Auditor Report of Concord Drugs Ltd.

Mar 31, 2016

Independent Auditors’ Report on Financial Statements To the Members of

CONCORD DRUGS LIMITED. Report on the financial Statements

We have audited the accompanying standalone financial statements of CONCORD DRUGS LIMITED (‘the Company’), which comprise the balance sheet as at 31st March 2016, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation 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 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.

Auditors 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, 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

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 profit and its cash flows for the ended on that date except emphasis of matters stated below.

Emphasis of Matters

1. Company has unsecured loans of Rs. 408.67 Lakhs as on balance sheet date received from other than Directors and promoters.

2. The stock of raw material, work in progress, finished goods and packing material worth of Rs.814.85 Lakhs are subject to management confirmations.

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 statement on the matters specified in the paragraph 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 balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the aforesaid 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;

e) 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; and

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

i. The Company does not have any pending litigations.

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

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

The Annexure-A referred to in our Independent Auditors'' Report to the members of the Company on the financial statements for the Year ended 31 March 2016, we report that:

1. a. The Company has not maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The title deeds of the immovable property are held in the name of the company.

2. The physical verification of the inventory excluding stocks with third parties has been conducted at reasonable intervals by the management during the year. In our opinion the frequency of the verification is reasonable.

3. The Company has not granted any loans to bodies corporate covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’).

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

5. The Company has not accepted any deposits from the public in specific and accepted unsecured loans from the persons other than directors and promoters.

6. The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.

7. a. According to the information and explanations given to us and on the basis

of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including duty of excise, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited during the year. The company has not complied the provisions under income tax (TDS), Employees State Insurance, Provident Fund and Service tax.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, sales tax, wealth tax,, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable except the following.

Financial Year	Section under which TDS Due	Amount in Rs.
2014-15	194 J	2,10,000
2014-15	194 C	3,964
2015-16	194J	62,800
2015-16	194C	1,036

c. According to the information and explanations given to us, there are no material dues of sales tax, service tax and value added tax, wealth tax, duty of customs and cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of income tax, have not been deposited by the Company on account of disputes:

Particulars	Demand U/s	Period to which the amount relates	Forum where the dispute is pending	Amount in Rs.
Income Tax Act, 1961	148	A.Y.2006-07	Commissioner of Income Tax (Appeals)-II	1,19,87,841
Income Tax Act, 1961	148	A.Y. 2007-08	Commissioner of Incom e Tax (Appeals)-II	22,44,779
Income Tax Act, 1961	148	A.Y. 2008-09	Commissioner of Income Tax (Appeals)-II	16,06,275
Income Tax Act, 1961	143(1)	A.Y. 2010-11	Jurisdictional AO	16,77,610
Income Tax Act, 1961	143(3)	A.Y. 2011-12	Commissioner of Income Tax (Appeals)-II	3,81,28,810
Income Tax Act, 1961	143(3)	A.Y. 2012-13	Jurisdictional AO	4,43,910
Income Tax Act, 1961	143 1(a)	A.Y. 2013-14	Jurisdictional AO	11,83,700
Income Tax Act, 1961	Others	A.Y. 2015-16	Jurisdictional AO	12,63,500

8. In our opinion and according to the information and explanations given to us, the Company is not in regular in repayment of loans or borrowings to banks, financial institutions. The Company has not issued any debentures.

9. The company did not raise any money by way of initial public offer or further public offer (including debt instruments) and terms loans during the year.

10. According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit Except Issues Reported Under Matters Emphases.

11. The company has paid/ provided managerial remuneration in accordance with requisite approvals mandated by the provisions of section 197 read with schedule V to the act.

12. The company is not Nidhi Company and the Nidhi Rules, 2014 not applicable to it. Accordingly the provisions of Clause 3(Xii) of order not applicable to the company.

13. The company has entered transactions with the related parties and complied with Section 188 and 177 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc as required by the accounting standards.

14. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause 3(xiv) of the Order is not applicable to the Company.

15. The company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly the provisions of Clause 3(xv) of order not applicable to the company.

16. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For M M REDDY & CO.,

Chartered Accountants

Firm Registration No.010371S

M Madhusudhana Reddy

Place: Hyderabad Partner

Date : 30.05.2016 Membership No.213077

---

Mar 31, 2015

We have audited the accompanying financial Statements of M/s. CONCORD DRUGS LIMITED which comprise the Balance Sheet as at 31 st March 2015, the statement of Profit & Loss and Cash Flow Statement for the year ended and a summary of the significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these 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.

Auditors 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, 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 Board of 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 said accounts read with other notes to accounts and accounting policies give the information required by the Companies Act 2013, in the manner so required and give a true and fair view:-

i) In the case of Balance Sheet of the state of the affairs of the Company as at 31 st March 2015 and

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

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

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 in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

b. In our opinion proper books of accounts as required by the law have been kept by the company as far as appears from our examination of these accounts.

c. The company's Balance Sheet and Statement of Profit & Loss and Cash Flow stamen dealt with by the report are in agreement with the books of accounts.

d. In our opinion the Balance Sheet and Statement of Profit & Loss and Cash Flow Statement comply with the accounting standards referred to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

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

i. The Company does not have any pending litigations

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

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

Annexure to the Auditors' Report

TheAnnexure referred to in our Independent Auditors' Report to the members of the Company on the financial statements for the Year ended 31 March 2015, we report that:

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

b. The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

ii. a. According to the information and explanations given to us, the management has conducted physical verification of inventories at reasonable intervals during the year. In our'opinion, the frequency of verification is reasonable.

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

c. In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventories. As per the information and explanation given to us, no material discrepancies were noticed on physical verification.

iii. The Company has not granted any loans to body corporate covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act').

iv. In our opinion and according to the information and explanations given to us, the Company has an adequate internal control system commensurate with its size and the nature of its business for the purchase 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 such internal control system.

v. The Company has not accepted any deposits from the public directly.

vi. The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.

vii. a. According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including duty of excise, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited during the year except in the case of income tax dues (TDS Payable), by the Company with the appropriate authorities.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable exceptthe following.

Financial Year Section under which TDS Due Amount in Rs.

2014-15 194J 2,10,000 2014-15 194 C 3.964

C. According to the information and explanations given to us, there are no material dues of sales tax, service tax and value added tax, wealth tax, duty of customs and cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of income tax, have not been deposited by the Company on account of disputes:

Particulars Demand Period to which Forum where the dispute Amount in U/s the amount relates is pending Rs.

Income Tax 148 A.Y.2006-07 Commissioner of Income 1,19,87,841 Act, 1961 Tax (Appeals)-ll

Income Tax 148 A.Y. 2007-08 Commissioner of Income 22,44,779 Act, 1961 Tax (Appeals)-II

Income Tax 148 A.Y. 2008-09 Commissioner of Income 16,06,275 Act, 1961 Tax (Appeals)-II

Income Tax 143(1) A.Y. 2010-11 Jurisdictional AO 16,77,610 Act, 1961

Income Tax 143(3) A.Y. 2011-12 Commissioner of Income 3,81,28,810 Act, 1961 Tax (Appeals)-l1

Income Tax 143(3) A.Y. 2012-13 Jurisdictional AO 4,43,910 Act, 1961

Income Tax 143 1(a) A.Y. 2013-14 Jionuridicat 11,83,700" Act, 1961

d. According to the information and explanations given to us the company does not have any liability to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 2013 and rules there under.

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

ix. The company has not defaulted in repayment of dues to a financial institution or bank.

x. In our opinion and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions

xi. Term Loans were applied for the purpose for which the loans were obtained.

