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Auditor Report of Medicamen Biotech Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Medicamen Biotech Limited, which comprise the Balance Sheet as at March 31, 2015, 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 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 Flow of the Company in accordance with the accounting principals 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 includes maintenance of adequate accounting records in accordance with the provision 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 judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that are operating effectively for ensuring the accuracy and correctness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing Standards and matters which are required to be included in the Audit Report under the provisions of the Act and the Rules made there under.

We conducted our audit, in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 whether the company has in place and adequate internal financial controls systems over financial reporting and operating effectiveness of such controls. 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, 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 sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards specified under Section 133 of the Act, read with Rule-7 of the Companies (Accounts) Rules, 2014;

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

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 statements.

ii) The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

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

Medicamen Biotech Limited

The Annexure referred to in our Independent Auditor's Report to the Members of the Company on the Financial Statement for the year ending-31st March, 2015, we report that:

(I) (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 have been physically verified by the management at regular intervals considering the size of the company and nature of assets. No material discrepancies have been noticed on such verification.

(ii) (a) As explained to us by management and Internal Auditor, the inventory was physically verified by the management at reasonable intervals during the year.

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

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

(iii) (a) The Company has not granted any loan to companies, firms or other parties covered in the register maintained under section 189 of the Act. Accordingly, paragraph 3(iii)(b) of the Order is not applicable to the Company.

(iv) The company has adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of stores, raw-materials including components, plant & machinery, equipment and other assets, and for sale of goods. We have not come across any major weakness in internal control during the course of Audit.

(v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of sections 73 and 76 of the Companies Act, 2013 and the rules framed there under.

(vi) As per the representation of the management company maintaining proper cost records as required under section 148(1) of the Act and duly supported by the certificate of the Cost Auditor.

(vii) In our opinion and as per the records of the Company, the Company is generally not regular in depositing undisputed applicable statutory dues including provident fund, employees' state insurance, income tax, sales tax, custom duty, excise duty, cess with the appropriate authorities.

Following are the undisputed statutory dues which have remained outstanding as at 31.03.2015, for a period of more than six months from the date they became payable.

SI.No. Nature Amount(Rs.

1. Provident Fund 16,39,728.00

2. ESI 1,15,293.00

3. Service Tax 5,85,659.00

4. Entry Tax 57,080.00

(viii) The company has no accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial Institutions.

(xi) On the basis of information and explanations given to us the Company has applied term loan, taken during the year, for the purpose for which obtained.

(xii) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

For ASHOK SHARMA & ASSOCIATES CHARTERED ACCOUNTANTS

Sd/- (Amit Kumar) PARTNER MEMBERSHIP NO. : 500805

PLACE : NEW DELHI DATE : 30/05/2015




Mar 31, 2014

We have audited the accompanying financial statements of Medicamen Biotech 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 Responsibilityforthe 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 Flow of the Company in accordance with the Accounting Standards referred to in the Companies Act, 1956 (the Act) read with General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs under section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whetherdue to fraud orerror.

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, whetherdue 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 ourauditopinion.

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 mannerso 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 forthe yearended 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 statementon 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 forthe purpose of ouraudit,

b. In our opinion proper books of account as required by law have been kept by the Company so faras appears from ourexamination 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 notified under 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,

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,

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

Medicamen Biotech Limited

(As referred to in paragraph 1 of our report of even date)

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

(b) These fixed assets have been physically verified by the management at regular intervals considering the size of the company and nature of assets. No material discrepancies have been noticed on such verification.

(c) No disposal of a substantial part of fixed assets of the company has taken place during the year.

(ii) (a) As explained to us, the inventory was physically verified by the management at reasonable intervals during the year.

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

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

(iii) (a) The Company has not granted any loan to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has during the year borrowed Rs. 1,03,50,000/- from a Director and repaid the same during the year itself.

(b) The loan taken by the company was without interest and other terms & conditions are prima facie not prejudicial to the interest of the company.

(c) The principal is paid in time

(d) There is no Amount outstanding on account of loan taken from the companies or other parties listed in the register maintained under Section 301 of Companies Act, 1956.

(iv) The company has adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of stores, raw-materials including components, plant & machinery, equipment and other assets, and for sale of goods. We have not come across any major weakness in internal control.

