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Auditor Report of Wanbury Ltd.

Mar 31, 2016

TO THE MEMBERS OF WANBURY LIMITED

Report on Standalone Financial Statements

We have audited the accompanying standalone financial statements of WANBURY LIMITED (“the Company”), which comprise the Balance Sheet as at 31 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 Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards 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 of 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 standalone financial statements based on our audit.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016, and its loss-and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a) Note 52 in the financial statements which indicate that the Company has accumulated losses and its net worth has been fully eroded. The financial statements of the Company have been prepared on a going concern basis for the reasons stated therein.

b) The Company has given guarantee in respect of Exim Bank’s investments of USD 60 Lakhs (Rs. 3,979.97 Lakhs) in Wanbury Holding B.V., a subsidiary of the Company and State Bank of India’s loan of Euro 32.60 Lakhs (Rs. 2,448.11 Lakhs) to Cantabria Pharma S.L., the step down subsidiary of the Company, which have been invoked by the respective parties. The said dues being part of the CDR Scheme will be accounted upon arriving at mutually agreed terms of settlement with the respective parties as stated in Note 30 of the financial statements.

Our opinion is not modified in respect of these matters.

Other Matter

We did not audit the financial statements/financial information of one branch included in the standalone financial statements of the Company whose financial statements/financial information reflect total assets of Rs. 10,090.60 Lakhs as at 31 March 2016 and total revenues of Rs. 16,072.61 Lakhs for the year ended on that date, as considered in the standalone financial statements. The financial statements/information of this branch have been audited by the branch auditor whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of this branch, is based solely on the report of such branch auditor.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“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” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 it appears from our examination of those books.

c) The reports on the accounts of the branch of the Company audited under Section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d) 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.

e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

f) On the basis of the written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

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

i. The Company has disclosed the impact, if any, of pending litigations as at 31 March 2016 on its financial position in its standalone financial statements - Refer Note 29 to the financial statements;

ii. The Company has not entered into any long-term contracts including derivative contracts requiring provision under the applicable law or accounting standards, for material foreseeable losses.

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

ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

(The Annexure referred to in Para 1 under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date to the Members of WANBURY LIMITED on the financial statements for the year ended 31 March 2016.)

1. In respect of its fixed assets:

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

b) As informed to us by the management, the Company has a policy of physically verifying fixed assets in a phased manner over a period which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informed that there were no material discrepancies noticed on such verification and the same has been properly dealt with in the books of account.

c) According to the information and explanations given to us and the title deeds / lease deeds and other records examined by us, we report that the title deeds / lease deeds in respect of all the immovable properties of land which are freehold, immovable properties of land that have been taken on lease and buildings, as disclosed in Note 11 - fixed assets in the standalone financial statements, are held in the name of the Company or in the erstwhile name of the Company or in the name of the transferor companies which have merged into the Company, as at the balance sheet date.

2. According to the information and explanations given to us, the inventories have been physically verified by the management at reasonable intervals during the year except for stocks with third parties for which most of the confirmation certificates have been obtained by the Company. The discrepancies noticed on such physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account.

3. According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured, to companies, firms, Limited Liability Partnership or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, paragraph 3(iii) of the Order is not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013.

5. The Company has not accepted any deposit from the public within the meaning of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013. Accordingly, paragraph 3(v) of the Order is not applicable.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under 148(1) of the Companies Act, 2013 in relation to products manufactured, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate and complete.

7. According to the information and explanations given to us :

a) Except in some cases where there have been delays, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, there are no undisputed amounts payable in respect of aforesaid material statutory dues as at 31 March 2016 which were in arrears for a period of more than six months from the date they became payable except statutory dues of erstwhile PPIL referred to in note 32 of the financial statements.

b) On the basis of our examination of the documents and records of the Company, there are no dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax and Cess which have not been deposited on account of a dispute, except as enumerated herein below which are pending before respective authorities as mentioned there against :

Name of the Statute

Nature of the Dues

Amount Rs. In Lakhs4

Period to which amounts relate

Forum where dispute is Pending

The Income Tax Act, 1961

Income Tax/ TDS/ Interest / Penalty

46.20

AY 1997-98

Bombay High Court

96.32

AY 2010-11

Deputy Commissioner of Income tax, Mumbai

5.65

AY 2010-11

Commissioner of Income tax (Appeals), Mumbai

The Central Sales Tax Act, 1956

Sales Tax/Interest / Penalty

220.39

60.35

19.95

FY 2006-07 FY 2007-08 FY 2002-03

Sales Tax Appellate Tribunal Andhra Pradesh

42.95

FY 1997-98 to FY 2004-05

Andhra Pradesh High Court

The Central Sales Tax Act, 1956

Sales Tax/Interest / Penalty

2,972.28

FY 1992-93 FY 1994-95 FY 1996-97 FY 1997-98 &

FY 2000-01 to FY 2004-05

Bombay High Court

Service Tax under Finance Act, 1994

Service Tax/ Interest/ Penalty

275.42

FY 2004-05 to FY 2010-11

Central, Excise and Service Tax Appellate Tribunal, Mumbai

31.43

FY 2011-12

The Commissioner of Central Excise (Appeals), Mumbai

The Central Excise Act, 1944

Excise Duty

25.31

FY 2009-10 to FY 2010-11

Central, Excise and Service Tax Appellate Tribunal, Bangalore

2.97

Apr 2011 to

Dec 2011

Central, Excise and Service Tax Appellate Tribunal, Bangalore

9.61

Apr 2005 to

Sept 2007

Central, Excise and Service Tax Appellate Tribunal, Bangalore

21.07

Apr 2011 to

Feb 2012

The Commissioner of Central Excise (Appeals), Guntur, Andhra Pradesh

26.10

Mar 2013 to

Dec 2013

The Commissioner of Central Excise (Appeals), Guntur, Andhra Pradesh

41.94

Jan 2014 to

Oct 2014

The Commissioner of Central Excise (Appeals), Guntur, Andhra Pradesh

8. Based on our audit procedures and on the basis of information and explanations given to us, there is no delay in respect of repayment of loans or borrowings to financial institutions, banks, government and dues to debenture holders, except for the following defaults.

