Auditor Report of Gufic BioSciences Ltd.

Mar 31, 2023

INDEPENDENT AUDITORS'' REPORT

To

The Members of Gufic Biosciences Limited
Report on the Financial Statements
Opinion

We have audited the accompanying financial statements of Gufic Biosciences Limited (‘the Company''), which comprise the
Balance Sheet as at 31^st March 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), the
Statement of Changes in Equity and the Statement of Cash Flow for the year then ended, and a summary of significant
accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial
statements give the information required by the Companies Act, 2013 (the "Act”) in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS”) and other accounting principles generally accepted in India,
of the state of affairs of the Company as at 31^st March 2023, and its profit, total comprehensive income, changes in equity and its
cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section
143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibility for the
Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant
to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit
evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Information other than the Financial Statements and Auditor’s Report thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the information
included in the Annual report, but does not include the financial statements and our auditors'' report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the
preparation of these financial statements that give a true and fair view of the financial position, financial performance including
other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other
accounting principles generally accepted in India. 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.

In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor’s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout
the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion
on whether the company has adequate internal financial controls system in place and the operating effectiveness of such
controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s
report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances,

we determine that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order”) issued by the Central Government of India in
terms of section 143(11) 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 Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of
Changes on Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of
account;

(d) In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act;

(e) On the basis of the written representations received from the directors and taken on record by the Board of Directors,
none of the directors is disqualified as on 31^st March 2023 from being appointed as a director in terms of Section 164(2)
of the Act; and

(f) With respect to the adequacy of the internal financial controls with reference to the financial statements of the
Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B”.

3. 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:

a. The Company has disclosed the impact of pending litigations as at 31^st March 2023 on its financial position in its financial
statements - Refer note 44 to the financial statements.

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

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

d. (i) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or

loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the
Company to or in any other persons or entities, including foreign entities ("Intermediaries”), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall:

• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate
Beneficiaries”) by or on behalf of the Company or

• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The management has represented that, to the best of its knowledge and belief, no funds have been received by the
Company from any persons or entities, including foreign entities ("Funding Parties”), with the understanding,
whether recorded in writing or otherwise, that the Company shall:

• directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate
Beneficiaries”) by or on behalf of the Funding Party or

• provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries; and

(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come
to our notice that has caused us to believe that the representations under subclause (d) (i) and (d) (ii) contain any
material misstatement.

e. The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Act.

4. With respect to the matter to be included in the Auditors'' Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its
directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to
any director is not i n excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not
prescribed other details under Section 197(16) which are required to be commented upon by us.

For Mittal Agarwal & Company

Chartered Accountants
(Firm Registration No. I3I025W)

Sd/-

Piyush Agarwal

Partner

Pl_ace: M_umb_ai Membership No. 135505

_{Dated: May 29}^th, ₂₀₂₃ UDIN: 23I35505BGXCUDI690

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Mar 31, 2018

1. Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Gufic Biosciences Limited (“the Company”), which comprise the Balance Sheet as at March 3l, 20l8, the Statement of Profit and Loss including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section l34(5) of the Companies Act, 20l3 (“the Act”) with respect to the preparation and presentation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified Section l33 of the Act, read with the Companies (Indian Accounting Standards) Rules, 20l5, as amended. 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statement in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, specified under Section l43(l0) 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 standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS financial statements.

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

4. Basis for Qualified Opinion

(a) During the year the company has switched over to new ERP system on account of GST implementation, which has been implemented in stages and only certain modules are operational, accuracy of which are yet to be tested by management. The audited financial statements for the year ended March 3l, 20l8 has been compiled from primary as well subsidiary or other records maintained by the management pending testing of accuracy of newly introduced ERP system. As a result, Debtors ledger control accounts and accounts as per subsidiary records are under reconciliation. We are unable to ascertain the impact on the financial statements of the company pending such reconciliation. (Refer Note No. 55)

(b) We have not participated in physical verification inventories of raw material, packing material, finished goods, work in progress goods, stock in trade. We have relied on physical verification certificate issued by internal auditors of the company, a firm of chartered accountants as well as certificate of the valuation of finished goods, stock in transit and work in progress. (Refer Note No.49)

(c) Amount of Rs. 124.04 lakhs (2016 - 2017: Rs. 124.04 lakhs) has been shown as recoverable relating to the misappropriation done by the employee of the company in the earlier years. However, no provision has been made against the said amount as the management has initiated legal steps for the recovery of the said amount and is confident of recovery. In our opinion the recovery of the amount is doubtful and consequently the profit is over stated by Rs. l24.04 lakhs (20l6 - 20l7: Rs. l24.04 lakhs) with consequential impact on Shareholders Fund and other non-current assets which are over stated by the said amount. (Refer Note 54).

(d) Balance of Trade Receivable, loans & advances, Employee Advance, Trade Payable and Security and Trade Deposits from Agents and Stockists, are subject to confirmations, verification and adjustments necessary upon reconciliation thereof. Adjustments required upon such confirmations, if any, are not ascertainable and hence not provided for.

(e) We have not been provided with reconciliation of purchase, sales, input credits shown in books of account with GST return filed by the company. Hence, we are unable to comment on effect of the same on the financial statements of the company pending such reconciliation.

The cumulative impact of the above said modification on the standalone financial statement are not ascertainable, except para 4© where the profit is over stated by Rs. I24.04 lakhs.

5. 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 matter specified in para 4 in the Basis for Qualified Opinion paragraph above, the aforesaid standalone Ind AS financial statements, read together with notes to the accounts 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, of the state of affairs of the Company as at March 3I, 20I8, its profit including other comprehensive income, its cash flows and changes in equity for the year ended on that date.

6. Emphasis of Matter

For the purpose of segment reporting we have relied upon the segment wise report prepared by the management based on the nature of product, risk and returns, organization structure. The figures have been regrouped and reclassified wherever necessary by the management.

7. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors’ Report) Order, 20I6 (“the Order”) issued by the Central Government of India in terms of sub-section (II) of section I43 of the Act, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.

8. As required by Section 143 (3) ofthe Act, we report that:

(a) We have sought and except for the matters described in the para 4 (a), 4 (d) and 4 (e) of the Basis for Qualified Opinion paragraph, 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 including the statement of other comprehensive Income, the Cash Flow Statement and the Statement of changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section I33 of the Act, read Companies (Indian Accounting Standards) Rules, 20I5, as amended.

(e) The matter described in the Basis for Qualified Opinion paragraph 4 above in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on March 3I, 20I8 and taken on record by the Board of Directors, none of the directors is disqualified as on March 3I, 20I8 from being appointed as a director in terms of Section I64 (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”; and

(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule II of the Companies (Audit and Auditors) Rules, 20I4, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 44 to the standalone Ind AS financial statements.

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

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

Annexure Referred to in Paragraph 7 Of Our Report of Even Date on The Standalone Ind AS Financial Statements For The Year Ended March 31, 2018 Of Gufic Biosciences Limited:

I. In respect of Fixed Assets:

(a) The company has not updated its records showing quantitative details and situation of the fixed assets.

(b) According to information and explanations provided to us, the fixed assets are physically verified by the management according to phased programme designed to cover all the items over a period of five years which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year. We have been informed that necessary adjustments in respect of discrepancies if any between physical asset and book record have already be made in the books upon reconciliation.