(v) (a) The transactions which needed to be entered into the register in pursuance of Section 301 of Companies Act, 1956 have been duly entered.

(b) During the year under consideration the Company has made Sales of Rs.3,83,18,328/- to Medicamen Organics Limited, Rs.1,89,313/- to M/s Red Line Healthcare a group company/concern. These sales were made at prevailing market price and the terms and conditions of the sale are not prejudicial to the interest of the company.

(c) During the year under consideration the Company has made Purchases of Rs.4,86,70,186/- from Medicamen Organics Limited and Rs.73,25,998/- from M/s Red Line Healthcare a group company/concern. This purchase was made at prevailing market price and the terms and conditions of the purchase are not prejudicial to the interest of the company.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

(vii) In our opinion, the internal audit system is commensurate with the size of the Company and nature of its business in supervision of CFO of the Company.

(viii) It is informed by the management that cost records as required under section 209 (1) (d) of the Companies Act, 1956 are properly maintained as supported by the certificate provided by the Cost Auditorand the Audit is in process.

(ix) (a) According to the records of the Company, the Company is generally not regular in depositing undisputed applicable statutory dues including provident fund, employees'' state insurance, income tax, sales tax, custom duty with the appropriate authorities.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31.03.2014, fora period of more than six months from the date they became payable.

(x) The company has no accumulated losses at the end of the financial year and it has incurred cash losses during the current financial year but there was no cash loss in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank.

(xii) According to the information and explanations given to us, the Company has not granted any loan and advances on the basis of security by way of pledge of shares, debenture or other security during the year and has no such outstanding at the year end.

(xiii) The provisions of any special statue applicable to chit fund, nidhi''s or mutual benefit fund / societies are not applicable to Company.

(xiv) The company is not dealing in or trading in shares, securities, debentures or other investments and hence, requirement of paragraph 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xv) According to the information and explanation given to us, the Company has not given any guarantee for loan taken by others from banks orfinancial institutions.

(xvi) On the basis of information and explanations given to us, the Company has applied term loan, taken during the year, forthe purpose for which obtained.

(xvii) On the basis of an overall examination of Balance sheet and cash flow of the Company and the information and explanations given to us, we report that there are no funds raised on a short-term basis, which have been used for long-term purposes and no long-term funds have been used for shortterm requirement except working capital requirements of the Company.

(xviii) The Company has allotted 4,23,606 equity Shares of Rs.10 each @ Rs.11/- per share including premium of Rs. 1/- per share to parties being directors and their relatives covered in the register maintained under section 301 of the act, which is not prejudicial to the interest of the company.

The company has also allotted 9,47,300 warrants convertible into Equity Shares of Rs. 10/- each @ Rs. 11/- per warrant including premium of Rs.1/- per warrant against the payment of upfront consideration of 25 percent being Rs. 2.75 per warrant to parties being directors and their relatives covered in the register maintained under section 301 of the act, which is not prejudicial to the interest of the company.

(xix) Since the Company does not have any debentures, the question of creation of securities for debentures does notarise.

(xx) Since the Company has not raised any money from public issue, this clause is not applicable.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

For ASHOK SHARMA & ASSOCIATES CHARTERED ACCOUNTANTS

PLACE : NEW DELHI DATE : 30/05/2014

Sd/-

(Amit Kumar) PARTNER MEMBERSHIP NO.: 500805


Mar 31, 2013

Report on the Financial Statements

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

Management''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 "the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 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, 2013,

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

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

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 subsection (3C) of section 211 of the Companies Act, 1956;

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

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

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

(b) These fixed assets have been physically verified by the management at regular intervals considering the size of the company and nature of assets. No material discrepancies have been noticed on such verification.

(c) No disposal of a substantial part of fixed assets of the company has taken place during the year.

(ii) (a) As explained to us, the inventory was physically verified by the management at reasonable intervals during the year.

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

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

(iii) (a) The Company has not granted any loan to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has during the year borrowed Rs.62,37,500/- from a Director and repaid the same during the year itself.

(b) The loan taken by the company was without interest and other terms & conditions are prima facie not prejudicial to the interest of the company.

(c) The principal is paid in time.