Particulars

Amount of default as at the balance sheet date (Rs. in Lakhs)

Period of default (in days) and Remarks

Andhra bank

- Principal

- Interest

19.20

27.94

1 day

1 to 32 days

Axis Bank

- Principal

- Interest

1.90

2.27

1 day

1 day

Bank of India

- Principal

- Interest

146.20

29.27

1 day

1 day

EXIM Bank

- Principal

- Interest

2.14

10.34

1 day

1 to 92 days

IDBI Bank

- Principal

- Interest

2.15

1.69

1 day

1 day

State bank of Mysore

- Principal

- Interest

89.97

70.18

1 day

1 to 61 days

State bank of India

- Principal

- Interest

1,591.32

895.15

1 to 367 days

1 to 367 days

Foreign Currency Convertible Bond Holders

- Principal

- Interest

717.56

329.28

92 to 1,438 days

1,438 to 1,737 days

Non Convertible Debentures

55.67

97.00

Unpaid from 1 May 2009 Unpaid from 1 May 2010 Pending fresh order from BIFR - Refer Note 9.1 and 32 of the financial statements

Optionally Fully Convertible Debentures

290.99

291.00

Unpaid from 30 April 2010 Unpaid from 30 April 2011 Pending fresh order from BIFR - Refer Note 9.2 and 32 of the financial statements

Term Loans taken by erstwhile PPIL from banks / financial institutions

68.02

Unpaid from respective due dates. Pending fresh order from BIFR - Refer Note 9.4, 9.5 and 32 of the financial statements

9. According to the information and explanations given to us, the Company has not raised any moneys by way of initial public offer or further public offer and has not taken any term loan during the year.

10. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

11. According to the information and explanation given to us, during the year the Company has paid Rs. 49.77 Lakhs in excess of the remuneration payable as per the provisions of section 197 read with Schedule V to the Companies Act, 2013, for which application has been made to the Central Government on 18 January 2016 and the said amount, pending approval of the Central Government, is shown as recoverable in the financial statements.

In respect of the excess managerial remuneration recoverable aggregating to Rs. 166.19 Lakhs pertaining to financial years 2011-12 to 2014-15 [Refer Note 38(a)], the Board of Directors at its meeting held on 18 May 2016 has extended repayment date and accordingly the said dues are repayable on or before 31 March 2017.

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

13. The company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Companies Act, 2013. The details of such related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

14. According to the information and explanation 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. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

15. In our opinion and according to the information and explanation given to us, the Company has not entered into any noncash transactions with directors or persons connected with directors. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

16. In our opinion and according to the information and explanation given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT

(The Annexure referred to in para 2 (f) under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date to the Members of WANBURY LIMITED on the Standalone financial statements for the year ended 31 March 2016.) 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 WANBURY LIMITED (“the Company”) as of 31 March 2016 in conjunction with our audit of the standalone 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 (“ICAI”). 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 issued by the ICAI 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. Those Standards and the above mentioned 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 (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) 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 (3) 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 31 March 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 ICAI.

For Kapoor & Parekh Associates

Chartered Accountants

ICAI FRN 104803W

Nikhil Patel

Partner

M. No.37032

Mumbai, 18 May 2016


Mar 31, 2015

We have audited the accompanying standalone financial statements of WANBURY 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 period then ended, and a summary of the significant accounting policies and other explanatory information.

Management,s Responsibility for the Standalone Financial Statements

The Company,s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards 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 of 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 standalone financial statements based on our audit.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015, and its profit and its cash fows for the period ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a) Note 55 in the financial statements which indicate that the Company has accumulated losses and its net worth has been fully eroded. The financial statements of the Company have been prepared on a going concern basis for the reasons stated therein.

b) The Company has given guarantee in respect of Exim Bank,s investments of USD 60 Lacs (Rs, 3,755.45 Lacs) in Wanbury Holding B.V., a subsidiary of the Company and State Bank of India,s loan of Euro 32.60 Lacs (Rs, 2,200.84 Lacs) to Cantabria

Pharma S.L., the step down subsidiary of the Company, which have been invoked by the respective parties. The said dues being part of the CDR Scheme will be accounted upon arriving at mutually agreed terms of settlement with the respective parties as stated in Note 34 of the Financial Statements.

Our opinion is not modified in respect of these matters.

Other Matter

We did not audit the financial statements/financial information of one branch included in the standalone financial statements of the Company whose financial statements/financial information reflect total assets of Rs, 9,864.82 Lacs as at 31 March 2015 and total revenues of Rs, 10,592.64 Lacs for the period ended on that date, as considered in the standalone financial statements. The financial statements/information of this branch have been audited by the branch auditor whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of this branch, is based solely on the report of such branch auditor.

Our opinion is not modified in respect of this matter.

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, to the extent applicable.

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 it appears from our examination of those books.

c) The reports on the accounts of the branch of the Company audited under Section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d) 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.

e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

f) On the basis of the written representations received from the directors as on 31 March 2015 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.

g) 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, if any, of pending litigations as at 31 March, 2015 on its financial position in its standalone financial statements – Refer Note 33 to the financial statements;

ii. The Company has not entered into any long-term contracts including derivative contracts requiring provision under the applicable law or accounting standards, for material foreseeable losses.

iii. There has been delay in transferring Rs, 6.54 Lacs, required to be transferred, to the Investor Education and Protection Fund by the Company, which has been paid on 8 May 2015.

ANNEXURE TO THE INDEPENDENT AUDITOR,S REPORT

(The Annexure referred to in Para 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the Members of WANBURY LIMITED on the financial statements for the period ended 31 March 2015.)

1 In respect of its fixed assets:

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

b) The fixed assets have been physically verified by the management during the period as per the phased programme which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informed that there was no material discrepancies noticed on such verification which were accounted in the financial statements.

2 In respect of inventories:

a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the period except for stocks with third parties for which most of the confirmation certificates have been obtained by the Company.

