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Auditor Report of Marksans Pharma Ltd.

Mar 31, 2017

To

The Members of

MARKSANS PHARMA LTD Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of MARKSANS PHARMA LTD ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial

Statements

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 to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and Accounting Standard 30, Financial Instruments: Recognition and Measurement issued by the Institute of Chartered Accountants of India to the extent it does not contradict any other accounting standard referred to in Section 133 of the Act read with Rule 7 of Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made there under including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

6. 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 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 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.

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

Opinion

8. In our opinion and to the best of our information and according to the explanation given to us, the aforesaid standalone financial statements give the required information 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 :-

(i) In the case of the Balance Sheet, of the State of affairs of the Company as at March 31, 2017;

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

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

Emphasis of Matter

9. We draw attention to Note No 21.1. to the financial statements regarding the remuneration paid to the Whole-time Director Dr. Vinay Gopal Nayak in excess of the limits prescribed under Section 197 read with Schedule V of the Act by Rs. 79,52,068.00, due to inadequacy of profits. The Company is in the process of complying with the statutory requirements prescribed to regularise such excess payment including seeking approval of Members and the Central Government, as necessary. Pending such approvals, no adjustments have been made in the accounts for the year ended 31st March, 2017, and the excess amount is held by the Whole-time Director in trust for the Company. Our Opinion is not modified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

10. As required by ''the Companies (Auditor''s Report) Order, 2016'', issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

(e) On the basis of the written representations received

from the directors as on March 31, 2017 taken on record by the Board of Director, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of section 164(2) of the Act.

(f) 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 A.

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

(i) The company does not have any pending litigation which would impact its financial position.

(ii) The Company did not have any long term contracts, including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.

(iii) There has not been occasion in case of the Company during the year under report to transfer any sums to the Investor Education And Protection Fund. The Question of delay in transferring such sums does not arise.

(iv) The Company has provided requisite disclosures in the standalone financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representation provided to us by the Management, we report that the disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.

Report of the Internal Financial Controls under Clause (i)

Referred to in paragraph 10(f) of the Independent Auditor''s Report of even date to the members of MARKSANS PHARMA LTD on the standalone financial statements for the year ended March 31, 2017. of Sub-section 3 of Section 143 of the Act.

1. We have audited the internal financial controls over financial reporting of Marksans Pharma Ltd ("the Company") as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial

Controls

2. 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 the 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 Act.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act 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.

4. 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.

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

Meaning of Internal Financial Controls Over Financial

Reporting

6. 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 purpose 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 transaction and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of Management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over

Financial Reporting

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

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

(1) (a) In our Opinion and according to the information given to us, the company is maintaining proper records showing full particulars, including quantitative details and situation of its Property, Plant & Equipment.

(b) In our Opinion and according to the information given to us, the Property, Plant & Equipment have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) In our Opinion and according to the information given to us and to the best of our knowledge and belief the title deeds of immovable properties are held in name of the Company.

(2) In our Opinion and according to the information given to us, physical verification of inventory has been conducted at reasonable intervals by the Management and no material discrepancies were noticed.

(3) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

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

Name of the Statute

Nature of the Dues

Amount (In Rs, Lakh)

Period to which the amount relates

Forum where disputes are pending

Commissioner of Sales Tax

Sales Tax (BST, CST) - 04-05

0.28

2004-2005

Commissioner of Sales Tax (Appeal)

(5) In our Opinion and according to the information and explanation given to us, the Company has not accepted any deposit from the public within the meaning of section 73 to 76 or any other relevant provisions of the Companies Act, 2013.

(6) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under sub section (1) of section 148 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

(7) (a) In our opinion and according to the information

given to us, the Company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Wealth Tax, Custom Duty , Excise Duty and Cess were in arrears, as at 31-032017 for a period of more than 6 months from the date they became payable. The sales tax which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

(8) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.

(9) According to the records of the Company examined by us and as per the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, the provisions of Clause 3(ix) of the order are not applicable to the Company.