(c) According to information and explanations provided to us there are no immovable property is in the name of the company and as regards the building shown in fixed asset schedule represents capital expenditure incurred on extension/renovation of factory building acquired on lease. Hence question of title deeds of immovable properties in the name of the company does not arise.

ii. In respect of Inventories:

As explained to us, inventory have been physically verified by the management during the year. The discrepancies if any between physical verification of inventory as compared to book records have been be adjusted in the books of account.

iii. In respect of Granting of Loan:

According to the information and explanations given to us, the Company has not granted any loans to parties covered in the register maintained u/s. I89 of the Companies Act, 20I3 (“The Act”). (other than interest free security deposits or advances given for its business purpose. Refer Note No. 52& 53)

Thus, the clause relating to terms and conditions of grant of loan, schedule repayment of principal and interest and amount overdue are not applicable to the company.

iv. In our opinion and according to information and explanations provided to us, the company has not granted any loan, made any investment or provided any securities covered under section I85 and I86 of the Act during the year under review, except loans to employees as part of condition of services.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 73 to 76 or any other relevant provision of the Companies Act and the rule framed there under during the year. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal.

vi. We have broadly reviewed the cost records pursuant to the Rules made by the Central Government for the maintenance of cost records under Section I48 (I) of the Companies Act, 20I3 and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made detailed examination of records with a view to determine whether they are accurate.

vii. In respect of Statutory dues:

(a) According to the information and explanations given to us and according to the records of the company examined by us, the company is generally regular in depositing undisputed statutory dues in respect of excise duty and custom duty with appropriate authorities. However, we have observed delays in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Goods and Services Tax, Service Tax and Profession tax applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no statutory dues outstanding as at the last day of the financial year for a period of more than six months from the date they became payable except the Income Tax - Dividend Distribution Tax Rs. 26.68 lakhs, Income Tax Rs. 20.87 lakhs, Sales tax Rs. 67.49 lakhs, Profession Tax Rs. 2I.27 lakhs, ESIC Rs. 30.54 lakhs, Service Tax Rs. 23.70lakhs and Provident Fund Rs. 44.II lakhs, Goods and Service Tax Act.There are certain old Income Tax / TDS demand outstanding of Rs. I5I.07 lakhs, as appearing on the website of the Income Tax Department. However in view of the company no such demand is payable and it will initiate necessary steps to get the said demand rectified.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax, Service Tax, Customs Duty or Cess, Goods & Service Tax outstanding on account of any dispute except the following dues which have not been deposited with appropriate authorities on account of dispute:

Name of the Statute	Nature of	Amount	Period to which	Forum where matter is pending
	Dues	(Rs. in Lakhs)	it relates
Income Tax Act, l96l	Income Tax	32.76	20l0 - 20ll	Appeal preferred by the company to the Income Tax Appellant Tribunal
		22.00	20l0 - 20ll	Appeal preferred by the company to the Commissioner of Income Tax (Appeal) against penalty order
		2ll.58	20ll - 20l2 & 20l3 - 20l4	Appeal preferred by the company to the Commissioner of Income Tax (Appeal) against penalty order
Central Excise Act, l944	Central Excise Duty	8.2l	2000	Departmental Authority
		86.6l	200l - 2008	Appeal preferred by the company to the Tribunal
		l4.04	2008 - 2009	Appeal preferred by the company to the Commissioner Appeal
Gujarat Value Added Tax Act, 2003	Sales Tax	29.l5	20l0 - 20ll	Appeal preferred by the company to the Commissioner Appeal

viii. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

ix. According to the information and explanations given to us, the company has obtained term loans during the year under review which has been utilized for the purpose of which it was raised. The company has not raised any moneys by way of further public offer (including debt instruments).

x. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on the company by its officers or employees or by the Company have been noticed or reported during the year.

xi. According to the information and explanations given to us and based on our examination of the records of the company, the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section l97 read with schedule V to the Act.

xii. 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.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections l77 and l88 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him.

xvi. In our opinion and according to the information and explanations given to us, the Company is not required to registered under section 45-IA of the Reserve Bank of India Act l934.

ANNEXURE: B REFERRED TO IN PARA 14(g) OF THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENT OF GUFIC BIOSCIENCES LIMITED

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

1. We have audited the internal financial controls over financial reporting of Gufic Biosciences Limited (the “Company”) as of March 3I, 20I8 in conjunction with our audit of the standalone financial statements for the year ended on that date.

2. 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, 20I3.

3. Auditors’ Responsibility: Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit.

We have conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemed to be prescribed under section I43(I0) of the Companies Act, 20I3, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects to the extent applicable.

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 judgement, 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 Qualified audit opinion on the Company’s internal financial controls system over financial reporting.

4. 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 authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

5. 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.

6. Qualified opinion: According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 3I, 20I8:

The company did not have an appropriate internal control system in respect of:

a) for review of Trade Receivables, other recoverable including loans and advances,Trade Payable and Security and Trade Deposits from Agents and Stockists, obtaining their confirmations and reconciliation of their outstanding balances with the books of accounts. This could potentially affect the balance in the trade receivable, other recoverable, trade payable, Security Deposit account and income and expenses account balances.

b) for reconciliation of purchase, sales, input credits shown in books of account with GST return filed by the company. This could potentially affect the income, expenses and receivable account balances.

c) segregation of duties to effectively monitor and operate the control of depositing undisputed statutory dues including Provident Fund, Income Tax, TDS, Sales-Tax, Wealth tax, VAT, duty of customs, Service tax, Cess and other material undisputed statutory dues with the appropriate authorities. This could potentially result in levy of interest and other penal provisions of statutes and have a significant impact on functioning of the Company.

d) There is a material weakness with regard to control over advances given to suppliers for goods and services. The controls with regard to subsequent settlement of advances are ineffective and as a result many parties to whom advances have been given are very old and remain unsettled. Further there is no control system over confirmation and reconciliation of balance with parties. These could potentially result in write off of advances and have an impact on financial statements of the Company.

e) The company during the year has implemented the new ERP system in stages and only certain modules are operational, accuracy of which are yet to be testes by the management. The system control requires strengthening, so that complete and accurate reports generated can be relied upon.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

7. Opinion: In our opinion, except for the possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 3I, 20I8, 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.

8. We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company for the year ended March 3I, 20I8 and these material weaknesses do not affect our opinion on the standalone financial statements of the Company, other than qualification reported by us in our Independent Audit Report.

For S H R & Co.

Chartered Accountants

FRN : I2049IW

Deep N. Shroff

Partner

Membership No. I22592

Mumbai : 29^th May, 20I8

---

Mar 31, 2017

To;

To the Members of Gufic Biosciences Limited

Report on the Financial Statements

1. We have audited the accompanying standalone financial statements of Gufic Biosciences Limited ("the Company"), which comprise the Balance Sheet as at March 3l, 20l7, 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 Responsibility for the Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section l34(5) of the Companies Act, 20l3 ("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 referred in under Section l33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 20l4. 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

3. 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.

4. We conducted our audit in accordance with the Standards on Auditing specified under Section l43(l0) 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.

5. 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.