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 physical stock and book records have been adequately dealt with in the books of account.

3 According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured, to companies, forms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 and hence, clause 3 (iii) of the Order is not applicable to the Company.

4 In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchases 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.

5 The Company has not accepted any deposit from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

6 We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Companies Act, 2013 in relation to products manufactured, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, made a detailed examination of the records with a view to determine whether they are accurate and complete.

7 According to the information and explanations given to us :

a) Except in some cases where there have been delays, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees, State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues with the appropriate authorities during the period. According to the information and explanations given to us, there are no undisputed amounts payable in respect of aforesaid material statutory dues as at 31 March 2015 which were in arrears for a period of more than six months from the date they became payable except in respect of income tax deducted at source of Rs, 0.21 Lac, profession tax ofRs, 4.11 Lacs, NMMC Cess ofRs, 8.72 Lacs, wealth tax ofRs, 2.80 Lacs and statutory dues of erstwhile PPIL referred to in Note 36 of the financial statements.

b) On the basis of our examination of the documents and records of the Company, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax and Cess which have not been deposited on account of a dispute, except as enumerated herein below which are pending before respective authorities as mentioned there against :

Name of the Nature of the Amount Period Statute Dues Rs, In Lacs* to which amounts relate

The Income Tax Income Tax/ 46.20 AY 1997-98 Act, 1961 TDS/ Interest / 96.32 AY 2010-11 Penalty

The Sales 220.39 FY 2006-07

Central Tax/Interest / 60.35 FY 2007-08

Sales Tax Penalty 19.95 FY 2002-03

Act, 1956 42.95 FY 1997-98 to

FY 2004-05

2,972.28 FY 1992-93

FY 1994-95

FY 1996-97

FY 1997-98 & 2000-01 to 2004-05 Service Tax under Service Tax/ 632.13 FY 2004-05 to Finance Act, 1994 Interest/ FY 2010-11

Penalty 31.43 FY 2011-12

The Central Excise Duty 25.31 FY 2009-10 to

Excise Act, 1944 FY 2010-11

2.97 Apr 2011 to Dec 2011

9.61 Apr 2005 to Sept 2007

21.07 Apr 2011 to Feb 2012

26.10 Mar 2013 to Dec 2013



Name of the Statute Forum where dispute is Pending

The Income Tax Bombay High Court

Tax,1961 Deputy Commissioner of Income Tax, Mumbai

The Sales Tax Appellate Tribunal, Visakhapatnam Central Sales Tax Sales Tax Appellate Tribunal, Andhra Pradesh Act,1956 Hyderabad High Court

Bombay High Court

Service Tax Under Central, Excise and Service Tax Appellate Tribunal, Mumbai

Financial Act,1994 The Commissioner of Central Excise (Appeals), Mumbai

The Central Central, Excise and Service Tax Appellate Excise ACt,1944 Tribunal,Bangalore

Central, Excise and Service Tax Appellate Tribunal,Bangalore

Central, Excise and Service Tax Appellate Tribunal, Bangalore

The Commissioner of Central Excise (Appeals), Guntur, Andhra Pradesh

The Commissioner of Central Excise (Appeals), Guntur, Andhra Pradesh

*Net of amounts paid under protest or otherwise. Amount is as per demand order including interest and penalty wherever quantifed.

c) Rs, 6.54 Lacs which was required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has remained unpaid as at the period end and subsequently transferred to the aforesaid fund.

8. The Company has accumulated losses exceeding ffty percent of the net worth as at the period end. The Company has not incurred cash losses during the current and the immediately preceding financial period.

9. Based on our audit procedures and on the basis of information and explanations given to us, Non Convertible Debentures of Rs, 152.67 Lacs and Optionally Fully Convertible Debenture of Rs, 581.99 Lacs have remained unpaid from due dates as referred to in note 10.1 and 10.2 respectively of the financial statements, pending fresh order of BIFR (Refer Note 36 of the financial statements). There is a delay in payment of principal amount to Foreign Currency Convertible Bond-Holders aggregating to Rs, 509.35 Lacs of 1,072 days and interest of Rs, 47.52 Lacs of 1,371 days. Term Loans of Rs, 68.02 Lacs taken by erstwhile PPIL from banks /financial institutions have remained unpaid from due dates as referred to in note 10.4 and 10.5 of the financial statements, pending fresh order from BIFR (Refer Note 36 of the financial statements). Further, except for delay in payment of principal aggregating to Rs, 2,509.22 Lacs ranging from 1 to 183 days and interest of Rs, 1,275.51 Lacs ranging from 1 to 92 days in respect of period ended 31 March 2015, there is no delay in respect of term loans due to banks/ financial institutions. However principal amount of Rs, 1,351.13 Lacs and interest amount of Rs, 1006.64 Lacs have been made good till period ended 31 March 2015 and principal amount of Rs, 0.49 Lac and interest of Rs, 51.05 Lacs have been made good subsequently.

10. According to the information and explanations given to us, the Company has given guarantees for loans taken by the subsidiaries, from bank and financial institutions, and the terms and conditions thereof are, prima facie, not prejudicial to the interest of the Company.

11. To the best of our knowledge and belief and according to the information and explanations given to us, the term loans taken by the Company were, prima facie, applied for the purposes for which they were obtained.

12. 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 has been noticed or reported during the course of our audit.