(d) There is no Amount outstanding on account of loan taken from the companies or other parties listed in the register maintained under Section 301 of Companies Act, 1956.

(iv) The company has adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of stores, raw-materials including components, plant & machinery, equipment and other assets, and for sale of goods. We have not come across any major weakness in internal control.

(v) (a) The transactions which needed to be entered into the register in pursuance of Section 301 of Companies Act, 1956 have been duly entered.

(b) During the year under consideration the Company has made Sales of Rs.1,36,13,759/- to Medicamen Organics Limited, Rs.28,200/- to M/s Red Line Healthcare a group company/concern. These sales were made at prevailing market price and the terms and conditions of the sale are not prejudicial to the interest of the company.

(c) During the year under consideration the Company has made Purchases of Rs.1,75,04,963/- from Medicamen Organics Limited and Rs.61,917/- from M/s Red Line Healthcare a group company/concern. This purchase was made at prevailing market price and the terms and conditions of the purchase are not prejudicial to the interest of the company.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

(vii) In our opinion, the internal audit system is commensurate with the size of the Company and nature of its business in supervision of CFO of the Company.

(viii) It is informed by the management that cost records as required under section 209 (1) (d) of the Companies Act, 1956 are properly maintained as supported by the certificate provided by the Cost Auditor and the Audit is in process.

(ix) (a) According to the records of the Company, the Company is generally not regular in depositing undisputed applicable statutory dues including provident fund, employees'' state insurance, income tax, sales tax, custom duty, excise duty, cess with the appropriate authorities.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31.03.2013, for a period of more than six months from the date they became payable. Except TDS of Rs.13,90,600/- and ESIC Contribution of Rs.2,20,803/-

(x) The company has no accumulated losses at the end of the financial year and it has incurred cash losses during the current financial year but there was no cash loss in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank.

(xii) According to the information and explanations given to us, the Company has not granted any loan and advances on the basis of security by way of pledge of shares, debenture or other security during the year and has no such outstanding at the year end.

(xiii) The provisions of any special statue applicable to chit fund, nidhi''s or mutual benefit fund / societies are not applicable to Company.

(xiv) The company is not dealing in or trading in shares, securities, debentures or other investments and hence, requirement of paragraph 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xv) According to the information and explanation given to us the Company has not given any guarantee for loan taken by others from banks or financial institutions.

(xvi) On the basis of information and explanations given to us the Company has applied term loan, taken during the year, for the purpose for which obtained.

(xvii) On the basis of an overall examination of Balance sheet and cash flow of the Company and the information and explanations given to us, we report that there are no funds raised on a short-term basis, which have been used for long-term purposes and no long-term funds have been used for short term requirement except working capital requirements of the Company.

(xviii) The Company has allotted 2,50,000 equity Shares of Rs.10 each to a party i.e. Director of the Company covered in the register maintained under section 301 of the act at a price of Rs.29/- per share, which is not prejudicial to the interest of the company.

(xix) Since the Company does not have any debentures, the question of creation of securities for debentures does not arise.

(xx) Since the Company has not raised any money from public issue, this clause is not applicable.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

For ASHOK SHARMA & ASSOCIATES

CHARTERED ACCOUNTANTS

PLACE : NEW DELHI

DATE : 30/05/2013 Sd/-

(Amit Kumar)

PARTNER

MEMBERSHIP NO. : 500805


Mar 31, 2011

1. We have audited the attached balance sheet of M/s Medicamen Biotech Limited, as at 31st March 2011, 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 conducted our audit in accordance with the Auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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

(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 faras 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.

(a) In the case of the balance sheet, of the state of affairs of the Company as at 31st March 2011;

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

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

Annexure

Medicamen Biotech Limited (As referred to in paragraph 3 of our report of even date)

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

(b) These fixed assets have been physically verified by the management at regular intervals considering the size of the company and nature of assets. No material discrepancies have been noticed on such verification.

(c) No disposal of a substantial part of fixed assets of the company has taken place during the year.

(ii) (a) As explained to us, the inventory was physically verified by the management at reasonable intervals during the year.

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

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

(iii) (a) The Company has not granted any loan to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Loan earlier taken by the Company outstanding at last year end was Rs. 12.00 lacs and the Company has during the year repaid the same and there is no outstanding at year end.