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

(11) According to the information and explanations given to us and based on our examination of the records of the Company, the managerial remuneration paid or provided to the Whole-time Director Dr. Vinay Gopal Nayak is in excess of the limits prescribed under Section 197 read with Schedule V of the Act by Rs. 79,52,068.00, due to inadequacy of profits. The Company is in the process of complying with the statutory requirements prescribed to regularise such excess payment including seeking approval of Members and the Central Government, as necessary. Pending such approvals, no adjustments have been made in the accounts for the year ended 31st March, 2017, and the excess amount is held by the Whole-time Director in trust for the Company.

(12) The Company is not Nidhi Company and Nidhi Rules 2014, are not applicable to it, the provisions of clause 3(xii) of the order are not applicable.

(13) In our opinion and according to the information and explanations given to us, the Company is in compliance with section 177 and 188 of the Act, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(14) The Company has not made any preferential allotment or private placements of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the order are not applicable to the Company.

(15) In our opinion and according to the information and explanation given to us, during the year the Company has not entered into any non-cash transaction with its Directors or persons connected to its Directors and hence provision of section 192 of the Act are not applicable.

(16) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For N K MITTAL & ASSOCIATES

Chartered Accountants

FR No. 113281W

CA N K MITTAL

Place : Mumbai (Proprietor)

Date : 29th May, 2017 M No. 046785


Mar 31, 2015

We have audited the accompanying standalone financial statements of MARKSANS PHARMA LIMITED ("the company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year ended 31st March, 2015 and a summary of significant accounting policies and other explanatory information .

Management's Responsibility for the Financial Statements The Management and Board of Directors of the company are responsible for the matters stated in Section 134 (5) of the Companies Act 2013, ('the act') with respect of the preparation of theses standalone financial statements that give a true and fair view of the financial position, financial performance and cash flow of the Company in accordance with the Accounting Standards specified under Section 133 of the Companies Act 2013, read with rule 7 of the Companies (Accounts) Rule 2014. This responsibility includes maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the Company and preventing and detecting frauds and other irregularities: selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal control, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give 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 statement based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standard and matters which are required to be included in the audit report under the provision of the Act and rules made there under.

We conducted our audit in accordance with 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 procedure to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgments, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditors 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 control system over financial reporting and the operating and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting polices used and the reasonableness of the accounting estimates made by Company's management and Board of Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanation given to us the aforesaid standalone financial statements give the required information 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 :-

(i) In the case of the Balance Sheet, of the State of affairs of the Company as at 31st March 2015;

(ii) In the case of Statement of Profit and Loss, 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.

Report on the Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor's Report) Order, 2015, ("the Order") issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said Order.

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

(i) 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.

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

(iii) 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;

(iv) In our opinion, the aforesaid financial statements comply with the applicable Accounting Standard specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rule 2014.

(v) On the basis of the written representations received from the Directors as on 31st March, 2015 and taken on record by the Board of Directors, that none of the Directors is disqualified as on 31st March, 2015 from being appointed as a Director in terms of sub-section (2) of section 164 of the Act.

(vi) In our opinion and to the best of our information and according to the explanation given to us, we report as under with respect to the matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014.

a) The Company does not have any pending litigation which would impact its financial position.

b) The Company did not have any long term contracts, including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.

c) There has not been occasion in case of the Company during the year under report to transfer any sums to the Investor Education And Protection Fund. The question of delay in transferring such sums does not arise.

CARO 2015 Report on the standalone financial statement of Marksans Pharma Limited for the year

1. (a) The Company is maintaining proper records showing full particulars, about its quantitative details and situation where it is located.

(b) The fixed assets are physically verified by the management according to a phased programmed designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

2. (a) Physical verification of inventory (excluding stocks with third parties) has been conducted at reasonable intervals by the management. In respect of Inventory lying with third parties, these have substantially been confirmed by them.

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

(c) The Company has maintained proper records of inventory and as per the information and explanation given to us, no material discrepancies were noticed on physical verification .

3. The company has not taken/granted any loan secured or unsecured from/to companies, firm or other parties covered under register maintained under section 189 of the Companies Act 2013.

4. In our opinion and according to the information and explanations given to us, there are an adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to the sale and services. In our opinion & according to the information and explanations given to us, we have not observed any major weakness in the internal control system during the course of the audit.

