2009 PROPRIETOR