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Auditor Report of Vista Pharmaceuticals Ltd.

Mar 31, 2016

TO THE MEMBERS OF VISTA PHARMACEUTICALS LIMITED (AND REDUCED)

Report on the Financial Statements

We have audited the accompanying financial statements of Vista Pharmaceuticals Limited (And Reduced) ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, 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

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

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 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.

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

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

a) in case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2016;

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

c) in the case of 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 (Auditors Report) Order, 2016 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to 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 the Annexure - 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

2 As required by Section 143 (3) (i) of the Companies Act, 2013, we had given in Annexure - 2, the report on Internal Financial Controls over Financial Reporting.

3. 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 and with the accounts of the branches

(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, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 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 Auditors 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 as notes to accounts in note no. IV (c) to notes to accounts.

ii. In our opinion and as per the information and explanations provided to us, The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

(Referred to in Paragraph 1 under section (Report on the Other Legal and Regulatory Requirements, of our report even date)

(i) (a) According to the information and explanations given to us, the Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us, majority of the fixed assets have been physically verified by the management during the year. There is a phased program of verification which in our opinion is at reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification;

(c) All the title deeds of the immovable properties are held in the name of the Company.

(ii) According to the information and explanations given to us, the inventories have been physically verified at reasonable intervals by the management and no material discrepancies were noticed on such verification.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 189 of companies'' act 2013. Accordingly, the sub-clauses (a) and (b) are not applicable to the company

(iv) According to the information and explanations given to us, the Company has not granted any loans nor has it made any investments or given any guarantee or securities which are covered under the provisions of section 185 and 186 of Companies'' act 2013.

(v) According to the information and explanations given to us, the Company has not accepted any deposits in terms of the directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.

(vi) The Central Government has not prescribed the maintenance of cost records under subsection (1) of section 148 of the Companies Act, 2013.

(vii) (a) In our opinion and according to the information and explanations given to us, the company is not regular in depositing undisputed statutory dues like provident fund, employees state insurance, tax deducted at source, professional tax, with the appropriate authorities. In our opinion and according to the information and explanations given to us, statutory dues outstanding as at the last day of the financial year under audit for a period of more than six months from the date they became payable are ESI Rs.6,95,317/-, Provident Fund 2,20,298/-, TDS payable 5,46,109/- and Professional Tax Rs.42,251/-

(b) In our opinion and according to the information and explanations given to us, the dues of income tax which have not been deposited on account of dispute are as under-

The Income Tax Department has raised a demand of Rs.3,86,58,242/- for the assessment year 2006-07 on the premise that the interest waived by IDBI under One time settlement of dues was income for the aforesaid assessment year. The company''s appeal against the order of CIT at the tribunal was settled in favor of the company. The departmental appeal in the High Court of Andhra Pradesh was also settled in favor of company. The dept has preferred an appeal against the orders of the Honorable high court of Andhra Pradesh at the Supreme Court, the matter is pending disposal at the Supreme Court.

(viii) According to the information and explanations given to us, the company has not defaulted in repayment of dues, to a financial institution or bank during the year. There are no debenture holders.

(ix) According to the information and explanations given to us, during the year under review, the Company has not raised any money by way of initial public offer, further public offer, or term loans and hence the reporting requirement on the purpose of application of the same is not warranted.

(x) According to the information and explanations given to us and based upon the audit procedures performed by us, no fraud by the Company or on the Company committed by its officers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us, none of the promoter directors of the company including managing director have received any remuneration during the financial year except professional whole time director. The managerial remuneration paid to other managerial personal including professional whole time director during the year is more than the limits prescribed under the provisions of Section 197 read with Schedule V Part II section II (B) of the Companies Act, 2013. The amount paid in excess of the limits prescribed is Rs.19.11 lakhs, no steps are reported for securing the refund of the same.

Management Reply

Company has not paid remuneration to any other managerial personnel'' except for one professional whole-time director i.e., Mr. Chalapathi Rao.