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

Basis for Qualified Opinion

7. Amount of Rs, 124.04 lakhs (2015 - 2016: Rs, 124.04 lakhs) has been shown as recoverable under the head other non-current assets relating to misappropriation done by the marketing employee of the company in earlier year. However, no provision has been made against the said amount as the management has initiated steps for the recovery of the said amount and is confident of recovery In our opinion the recovery of the amount is doubtful and consequently the profit is over stated by Rs, 124.04 lakhs (2015 - 2016: Rs, 124.04 lakhs) with consequential impact on Shareholders Fund and other non-current assets which are over stated by the said amount. (Refer Note 56)

8. We are unable to express our opinion on recoverability of debts of Rs, 209.08 lakhs (2015 - 2016 Rs, 185.45 lakhs) and advances ofRs, 68.37 lakhs shown under the head long term loans and advances as at Balance sheet date (2015 - 2016: Rs,. 68.46 lakhs), which are outstanding for more than one year. In the absence of appropriate evidences, we are unable to ascertain its recoverability and its impact on the accounts of the company. However, in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature (Refer Note 55).

Qualified Opinion

9. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter specified in para 7 and possible effects of the matter specified in para 8 in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements, read together with notes to the accounts 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 case of balance sheet of the state of affairs of the Company as at March 31,2017,

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, of the cash flows for the year ended on that date.

Emphasis of Matter

10. In the absence of information, we have relied upon the segment wise report prepared by the management based on the nature of product, risk and returns and organization structure. The figures have been regrouped and reclassified wherever necessary by the management.

11. The company has introduced implementation of ERP system in stages and only certain modules are operational, accuracy of which are yet to be tested. The audited financial amounts for year ended March 3l, 20l7 has been compiled from various sources by the management, including introduced ERP Modules. We have relied on management representation that it has taken enough care and diligence to ensure that the presented data and accounts, so compiled, are true & correct. (Refer Note No. 57)

12. We did not participate in physical counting of the Inventory and its valuation. The Company has appointed an internal

auditor, an independent firm of Chartered Accountants to carry out physical verification and valuation of inventories and also to conduct audit of stock records maintained by the company. We have relied upon certificate issued by them in this regard. (Refer Note No. 5l & 52)

Report on Other Legal and Regulatory Requirements

13. As required by the Companies (Auditors’ Report) Order, 20l6 (“the Order”) issued by the Central Government of India in terms of sub-section (ll) of section l43 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

14. As required by Section l43 (3) of the Act, we report that:

(a) We have sought and except for the matters described in the para 8 of the Basis for Qualified Opinion paragraph, 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 l33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 20l4.

(e) The matter described in the Basis for Qualified Opinion paragraph 7 & 8 above in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on March 3l, 20l7 taken on record by the Board of Directors, none of the directors is disqualified as on March 3l, 20l7 from being appointed as a director in terms of Section l64 (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”; and

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule ll of the Companies (Audit and Auditors) Rules, 20l4, in our opinion and to the best of our information and according to the explanations given to us:

(I) The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 33 to the financial statements.

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

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

(iv) The company has provided requisite disclosures in its standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 20l6 to 30 December, 20l6, refer Note 34 to the standalone financial statements. As per the information and explanation provided to us and based on the representation received from the management, the said disclosure are in accordance with the books of accounts maintained by the Company.

Annexure Referred to in Paragraph 13 of Our Report of Even Date On The Standalone Financial Statements

For The Year Ended March 31, 2017 of Gufic Biosciences Limited:

i. In respect of Fixed Assets :

(a) The company has updated its records showing quantitative details and situation of the fixed assets.

(b) According to information and explanations provided to us, the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of five years which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year. We have been informed that necessary adjustments in respect of discrepancies if any between physical asset and book record have already be made in the books upon reconciliation.

(c) According to information and explanations provided to us there are no immovable properties in the name of the company and as regards the building shown in fixed asset schedule represents capital expenditure incurred on extension/renovation of factory building acquired on lease. Hence question of title deeds of immovable properties in the name of the company does not arise.

ii. In respect of Inventories:

As explained to us, inventory have been physically verified by the management during the year. The discrepancies if any between physical verification of inventory as compared to book records have been be adjusted in the books of account.

iii. In respect of Granting of Loan:

According to the information and explanations given to us, the Company has not granted any loans to parties covered in the register maintained u/s. l89 of the Companies Act, 20l3 (“The Act”). (other than interest free security deposits or advances given for its business purpose. Refer Note No. 51 & 52) Thus the clause relating to terms and conditions of grant of loan, schedule repayment of principal and interest and amount overdue are not applicable to the company.

iv. In our opinion and according to information and explanations provided to us, the company has not granted any loan, made any investment or provided any securities covered under section l85 and l86 of the Act during the year under review, except loans to employees as part of condition of services. In respect of guarantees given the company has complied with the provision of section l86 of the Act.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 73 to 76 or any other relevant provision of the Companies Act and the rule framed there under during the year. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal.

vi. We have broadly reviewed the cost records pursuant to the Rules made by the Central Government for the maintenance of cost records under Section l48 (l) of the Companies Act, 20l3 and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made detailed examination of records with a view to determine whether they are accurate.

vii. In respect of Statutory dues:

(a) According to the information and explanations given to us and according to the records of the company examined by us, the company is generally regular in depositing undisputed statutory dues in respect of excise duty and custom duty with appropriate authorities. However, we have observed delays in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax and Profession tax applicable to it with the appropriate authorities. According to the information and explanations given to us, there are no statutory dues outstanding as at the last day of the financial year for a period of more than six months from the date they became payable except the Income Tax - Dividend Distribution Tax Rs, 15.75 lakhs, Income Tax Rs, 446.34 lakhs, Sales tax Rs,.89.93 lakhs, Profession Tax Rs,15.73 lakhs, ESIC Rs, 20.47 lakhs and Provident Fund Rs, 69.43 lakhs.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax, Service Tax, Customs Duty or Cess outstanding on account of any dispute except following dues have not been deposited with appropriate authorities on account of dispute:

Name of the Statute	Nature of	Amount	Period to which	Forum where matter is pending
	Dues	(Rs, in Lakhs)	it relates
Income Tax Act, l96l	Income Tax - TDS	94.79	2007 - 2008 to 20l2 - 20l3	Departmental Authority
		l8.52	20l3 - 20l4
		5.73	20l4 - 20l5
		26.30	20l5 - 20l6
		8.22	20l6 - 20l7
	Income Tax	45.82	l999 - 2000 to 2009 - 20l0& 20l2 - 20l3	Departmental Authority
		282.9l	20l0 - 20ll & 20ll - 20l2	Appeal preferred by the company to the Commissioner of Income Tax (Appeal)
Central Excise Act, l944	Central Excise Duty	8.2l	2000	Departmental Authority
		86.6l	200l - 2008	Appeal preferred by the company to the Tribunal
		l4.04	2008 - 2009	Appeal preferred by the company to the Commissioner Appeal
Gujarat Value Added Tax Act, 2003	Sales Tax	29.l5	20l0 - 20ll	Appeal preferred by the company to the Commissioner Appeal

viii. We have relied on the representation and confirmation received from the bank that the company has not defaulted in repayment of dues to a bank.

ix. According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained. The company has not raised any moneys by way of further public offer (including debt instruments).

x. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on the company by its officers or employees or by the Company have been noticed or reported during the year.

xi. According to the information and explanations given to us and based on our examination of the records of the company, the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section l97 read with schedule V to the Act.

xii. 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.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections l77 and l88 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him.

xvi. In our opinion and according to the information and explanations given to us, the Company is not required to registered under section 45-IA of the Reserve Bank of India Act l934.