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

For M M REDDY & Co., Chartered Accountants Firm Registration No.010371S

Sd/-

M. Madhusudhana Reddy Place: Hyderabad Partner

Date : 30.05.2015 Membership No.213077

---

Mar 31, 2014

We have audited the accompanying financial Statements of M/s. CONCORD DRUGS LIMITED which comprise the Balance Sheet as at 31st March 2014, the statement of Profit & Loss for the year ended and a summary of the significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements

The Companies management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance 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") read with the General Circular 15/2014dates September 13, 2014 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2014. 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 misstatements, whether due to fraud or error.

Auditors Responsibility

We have audited the attached Balance Sheet of M/s CONCORD DRUGS LIMITED., Hyderabad as at 31st March 2014, Statement of Profit & Loss for the year ended annexed thereto. These financial statements are the responsibility of the company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us the said accounts read with other notes to accounts and accounting policies give the information required by the Companies Act 1956, in the manner so required and give a true and fair view subject to point numbers 2 and 5 mentioned in the notes to accounts:-

a. In the case of Balance Sheet of the state of the affairs of the Company as at 31st March 2014; and

b. In the case of Statement of Profit & Loss of the Profit of the Company for the year ended on that date.

1. As required by the Companies (Auditor Report) Order 2003,issued by the Company Law Board in terms of section 227(4A) of the Companies Act 1956, we give in annexure a statement on the matters specified in the paragraph 4 & 5 of the said order.

2. Further to our comments in the annexure referred to in paragraph 1 above, we state that:

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

b. In our opinion proper books of accounts as required by the law have been kept by the company so far as appears from our examination of these accounts.

c. The company''s Balance Sheet and Statement of Profit & Loss dealt with by the report are in agreement with the books of accounts.

d. In our opinion the Balance Sheet and Statement of Profit & Loss comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (the "Act") read with the General Circular 15/2014dates September 13,2014 of the Ministry of Corporate Affairs in respect of section 133 0f Companies Act .

e. On the basis of written representations received and taken on record by Board of Directors, none of the directors is disqualified under clause (g) of sub - section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditors'' Report (referred to in paragraph 3 of our Report of even date to the Members of CONCORD DRUGS LIMITED for the year ended March 31, 2014)

1. In respect of its fixed assets

a) The Company has maintained proper records to show full particulars including quantitative details and situation of its Fixed Assets on the basis of available information wherein the fixed asset register is in the process of being updated. .

b) The Fixed Assets of the Company were physically verified by the management at reasonable intervals and no material discrepancies between the books/records and the physical inventory was noticed on such verification.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a) The Inventory of the Company has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c) The Company has maintained proper record of inventories. As explained to us, there were no material discrepancies notices on physical verification of inventories as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/ from Companies, firms or other parties covered in the register maintained under Section 301 of the Company''s Act, 1956.

a) The Company has not granted any loans during the year to Companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

Consequently, the requirements of clauses (iii) (b),(c),(d) of paragraph 4 of the order are not applicable.

b) As informed, the Company has not taken loans from parties covered in the register maintained under Section 301 of the Act1956. Consequently, the requirements of clauses (iii) (c),(d) of paragraph 4 of the order are not applicable.

4. In our opinion and according to the information and explanation given to us, the Company has an adequate internal control procedure commensurate with the size and nature of business of the company for the purchase of inventory, fixed assets and 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. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956, in our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements , that need to be entered in the Register maintained under Section 301 of the Companies Act, 1956 . Consequently, clause 4(v) of the order is not applicable.

6. According to the information and explanation given to us, the Company has not accepted any deposits contemplated under Sec. 58A of the Companies Act, 1956 from the public. Therefore the provisions of clause 4(vi) of the order are not applicable.

7. In our opinion, the Company has an internal audit system which needs to be strengthened.

8. We have been informed that the Central Government has not prescribed maintenance of cost records U/s 209 (I)(d) of the Companies Act, 1956 (1 of 1956) for the Company''s services.