For Kapoor & Parekh Associates

Chartered Accountants

ICAI FRN 104803W



Nikhil Patel

Partner

Mumbai, 21 May 2015 M. No. 37032


Sep 30, 2014

We have audited the accompanying financial statements of Wanbury Limited ("the Company"), which comprise the Balance Sheet as at 30 September 2014, and the Statement of Profit & Loss and Cash Flow Statement for the period 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.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material 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 the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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 and read with matter described in the Emphasis of Matter paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30 September 2014;

(b) in the case of the Statement of Profit and Loss, of the loss for the period ended on that date; and

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

Emphasis of Matter

1. Financial Statements are prepared on a "going concern" basis as stated in note 56.

2. The Company has given guarantee in respect of Exim Bank''s investments of USD 60 Lacs (Rs. 3,696.81 Lacs ) in Wanbury Holding B.V., a subsidiary of the Company and State Bank of India''s loan of Euro 32.60 Lacs (Rs. 2,549.52 Lacs ) to Cantabria Pharma S.L., the step down subsidiary of the Company, which have been invoked by the respective parties. The said dues being part of the CDR Scheme will be accounted upon arriving at mutually agreed terms of settlement with the respective parties as stated in note 38 of the financial statements.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") as amended 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 report of the Branch Auditor as required by clause (c) of sub-section (3) of Section 228 have been forwarded to us and appropriately dealt with in preparing the report;

d) 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.

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

f) on the basis of written representations received from the directors as on 30 September 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 30 September 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

(The Annexure referred to in para 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the Members of Wanbury Limited on the financial statements for the period ended 30 September 2014)

1 In respect of its fixed assets:

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

b) The fixed assets have been physically verified by the management during the period as per the phased programme which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informed that there was no material discrepancies noticed on such verification which were accounted in the financial statements.

c) In our opinion and according to the information and explanations given to us, the Company has not disposed of substantial part of fixed assets during the period and going concern status of the Company is not affected.

2 In respect of inventories:

a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the period except for stocks with third parties for which most of the confirmation certificates have been obtained by the Company and stocks in transit.

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 physical stock and book records have been adequately dealt with in the books of account.

3 In our opinion and according to the information and explanations given to us, the Company has neither granted nor taken any loan, secured or unsecured, to/from companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of clause (iii) (b) (c), (d), (f) and (g) of Paragraph 4 of the Order are not applicable to the Company.

4 In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchases of inventory and 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.

5 Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that there are no transactions that needs to be entered into the register maintained under Section 301 of the Companies Act, 1956. Accordingly provision of clause 4(v) (b) of the Order is not applicable to the Company.

6 As the Company has not accepted or renewed any deposit from the public, the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder are not applicable. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7 According to the information and explanations given to us and on the basis of internal audit reports broadly reviewed by us, we are of the opinion that the internal audit system commensurate with the size of the Company and nature of its business.

8 We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1)(d) of the Act in relation to products manufactured, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, made a detailed examination of the records.

9 According to the information and explanations given to us in respect of statutory and other dues:

a) Except in some cases where there have been delays, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities during the period. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears, as at 30 September 2014 for a period of more than six months from the date they became payable except in respect of income tax deducted at source of Rs. 0.23 Lac, profession tax of Rs. 4.09 Lacs, NMMC Cess of Rs. 7.20 Lacs, wealth tax of Rs. 1.46 Lacs and statutory dues of erstwhile PPIL referred to in note 36 of the financial statements.

b) There were no unpaid disputed amounts in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess during the period except as enumerated herein below which are pending before respective authorities as mentioned there against :

Name of the Nature of the Dues Amount in Period to which amounts Statute Rs. In Lacs* relate

The Income Tax Income Tax / TDS / 46.20 AY 1997-98 Act, 1961 Interest / Penalty 96.32 AY 2010-11

The Central Sales Sales Tax/Interest/ 19.95 FY 2002-03 Tax Act, 1956 Penalty

220.39 FY 2006-07

60.35 FY 2007-08

2,972.28 FY 1992-93 FY 1994-95 FY 1996-97 FY 1997-98 & 2000-01 to 2004-05

Service Tax under Service Tax/Interest/ 632.13 FY 2004-05 to Finance Act, 1994 Penalty FY 2010-11

31.43 FY 2011-12

The Central ExciseExcise Duty 25.31 FY 2009-10 to Act, 1944 FY 2010-11

2.97 Apr 2011 to Dec 2011

9.61 Apr 2005 to Sept 2007

21.07 Apr 2011 to Feb 2012

26.10 Mar 2013 to Dec 2013



Name of the Statute Forum where dispute is Pending

The Income Tax Act, 1961 Bombay High Court

Deputy Commissioner of Income Tax, Mumbai

The Central Sales Tax Act, 1956 Sales Tax Appellate Tribunal Andhra Pradesh

Sales Tax Appellate Tribunal Visakhapatnam

Bombay High Court

Service Tax under Finance Act, 1994 Central, Excise and Service Tax Appellate Tribunal, Mumbai

The Commissioner of Central Excise (Appeals), Mumbai

The Central Excise Act, 1944 Central, Excise and Service Tax Appellate Tribunal, Bangalore

Central, Excise and Service Tax Appellate Tribunal, Bangalore

Central, Excise and Service Tax Appellate Tribunal, Bangalore

The Commissioner of Central Excise (Appeals), Guntur, Andhra Pradesh

The Commissioner of Central Excise (Appeals), Guntur, Andhra Pradesh

*Net of amounts paid under protest or otherwise. Amount as per demand order including interest and penalty wherever quantified.

10 The Company has accumulated losses exceeding fifty percent of the net worth as at the period end and has not incurred cash losses in the current financial period but has incurred cash losses in the immediately preceding financial year.

11 Based on our audit procedures and on the basis of information and explanations given to us, Non Convertible Debentures of Rs.152.67 Lacs and Optionally Fully Convertible Debenture of Rs. 581.99 Lacs have remained unpaid from due dates as referred to in note 10.1 and 10.2 respectively of the financial statements, pending fresh order of BIFR (refer note 36 of the financial statements). There is a delay in payment of principal amount to Foreign Currency Convertible Bond-Holders aggregating to Rs. 457.67 Lacs of 890 days and interest of Rs. 46.25 Lacs of 1189 days. Term Loans of Rs. 68.02 Lacs taken by erstwhile PPIL from banks /financial institutions have remained unpaid from due dates as referred to in note 10.4 and 10.5 of the financial statements, pending fresh order from BIFR (refer note 36 of the financial statements). Further, except for delay in payment of principal aggregating to Rs. 4,481.18 Lacs ranging from 1 to 179 days and interest of Rs. 2,833.50 Lacs ranging from 1 to 149 days (out of which amount of principal and interest aggregating to Rs. 3,695.36 Lacs and Rs. 2,270.71 Lacs respectively have been made good before the period end), there is no delay in respect of term loans due to banks/financial institutions.