5. In Our opinion and according to the information and explanations given to us, the company has not accepted any deposit from the public within the meaning of section 73 to 76 or any other relevant provisions of the Companies Act, 2013.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under sub section (1) of Section 148 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

7. (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Employee's State Insurance, Cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess were in arrears, as at 31-03-2015 for a period of more than 6 months from the date they became payable. The sales tax which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

Name of the Statute Nature of the Dues Amount Period to which the Forum where disputes are (In Rs. Lacs) amount relates pending

Commissioner of Sales Tax Sales Tax (BST,CST) - 04-05 0.28 2004-2005 Commissioner of Sales Tax (Appeal)

Commissioner of Sales Tax Sales Tax (BST,CST) - 04-05 7.62 2004-2005 Commissioner of Sales Tax (Appeal)

Total 7.90

(c) According to the information and explanations given to us, there has not been any occasion of the Company during the year under report to transfer any sums to Investor Education and Protection Fund.

8. In our opinion and according to the information and explanations given to us, the accumulated losses of the Company were H24427.16 lacs as on 31-03-2014. The Company has earned profit of H6710.99.lacs during the current financial year and Net Worth of the Company is H35817.78 as on 31-03-2015.

9. According to the information and explanation given to us, the Company has not defaulted in payments of dues to financial institution and bank and debenture holders.

10. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has given guarantee to Bank for loans taken by its Subsidiary Company the terms and conditions whereof are not prejudicial to the interest of the company.

11. According to the records of the company examined by us and as per the information and explanation given to us, the

Term Loans and Cash Credit loans availed by The company were prima facie, applied for the purpose for which the loans were obtained.

12. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year that causes the financial statements to be materially misstated. Clause Para 4 matters listed in the Companies (Auditor's Report) Order 2015 for the year ended 31st March 2015 is not applicable to the company.



For N. K. MITTAL & ASSOCIATES

Chartered Accountants

FR No. 113281W



[CA N. K. MITTAL]

Place : Mumbai Proprietor

Date : 30th May, 2015 M No 46785


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of theses 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 Section 211 (3C) of the Companies Act 1956, ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give 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 accounting standards 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 any material misstatement.

An audit involves performing a procedure to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgments, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditors considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting polices used and reasonable 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 explanation given to us, the said financial statements together with the notes thereon, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

(ii) In the case of Statement of Profit & Loss, 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.

Report on the Other Legal and Regulatory Requirements

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

2. As required by Section 227(3) of the Act, we report that : -

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

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

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

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act, to the extent applicable; and

(v) On the basis of the written representations received from the Directors as on 31st March, 2014 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2014 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Annexure Re: MARKSANS PHARMA LIMITED, 31st March, 2014 Referred to in point no.1 of our report of even date.

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

(b) The fixed assets have been physically verified by the management at reasonable intervals. We have been informed that no material discrepancies were noticed on such verification.

ii. (a) Physical verification of inventory (excluding stocks with third parties) has been conducted at reasonable intervals by the management. In respect of inventory lying with third parties, these have substantially been confirmed by them.

(b) In our opinion, 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 has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

iii. The company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act.

iv. In our opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

v. (a) According to the information & explanations given to us, the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transaction made

in pursuance of such contracts or arrangements exceeding the value of five lacs rupees have been entered during the period at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Act and the rules framed there under.

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

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

ix. (a) The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, cess and any other statutory dues with the appropriate authorities.

(b) According to the information & explanations given to us, no undisputed amounts payable in respect of Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty and cess were in arrears, as at 31st March, 2014, for a period of more than 6 months from the date they became payable.

(c) According to the information & explanations given to us, the dues of Sales-tax which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

Name of the Statute Nature of the Dues Amount (Rs in Lacs)

Commissioner of Sales Sales Tax (BST,CST) - 04- 0.28 Tax 05

Commissioner of Sales Sales Tax (BST,CST) - 04- 7.62 Tax 05

Period to which Forum where disputes are the amount relates pending

2004-2005 Commissioner of Sales Tax Appeal

2004-2005 Commissioner of Sales Tax Appeal

x. In our opinion and according to the information and explanation given to us, the accumulated losses of the company were Rs.29,421.52 Lacs as on 31.03.13. The Company has earned profit of Rs.5,555.71 Lacs during the current financial year and the Net Worth of the Company is Rs.15,991.99 Lacs as on 31.03.2014.

xi. According to the information & explanations given to us, the company has not defaulted in payments of dues to financial institution & banks.