(b) Rate of interest and other terms & conditions of the loan taken by the company are prima facie not prejudicial to the interest of the company. The loan taken from the Director was free of interest.

(c) The principal and interest are paid in time.

(d) There is no amount outstanding on account of loan taken from the companies or other parties listed in the register maintained under Section 301 of Companies Act, 1956.

(iv) The company has adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of stores, raw-materials including components, plant & machinery, equipment and other assets, and for sale of goods. We have not come across any major weakness in internal control.

(v) (a) The transactions which needed to be entered into the register in pursuance of Section 301 of Companies Act, 1956 have been duly entered.

(b) During the year under consideration the Company has made Sales of Rs.22,79,938/- to Medicamen Organics Limited, Rs.1,95,582/- to M/s Red Line Healthcare a group company/concern, Rs.30,63,32,310/- to Missionpharma A/s and Rs.53,62,50,284/- to Missionpharma Logistics (India) Pvt. Ltd, companies in which director is director. These sales were made at prevailing market price and the terms and conditions of the sale are not prejudicial to the interest of the company.

(C) During the year under consideration the Company has made Purchases of Rs.8,76,72,503/- from Medicamen Organics Limited and Rs.77,700/- from M/s Red Line Healthcare a group company/concern. This purchase was made at prevailing market price and the terms and conditions of the purchase are not prejudicial to the interest of the company.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

(vii) The Company has appointed a firm of Chartered Accountants to carry out its internal audit function. In our opinion, the internal audit system is commensurate with the size of the Company and nature of its business.

(viii) It is informed by the management that cost records as required under section 209 (1) (d) of the Companies Act, 1956 are properly maintained but the same are not provided to us for our examination.

(ix) (a) According to the records of the Company, the Company is generally regular in depositing undisputed applicable statutory dues including provident fund, employees' state insurance, income tax, sales tax, custom duty, excise duty, cess with the appropriate authorities except payment of advance Income Tax.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31.03.2011, for a period of more than six months from the date they became payable. However, the Company is late in depositing TDS payment in some cases.

(c) According to the information and explanation given to us, there is no disputed amount.

(x) The company has no accumulated losses at the end of the financial year and it has not incurred cash losses during the current financial year and the immediately preceding such financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank.

(xii) According to the information and explanations given to us, in cases the Company has granted loans and advances on the basis of security by way of pledge of shares, the Company has maintained adequate documents and records. However the Company has not made any such loan and advances during the year and has no such outstanding at the year end.

(xiii) The provisions of any special statue applicable to chit fund, nidhi's or mutual benefit fund / societies are not applicable to Company.

(xiv) The company is not dealing in or trading in shares, securities, debentures or other investments and hence, requirement of paragraph 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xv) According to the information and explanation given to us the Company has not given any guarantee for loan taken by others from banks or financial institutions.

(xvi) On the basis of information and explanations given to us the Company has applied term loan, taken during the year, for the purpose for which obtained.

(xvii) On the basis of an overall examination of Balance sheet and cash flow of the Company and the information and explanations given to us, we report that there are no funds raised on a short-term basis, which have been used for long-term purposes and no long-term funds have been used for short term requirement except working capital requirements of the Company.

(xviii) The Company has allotted 1,65,976 equity Shares of Rs.10 each to a company covered in the register maintained under section 301 of the act at a price of Rs.29/- per share, which is not prejudicial to the interest of the company.

The company has also made allotment of 8,82,400 warrants convertible in equity within a period of 18 months at a price of Rs.29/- per share against the payment of 25% of the issue price to the parties covered in the register maintained under section 301 of the act at a price which is not prejudicial to the interest of the company.

(xix) Since the Company does not have any debentures, the question of creation of securities for debentures does not arise.

(xx) Since the Company has not raised any money from public issue, this clause is not applicable.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

For ASHOK SHARMA & ASSOCIATES CHARTERED ACCOUNTANTS

Sd/- (Amit Kumar) PARTNER MEMBERSHIP NO. : 500805

PLACE : NEW DELHI DATE : 12/08/2011


Mar 31, 2010

1. We have audited the attached balance sheet of M/s Medicamen Biotech Limited, as at 31st March 2010, 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 Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

(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 31s1 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 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.