12 The Company has not granted any loans and advances on the basis of the security by way of pledge of shares, debentures and other securities.

13 In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

14 According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15 According to the information and explanations given to us, the Company has given guarantees for loans taken by the subsidiaries, from bank and financial institutions, and the terms and conditions thereof are, prima facie, not prejudicial to the interest of the Company.

16 To the best of our knowledge and belief and according to the information and explanations given to us, the term loans taken by the Company were, prima facie, applied for the purposes for which they were obtained.

17 According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the Company, funds raised on short term basis have, prima facie, not been used during the period for long term investment.

18 As per the terms of Master Restructuring Agreement dated 19 September 2011, during the period, the Company has made preferential allotment of shares to party covered in the register maintained under Section 301 of the Act. In our opinion, the price at which shares have been issued is not, prima facie, prejudicial to the interest of the Company.

19 The Company has not created security or charge in respect of the debentures issued during the earlier years.

20 The Company has not raised any money by public issue during the period.

21 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 has been noticed or reported during the course of our audit.

For Kapoor and Parekh Associates Chartered Accountants ICAI FRN 104803W

Nikhil Patel Partner Membership No. 37032

Mumbai, 26 November 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Wanbury Limited ("the Company"), which comprise the Balance Sheet as at 31 March 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 judgement, 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 qualified audit opinion.

Basis for Qualified Opinion

Attention is invited to:

a) Note 40 of the financial statements regarding investment in subsidiaries and other company aggregating to Rs. 3,907.71 Lacs, advances against equity pending allotment of Rs. 5,375.35 Lacs and Rs. 12,619.78 Lacs being amount recoverable as at the year end, for which no provision has been considered necessary by the management forthe reasons stated in the aforesaid note.

b) Note 37 of the financial statements regarding non provision for shortfall; in recovery against trade receivables and loans & advances given (impact unascertained), pending confirmation and reconciliation of balances and our inability to comment thereon.

In respect of the above, we are unable to express an opinion as to whether any provision for diminution in the value of aforesaid investments and the non recoverability of aforesaid dues, is necessary, and the consequential effect thereof on the loss forthe year and on the assets, liabilities and reserves stated in the financial statements. Our audit opinion on the financial statements has been qualified accordingly.

Our audit opinion on the financial statements forthe year ended 31 March 2012 was also qualified accordingly. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted m iridia:

¦ (a) in the case of the Balance Sheet, of the state of affairs of tiie Companyas at 31 March 2013;

(b) in the case of the Statement of Profit and Loss, of the loss forthe year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows forthe year ended on that date. Emphasis of Matter

We draw attention to the following notes to the financial statements:

1. Financial Statements are prepared on a "going concern" basis as stated in note 57;

2. The Company has given guarantee in respect of Exim Bank''s investments of USD 60 Lacs (Rs. 3,263.40 Lacs) in

Wanbury Holding B.V., a subsidiary of the Company, and State Bank of India''s loan of Euro 32.60 Lacs (Rs. 2,267 Lacs) to Cantabria Pharma S.L., the step down subsidiary of the Company, which have been invoked by the respective parties. The said dues being part of the CDR Scheme will be accounted upon arriving at mutually agreed terms of settlement with the respective parties as stated in note 33; and

3. IDBI Bank vide its letter dated 4 August 2012 has invoked guarantee of Wanbury Limited in respect of dues from Bravo Healthcare Limited of Rs. 2,034.21 Lacs. The Company does not expect any liability as stated in note 34 of the financial statements.

Our opinion is not qualified in respect of these matters. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") as amended 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) ofthe Act, we reportthat:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary forthe 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 and proper returns adequate forthe purposes of our audit have been received from branch audited by the branch auditor; whose report has been forwarded to us and has been dealt with by us in preparing this report;

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 and the audited branch return:

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

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

ANNEXURE TO THE AUDITORS'' REPORT

(The Annexure referred to in para 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the Members of Wanbury Limited on the financial statements for the year ended 31 March 2013)

1 In respect of its fixed assets:

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

b) The fixed assets have been physically verified by the management during the year as per the phased programme which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informedthatthere were no discrepancies noticed on such verification.

c) In our opinion and according to the information and explanations given to us, the Company has not disposed of substantial part of fixed assets during the year and going concern status of the Company is not affected.

2 In respect of inventories:

a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the year except for stocks with third parties for which most of the confirmation certificates have been obtained by the Company and stocks in transit.

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 physical stock and book records have been adequately dealt with in the books of account.

3 In our opinion and according to the information and explanations given to us, the Company has neither granted nor taken any loan, secured or unsecured, to/from companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of clause (iii) (b), (c), (d), (f) and (g) of Paragraph 4 of the Order are not applicable to the Company.

4 In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchases of inventory and 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.

5 Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that there are no transactions that needs to be entered into the register maintained under Section 301 of the Companies Act, 1956. Accordingly provision of clause 4(v) (b) of the Order is not applicable to the Company.

6 As the Company has not accepted or renewed any depositfrom the public, the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder are not applicable. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7 According to the information and explanations given to us and on the basis of internal audit reports broadly reviewed by us, we are of the opinion that the internal audit system commensurate with the size of the Company and nature of its business.

8 We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed cost records have been maintained. However, we have not made a detailed examination of the cost records with a view to determine whetherthey are accurate or complete.

9 According to the information and explanations given to us in respect of statutory and other dues:

a) Except in some cases where there have been delays, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears, as at 31 March 2013 for a period of more than six months from the date they became payable except in respect of income tax of Rs.15.16 Lacs, profession tax of Rs.3.50 Lacs, provident fund of Rs. 0.22 Lacs, ESIC of Rs.0.15 Lacs, NMMC Cess of Rs. 5.81 Lacs, wealth tax of Rs. 1.60 Lacs and statutory dues of erstwhile PPIL referred to in note 36 of the financial statements.