As per Schedule V and section 197 (Overall maximum managerial remuneration) of Companies Act, 2013, Managerial personnel refers to: managing or whole-time director or a manager. ''Chief Financial Officer'' and ''Company Secretary'' are not referred as managerial personnel under the provisions of section 197 and schedule V of the Act and thereby limits specified thereof doesn''t apply to a CFO & CS.

Mr. Chalapathi Rao , was appointed as Wholetime Director, by the members of the company at the 24th Annual General meeting of the company and members have authorized the Nomination and Remuneration committee to fix the remuneration of Whole time Director. The Committee has in compliance with provisions of section 197 read with schedule V Part II section II (B) of the Companies Act, 2013 fixed the remuneration of Mr. Chalapathi Rao at Rs. 18,00,000/- per annum.

The total net profits under section 197 is 2,03,35,052 as on 31st March,2016. Profits of the company were inadequate to pay remuneration as approved by the committee and due to such inadequacy in profits, Mr. Chalapati Rao will be entitled to remuneration as per the limits specified under schedule V of the Companies Act,2013, which is Rs. 42 lakhs per annum based on the net effective capital of the Company i.e, Rs. 11,20,94,579/- in compliance with

Schedule V of the Companies Act, 2013 ?. Payment of remuneration amounting to Rs. 18,00,000/- per annum to Mr. Chalapathi Rao, Whole Time Director is within the specified limits under schedule V of the Companies Act,2013.?

Since the amount paid to Mr. Chalapathi Rao, Whole time Director is within the limits specified under Companies Act, 2013, there is no requirement for refund of same. Your company is in compliance with provisions of Companies Act,2013.

(xii) As the Company is not a Nidhi Company in terms of the provisions of the Companies Act, 2013 read with Nidhi Rules, 2014, the matters to be reported under clause (xii) are not applicable.

(xiii) According to the information and explanations given to us, in respect of the transactions with the related parties, the Company has complied with the provisions of Section 177 and 188 of the Companies Act. 2013, wherever applicable. In our opinion, the details as required by the applicable accounting standards have been disclosed in the financial statements for the year under review.

(xiv) According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Hence, reporting requirement on compliance with Section 42 of the Companies Act, 2013 and purpose of application of the funds so raised is not applicable.

(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him and hence, reporting requirement on compliance with the provisions of Section 192 of the Companies Act, 2013 is not applicable.

(xvi) According to the information and explanations given to us and in our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act"):

We have audited the internal financial controls over financial reporting of VISTA PHARMACEUTICALS LIMITED (AND REDUCED) ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit.

We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal

Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

FOR PRV ASSOCIATES

Chartered Accountants

Firm Reg. No. 06447S

Sd/-

(CH. VENKATRAMAYYA)

Place: Hyderabad PARTNER

Dated: 27-05-2016 Membership No. 009867


Mar 31, 2015

We have audited the accompanying financial statements of VISTA PHARMACEUTICALS LIMITED ("the company"),which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the 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

The Company''s Board of Directors are responsible for the matters 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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 financial control relevant to the Company''s preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

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 Companies (Auditor''s Report) Order 2015 issued by the Central Government of India in terms of Sub Section (11) of section 143 of the Act (hereinafter referred to the Order), and on the basis of such checks of books and records of the company as we considered appropriate and according to the information and explanations given to us, 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 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 appears from our examination of those books.

c) The Balance Sheet, the 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 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 written representations received from the directors as on 31 March, 15 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred in note no.XII under the contingent liability.

ii. In our Opinion and as per the information and explanations provided to us the Company has not entered into any long term contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses, and

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

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT

(Referred to in Paragraph 1 under section (Report on the Other Legal and Regulatory Requirements, of our report even date)

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

(b) All the Fixed Assets of the company have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The inventories have been physically verified at reasonable intervals by the management.

(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 is maintaining proper records of inventories and no material discrepancies were noticed on such verification.

(iii) As informed to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of Companies Act. Accordingly, the sub-clauses (a) and (b) are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size and nature of the business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits in terms of directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the companies Act, and rules framed there under.