ANNEXURE: B REFERRED TO IN PARA 14(g) OF THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENT OF GUFIC BIOSCIENCES LIMITED

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

1. We have audited the internal financial controls over financial reporting of Gufic Biosciences Limited (the “Company”) as of March 3l, 20l7 in conjunction with our audit of the standalone financial statements for the year ended on that date.

2. 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, 20l3.

3. Auditors'' Responsibility: Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We have conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemed to be prescribed under section l43(l0) of the Companies Act, 20l3, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects to the extent applicable.

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 Qualified audit opinion on the Company’s internal financial controls system over financial reporting.

4. 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 (l) 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.

5. 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.

6. Qualified opinion: According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 3l, 20l7:

The company did not have an appropriate internal control system:

a) for review of debtors, other recoverable including loans and advances and creditors outstanding balances, obtaining their confirmations and reconciliation of their outstanding balances with the books of accounts. This could potentially affect the balance in the trade receivable, other recoverable, trade payable, income and expenses account balances.

b) for timely payment of statutory due, which could potentially give rise to liabilities.

A ‘material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company''s annual or interim financial statements will not be prevented or detected on a timely basis.

7. Opinion: In our opinion, except for the possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 3l, 20l7, 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.

8. We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company for the year ended March 3l, 20l7 and these material weaknesses do not affect our opinion on the standalone financial statements of the Company, other than qualification reported by us in our Independent Audit Report.

For S H R & Co.

Chartered Accountants

FRN : l2049lW

Deep N. Shroff

Partner

Membership No. l22592

Mumbai : 29th May, 20l7

---

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of Gufic Biosciences Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management Responsibility for the Financial Statements

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

3. 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 thereunder.

4. 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.

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

Basis for Qualified Opinion

6. We refer to Note No 53 of the Financial Statements in respect of misappropriation by one of the marketing employee of the company. The amount of misappropriation of Rs.. 123.80 lacs (net of recovery of Rs.. 22.50 lacs) has been shown as recoverable under the head other noncurrent assets (other). However no provision has been In our opinion the recovery of the amount is doubtful. Consequently profit is overstated by Rs.. 123.80 lacs with consequential impact on Reserves and Surplus and Loans and Advances (other), which areover stated by the said amount.

7. We are unable to express our opinion on recoverability of debts of Rs.. 151.48 lakhs (2013 – 2014 Rs.. 326.69 lakhs) which are outstanding for more than one year and advances of Rs.. 23.08 lakhs shown under the head long term loans and advances as at Balance sheet date (2013 - 2014: Rs.. 40.14 lakhs), which are outstanding for more than 2 years. In the absence of appropriate evidences we are unable to ascertain its recoverability and its impact on the accounts of the company. However in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature (Refer Note 51).

Qualified Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter specified in para 6 and possible effects of the matter specified in para 7 in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements, read together with notes to the accounts 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, 2015,

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

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

Emphasis of Matter

10. In the absence of information, we have relied upon the segment wise report prepared by the management based on the nature of product, risk and returns and organization structure. The figures have been regrouped and reclassified wherever necessary by the management.

11. We did not participate in physical counting of the Inventory and its valuation. The Company has appointed an internal auditor, an independent firm of Chartered Accountants to carry out physical verification and valuation of inven to ri e s and also to conduct audit of stock records maintained by the company. We have relied upon certificate issued by them in this regard. (Refer Note No.49)

Report on Other Legal and Regulatory Requirements

12. As required by the Companies (Auditors' 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.

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

(a) We have sought and, except for the matters described in the para 7 of the Basis for Qualified Opinion paragraph, 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 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) The matter described in the Basis for Qualified Opinion paragraph 6 & 7 above in our opinion, may have an adverse effect on the functioning ofthe Company.

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

(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(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 of pending litigations on its financial position in its financial statements as referred to in Note 34 to the financial statements.

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-termcontracts including derivative contracts.

(iii) We have observed delay in transferring unpaid dividend of Rs. 2 laks credited to said account in FY 2006-07 pertaining to Financial Year 2005-2006, required to be transferred to the Investors Education and Protection Fund by the company as at Balance Sheet date

(ANNEXURE REFERRED TO IN PARAGRAPH 11 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2015 OF GUFIC BIOSCIENCES LIMITED)

I. (a) The Company has updated its records showing quantitative details and situation of fixed assets;

(b) According to information and explanations provided to us, the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of five years which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year. We have been informed that necessary adjustments in respect of discrepancies if any between physical asset and book record have already be made in the books upon reconciliation.

ii. (a) As explained to us, inventory have been physically verified during the year by the management. In our opinion frequency of verification is sufficient.

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

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that, the Company is maintaining proper records of its inventory. Discrepancies which were noticed on physical verification of inventory as compared to book records have been properly dealt with in the books of account.

iii. According to the information and explanations given to us, the Company has granted unsecured loans to parties covered in the register maintained u/s 189 of the Companies Act, 2013, the recovery of principal and interest thereon, wherever stipulated, is regular. (Other than interest free security deposits or advances given for its business purpose. Refer note no 52).

iv. According to the information and explanations given to us, the company is in process of strengthening its internal control procedures in respect of purchase of inventory and fixed assets and for the sale of goods and services so as to commensurate with the size of the company.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 73 to 76 or any other relevant provision of the Companies Act and the rule framed there under during the year. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal.

vi. We have broadly reviewed the cost records pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 143 (1) of the Companies Act, 2013 and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made detailed examination of records with a view to determine whether they are accurate.

vii. (a) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing undisputed statutory due in respect of Excise Duty and Custom Duty with appropriate authorities. However, we have observed delays in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Service Ta x and Professional Ta x applicable to it with the appropriate authorities. According to information and explanations given to us, there are no statutory dues outstanding as at the last day of financial year for a period of more than six months from the date they became payable, except: Income Tax: Rs.. 235.66 lacs Sales tax of Rs.. 19.14 lacs, Profession Tax of Rs.. 10.60 lacs, Employee State Insurance Corporation of Rs.. 16.61 lacs Provident Fund of Rs.. 56.37 lacs.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax, Service Tax, Excise Duty, Customs Duty or Cess outstanding on account of any dispute except following dues have not been deposited with appropriate authorities on account of dispute :

(c) According to the information and explanations given to us and based on the documents and records produced to us, the company has not transferred unpaid dividend of Rs. 2 lacs credited to the said account in the FY 2006 – 2007 (pertaining to FY 2005 – 2006), required to be transferred, to the Investor Education and Protection Fund by the Company, as at the Balance Sheet date, in accordance with the relevant provision of the Companies Act, 1956 and the rules made thereunder have not been so transferred.