9. In respect of statutory dues:

(a) According to the records of the company, the company is regular in depositing undisputed statutory dues including provident fund, ESI, Income Tax, Excise duty, cess and other material statutory dues applicable at the end of the year for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, there are dues of income tax which have not been deposited on account of dispute and no dues of sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute. There were no dues on account of cess under 441A of the Companies Act 1956, since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

Details of dues of Income Tax which have not been deposited as at March 31,2014 on account of disputes are given below:

Particulars Demand Period to which Forum where the dispute is U/s the pending amount relates

Income Tax 148 A.Y.2006-07 Commissioner of Income Tax Act, 1961 (Appeals)-ll

Income Tax 148 A.Y. 2007-08 Commissioner of Income Tax Act, 1961 (Appeals)-ll

Income Tax 148 A.Y. 2008-09 Commissioner of Income Tax Act, 1961 (Appeals)-ll

Income Tax 143(3) A.Y. 2011-12 Commissioner of Income Tax Act, 1961 (Appeals)-ll

Particulars Amount in Rs. Income Tax 1,19,87,841 Act, 1961

Income Tax 22,44,779 Act, 1961

Income Tax 16,06,275 Act, 1961

Income Tax 3,81,28,810 Act, 1961

1. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

2. Based on the audit procedures, and according to the information and explanation given to us, we are of the opinion that, the Company has during the year delayed on few occasions in repaying term loan instilments due to the banks and financial institutions.

3. In our opinion and according to the explanation given to us and based on the information available, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

4. In our opinion, the Company is not a Chit Fund, Nidhi or Mutual Benefit fund / Societies. Therefore the provisions clause (xiii) of paragraph 4 of the order is not applicable to the Company.

5. The Company is not dealing or trading in shares, securities, debentures.

6. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

7. The term loans and working capital loans obtained from the banks have been applied for the purpose for which they were taken.

8. On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, we report that funds raised on short-term basis have not been used for long-term investment.

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

10. During the period covered by our audit report, the company does not have any outstanding debentures during the year.

11. The Company has not raised any money by way of public issues during the year.

12. In our opinion and according to the explanation given to us, no fraud, on or by the Company, has been noticed or reported during the year.

For M M REDDY & CO., Chartered Accountants Firm Registration No.010371S

Sd/- Place: Hyderabad M Madhusudhana Reddy Date : 30.05.2014 Partner Membership No.213077

---

Mar 31, 2013

We have audited the accompanying financial Statements of M/s. M/S. CONCORD DRUGS LIMITED which comprise the Balance Sheet as at 31st March 2013, the statement of Profit & Loss Account and the cash flow Statement for the year ended, and a summary of the significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements

The Companies management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the company in accordance with the accounting standards referred to in Sub-section (3C) of section 211 of the companies Act, 1956. 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 misstatements, whether due to fraud or error.

Auditors Responsibility

We have audited the attached Balance Sheet of M/s. CONCORD DRUGS LIMITED, Hyderabad as at 31st March 2013, 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 company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

1. As required by the Companies (Auditor Report) Order 2003,issued by the Company Law Board in terms of section 227(4A) of the Companies Act 1956, we give in annexure a statement on the matters specified in the paragraph 4 & 5 of the said order.

2. Further to our comments in the annexure referred to in paragraph 1 above, we state that:

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

b) In our opinion proper books of accounts as required by the law have been kept by the company so far as appears from our examination of these accounts.

c) The company''s Balance Sheet, Profit & Loss Account and Cash Flow statement dealt with by the report are in agreement with the books of accounts.

d) In our opinion the Balance Sheet, Profit & Loss Account and Cash Flow statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received and taken on record by Board of Directors, none of the directors is disqualified under clause (g) of sub - section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us the said accounts read with other notes to accounts and accounting policies give the information required by the Companies Act 1956, in the manner so required and give a true and fair view subject to point numbers 2 and 5 mentioned in the notes to accounts:-

i) In the case of Balance Sheet of the state of the affairs of the Company as at 31st March 2013 and

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

iii) In the Cash Flow statement of the Cash Flow for the year ended on that date.