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

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

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

xv. The company has given guarantee to Bank for loans taken by its Subsidiary Company.

xvi. Term loans availed by the Company were, prima facie, applied for the purpose for which the loans were obtained.

xvii. On an overall basis, the funds raised on short-term basis have, prima facie, not been used for long term investment and vice versa.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

xix. The Company has not issued any debentures.

xx. The Company has not raised money by public issues during the year.

xxi. Based on the checks carried out by us, any fraud on or by the company has not been noticed or reported during the year.

For N. K. MITTAL & ASSOCIATES Chartered Accountants FR No. 113281W

[N. K. MITTAL] Place : Mumbai Proprietor Date : 29th May, 2014 M No 46785


Mar 31, 2013

We have audited the accompanyin" financial statements of MARKSANS PHARMA LIMITED (the company"), which comprise the Balance Sheet as at 31st March 2013, the Statement of Profit & Loss and Cash Flow Statement for the year ended on 31st March 2013 and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of theses 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 Section 211 (3C) of the Companies Act 1956, ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give 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 accounting standards 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 any material misstatement.

An audit involves performing a procedure to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgments, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditors considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting polices used and reasonable 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 explanation given to us, the said financial statements together with the notes thereon, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India : -

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

(ii) In the case of Statement of Profit & Loss, of the Profit for the year ended on that date; and

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

Report on the Other Legal and Regulatory Requirements

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

2. As required by Section 227(3) of the Act, we report that: -

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

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

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

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Act, to the extent applicable and

(v) On the basis of the written representations received from the Directors as on March 31, 2013 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2013 from being appointed as a Director in terms of clause (g) of su b-section (1) of section 274 of the Act.

ANNEXURE

Re: MARKSANS PHARMA LIMITED, 31st March, 2013

Referred to in point no.1 of our report of even date.

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

(b) The fixed assets have been physically verified by the management at reasonable intervals. We have been informed that no material discrepancies were noticed on such verification.

ii. (a) Physical verification of inventory (excluding stocks with third parties) has been conducted at reasonable intervals by the management. In respect of inventory lying with third parties, these have substantially been confirmed by them.

(b) In our opinion, 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 has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

iii. The company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act.

iv. In our opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

v. (a) According to the information & explanations given to us, the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transaction made in pursuance of such contracts or arrangements exceeding the value of five lacs rupees have been entered during the period at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Act and the rules framed there under.

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

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

ix. (a) The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, cess and any other statutory dues with the appropriate authorities.

(b) According to the information & explanations given to us, no undisputed amounts payable in respect of Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty and cess were in arrears, as at 31st March 2013, for a period of more than 6 months from the date they became payable.

(c) According to the information & explanations given to us, the dues of Sales-tax which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

Name of the Nature of the Dues Amount (In Lacs) Period to which the Forum where Statute amount relates disputes are pending

Commissioner of Sales Tax (BST, 15.14 2003-2004 Commissioner of Sales Tax CST) - 03-04 sales Tax Appeal

Commissioner of Sales Tax (BST, 0.28 2004-2005 Commissioner of Sales Tax CST) - 04-05 Sales Tax Appeal

Commissioner of Sales Tax (BST, 7.62 2004-2005 Commissioner of Sales Tax (CST) - 04-05 Sales Tax Appeal

x. In our opinion and according to the information and explanation given to us, the accumulated losses of the company wereRs. 33,380 Lacs as on 31.03.12. The Company has earned profit of Rs. 3,958 Lacs during the current financial year and the Net worth of the Company is Rs. 10,998 Lacs as on 31.03.2013.

xi. According to the information & explanations given to us, the company has not defaulted in payments of dues to financial institution & banks.