Name of the Statute Nature of Amount Period to which Dues (Rs. in Lacs) it relates

Income Tax Act, 1961 Income Tax 43.51 Prior Years - TDS 63.50 2008 – 2009 to 2013 – 14

Income Tax 99.54 1999 – 2000 to 2009 – 2010 & 2012 – 2013

303.03 2010 – 2011 & 2011 – 2012

Central Excise Central 44.27 2004 – 2008 Act, 1944 Excise Duty

14.04 2008 – 2009

Gujarat Value Sales Tax 29.15 2010 – 2011 Added Tax Act, 2003

Name of the Statute Forum where matter is pending

Income Tax Act, 1961 Departmental Authority

Departmental Authority

Departmental Authority

Appeal preferred by the company to the Commissioner of Income Tax (Appeal)

Central Excise Act, 1944 Appeal preferred by the company to the Tribunal

Appeal preferred by the company to the Commissioner Appeal

Gujarat Value Added Tax Act, 2003 Appeal preferred by the company to the Commissioner Appeal

viii. The Company does not have accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial year.

ix. According to the information and explanations given to us and based on the documents and records produced to us, the Company has delayed or defaulted in repayment of dues to banks to the tune of Rs.. 1.25 lakhs and the period of default was between 0 to2 months.

x. According to the information and explanations given to us, the Company has given corporate guarantee of Rs.. 450 lakhs for loans taken by a company in which directors are interested from bank, the terms and conditions where of are not prejudicial to the interest of the Company.

xi. According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

xii. As per the information and explanations given, by the management there was a misappropriation of Rs. 123.80 lacs (net of recoveries) by one of the marketing employee of the company. As per the investigation conducted by the management estimated amount of misappropriation is Rs. 123.80 lacs. We have been informed that necessary steps have been taken to recover said amount which has been shown in the Financial Statement under the head other noncurrent assets (others). (Refer Note 53 to the Financial Statements)

For S H R & Co.

Chartered Accountants

FRN : 120491W

Deep N. Shroff

Partner

Membership No. 122592

Mumbai : 29th May, 2015

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Mar 31, 2014

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

Management Responsibility for the Financial Statements

2. 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 notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

3. 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.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, 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.

5. 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

6. We are unable to express our opinion on recoverability of debts of Rs. 326.69 lakhs (2012 - 2013 Rs. 191.52 lakhs) which are outstanding for more than one year and advances of Rs. 40.14 lakhs shown under the head long term loans and advances as at Balance sheet date (2012-13: Rs. 40.92 lakhs), which are outstanding for more than 2 years. In the absence of appropriate evidences we are unable to ascertain its recoverability and its impact on the accounts of the company. However in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature (Refer Note 53).

Qualified Opinion

7. In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis of Qualified Opinion Paragraph, the financial statements, read together with notes to the accounts 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, 2014;

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

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

8. In the absence of information, we have relied upon the segment wise report prepared by the management based on the nature of product, risk and returns and organization structure. The figures have been regrouped and reclassified wherever necessary by the management.

9. We did not participate in physical counting of the Inventory and its valuation. The Company has appointed an internal auditor, an independent firm of Chartered Accountants to carry out physical verification and valuation of inventories and also to conduct audit of stock records maintained by the company. We have relied upon certificate issued by them in this regard.( Refer Note No.49)

10. Certain transactions entered into by the company with certain private companies in which directors are interested, are in violation of section 297 of the Companies Act 1956, which requires the prior approval of Central Government (Refer Note 54).

Report on Other Legal and Regulatory Requirements

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

12. 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; except for the matter described in para 6 of Basis for Qualified Opinion and para 8 of the Emphasis of Matter.

(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 the books;

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

(d) In our opinion, the Balance Sheet, Profit & Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 to the extent applicable.

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

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

ANNEXURE TO THE AUDITOR''S REPORT

(ANNEXURE REFERRED TO IN PARAGRAPH 10 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2014 OF GUFIC BIOSCIENCES LIMITED)

I. (a) The Company is in process of updating its records showing particulars, including quantitative details and situation of fixed assets;

(b) According to information and explanations provided to us the company has carried out physical verification of its major assets viz. plant and machineries, which in our opinion, is reasonable having regard to the size of the company and nature of its business. We have been informed that the company is in process of updating its fixed assets register and necessary adjustments in respect of discrepancies if any between physical assets and book record will be made in the books on such updation.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii. According to the information and explanation given to us and based on the certificate issued by the internal auditor, who has carried out the audit of stock records maintained by the company which interalia includes physical verification and valuation of inventory, we state that:

(a) Inventory have been physically verified during the year by the management. In our opinion frequency of verification needs to be increased.

(b) The procedures followed by the management for physical verification of inventory, are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) Discrepancies which were noticed on physical verification of inventory as compared to book records have been properly dealt with in the books of account.

iii. (a) According to the information and explanations given to us, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956 except interest free security deposits or advances given for its business purpose.(Refer Note 52).

(b) According to the information and explanations given to us, the Company has taken unsecured loans from Companies and other parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 614.51 lacs and the year-end balance of such loans aggregates to Rs. 436.44 lacs. There are four parties including Companies and other parties covered in the register maintained u/s 301 of the Companies Act, 1956 from whom Company has taken loans.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans have been taken from Companies, firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(d) There is no stipulation as to repayments of principal amount in respect of aforesaid loans. The said loans are interest free in nature.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for sale of services. However internal control procedures in respect of purchase of inventory, fixed assets and for the sale of goods needs to be strengthened so as to commensurate with the size of the company. Other than the above, no major weaknesses have been noticed in the internal controls during the course of our audit.

v. (a) According to the information and explanations given to us, we are of the opinion that during the year, the particulars of contracts/ arrangements that need to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lacs have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58 AA of the Companies Act, 1956, and the rules framed there under during the year. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any Tribunal.

vii. The company has a formal internal audit system, which needs to be strengthened so as to commensurate with the size of the company and nature of its business.

viii. We have broadly reviewed the cost records pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made detailed examination of records with a view to determine whether they are accurate.

ix. (a) According to the information and explanations given to us and according to records of the company, we have to state that, there have been delays in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection fund, Employees'' State Insurance, Income Tax, Service Tax and Professional Tax applicable to it with the appropriate authorities. According to information and explanations given to us, there are no statutory dues outstanding as at the last day of financial year for a period of more than six months from the date they became payable, except Employers Contribution to Provident Fund of Rs.16.60 lacs, Employers Contribution to ESIC of Rs. 8.27 lacs, Advance Tax of Rs. 61.02 lacs, Income Tax of Rs. 45.23 lacs, Tax Deducted at Source of Rs. 47.18 lacs and Professional Tax of Rs. 2.60 lacs. The company is generally regular in depositing Excise Duty and Custom Duty with appropriate authorities.

(b) According to the information and explanations given to us , there were no disputed dues in respect of Value Added Tax, Wealth Tax, Service Tax, Excise Duty, Customs Duty or Cess outstanding on account of any dispute except following dues have not been deposited with appropriate authorities on account of dispute :

Name of the Statute Financial Year Forum where matter Amount is pending (Rs.in Lacs)

Income Tax Act, 1961 2010 - 2011 Commissioner of 32.87 Income Tax (Appeal)

Central Excise 2004 - 2008 Appeal to the Tribunal 44.27 2008 - 2009 Appeal to the Commissioner Appeal 14.04

x. The Company does not have accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial year.

xi. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

xii. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares and other securities.

xiii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

xiv. The Company does not deal or trade in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi. According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

xvii. According to the information and explanations given to us on an overall examination of Balance Sheet and Cash Flows of the Company, we report that the Company has not utilised funds raised on short-term basis for long term investment.

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

xix. The Company did not issue any debentures during the year.

xx. The Company has not raised any money through a public issue during the year.

xxi. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S H R & Co. Chartered Accountants FRN : 120491W

Deep N. Shroff Partner Membership No. 122592 Mumbai : 30th May, 2014

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Mar 31, 2013

Report on Financial Statements

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

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

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements, give the information required by the Act in the manner so required and on emphasis of matter below, the impact whereof can not be ascertained, give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of the Profit and Loss Account, of the profit 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.

