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

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

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

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

On the basis of the written representations received from the directors as on March 31, 2013, 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 Section 274(1)(g) of the Act.

1

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

(b) The fixed assets have been physically verified during the year by the management. According to the information and explanations given to us, no material discrepancies were noticed on verification.

(c) There was no disposal of any fixed assets during the year.

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

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

(c) The Company has maintained proper records of inventory. No material discrepancies were noticed on physical verification of inventory.

The Company has not granted or taken any loans, secured or unsecured, to or from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of sub-clause (b), (c), (d), (e), (f) and (g) of sub-para (iii) of para 4 of the order are not applicable.

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

(a) The Particulars of contracts or arrangements referred to in section 301 of the Act, have been entered in the register maintained under that section.

(b) The transaction made in pursuance of contracts or arrangements referred to in section 301 of the Act are, in our opinion, at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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 Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

We have broadly reviewed the books of accounts maintained by the Company in respect of the products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of  sub- section(1) of section 209 of the Act, and are of the  opinion that prima facie, the prescribed  accounts and records have been made and  maintained. We have not , however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9

(a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, provisions of Employees State Insurance Act is not applicable to the Company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31-03-2013 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

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

In our opinion and according to the information and explanations given to us the company has not defaulted in repayment of dues to a financial institution or bank.

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

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.

In respect of shares, securities or other investments dealt in or traded by the Company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name.

In our opinion and according to the information and explanations given to us, the Company has not given guarantee for loans taken by others from Bank or Financial Institutions

On the basis of the records examined by us and relying on the information compiled by the Company for co-relating the funds raised to the end use of term loans, we have to state that, the Company has, prima-facie, applied the term loans for the purposes for which they were obtained.

According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investments by the Company.

The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956 and therefore the question of the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

The Company has not issued debentures and therefore the question of creation of security in respect of debentures does not arise.

The Company has not raised monies by public issues during the year and therefore the question of disclosure and verification of end use of such monies does not arise.

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

The company maintains its accounts on accrual basis following the historical cost convention In compliance with the accounting standards specified by Institute of Chartered Accountants of India, referred to in Section 211 ( 3C ) of the Companies Act, 1956.

i) Tangible assets are stated at  original cost net of tax / duty credits availed, if any.
ii) Depreciation has been provided under Straight Line Method at the applicable rates, as provided  under Schedule XIV to the Companies Act, 1956. Depreciation on additions / deletions of  assets during the year is provided on a pro-rata basis.

Capital work in progress:
The capital work in progress as on 31-03-2013 is Rs. Nil

Inventories:
Raw materials and packing materials are valued at cost on FIFO basis as per revised Accounting Standard AS-2 of the Institute of Chartered Accountants of India. Finished goods and semi-finished goods are valued at lower of cost or net realizable value.

Investments:
Investments are stated at cost.

Revenue Recognition
i) Income From  sales of goods is recognized upon transfer of significant risk and rewards of ownership of the goods to the customers which generally coincides with delivery  and acceptance of goods sold; sales are shown inclusive of excise duty and exclusive of Sales Tax (VAT).

ii) Other income:
Includes  interest on Fixed Deposits with Bank and dividends received.

Research and Development Expenses:
No capitalization of Research and Development expenses is made since no capital expenditure on research and development expenditure has been incurred during the year.

Foreign Currency Transactions:
Export earnings of Rs.Nil (Previous Year - Rs.NIL)
Foreign Exchange Outgo of Rs.NIL (Previous Year – Rs. NIL /-)

Retirement Benefits:
Retirement benefit or Post separation expenses in respect of gratuity is not provided for, and liability is not ascertained.

i)Privilege leave entitlement: Privilege leave entitlements are recognized as a liability as and when the same is encashed by the employees.

ii)Provident Fund: Contribution to Government provident Fund are made as per the provisions regularly.

The figures of previous year have been regrouped wherever necessary.

As per the available records, there is no outstanding dues to enterprises registered under  Micro, Small and Medium Enterprises Development Act, 2006, at the end of the year. Further no interest  has been paid or payable on delayed payment of dues, if any, to such enterprises during the year.

Estimated amount of contracts remaining to be executed on capital account and not provided for: Rs.Nil         [ Previous Year : Rs. Nil  ]

Contingent liabilities :
Contingent liabilities as defined in Accounting  Standard 29 on “Provisions, Contingent Liabilities
and Contingent Assets” are disclosed by ways of notes to the accounts. Disclosures is not made if  the possibility of an outflow of future economics benefits is remote. Provision is made if it is probable that an outflow of future economics benefits  will be required to settle the Obligation.

Segment Reporting
The Company is engaged in pharmaceutical formulation business which as per Accounting Standard – AS 17 is considered the only reportable business segment.

Related party transaction
As required by Accounting Standard – AS 18 ‘Related Parties Disclosure’ issued by the Institute of
Chartered Accountants of India are as follows :

With regard to loan given to Company, the Board of Directors are of the opinion that, no provision for doubtful debt is required to be made as the amount being recovered in installments

Earning per share
The Company reports Earning Per Share (EPS) in accordance with Accounting Standard 20 on “Earning  Per Share“. Basic EPS is  computed  by dividing  the net  profit for  the year  by the weighted  Average number of Equity Shares outstanding during  the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding  during the year as adjusted for the effects of all dilutive potential equity shares, except where the  results  are anti-dilutive.

Provisions for Current and Deferred Tax.
i)Provision for Current Tax is made after taking into consideration benefits admissible under the provision of Income Tax Act 1961.

ii) Deferred tax resulting from timing differences between taxableand accounting income is accounted for using the tax rate and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset arising on account of brought forward unabsorbed depreciation is recognized only to the extent there is a reasonable certainty of realization

Deferred Tax Liability :
The break up of the deferred tax liability as at 31st March, 2013 is as under:

2012-13

2011-12

AS – 28 Impairment of Assets.
As on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of those assets. Hence there is no impairment loss on the assets of the company.