Annexure to the Auditors'' Report (referred to in paragraph 3 of our Report of even date to the Members of CONCORD DRUGS LIMITED for the year ended March 31,2013)

1. In respect of its fixed assets

a) The Company has maintained proper records to show full particulars including quantitative details and situation of its Fixed Assets on the basis of available information wherein the fixed asset register is in the process of being updated. .

b) The Fixed Assets of the Company were physically verified by the management at reasonable intervals and no material discrepancies between the books/records and the physical inventory was noticed on such verification.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a) The Inventory of the Company has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c) The Company has maintained proper record of inventories. As explained to us, there were no material discrepancies notices on physical verification of inventories as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/ from Companies, firms or other parties covered in the register maintained under Section 301 of the Company''s Act, 1956.

a) The Company has not granted any loans during the year to Companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirements of clauses (iii) (b),(c),(d) of paragraph 4 of the order are not applicable.

b) As informed, the Company has not taken loans from parties covered in the register maintained under Section 301 of the Act1956. Consequently, the requirements of clauses (iii) (c),(d) of paragraph 4 of the order are not applicable.

4. In our opinion and according to the information and explanation given to us, the Company has an adequate internal control procedure commensurate with the size and nature of business of the company for the purchase of inventory, fixed assets and 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. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956, in our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements , that need to be entered in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, clause 4(v) of the order is not applicable.

6. According to the information and explanation given to us, the Company has not accepted any deposits contemplated under Sec. 58A of the Companies Act, 1956 from the public. Therefore the provisions of clause 4(vi) of the order are not applicable.

7. In our opinion, the Company has an internal audit system which needs to be strengthened.

8. We have been informed that the Central Government has not prescribed maintenance of cost records U/s 209 (I)(d) of the Companies Act, 1956 (1 of 1956) for the Company''s services.

9. In respect of statutory dues:

(a) According to the records of the company, the company is regular in depositing undisputed statutory dues including provident fund, ESI, Income Tax, Excise duty, cess and other material statutory dues applicable at the end of the year for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute. There were no dues on account of cess under 441A of the Companies Act 1956, since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on the audit procedures, and according to the information and explanation given to us, we are of the opinion that, the Company has during the year delayed on few occasions in repaying term loan instilments due to the banks and financial institutions.

12. In our opinion and according to the explanation given to us and based on the information available, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

13. In our opinion, the Company is not a Chit Fund, Nidhi or Mutual Benefit fund / Societies. Therefore the provisions clause (xiii) of paragraph 4 of the order is not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

16. The term loans and working capital loans obtained from the banks have been applied for the purpose for which they were taken.

17. On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, we report that funds raised on short-term basis have not been used 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 during the year.

19. During the period covered by our audit report, the company does not have any outstanding debentures during the year.

20. The Company has not raised any money by way of public issues during the year.

21. In our opinion and according to the explanation given to us, no fraud, on or by the Company, has been noticed or reported during the year.

For M M REDDY & CO., Chartered Accountants Firm Registration No.010371S

Place: Hyderabad M Madhusudhana Reddy Date : May 30th, 2013 Partner Membership No.213077

---

Mar 31, 2012

1. We have audited the balance sheet of CONCORD DRUGS LIMITED as at March 31,2012 the Profit and Loss Account and also the related Cash Flow Statement for the year ended on that date annexed thereto. These Financial Statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our Audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes an examination on test basis evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates and judgments made by the management in the preparation of financial statements and evaluating the overall financial statement presentation.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) order, (Amendment) 2004 issued by the Central Government in terms of Sub Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matter specified in Paragraphs 4 and 5 of the said order.

4. Further to the comments in the Annexure referred to in paragraph 3 above:

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

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

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

(iv) In our opinion, the Balance Sheet, Profit and Loss Accounts and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act.