Emphasis of Matter

We draw attention to the following matters repented to in the note nos. 2.29, 2.30, 2.32 and 2.44. forming part of the financial statements.

Our observation on the said accounts are given below:

(a) We are unable to express our opinion on recoverability of debts of Rs.191.52 Lacs which are overdue for more than one year and of Loans and Advances of Rs. 35.39 Lacs which are outstanding for more than three years. In the absence of appropriate evidences, we are unable to ascertain its recoverability and its impact on the accounts of the Company. However, in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature. (Refer Note No.2.33)

(b) Certain transactions entered into by the Company with companies in which Directors are interested are in violation of Section 297 of the Companies Act, 1956, which requires the prior approval of the Central Government, (Refer Note 2.35)

Report on other Legal & Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2003 ("theOrder") 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.

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

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

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

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

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

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

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

ANNEXURE TO THE AUDITOR''S REPORT

(ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2013 OF GUFIC BIOSCIENCES LIMITED)

i. (a) The Company is in the process of updating its records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets of the Company, have been physically verified by the Management during the year. In our opinion, period of verification is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been reported on such verification.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii. According to the information and explanations given to us and based on the certificate issued by the internal auditor, who has conducted physical verification and valuation fixed assets, we state that ;

(a) the Inventory of the Company has been physically verified by the Management during the year. In our opinion frequency of verification needs to be increased.

(b) the procedures of physical verification of inventory followed by the Management, are reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) the Company is maintaining proper records of its inventory and the discrepancies which were noticed on physical verification of Inventory as compared to book records, have been properly dealt with in the books of account.

iii (a) According to the information and explanations given to us, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. except interest free security deposits given (Refer note 2.13)

(b) According to the information and explanations given to us, the Company has taken advances in the nature of loans from three Companies / Parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount of loans taken during the year was Rs 398.90 Lacs and the year end balance wasRs. 380.86 Lacs.

(c) The advances / loans are interest free in nature and other terms and conditions of loans taken by the company, secured or unsecured are prima facie not prejudicial to the interest of the company.

(d) There are no specific stipulations as to repayment of such advances / loans.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for fixed assets and sale of services. However, internal control procedures in respect of purchase of Inventory and sale of goods need to be strengthened so as to commensurate with the size of the company. Other than above, no major weaknesses have been noticed in the internal control systems.

v. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that during the year, the particulars of contracts/arrangements that were required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 have been so entered. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. Five Lacs have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58 AA or any other provisions of the Companies Act, 1956, and the rules framed thereunder during the year. To the best of our knowledge and according to information and explanations given to us, no order has been passed by the Company Law Board or any court or any other Tribunal.

vii. In our opinion, Company has an internal audit system which needs to be strengthened so as to commensurate with the size of the Company and nature of its business.

viii. According to information and explanations provided to us, the Central Government has prescribed under section 209(1)(d) of the Companies Act,1956 the maintenance of cost records in respect of certain products manufactured by the Company viz. Formulations, Bulkdrugs. We have broadly reviewed the books of account maintained by the company and are of the opinion that prima facie, the prescribed accounts and records have been maintained by the company. We have not, however, made a detailed examination of records with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information given to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, for any other products of the company.

ix. (a) According to the information and explanations given to us and according to the records of the Company, we have to state that, the company has not been regular in depositing undisputed statutory dues of Provident fund, Employees'' State Insurance, Income Tax, Dividend Distribution Tax, Income tax deducted at source, Sales tax and Excise Duty. We are informed that there are undisputed demand outstanding, as at 31st March 2013 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are dues in respect of Income Tax, Sales tax, Service Tax, Customs Duty, Excise Duty and Cess, which have not been deposited.

x. The Company does not have accumulated losses at the end of the financial year March 31,2013. Without considering the effect of our observation stated in the Auditor''s Report, the impact where of on the profits can not be ascertained, the Company has not incurred any cash losses during the financial year ended March 31,2013 and in the immediately preceding financial year.

xi. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

xii. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares and other securities.

xiii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund/societies.

xiv. The Company does not deal or trade in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi. According to the information and explanations given to us, the Company has obtained term loan during the year and the proceeds have been utilized for the purpose for which it was obtained.

xvii. According to the information and explanation given to us and on the overall examination of the Balance Sheet and Cash Flow of the Company, we report that the Company has neither raised any long term nor short term funds during the year.

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

xix The Company did not issue any debentures during the year.

xx. The Company has not raised any money through a public issue during the year.

xxi. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For Mayur Chokshi & Co.

Chartered Accountants

Mayur Chokshi

Proprietor

Firm Registration No. 106116W

Membership No.33936

Mumbai : 30th May, 2013

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Mar 31, 2012

1. We have audited the attached Balance Sheet of "GUFIC BIOSCIENCES LTD" as at March 31, 2012, the Profit and Loss Account and also the Cash Flow Statement of the Company 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 the 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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

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

c) The Balance Sheet , Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the Books of Account ;

d) On the basis of written representation 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 are disqualified as at March 31, 2012 from being appointed as Director in term of Clause (g) of sub-section (I) of Section 274 of the Companies Act, 1956;

e) Attention is invited to the fact that we have relied upon the Board's/ Management's assertions, opinion, view, representation and various other certificates produced before us, inter-alia, in respect of and as detailed in the note nos. 2.29, 2.30, 2.32 and 2.44.

f) Our observation on the said accounts are given below:

(i) We are unable to express our opinion on recoverability of debts of Rs. 174.48 Lacs which are overdue for more than one year and of Loans and Advances ofRs. 37.76 Lacs which are outstanding for more than three years. In the absence of appropriate evidences, we are unable to ascertain its recoverability and its impact on the accounts of the Company. However, in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature. (Refer Note No.2.33)

(ii) Certain transactions entered into by the Company with companies in which Directors are interested are in violation of Section 297 of the Companies Act, 1956, which requires the prior approval of the Central Government, (Refer Note 2.35)

g) In our opinion ,and to the best of our information and according to the explanations given to us, the Balance Sheet , Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

h) In our opinion and to the best of our information and according to the explanations given to us, the said accounts with notes thereon when read in conjunction with the para (e) above, give the information required by the Companies Act,I956, in the manner so required and subject to para 4(f) above, the impact whereof can not be ascertained, give a true and fair view in conformity with the accounting principles generally accepted in India:

i] In the case of the Balance Sheet of the state of affairs of the Company as at March 31, 2012;

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

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

i. (a) The Company is in the process of updating its records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets of the Company, have been physically verified by the Management during the year. In our opinion, period of verification is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been reported on such verification.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii. According to the information and explanations given to us and based on the certificate issued by the internal auditor, who has conducted physical verification and valuation fixed assets, we state that ;

(a) the Inventory of the Company has been physically verified by the Management during the year. In our opinion frequency of verification needs to be increased.

(b) the procedures of physical verification of inventory followed by the Management, are reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) the Company is maintaining proper records of its inventory and the discrepancies which were noticed on physical verification of Inventory as compared to book records, have been properly dealt with in the books of account.

iii (a) According to the information and explanations given to us, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. except interest free security deposits given (Refer note 2.13)

(b) According to the information and explanations given to us, the Company has taken advances in the nature of loans from four Companies / Parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount of loans taken during the year was Rs. 312.08 Lacs and the year end balance was Rs. 266.90 Lacs.

(c) The advances / loans are interest free in nature and other terms and conditions of loans taken by the company, secured or unsecured are prima facie not prejudicial to the interest of the company.