10.The Company does not have accumulated losses as at the end of the financial year and has incurred cash losses during the current as well as in the immediately preceding financial year.

11 Based on our audit procedures and on the basis of information.and explanations given to us, Non Convertible Debentures of Rs.152.67 Lacs and Optionally Fully Convertible Debenture of Rs. 581.99 Lacs have remained unpaid as referred to in note 10.1 and 10,2 respectively of the financial statements, pending fresh order of BIFR (refer note 36 of the financial statements). There is a delay in payment of interest to Foreign Currency Convertible Bond-Holders aggregating to Rs.36.94 Lacs ranging from 91 to 275 days. Term Loans of Rs. 68.02 Lacs taken by erstwhile PPIL from banks /financial institutions have remained unpaid as referred to in note 10.4 and 10.5 of the financial statements, pending fresh order from BIFR (refer note 36 of the financial statements). Further, except for delay in payment of principal aggregating to Rs.525.97 Lacs ranging from 3 to 182 days and interest of Rs. 898.99Lacs ranging from 1 to 248 days, there is no delay in respect of dues to banks/financial institutions.

12 The Company has not granted any loans and advances on the basis of the security by way of pledge of shares, debenture and other securities.

13 In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

14 According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, ¦ debentures and other investments.

15 According to the information and explanations given to us, the Company has given guarantees for loans taken by the subsidiaries and other company, from bank and financial institutions, and the terms and conditions thereof are, prima facie, not prejudicial to the interest of the Company.

16 To the best of our knowledge and belief and according to the information and explanations given to us, the term loans taken by the Company were, prima facie, applied for the purposes for which they were obtained.

17 According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the Company, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

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

19 The Company has not created security or charge in respect ofthe debentures issued during the earlier years.

20 The Company has not raised any money by public issue during the year.

21 We have been informed that there has been fraud at one sales depot of Rs.12.41 Lacs during the year under audit. The Company has made full provision for the same and has initiated necessary actions including filing of police complaint, in this regard. For Kapoor & Parekh Associates

Chartered Accountants

ICAI FRN 104803W

Nikhil Patel Partner

Membership No. 37032

Mumbai, 30 May 2013


Mar 31, 2012

1 We have audited the attached Balance Sheet of WANBURY LIMITED as at 31 March 2012, the Statement of Profit & Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the 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 a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (the Order), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in 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 explanation, 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 the law have been kept by the Company so far as appears from our examination of these books and proper returns adequate for the purposes of our audit have been received from branches not visited by us. The Branch Auditor's Report has been forwarded to us and have been appropriately dealt with;

iii. The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

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

vi. Attention is invited to the following notes

(a) Note 37 of the financial statements regarding investment in subsidiaries and other company aggregating to Rs. 3,907.71 Lacs, advances against equity pending allotment of Rs. 5,348.35 Lacs andRs. 12,313 Lacs being amount recoverable as at the year end for which no provision has been considered necessary by the management for the reasons stated in the aforesaid note.

(b) Note 34 of the financial statements regarding non provision for shortfall in recovery against trade receivables and loans & advances (impact unascertained), pending confirmation and reconciliation of balances and our inability to comment thereon.

(c) Note 42 of the financial statements regarding excess managerial remuneration ofRs. 19.37 Lacs is subject to the approval of the Central Government for which application is being made.

In respect of (a) and (b) above, we are unable to express an opinion as to whether any provision for diminution in the value of aforesaid investments and the non recoverability of aforesaid dues, is necessary, and the consequential effect thereof on the loss for the year and on the assets, liabilities and reserves stated in the balance sheet. Had the effect of (c) above been given, the loss for the year would have been lower by Rs. 19.37 Lacs and assets and reserves would have been higher by Rs. 19.37 Lacs.

vii. Subject to para (vi) above, in our opinion and to the best of our information and according to the explanations given to us, the said financial statements read with accounting policies and notes to the accounts attached thereto, 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 31 March 2012;

(b) In the case of the Statement of Profit & 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.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in the paragraph 3 of our report of even date to the Members of Wanbury Limited on the accounts for the year ended on 31 March 2012)

1. In respect of its fixed assets:

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

b) The fixed assets have been physically verified by the management during the year as per the phased programme which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informed that there were no material discrepancies noticed on such verification.

c) In our opinion and according to the information and explanations given to us, the Company has not disposed of substantial part of fixed assets during the year and going concern status of the Company is not affected.

2. In respect of inventories:

a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the year except for stocks with third parties for which most of the confirmation certificates have been obtained by the Company and stocks in transit.

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 physical stock and book records have been adequately dealt with in the books of account.

3. In our opinion and according to the information and explanations given to us, the Company has neither granted nor taken any loan, secured or unsecured, to/from companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of clause (iii) (b), (c), (d), (f) and (g) of Paragraph 4 of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchases of inventory and 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.

5. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that there are no transactions that needs to be entered into the register maintained under section 301 of the Companies Act, 1956. Accordingly provision of clause 4(v) (b) of the Order is not applicable to the Company.

6. As the Company has not accepted or renewed any deposit from the public, the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed there under are not applicable. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7. According to the information and explanations given to us and on the basis of internal audit reports broadly reviewed by us, we are of the opinion that the internal audit system commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed cost records have been maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. According to the information and explanations given to us in respect of statutory and other dues:

a) Except in some cases where there have been deCays, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees' State

Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears, as at 31 March 2012 for a period of more than six months from the date they became payable except in respect of income tax. 173.52 Lacs, profession tax. of 3.29 Lacs and statutory dues of erstwhile PPIL referred to in note 33 of the financial statements.

b) There were no unpaid disputed amounts in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess during the year except the Central Sales Tax of Rs. 19.95 Lacs relating to the F.Y. 2002-03 which is pending before the Sales Tax Appellate Tribunal, Andhra Pradesh.

10. The Company does not have accumulated losses as at the end of the financial year and has incurred cash losses during the current as well as in the immediately preceding financial year.