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

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

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

xv. The company has given guarantee to Bank for loans taken by its Subsidiary Company.

xvi. Term loans availed by the Company were, prima facie, applied for the purpose for which the loans were obtained.

xvii. On an overall basis, the funds raised on short-term basis have, prima facie, not been used for long term investment and vice versa.

xviii.The Company has made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

xix. The Company has not issued any debentures.

xx. The Company has not raised money by public issues during the year.

xxi. Based on the checks carried out by us, any fraud on or by the company has not been noticed or reported during the year.

FOR N. K. MITTAL & ASSOCIATES

Chartered Accountants

FR NO. 113281W

N. K. MITTAL

(Proprietor)

M. NO. 46785

Place : Mumbai

Date : 27th May, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of MARKSANS PHARMA LIMITED ("the Company") as at 31st March 2012 and also the Statement of Profit & Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and 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.

We report as follows:

1) As required by the Companies (Auditors' Report) Order, 2003 (as amended) by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Sub Section (4A) of Section 227 of The Companies Act, 1956, of India (the Act) and on the basis of such checks of the books of accounts of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2) 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 purposes of our audit;

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

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

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

e) On the basis of the written representations received from the Directors as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in terms of Clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;

3) Without qualifying our opinion we draw attention : -

a) To Note No.9.1 of the financial statements, wherein as explained, the Company's outstanding liabilities of Rs. 19746.64 Lacs are in respect of Zero Coupon Foreign Currency Convertible Bond November, 2005. The Bonds have become due for redemption on 09th November 2010, and were not redeemed. These bonds have redemption premium of Rs. 8925.48 Lacs.

b) To Note No.1 of the financial statements, wherein the entire net worth of the company is eroded as on 31st March, 2011.

c) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes, give the information required by the Companies Act, 1956 and in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

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

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

ANNEXURE

Re: MARKSANS PHARMA LIMITED, 31st March, 2012

Referred to in point no.1 of our report of even date.

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

(b) The fixed assets have been physically verified by the management at reasonable intervals. We have been informed that no material discrepancies were noticed on such verification.

(c) Substantial parts of Intangible assets have been impaired during the year.

ii. (a) Physical verification of inventory (excluding stocks with third parties) has been conducted at reasonable intervals by the management. In respect of inventory lying with third parties, these have substantially been confirmed by them.

(b) In our opinion, 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 has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

iii. The company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act.

iv. In our opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

v. (a) According to the information & explanations given to us, the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transaction made in pursuance of such contracts or arrangements exceeding the value of five lacs rupees have been entered during the period at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Act and the rules framed there under.

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

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

ix. (a) The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, cess and any other statutory dues with the appropriate authorities.

(b) According to the information & explanations given to us, no undisputed amounts payable in respect of Income- tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty and cess were in arrears, as at 31st March 2012, for a period of more than 6 months from the date they became payable.

(c) According to the information & explanations given to us, the dues of Sales-tax, Wealth Tax, Custom Duty, Excise Duty and cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

Name of the Nature of the Dues Amount Period to which Forum where disputes are Statute (In Lacs) the amount pending relates

Commissioner of Sales Tax (BST,CST) - 03-04 15.14 2003-2004 Commissioner of Sales tax Sales Tax Appeal

Commissioner of Sales Tax (BST,CST) - 04-05 0.28 2004-2005 Commissioner of Sales tax Sales Tax Appeal

Commissioner of Sales Tax (BST,CST) - 04-05 7.62 2004-2005 Commissioner of Sales tax Sales Tax Appeal

x. In our opinion and according to the information and explanation given to us , the accumulated losses of the company are more than its net worth at the end of the financial year under report. The Company has incurred cash losses during the current financial year as well as in the previous financial year.

a) In our opinion and according to the information and explanation given to us, the Company's outstanding liabilities of Rs. 19746.64 Lacs are in respect of Zero Coupon Foreign Currency Convertible Bonds November 2005. The Bonds have become due for redemption on 9th November 2010, and were not redeemed. These bonds have redemption premium of Rs. 8925.48 Lacs. The Company is in default in bond redemption.

b) In our opinion and according to the information and explanation given to us the entire net worth of the company is eroded as on 31st March, 2011.

xi. According to the information & explanations given to us, the company has not defaulted in payments of dues to financial institution & banks.