(d) There are no specific stipulations as to repayment of such advances / loans.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for fixed assets and sale of services. However, internal control procedures in respect of purchase of Inventory and sale of goods need to be strengthened so as to commensurate with the size of the company. Other than above, no major weaknesses have been noticed in the internal control systems.

v. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that during the year, the particulars of contracts/arrangements that were required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. Five Lacs have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58 AA or any other provisions of the Companies Act, 1956, and the rules framed thereunder during the year. To the best of our knowledge and according to information and explanations given to us, no order has been passed by the Company Law Board or any court or any other Tribunal.

vii. In our opinion, Company has an internal audit system which needs to be strengthened so as to commensurate with the size of the Company and nature of its business.

viii. According to information and explanations provided to us, the Central Government has prescribed under section 209(l)(d) of the Companies Act,I956 the maintenance of cost records in respect of certain products manufactured by the Company viz. Formulations, Bulkdrugs. We have broadly reviewed the books of account maintained by the company and are of the opinion that prima facie, the prescribed accounts and records have been maintained by the company. We have not, however, made a detailed examination of records with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information given to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, for any other products of the company.

ix. (a) According to the information and explanations given to us and according to the records of the Company, we have to state that, the company has not been regular in depositing undisputed statutory dues of Provident fund, Employees' State Insurance, Income Tax, Dividend Distribution Tax, Income tax deducted at source, Sales tax and Excise Duty We are informed that there are undisputed demand outstanding, as at 31st March 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are dues in respect of Income Tax, Sales tax, Service Tax, Customs Duty, Excise Duty and Cess, which have not been deposited.

x. The Company does not have accumulated losses at the end of the financial year March 31,2012. Without considering the effect of our observation stated in the Auditor's Report, the impact where of on the profits can not be ascertained, the Company has not incurred any cash losses during the financial year ended March 31,2012 and in the immediately preceding financial year.

xi. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

xii. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares and other securities.

xiii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund/societies.

xiv. The Company does not deal or trade in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xvi. According to the information and explanations given to us, the Company has not obtained any term loan during the year.

xvii. According to the information and explanation given to us and on the overall examination of the Balance Sheet and Cash Flow of the Company, we report that the Company has neither raised any long term nor short term funds during the year.

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

xix The Company did not issue any debentures during the year.

xx. The Company has not raised any money through a public issue during the year.

xxi. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For Mayur Chokshi & Co.

Chartered Accountants

Mayur Chokshi

Proprietor

Firm Registration No. 106116W

Membership No.33936

Mumbai : 10th July, 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of "GUFIC BIOSCIENCES LTD" as at March 31,2011, the Profit and Loss Account and also the Cash Flow Statement of the Company 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 the 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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

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

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the Books of Account;

d) On the basis of written representation 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 are disqualified as at March 31, 2011 from being appointed as Director in term of Clause (g) of sub-section (I) of Section 274 of the Companies Act, 1956;

e) Attention is invited to the fact that we have relied upon the Board's / Management's assertions, opinion, view, representation and various other certificates produced before us, inter-alia, in respect of and as detailed in the note nos. 1, 2, 4, and 14 to the Schedule 19.11.

f) Our observation on the said accounts are given below:

(i) Non adherence to the revised accounting standards 15 issued by the ICAI on Employees Benefits in relation to provision for compensated leave benefits, impact unascertained (Refer Note I to schedule 19 (I))

(ii) We are unable to express our opinion on recoverability of debts of Rs. 10469 thousand which are outstanding for more than one year and of Loans and Advances of Rs. 4099 thousand which are outstanding for more than three years. In the absence of appropriate evidences, we are unable to ascertain its recoverability and its impact on the accounts of the Company. However, in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature. (Refer Note No. 9 and 32 to schedule 19(11)).

(iii) Certain transactions entered into by the Company with companies in which Directors are interested in violation of Section 297 of the Companies Act, /956, which requires the prior approval of the Central Government,. (Refer Note 31 to Schedule 19(H))

g) In our opinion ,and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

h) In our opinion and to the best of our information - and according to the explanations given to us, the said accounts with notes thereon when read in conjunction with the para (e) above, give the information required by the Companies Act, 1956, in the manner so required and subject to para 4(f) above, the impact whereof can not be ascertained, give a true and fair view in conformity with the accounting principles generally accepted in India:

I] In the case of the Balance Sheet of the state of affairs of the Company as at March 31,2011;

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

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

ANNEXURE TO THE AUDITOR'S REPORT

(ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2011 OF GUFICBIOSCIENCES LIMITED)

i. (a) The Company is in the process of updating its records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets of the Company, have been physically verified by the Management during the year. In our opinion, period of verification is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been reported on such verification.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii. (a) According to the information and explanations given to us and based on the certificate issued bythe internal auditor, who has conducted physical verification and valuation fixed assets, we state that;

(a) the Inventory of the Company has been physically verified by the Management during the year. In our opinion frequency of verification needs to be increased.

(b) the procedures of physical verification of inventory followed by the Management, are reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) the Company is maintaining proper records of its inventory and the discrepancies which were noticed on physical verification of Inventory as compared to book records, have been properly dealt with in the books of account.

iii (a) According to the information and explanations given to us, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. except interest free security deposits given (Refer note 17 of schedule 1911)

(b) According to the information and explanations given to us ,the Company has taken advances in the nature of loans from four Companies / Parties covered in the register maintained u/s 301 of the Companies Act, 1956. The maximum amount of loans taken during the year was Rs. 31908 thousands and the year end balance was Rs. 31208 thousand.

(c) The advances / loans are interest free in nature and other terms and conditions of loans taken by the company , secured or unsecured are prima facie not prejudicial to the interest of the company.

(d) There are no specific stipulation as to repayment of such advances/loans.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for fixed assets and sale of services. However, internal control procedures in respect of purchase of Inventory and sale of goods need to be strengthened so as to commensurate with the size of the company. Other than above, no major weaknesses have been noticed in the internal control systems.

v. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that during the year , the particulars of contracts/arrangements that were required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b)ln our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58 AA or any other provisions of the Companies Act, 1956, and the rules framed the reunder during the year . lb the best of our knowledge and according to information and explanations given to us, no order has been passed by the Company Law Board or any courtor any other Tribunal.

vii. In our opinion , Company has an internal audit system which needs to be strengthened so as to commensurate with the size of the Company and nature of its business.

viii. According to information and explanations provided to us , the Central Government has prescribed under section 209(l)(d) of the Companies Act, 1956 the maintenance of cost records in respect of certain products manufactured by the Company viz. Formulations, Bulkdrugs. We have broadly reviewed the books of account maintained by the company and are of the opinion that prima facie, the prescribed accounts and records have been maintained by the company. We have not, however ,made a detailed examination of records with a view to determine whether they are accurate or complete. To the best our knowledge and according to the information given to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, for any other products of the company.

(a) According to the information and explanations given to us and according to the records of the Company , we have to state that, the company has not been regular in depositing undisputed statutory dues of Provident fund, Employees' State Insurance, Income Tax, Service Tax, Income tax deducted at source, Sales tax and Excise Duty. We are i n f o r m e d that there are undisputed demand outstanding, as at 31 st March 20II for a period of more than six months from the date they became payable.