(vi) In the terms of section 148(1) of Companies Act2013,read with rules framed there under the provisions ot the aforedaid section are not applicable to the Company.

(vii) (a) The company is not regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities. The Unpaid amounts as on 31-03-2015 are as follows TDS Rs 3,56,481/-, ESI contribution 6,08,673/-, PF contribution 3,89,201/-, Professional Tax 53,201/-.

(b) According to the information and explanations given to us, no undisputed amount is payable in respect of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess as at March 31, 2015.

(c) In our opinion and according to the information and explanation given to us , amounts required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act 1956(1 of 1956) and rules made there under have been transferred to such fund within time.

(viii) The company has no accumulated losses at the end of the financial year under audit.

The company has not incurred cash losses during the financial year covered by audit and immediately preceding financial year.

(ix) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or Bank. There are no debenture holders.

(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) According to the information and explanations given to us, no term loans were obtained during the period under audit.

(xii) Based upon the audit procedures performed and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the period of our audit.

FOR PRV ASSOCIATES Chartered Accountants Firm Reg. No. 06447S

(CH. VENKATRAMAYYA) Place: Hyderabad PARTNER Dated: 29-05-2015 Membership No. 009867


Mar 31, 2014

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

Management''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 auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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 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 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, 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 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

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) All the assets have not been physically verified by the Management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

ii) (a) The inventory has been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(d) Valuation of Inventory: Raw Materials, Stores & Spares and Packing Materials are valued at cost. Work in Progress and Finished Goods is stated at cost or net realizable value whichever is lower.

iii) The Company has not taken any loan from companies covered in the register maintained under Section 301 of the Companies Act, 1956.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pu rsu ance of contracts or arrangements entered in the register maintained under Section 301 of the Companies act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The Company has not accepted any deposits as defined under Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

vii) In our opinion, the Company has no internal audit system in force. However the Internal control procedures prevalent in the company are commensurate with the size and in the opinion of the management it is not required in view of the nature of business of the Company.

viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

ix) (a) The Company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it. The unpaid amounts as on 31-03-2014 are as follows: TDS Rs.4,21,892, ESI Employees contribution Rs.4,48,847, PF Employees contribution Rs.9,82,789 and profession tax Rs.41,501, aggregating to Rs.1,89,5029.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears, as at March 31, 2014 for a period of more than six months from the date they became payable.

x) The accumulated losses of the Company are not more than fifty percent of its net worth. The Company has made no cash loss during the financial year.

xi) The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xiii) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xiv) The company has not given any guarantees for loans taken by others from Banks or Financial institutions.

xv) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment and vice versa.

xvi) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

xvii) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued debentures.

xviii) The Company has not raised money by way of public issues during the year.

xix) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit

For PRV ASSOCIATES Chartered Accountants (Firm Reg.No. 006447S)

Place: Hyderabad. (CH.VENKATRAMAYYA) Date: 1st August, 2014 Partner M.Num. 009867


Mar 31, 2013

Report on the Financial Statements

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

Management''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 Profit and Loss Account, of the profit/ 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.

ANNEXURE TO THE AUDITORS'' REPORT

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) All the assets have not been physically verified by the Management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

ii) (a) The inventory has been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(d) Valuation of Inventory: Raw Materials, Stores & Spares and Packing Materials are valued at cost. Work in Progress and Finished Goods is stated at cost or net realizable value whichever is lower.

iii) The Company has not taken any loan from companies covered in the register maintained under Section 301 of the Companies Act, 1956.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The Company has not accepted any deposits as defined under Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

vii) In our opinion, the Company has no internal audit system inforce, however the internal control procedures prevalent in the company are commensurate with the size and the opinion of the management is not required in view of the nature of business of the company.

viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it. However, the management undertakes to clear certain dues of the above nature outstanding as on 31.03.2013, during the current financial year.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears, as at March 31, 2013 for a period of more than six months from the date they became payable.

x) The accumulated losses of the Company are more than fifty percent of its net worth. However, consequent upon the approval of Reduction of share capital by the concerned authorities with effective date as 31.03.2012, this clause will become redundant.