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, The said accounts together with the notes thereon give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2012;

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

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

ANNEXURE TO AUDITORS' REPORT

Referred to in Paragraph 3 of our report of even date

1. In respect of its fixed assets

a) The Company has maintained proper records to show full particulars including quantitative details and situation of its Fixed Assets on the basis of available information wherein the fixed asset register is in the process of being updated. .

b) The Fixed Assets of the Company were physically verified by the management at reasonable intervals and no material discrepancies between the books/records and the physical inventory was noticed on such verification.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a) The Inventory of the Company has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c) The Company has maintained proper record of inventories. As explained to us, there were no material discrepancies notices on physical verification of inventories as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/ from Companies, firms or other parties covered in the register maintained under Section 301 of the Company's Act, 1956.

a) The Company has not granted any loans during the year to Companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirements of clauses (iii) (b),(c),(d) of paragraph 4 of the order are not applicable.

b) As informed, the Company has not taken loans from parties covered in the register maintained under Section 301 of the Act1956. Consequently, the requirements of clauses (iii) (c),(d) of paragraph 4 of the order are not applicable.

4. In our opinion and according to the information and explanation given to us, the Company has an adequate internal control procedure commensurate with the size and nature of business of the company for the purchase of inventory, fixed assets and 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. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956, in our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements , that need to be entered in the Register maintained under Section 301 of the Companies Act, 1956 . Consequently, clause 4(v) of the order is not applicable.

6. According to the information and explanation given to us, the Company has not accepted any deposits contemplated under Sec. 58A of the Companies Act, 1956 from the public. Therefore the provisions of clause 4(vi) of the order are not applicable.

7. In our opinion, the Company has an internal audit system which needs to be strengthened.

8. We have been informed that the Central Government has not prescribed maintenance of cost records U/s 209 (I)(d) of the Companies Act, 1956 (1 of 1956) for the Company's services.

9. In respect of statutory dues:

(a) According to the records of the company, the company is regular in depositing undisputed statutory dues including provident fund, Income Tax, Excise duty, cess and other material statutory dues applicable at the end of the year for a period of more than six months from the date they became payable. The company has not made registration for the E.S.I under Employees State Insurance Act, 1948. So the company has not made any deposit under the employees State Insurance Scheme. The company has not deducting the TDS on the payments made to the expenses which are even though covered under TDS parameters and the company has not filing the TDS returns. In case of VAT, The Company covered under Deferment Scheme for 14 years and these 14 years will end on June 2012. Under this scheme the company need not pay VAT for every year. The VAT payable is transferred to Interest free Sales Tax Loan Account.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute. There were no dues on account of cess under 441A of the Companies Act 1956, since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on the audit procedures, and according to the information and explanation given to us, we are of the opinion that, the Company has during the year delayed on few occasions in repaying term loan instilments due to the banks and financial institutions.

12. In our opinion and according to the explanation given to us and based on the information available, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

13. In our opinion, the Company is not a Chit Fund, Nidhi or Mutual Benefit fund / Societies. Therefore the provisions clause (xiii) of paragraph 4 of the order are not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

16. The term loans and working capital loans obtained from the banks have been applied for the purpose for which they were taken.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow statement, the funds raised on short term basis have not been used for long term purposes.

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

19. The Company has not issued any debentures.

20. The Company has not raised any money by way of public issues during the year.

21. In our opinion and according to the explanation given to us, no fraud, on or by the Company, has been noticed or reported during the year.

For M M REDDY & CO., Chartered Accountants Firm Reg. No.010371S

Sd/- Place : Hyderabad (M. Madhusudhana Reddy) Date : 01.09.2012 Partner Membership No.213077

---

Mar 31, 2011

1. We have audited the balance sheet of CONCORD DRUGS LIMITED as at March 31, 2011 the Profit and Loss Account and also the related Cash Flow Statement for the year ended on that date annexed thereto. These Financial Statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our Audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes an examination on test basis evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates and judgments made by the management in the preparation of financial statements and evaluating the overall financial statement presentation.