(b)According to the information and explanations given to us, there are dues in respect of Income Tax, Sales tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess, which have not been deposited.

ix. The Company does not have accumulated losses at the end of the financial year March 31,2011 . Without considering the effect of our observation stated in the Auditor's Report the impact where of on the profits can not be ascertained, the Company has not incurred any cash losses during the financial year ended March 2II ,2011 and in the immediately preceding financial year.

x. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

xi. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares and other securities.

xii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutuai benefit fund/societies.

xiii. The Company does not deal or trade in shares, securities, debentures and other investments.

xiv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xv. According to the information and explanations given to us, the Company has not obtained any term loan during the year.

Xvi. According to the information and explanation given to us and on the overall examination of the Balance Sheet and Cash Flow of the Company, we report that the Company has neither raised any long term nor short term funds during the year.

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

xyiii The Company did not issue any debentures during the year.

xix. The Company has not raised any money through a public issue during the year.

xx. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For Mayur Chokshi & Co.

Chartered Accountants

Mayur Chokshi

Proprietor

Firm Registration No. 106116W Mumbai

Membership No. 33936 31 st August, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of "GUFIC BIOSCIENCES LTD" as at March 31, 2010 ,the Profit & Loss Account and also the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted the 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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

a) Subject to our comments in paragraph 4e & 4f below, 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 accounts as required by law have been kept by the Company so far as it appears from our examination of the books;

c) The Balance Sheet , Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the Books of Account ;

d) On the basis of written representation received from the Directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as at March 31, 2010 from being appointed as Director in term of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 ;

e) Attention is invited to the fact that we have relied upon the Boards / Managements assertions, opinion, view, representation and various other certificates produced before us, inter-alia, in respect of and as detailed in the note nos.1, 2, 4, and 14 to the Schedule 19.II.

f) Our observation on the said accounts are given below:

(i) Non adherence to the revised accounting standards 15 issued by the ICAI on Employees Benefits in relation to provision for compensated leave benefits, impact unascertained (Refer Note I to schedule 19 (1) )

(ii) We are unable to express our opinion on recoverability of debts of ` 25560 thousand which are outstanding for more than one year and of Loans and Advances of ` 2529 thousand which are outstanding for more than three years. In the absence of appropriate evidences, we are unable to ascertain its recoverability and its impact on the accounts of the Company. However, in the opinion of the management no provision is required in respect of such debts since they are good and recoverable in nature. (Refer Note No. 9 and 32 to schedule 19(II) ).

(iii) Certain transactions entered into by the Company with companies in which Directors are interested in violation of Section 297 of the Companies Act, 1956, which requires the prior approval of the Central Government,. (Refer Note 31 to Schedule 19 (II) )

g) In our opinion ,and to the best of our information and according to the explanations given to us, the Balance Sheet , Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

h) In our opinion and to the best of our information and according to the explanations given to us, the said accounts with notes thereon when read in conjunction with the para (e) above, give the information required by the Companies Act,1956, in the manner so required and subject to para 4(f) above, the impact whereof can not be ascertained , give a true and fair view in conformity with the accounting principles generally accepted in India:

I] In the case of the Balance Sheet of the state of affairs of the Company as at March 31, 2010 ;

ii] In the case of the Profit & Loss Account, of the profit for the year ended on that date and

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

ANNEXURE TO THE AUDITORS REPORT (ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2010 OF GUFIC BIOSCIENCES LIMITED)

i. (a) The Company is in the process of updating its records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us, fixed assets of the Company , have been physically verified by the Management during the year. In our opinion, period of verification is reasonable having regard to the size of the company and nature of its assets. No material discrepancies have been reported on such verification.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

ii.(a) According to the information and explanations given to us and based on the certificate issued by the internal auditor, who has conducted physical verification and valuation fixed assets, we state that ;

(a) the Inventory of the Company has been physically verified by the Management during the year. In our opinion frequency of verification needs to be increased.

(b)the procedures of physical verification of inventory followed by the Management, are reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) the Company is maintaining proper records of its inventory and the discrepancies which were noticed on physical verification of Inventory as

compared to book records, have been properly dealt with in the books of account.

iii (a) According to the information and explanations given to us, the Company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. except interest free security deposits given (Refer note 17 of schedule 19 II)

(b) According to the information and explanations given to us ,the Company has taken advances in the nature of loans from four Companies / Parties covered in the register maintained u/s 301 of the Companies Act,1956. The maximum amount of loans taken during the year was ` 12860 thousands and the year end balance was ` 10294 thousand.

(c) The advances / loans are interest free in nature and other terms and conditions of loans taken by the company , secured or unsecured are prima facie not prejudicial to the interest of the company.

(d) There are no specific stipulation as to repayment of such advances / loans.

iv. In our opinion and according to the information and

explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for fixed assets and sale of services. However, internal control procedures in respect of purchase of Inventory and sale of goods need to be strengthened so as to commensurate with the size of the company. Other than above, no major weaknesses have been noticed in the internal control systems.

v. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that during the year , the particulars of contracts/arrangements that were required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b)In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in register maintained u/s 301 of the Companies Act, 1956 and exceeding the value of ` 5,00,000 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. In our opinion and according to the information and

explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58 AA or any other provisions of the Companies Act, 1956, and the rules framed thereunder during the year . To the best of our knowledge and according to information and explanations given to us , no order has been passed by the Company Law Board or any court or any other Tribunal.

vii. In our opinion , Company has an internal audit system which needs to be strengthened so as to commensurate with the size of the Company and nature of its business.

viii. According to information and explanations provided to us , the Central Government has prescribed under section 2 0 9 ( 1 ) ( d ) o f t h e Companies Act,1956 the maintenance of cost records in respect of certain products manufactured by the Company viz. Formulations, Bulkdrugs. We have broadly reviewed the books of account maintained by the company and are of the opinion that prima facie, the prescribed accounts and records have been maintained by the company. We have not, however ,made a detailed examination of records with a view to determine whether they are accurate or complete. To the best our knowledge and according to the information given to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1) (d) of the Companies Act , 1956 , for any other products of the company.

(a) According to the information and explanations given to us and according to the records of the Company , we have to state that, the company has not been regular in depositing undisputed statutory dues of Provident fund, Employees State Insurance, Income Tax, Service Tax, Income tax deducted at source, Sales tax and Excise Duty. We are informed that there are undisputed demand outstanding, as at 31st March 2010 for a period of more than six months from the date they became payable.

(b)According to the information and explanations given to us, there are dues in respect of Income Tax, Sales tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess, which have not been deposited.

ix. The Company does not have accumulated losses at

the end of the financial year March 31,2010 . Without considering the effect of our observation stated in the Auditors Report the impact where of on the profits can not be ascertained, the Company has not incurred any cash losses during the financial year ended March 31,2010 and in the immediately preceding financial year.

x. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to banks.

xi. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares and other securities.

xii. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

xiii. The Company does not deal or trade in shares, securities, debentures and other investments.

xiv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

xv. According to the information and explanations given to us, the Company has not obtained any term loan during the year.

Xvi. According to the information and explanation given to us and on the overall examination of the Balance Sheet and Cash Flow of the Company, we report that the Company has neither raised any long term nor short term funds during the year.

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

xviii The Company did not issue any debentures during the year.

xix. The Company has not raised any money through a public issue during the year.

xx. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.





For Mayur Chokshi & Co.

Chartered Accountants



Mayur Chokshi

Proprietor

Firm Registration No. 106116W Mumbai

Membership No. 33936 30th August, 2010