The Company has made no cash loss of during the financial year.

xi) The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xii) In our opinion, the Company is not a chit fund or a nidhi/mutual benef it fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xiii) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xiv) The company has not given any guarantees for loans taken by others from Banks or Financial institutions.

xv) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment and vice versa.

xvi) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

xvii) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued debentures.

xviii) The Company has not raised money by way of public issues during the year.

xix) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit

For PRV ASSOCIATES

Chartered Accountants

Place: Hyderabad. (CH.VENKATRAMAYYA)

Date: 14-08-2013 Partner


Mar 31, 2012

1) We have audited the attached Balance Sheet Of VISTA PHARMACEUTICALS LIMITED, Hyderabad as at 31st March, 2012 and the Profit and Loss Account 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 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 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 and report thereto.

3) As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company, as we considered appropriate, we enclose in the annexure a statement on the matters specified in the said Order.

4) Further to our comments in annexure referred to in paragraph (3) above:

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.

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

The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account.

In our opinion, the Profit & Loss Account, Balance Sheet and Cash Flow Statement comply with the Accounting Standards referred in sub-section 3(c) of Section 211 of the Companies Act, 1956.

On the basis of representations received from the Directors as on 31.03.2012 and taken on record by the Board of Directors, we report that. none of the Directors is disqualified as on 31.03.2012 from being appointed as Directors in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanations given to us, read with the accounting policies together with notes thereon 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 Balance Sheet, of the state of affairs of the company as at 31st March, 2012

ii) in the case of Profit and Loss Account, of the loss 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 AUDITORS REPORT

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) All the assets have not been physically verified by the Management during the year "but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

ii) (a) The inventory has been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(d) Valuation of Inventory: Raw Materials, Stores & Spares and Packing Materials are valued at cost. Work in Progress and Finished Goods is stated at cost or net realizable value whichever is lower.

iii) The Company has not taken any loan from companies covered in the register maintained under Section 301 of the Companies Act, 1956.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The Company has not accepted anv deposits as defined under Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

vii) In our opinion, the Company has no internal audit system inforce, however the internal control procedures prevalent in the company are commensurate with the size and the opinion of the management is not required in view of the nature of business of the company.

viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, investor Education Protection Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it. However Provident Fund & ESI contributions of Rs.2,43,749/- and Rs.1,23,407/- are yet to be deposited as on 31-03-2012.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears, as at March 31, 2012 for a period of more than six months from the date they became payable.

x) The accumulated losses of the Company are not more than fifty percent of its net worth. The Company has made cash loss of Rs90.42 lacs during the financial year.

xi) The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

xiii) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xiv) The company has not given any guarantees for loans taken by others from Banks or Financial institutions.

xv) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment and vice versa.

xvi) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

xvii) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued debentures.

xviii) The Company has not raised money by way of public issues during the year.

xix) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.



For PRV ASSOCIATES

Chartered Accountants

Place: Hyderabad. (CH.VENKATRAMAYYA)

Date: 01-10-2012 Partner


Mar 31, 2011

1) We have audited the attached Balance Sheet of VISTA PHARMACEUTICALS LIMITED, Hyderabad as at 31st March, 2011 and the Profit and Loss Account 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 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 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 and report thereto.

3) As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Section 227 (4A)of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company, as we considered appropriate, we enclose in the annexure a statement on the matters specified in the said Order.

4) Further to our comments in annexure referred to in paragraph (3) above:

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.

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

The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account.

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

On the basis of representations received from the Directors as on 31.03.2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31.03.2011 from being appointed as Directors in terms of clause (g) of sub-section (1) of Section 274oftheCompaniesAct, 1956.

In our opinion and to the best of our information and according to the explanations given to us, read with the accounting policies together with notes thereon 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 Balance Sheet, of the state of affairs of the company as at 31st March, 2011.