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

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

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

xv. The company has given guarantee to Bank for loans taken by its Subsidiary Company.

xvi. Term loans availed by the Company were, prima facie, applied for the purpose for which the loans were obtained.

xvii. On an overall basis, the funds raised on short-term basis have, prima facie, not been used for long term investment and vice versa.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

xix. The Company has not issued any debentures.

xx. The Company has not raised money by public issues during the year.

xxi. Based on the checks carried out by us, any fraud on or by the company has not been noticed or reported during the year.

FOR N.K.MITTAL & ASSOCIATES

Chartered Accountants

N.K.MITTAL (Proprietor) M. NO. 46785 F. No. 113281W

Place : Mumbai

Date : 29th May, 2012


Mar 31, 2011

We have audited the attached Balance Sheet of MARKSANS PHARMA LIMITED ("the Company") as at 31st March 2011 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and 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.

We report as follows :

1) As required by the Companies (Auditors' Report) Order, 2003 (as amended) by the Companies ( Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Sub Section (4A) of Section 227 of The Companies Act, 1956, of India (the Act) and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2) 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 purposes of our audit;

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

c) The Balance Sheet and the 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 and the Profit & Loss Account and Cash Flow Statement comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956;

e) On the basis of the written representations received from the Directors as on 31st March, 2011, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director in terms of Clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;

3) Without qualifying our opinion we draw attention

a) To Schedule No.17 Point 3 of the financial statements, wherein as explained, the Company's outstanding liabilities are in respect of USD 43,999,000 (Rs. 19949.85 Lacs) zero coupon Foreign Currency Convertible Bond November, 2005. The Bonds have become due for redemption on 09th November 2010, and were not redeemed. These bonds have redemption premium of USD 19.89 MN.(Rs. 9017.33 Lacs).

b) To Schedule No.17 Point 3 of the financial statements the entire net worth of the company is eroded as on 31st March, 2011.

c) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes, give the information required by the Companies Act, 1956 and in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011,

ii) In the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date,and

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

ANNEXURE Re: MARKSANS PHARMA LIMITED Referred to in point no.1 of our report of even date.

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

(b) The fixed assets have been physically verified by the management at reasonable intervals. We have been informed that no material discrepancies were noticed on such verification.

(c) Substantial parts of fixed assets have been disposed off during the year.

ii. (a) Physical verification of inventory (excluding stocks with third parties) has been conducted at reasonable intervals by the management. In respect of inventory lying with third parties, these have substantially been confirmed by them.

(b) In our opinion, 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 has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

iii. The Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act.

iv. In our opinion, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

v. (a) According to the information & explanations given to us, the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanation given to us the transaction made in pursuance of such contracts or arrangements exceeding the value of five lacs rupees have been entered during the period at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Act and the rules framed there under.

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

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

ix. (a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales- tax, Wealth Tax, Custom Duty, Excise Duty, cess and any other statutory dues with the appropriate authorities.

(b) According to the information & explanations given to us, no undisputed amounts payable in respect of Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty and cess were in arrears, as at 31st March 2011, for a period of more than 6 months from the date they became payable.

(c) According to the information & explanations given to us, the dues of Sales-tax, Wealth Tax, Custom Duty, Excise Duty and cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

Name of the Statute Nature of the Amount Period to Dues (In Lacs) which the amount relates

Commissioner of Sales Tax Sales Tax 11.51 2003-2004 (BST,CST) – 03-04

Commissioner of Sales Tax Sales Tax 7.62 2004-2005 (BST,CST) – 04-05

Name of the Statute Forum where disputes are pending

Commissioner of Sales Commissioner of Sales tax Appeal

Commissioner of Sales Commissioner of Sales tax Appeal

x. In our opinion and according to the information and explanation given to us , the accumulated losses of the company are more than its net worth at the end of the financial year under report. The Company has incurred cash losses only during the current financial year and not during the preceding financial year.

a) In our opinion and according to the information and explanation given to us, the Company's outstanding liabilities are in respect of USD 43,999,000 (Rs. 19949.85 Lacs) zero coupon Foreign Currency Convertible Bond November, 2005. The Bonds have become due for redemption on 09th November, 2010, and were not redeemed. These bonds have redemption premium of USD 19.89 MN. (Rs. 9017.33 Lacs).The Company is in default in bond redemption.

b) In our opinion and according to the information and explanation given to us the entire net worth of the Company is eroded as on 31st March, 2011.

xi. According to the information & explanations given to us, the company has not defaulted in payments of dues to financial institution & banks.