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

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

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

Annexure Medicamen Biotech Limited (As referred to in paragraph 3 of our report of even date)

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

(b) These fixed assets have been physically verified by the management at regular intervals considering the size of the Company and nature of assets. No material discrepancies have been noticed on such verification.

(c) No disposal of a substantial part of fixed resets of the Company has taken place during the year.

(ii) (a) As explained to us, the inventory was physically verified by the management at reasonable intervals during the year.

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

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

(iii) (a) The Company has not granted any loan to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Loan earlier taken by the Company outstanding at year end are Rs.12.00 lacs as against Rs.12.00 lacs at the end of last year. The Company has during the year repaid and taken loan of Rs.112 lacs from Directors/Associate concerns.

(b) Rate of interest and other terms & conditions of the loan taken by the Company are prima facie not prejudicial to the interest of the Company. The loan taken from the Director is free of interest.

(c) The principal and interest are paid in time.

(d) There is no overdue amount of loan taken from the companies or other parties listed in the register maintained under Section 301 of Companies Act, 1956.

(iv) The Company has adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of stores, raw-materials including components, plant & machinery, equipment and other assets, and for sale of goods. We have not come across any major weakness in internal control.

(v) (a) The transactions which needed to be entered into the register in pursuance of Section 301 of Companies Act, 1956 has been duly entered.

(b) During the year under consideration the Company has made Sales of Rs.8,54,405/- to Medicamen Organics Limited, Rs.1,31,521/- to M/s Red Line Healthcare a group Company/concern, Rs.25,46,76,295/- to Missionpharma A/s and Rs.33,04,45,065/- to Missionpharma Logistics (India) Pvt. Ltd, companies in which director is director/CEO. These sales were made at prevailing market price and the terms and conditions of the sale are not prejudicial to the interest of the Company.

During the year under consideration the Company has made Purchases of Rs.1,83,988/- from Medicamen Organics Limited, a group Company. This purchase was made at prevailing market price and the terms and conditions of the purchase are not prejudicial to the interest of the Company,

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under.

(vii) The Company has appointed a firm of Chartered Accountants to carry out its internal audit function. In our opinion, the internal audit system is commensurate with the size of the Company and nature of its business.

(vii > It is informed by the management that cost rear de as required under sect-on 209 (1) (d) of the Companies Act, 1956 are properly maintained but the same are not provided to us for our examination.

(ix)- (a) According to the records of the Company, the Company is generally regular in depositing undisputed applicable statutory dues including provident fund, employees state insurance, income tax, sales tax, custom duty, excise duty, cess with the appropriate authorities except payment of advance I ncome Tax.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31.03.2010, for a period of more than six months from the date they became payable. However, the Company is late in depositing TDS payment in some cases.

(c) According to the information and explanation given to us, there is no disputed amount.

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses during the current financial year and the immediately preceding such financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank.

(xii) According to the information and explanations given to us, in cases the Company has granted loans and advances on the basis of security by way of pledge of shares, the Company has maintained adequate documents and records. However the Company has not made any such loan and advances during the year and has no such outstanding at the year end.

(xiii) The provisions of any special statue applicable to chit fund, nidhis or mutual be^ fit fund / societies are not applicable to Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures or oth^r investments and hence, requirement of paragraph 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) According to the information and explanation given to us the Company has not given any guarantee for loan taken by other;, :rom banks orfinancial institutions.

(xvi) On the basis of information and explanation*- given to us the Company has applied term loan, taken during the year, for the purpose tor ¦:¦& ,ch obtained.

(xvii) On the basis of an overall examination of Balance sheet and cash flow of the Company and the information and explanations given to us, we report that there are no funds raised on a short- term basis, which have been used for long-term purposes and no long-term funds have been used for short term requirement except working capital requirements of the Company.

(xviii) During the year, the Company has not issued and allotted any shares.

(xix) Since the Company does not have any debentures, the question of creation of securities for debentures does not arise.

(xx) Sioce the Company has not raised any money from public issue, this clause is not applicable.

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



For ASHOK SHARMA & ASSOCIATES CHARTERED ACCOUNTANTS

PLACE : NEW DELHI DATE : 12/08/2010

(Amit Kumar) PARTNER MEMBERSHIP NO. : 500805



 
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