11. Based on our audit procedures and on the basis of information and explanations given to us, Non convertibCe Debentures ofRs. 152.67 Lacs and Optionally Fully Convertible Debentures of Rs. 581.99 Lacs have remained unpaid as referred to in note 10.1 and 10.2 respectively of the financial statements, pending fresh order of BIFR. (refer note 33 of the financial statements).There is delay in payment of interest to Foreign Currency Convertible Bondholders aggregating to Rs. 64.79 Lacs ranging from 91 to 275 days. Term loans ofRs. 68.02 Lacs taken by erstwhile PPIL from banks/financial institutions have remained unpaid as referred to in note 10.4 of the financial statements, pending fresh order from BIFR. (refer note 33 of the financial statements). Considering the effect of CDRScheme (refer note 35 of the financial statements), except delay in payment of interest ofRs. 37.01 Lacs ranging from 1 to 157 days, there is no delay in payment of dues to banks/financial institutions.

12. The Company has not granted any loans and advances on the basis of the security by way of pledge of shares, debenture and other securities.

13. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has given guarantees for loans taken by the subsidiary and other company, from bank and financial institutions, and the terms and conditions thereof are, prima facie, not prejudicial to the interest of the Company.

16. To the best of our knowledge and belief and according to the information and explanations given to us, the term loans taken by the Company were, prima facie, applied for the purposes for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the Company, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

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

19. The Company has not created security or charge in respect of the debentures issued during the earlier years.

20. The Company has not raised any money by public issue during the year.

21. 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 has been noticed or reported during the course of our audit. For KAPOOR & PAREKH ASSOCIATES

Chartered Accountants

(ICAI FRN 104803W)

NIKHIL PATEL

Partner

Membership No. 37032

Mumbai, 28 May 2012


Mar 31, 2011

1 We have audited the attached Balance Sheet of WANBURY LIMITED as at 31st March, 2011, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the 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 a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditor's Report) Order,2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (the Order), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in 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 explanation, 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 the law have been kept by the Company so far as appears from our examination of these books and proper returns adequate for the purposes of our audit have been received from branches not visited by us. The Branch Auditor's Report has been forwarded to us and have been appropriately dealt with;

iii. The Balance Sheet, Profit & 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 & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

v. On the basis of written representation received from the Directors as on 31st March, 2011 and taken on record by 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 Section 274(1)(g) of the Companies Act, 1956;

vi. Attention is invited to the following notes of'Schedule 18 .:

(a) Note No. 8 regarding investment in subsidiaries and other Company aggregating to Rs.3907.71 Lac advances against equity pending allotment of Rs.5,240.27 Lac and Rs.11,628.11 Lac being amount recoverable as at the year end for which no provision has been considered necessary by the management for the reasons stated in the afotesaid note.

(b) Note No. 16 regarding excess managerial remuneration of Rs. 63.45 Lac is subject to the approval of the Central Government for which application is being made.

In respect of (a) above, we are unable to express an opinion as to whether any provision for diminution in the value of aforesaid investments and the non recoverability of aforesaid dues, is necessary, and the consequential effect thereof on the loss for the year and on the asset and reserves, stated in the balance sheet. Had the effect of (b) above been given, the loss for the year would have been lower by Rs.63.45 Lac and assets and reserves would have been higher by Rs. 63.45 Lac.

vii. Subject to Para (vi) above, in our opinion and to the best of our information and according to the explanations given to us, the said financial statements read with accounting policies and notes to the accounts attached thereto, 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 & Loss Account, 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.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in the paragraph 3 of our report of even date to the Members of Wanbury Limited on the accounts for the year ended on 31st March, 2011)

1. In respect of its fixed assets:

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

b) The fixed assets have been physically verified by the management during the year as per the phased programme which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informed that there were no material discrepancies noticed on such verification.

c) In our opinion and according to the information and explanations given to us, the Company has not disposed of substantial part of fixed assets during the year and going concern status of the Company is not affected.

2. In respect of inventories:

a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the year except for stocks with third parties for which most of the confirmation certificates have been obtained by the Company and stocks in transit.

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 physical stock and book records have been adequately dealt with in the books of account.

3. In our opinion and according to the information and explanations given to us, the Company has neither granted nor taken any loan, secured or unsecured, to/from companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, provisions of clause (iii) (b) (c), (d), (f) and (g) of Paragraph 4 of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchases of inventory and 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.

5. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that there are no transactions that needs to be entered into the register maintained under Section 301 of the Companies Act, 1956. Accordingly provision of clause 4(v) (b) of the Order is not applicable to the Company.

6. As the Company has not accepted or renewed any deposit from the public, the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder are not applicable. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7. According to the information and explanations given to us and on the basis of internal audit reports broadly reviewed by us, we are of the opinion that the internal audit system commensurate with the size of the Company and nature of its business.

8. According to the information and explanations given to us and on the basis of records produced before us, we are of the opinion that prima facie, the prescribed accounts and records relating to the products covered pursuant to the Order made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 have been maintained. However, we have not made a detailed examination of these records.

9. According to the information and explanations given to us in respect of statutory and other dues:

a) Except in some cases where there have been delays, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears, as at 31st March, 2011 for a period of more than six months from the date they became payable except in respect of income tax of Rs.170.18 Lac, profession tax of Rs.4.34 Lac and statutory dues of erstwhile PPIL referred to in note 3 of Schedule 18.

b) There were no unpaid disputed amounts in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess during the year except the Central Sales Tax of Rs.19.95 Lac relating to the F.Y. 2002-03 which is pending before the Sales Tax Appellate Tribunal, Andhra Pradesh.

10. The Company does not have accumulated losses as at the end of the financial year and has incurred cash losses during the current financial year. However, the Company has not incurred cash losses in the immediately preceding financial year.

11. Based on our audit procedures and on the basis of information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders except the delay in repayment of principal aggregating to Rs.2,769.61 Lac ranging from 1 to 151 days and interest aggregating to Rs.1,214.36 Lac ranging from 1 to 182 days in respect of dues to financial institutions and Rs.443.67 Lac dues to debenture holders as referred to in Note .3 of Schedule 18 (also refer note 6 of Schedule 18).