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

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

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

xv. The Company has given guarantee to Bank for loans taken by its Subsidiary Company.

xvi. Term loans availed by the Company were, prima facie, applied for the purpose for which the loans were obtained.

xvii. On an overall basis, the funds raised on short-term basis have, prima facie, not been used for long term investment and vice versa.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

xix. The Company has not issued any debentures.

xx. The Company has not raised money by public issues during the year.

xxi. Based on the checks carried out by us, any fraud on or by the company has not been noticed or reported during the year.

For N.K. MITTAL & ASSOCIATES Chartered Accountants

N.K. MITTAL (Proprietor) M. No. 46785 F. No. 113281W

Place : Mumbai Date : 28th May, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of MARKSANS PHARMA LIMITED as at 31st March 2010 and the Profit & Loss Account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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.

We report as follows:

1) As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified therein.

2) Further to our comments in the Annexure referred to above, we state that:

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

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 these books;

c) The Balance Sheet and the Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account;

d) In our opinion the Balance Sheet and the Profit & Loss Account and Cash Flow Statement comply

with the Accounting Standards referred with in Section 211(3C) of the Companies Act, 1956;

e) On the basis of the written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that none of the Directors is disqualified as at 31st March, 2010 from being appointed as a Director in terms of Clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes, subject to note no.2 regarding non provision of Foreign exchange loss on Foreign Currency Convertible Bonds, give the information required by the Companies Act, 1956 and in the manner so required and give a true and fair view in confirmity 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 31st March, 2010, and

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

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

ANNEXURE Re: MARKSANS PHARMA LIMITED Referred to in point no.1 of our report of even date.

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

(b) The fixed assets have been physically verified by the management at reasonable intervals. We have been informed that no material discrepancies were noticed on such verification.

(c) Substantial parts of fixed assets have not been disposed off during the year.

ii. (a) Physical verification of inventory (excluding stocks with third parties) has been conducted at reasonable intervals by the management. In respect of inventory lying with third parties, these have substantially been confirmed by them.

(b) In our opinion, 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 has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

iii. The company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act.

iv. In our opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods.

v. (a) According to the information & explanations given to us, the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

(b) In our opinion, each of these transactions and exceeding the value of five lakh rupees in respect of any party during the financial year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Act and the rules framed there under.

vii. In our opinion, the company has an internal audit system commens -urate with its size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for mainte -nance of cost records under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

ix.(a) The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, cess and any other statutory dues with the appropriate authorities.

(b) According to the information & explanations given to us, no undisputed amounts payable in respect of Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty and cess were in arrears, as at 31st March 2010, for a period of more than 6 months from the date they became payable.

(c) According to the information & explanations given to us, there are no dues of Sales-tax, Wealth Tax, Custom Duty, Excise Duty and cess which have not been deposited on account of any dispute.

x.At the end of the financial year, the Company does not have accumulated losses. The Company has not incurred cash losses in the financial year under report and in the immediately preceding financial year.

xi. According to the information & explanations given to us, the company has not defaulted in payments of dues to financial institution & banks.

xii. The company has not granted any loans and advances on the basis of security by way of pledge of shares, ebentures and other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/society. Therefore the provisions of clause 4

(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other Investments. Therefore the provisions of clause 4

(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xv. The company has given guarantee to Bank for loans taken by its Subsidiary Company.

xvi. Term loans availed by the Company were, prima facie, applied for the purpose for which the loans were obtained.

xvii. On an overall basis, the funds raised on short-term basis have, prima facie, not been used for long term investment and vice versa.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

xix. The Company has not issued any debentures.

xx. The Company has not raised money by public issues during the year.

xxi. Based on the checks carried out by us, any fraud on or by the company has not been noticed or reported during the year.

FOR N. K. MITTAL & ASSOCIATES

Chartered Accountants

N. K. MITTAL

( Proprietor) M. NO. 46785

F. NO. 113281W

Place : Mumbai

Date : 12th August, 2010

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