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

iii > incase of Cash Flow Statement of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT 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)All the assets have not been physically verified by the Management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

ii) (a) The inventory has been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the company and the nature of its business;

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii) The Company has not taken any loan from companies covered in the register maintained under Section 301 of the Companies Act, 1956.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The Company has not accepted any deposits as defined under Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the rules made by The Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees . State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it. However Provident Fund & ESI contributions of Rs.3,25,737/- and Rs.1,60,004/- are yet to be deposited as on 31-03-2011.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears, as at March 31, 2011 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of Sale Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute except the following disputed income tax due: Assessment year 2006-07 Commissioner of lncometax,Hyderrabad issued order raising demand for tax of Rs.3,86,58,242/-, which will be contested before the Appellate Tribunal of Incometax, Hyderabad within the prescribed time limit.

x) The accumulated losses of the Company are not more than fifty percent of its net worth. The Company has made cash profit of Rs.22.73 lacs during the financial year.

xi) The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xiii) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

xiv) The company has not given any guarantees for loans taken by others from Banks or Financial institutions.

xv) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment and vice versa.

xvi) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

xvii) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued debentures.

xviii) The Company has not raised money byway of public issues during the year.

xix) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For PRV ASSOCIATES. Chartered Accountants

Place:Hyderabad (CH.VENKATRAMAYYA)

Date:02.05.2011 Partner


Mar 31, 2010

1) We have audited the attached Balance Sheet of VISTA PHARMACEUTICALS LIMITED, Hyderabad as at 31st March, 2010 and the Profit and Loss Account for the year ended on that date annexedthereto. 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 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 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 financiaJ statement presentation. We believe that our audit provides a reasonable basis for our opinion and report thereto.

3) As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company, as we considered appropriate, we enclose in the annoxure a statement on the matters specified in the said Order.

4) Further to our comments in annexurc referred to in paragraph (3) above:

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.

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

The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account.

In our opinion, the Profit & Loss Account, Balance Sheet and Cash Flow Statement comply with the Accounting Standards referred in sub-section 3(c) of Section 211 of the Companies Act, 1956.

On the basis of representations received from . the Directors as on 31.03.2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31.03.2010 from being appointed as Directors ¦ in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

In ouropinion and to the best of our information and according to the explanations given to us, read with the accounting policies together with notes thereon the said accounts give the information required by the Companies Act, 1956 in the manner so required and give us a true and fair view in conformity with the accounting principles generally acceptedin India.

i) in the case of Balance Sheet, of the state of affairs of the company as at" 31st March, 2010

ii) in the case of Profit and Loss Account, of the loss 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 AUDITORS REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

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

(b) All the assets have not been physically verified by the Management during the yearlaut there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

ii) (a) The inventory has been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the Management arc 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii) The Company has hot taken any loan from companies covered in the register maintained under Section 301 of the Companies Act, 1956.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The Company has not accepted any deposits as defined under Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

viii) We have broadly reviewed the books of account rcJating to materials, labour and other items of cost maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost t. curds under Section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income lax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears, as at March 31, 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there arc no dues of Sale Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute except the following disputed income tax due:

Assessment Amount Forum where

Year in Rupees Pending

2006-07 3,86,58,242/- Commissioner

of Income Tax

III

Hyderabad.

x) The accumulated losses of the Company are not more than fifty percent of its net worth. The Company has incurred cash loss of Ks.106.33 lacs during the financial year.

xi) We are of the opinion that the company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xiii) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.• Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 arc not applicable to the company,

xiv) The company has not given any guarantees for loans taken by others from Banks or Financial institutions.

xv) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment and vice versa.

xvi) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

xvii) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued debentures.

xviii)The Company has not raised money by way of public issues during the year.

xix) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For PRV ASSOCIATES.

Chartered Accountants

(CH.VENKATRAMAYYA)

Place : Hyderabad Partner

Date : 05-05-2010

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