12. The Company has not granted any loans and advances on the basis of the security by way of pledge of shares, debenture and other securities.

13. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/ society.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has given guarantees for loans taken by the subsidiaries and other company, from bank and financial institutions, and the terms and conditions thereof are, prima facie, not prejudicial to the interest of the Company.

16. To the best of our knowledge and belief and according to the information and explanations given to us, the term loans taken by the Company were, prima facie, applied for the purposes for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the Company, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

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

19. The Company has not created security or charge in respect of the debentures issued during the earlier years.

20. In respect of the money raised by public issue of Foreign Currency Convertible Bonds during the earlier years, the management has disclosed the end use of the money so raised in Note No. 7 of Schedule 18, which have been verified by us with the relevant records together with the information and explanations given to us.

21. 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 has been noticed or reported during the course of our audit.

For KAPOOR & PAREKH ASSOCIATES

(ICAI FRN 104803W) Chartered Accountants

NIKHIL PATEL

Partner Membership No.: 37032

Mumbai, 30th May, 2011


Mar 31, 2010

1 We have audited the attached Balance Sheet of WANBURY LIMITED as at 31st March, 2010, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the 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 a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditor’s Report) Order, 2003, as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004 (the Order), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in 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 explanation, 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 the law have been kept by the Company so far as appears from our examination of these books and proper returns adequate for the purposes of our audit have been received from branches not visited by us. The Branch Auditor’s Report has been forwarded to us and have been appropriately dealt with;

iii. The Balance Sheet, Profit & 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 & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

v. On the basis of written representation received from the Directors as on 31st March, 2010 and taken on record by 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 Section 274(1) (g) of the Companies Act, 1956;

vi. The Company has investment in subsidiaries and other company aggregating to Rs.3,907.71 Lacs, advances against equity pending allotment of Rs. 4,957.87 Lacs and Rs.7,027.96 Lacs being amount recoverable as at the year end for which no provision has been considered necessary by the management for the reasons stated in Note No.7 of Schedule 18.

We are unable to express an opinion as to whether any provision for diminution in the value of aforesaid investments and the recoverability of aforesaid dues, is necessary, and the consequential effect thereof on the profit for the year and on the assets, liabilities and reserves, stated in the balance sheet.

vii. Subject to para (vi), in our opinion and to the best of our information and according to the explanations given to us, the said financial statements read with accounting policies and notes to the accounts attached thereto, 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 & 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 TO THE AUDITORS’ REPORT Referred to in the paragraph 3 of our report of even date to the Members of Wanbury Limited on the accounts for the period ended on 31st March, 2010).

1. In respect of its fixed assets:

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

b) The fixed assets have been physically verified by the management during the year as per the phased programme which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informed that there were no material discrepancies noticed on such verification.

c) In our opinion and according to the information and explanations given to us, the Company has not disposed of substantial part of fixed assets during the year and going concern status of the Company is not affected.

2. In respect of inventories:

a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the year except for stocks with third parties for which most of the confirmation certificates have been obtained by the Company and stocks in transit.

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 physical stock and book records have been adequately dealt with in the books of account.

3. In our opinion and according to the information and explanations given to us, the Company has neither granted nor taken any loan, secured or unsecured, to/from companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of clause (iii) (b) (c), (d), (f) and (g) of Paragraph 4 of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchases of inventory and 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.

5. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that there are no transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956. Accordingly provision of clause 4(v) (b) of the Order is not applicable to the Company.

6. As the Company has not accepted or renewed any deposit from the public, the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder are not applicable. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7. According to the information and explanations given to us and on the basis of internal audit reports broadly reviewed by us, we are of the opinion that the internal audit system commensurate with the size of the Company and nature of its business.

8. According to the information and explanations given to us and on the basis of records produced before us, we are of the opinion that prima facie, the prescribed accounts and records relating to the products covered pursuant to the Order made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 have been maintained. However, we have not made a detailed examination of these records.

9. According to the information and explanations given to us in respect of statutory and other dues:

a) Except in some cases where there have been delays, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears, as at 31st March, 2010 for a period of more than six months from the date they became payable except in respect of income tax Rs. 8.19 Lacs, profession tax of Rs.1.80 Lacs and statutory dues of erstwhile PPIL referred to in Note 3 of Schedule 18. b) There were no unpaid disputed amounts in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess during the year except the Central Sales Tax of Rs.19.95 Lacs (Pr.Yr.Rs 19.95 Lacs) relating to the F.Y. 2002- 03 which is pending before the Sales Tax Appellate Tribunal, Andhra Pradesh.

10. The Company has no accumulated losses as at the end of the financial year and has not incurred cash losses during the current financial year and in the immediately preceding financial year.

11. Based on our audit procedures and on the basis of information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders except Rs. 55.67 Lacs due to debentures referred to in Note 3 of Schedule 18.

12. The Company has not granted any loans and advances on the basis of the security by way of pledge of shares, debenture and other securities.

13. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has given guarantees for loans taken by the subsidiaries and other company, from bank and financial institutions, and the terms and conditions thereof are, prima facie, not prejudicial to the interest of the Company.

16. To the best of our knowledge and belief and according to the information and explanations given to us, the term loans taken by the Company were, prima facie, applied for the purposes for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the Company, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

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

19. The Company has not created security or charge in respect of the debentures issued during the earlier years.

20. In respect of the money raised by public issue of Foreign Currency Convertible Bonds during the earlier years, the management has disclosed the end use of the money so raised in Note No. 6 of Schedule 18, which have been verified by us with the relevant records together with the information and explanations given to us.

21. 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 has been noticed or reported during the course of our audit except as mentioned in Note No.8 of Schedule 18.

For KAPOOR & PAREKH ASSOCIATES (ICAI FRN 104803W) Chartered Accountants

NIKHIL PATEL

Partner

Membership No.: 37032

Mumbai, 28th May, 2010

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