3. As required by the Companies (Auditor''s Report) Order, 2003 as amended by the Companies (Auditor''s Report) order, (Amendment) 2004 issued by the Central Government in terms of Sub Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matter specified in Paragraphs 4 and 5 of the said order.

4. Further to the comments in the Annexure referred to in paragraph 3 above:

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

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

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

(iv) In our opinion, the Balance Sheet, Profit and Loss Accounts and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act.

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

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

and

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

Annexure to the Auditors'' Report (referred to in paragraph 3 of our Report of even date to the Members of CONCORD DRUGS LIMITED for the year ended March 31, 2011)

1. In respect of its fixed assets

a) The Company has maintained proper records to show full particulars including quantitative details and situation of its Fixed Assets on the basis of available information wherein the fixed asset register is in the process of being updated.

b) The Fixed Assets of the Company were physically verified by the management at reasonable intervals and no material discrepancies between the books/records and the physical inventory were noticed on such verification.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a) The Inventory of the Company have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

c) The Company has maintained proper record of inventories. As explained to us, there were no material discrepancies notices on physical verification of inventories as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/ from Companies, firms or other parties covered in the register maintained under Section 301 of the Company''s Act, 1956.

a) The Company has not granted any loans during the year to Companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirements of clauses (iii) (b),(c),(d) of paragraph 4 of the order are not applicable.

b) As informed, the Company has not taken loans from parties covered in the register maintained under Section 301 of the Act1956. Consequently, the requirements of clauses (iii) (c),(d) of paragraph 4 of the order are not applicable.

4. In our opinion and according to the information and explanation given to us, the Company has an adequate internal control procedure commensurate with the size and nature of business of the company for the purchase of inventory, fixed assets and 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. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956, in our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements , that need to be entered in the

6. Register maintained under Section 301 of the Companies Act, 1956 . Consequently, clause 4(v) of the order is not applicable.

7. According to the information and explanation given to us, the Company has not accepted any deposits contemplated under Sec. 58A of the Companies Act, 1956 from the public. Therefore the provisions of clause 4(vi) of the order are not applicable.

8. In our opinion, the Company has an internal audit system which needs to be strengthened.

9. We have been informed that the Central Government has not prescribed maintenance of cost records U/s 209 (I)(d) of the Companies Act, 1956 (1 of 1956) for the Company''s services.

10. In respect of statutory dues:

(a) According to the records of the company, the company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, Income Tax, Wealth Tax, Customs Duty, Excise duty, cess and other material statutory dues applicable at the end of the year for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute. There were no dues on account of cess under 441A of the Companies Act 1956, since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

11. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

12. Based on the audit procedures, and according to the information and explanation given to us, we are of the opinion that, the Company has during the year delayed on few occasions in repaying term loan instilments due to the banks and financial institutions.

13. In our opinion and according to the explanation given to us and based on the information available, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

14. In our opinion, the Company is not a Chit Fund, Nidhi or Mutual Benefit fund / Societies. Therefore the provisions clause (xiii) of paragraph 4 of the order are not applicable to the Company.

15. The Company is not dealing or trading in shares, securities, debentures.

16. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

17. The term loans and working capital loans obtained from the banks have been applied for the purpose for which they were taken.

18. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow statement, the funds raised on short term basis have not been used for long term purposes.

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

20. The Company has not issued any debentures.

21. The Company has not raised any money by way of public issues during the year.

22. In our opinion and according to the explanation given to us, no fraud, on or by the Company, has been noticed or reported during the year.

For M M REDDY & CO., Chartered Accountants Firm Reg. No.010371S

Place: Hyderabad (M. Madhusudhana Reddy) Date: 30.05.2011 Partner Membership No.213077