Auditor Report of Ankur Drugs & Pharma Ltd.

Mar 31, 2011

1. We have audited the attached Balance Sheet of ANKUR DRUGS AND PHARMA LIMITED as at March 31, 2011, the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto [together referred to as 'Financial Statements']. These Financial Statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these Financial Statements based on our audit.

2. We have conducted our audit in accordance with the Auditing Standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatement. An audit includes 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 Statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies [Auditor's Report] Order, 2003 issued by the Government of India in terms of sub-section [4A] of section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records as we considered necessary and appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph 3 and subject to point no. 4 above, we report that:

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

[b] In our opinion, proper books of 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 and Profit and Loss Account, dealt with by this report are in agreement with the books of account.

[d] In our opinion the Balance Sheet and Profit and Loss Account and the Cash Flow Statement comply with Accounting Standard referred to sub-section [3C]of section 211 of the Companies Act, 1956.

[e] On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31, 2011 from being appointed as a Director of the Company under clause [g] of sub-section [1] of Section 274 of the Companies Act, 1956.

[f] In our opinion and to the best of our information and according to the explanations given to us, the said Financial Statements, read together with the statement on significant accounting policies and notes on accounts, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

[i] In the case of the Balance Sheet, of the State of Affairs of the Company, as at March 31,2011;

[ii] In the case of the Profit & Loss Account, of the Loss of the Company for the year ended on that date;

[iii] In the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS'REPORT [Referred to in para 3 of our Report of even date]

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

[b] The fixed assets are physically verified by the Management at reasonable intervals having regard to size of the Company and nature of its assets. We have been informed that no material discrepancies were noticed during such physical verification.

[c] The Company has not disposed off any significant part of fixed assets during the year and accordingly going concern status of the Company is not affected.

ii. In respect of Inventories:

[a] As explained to us, physical verification of inventory was carried out at reasonable intervals by the Management.

[b] In our opinion and according to the information and explanation given to us, 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] In our opinion, and according to the information and explanations given to us, the Company has maintained proper records of its inventory, and the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

iii. [a] In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to any company, firm or parties covered in the register maintained under section 301 of the Companies Act, 1956.

[b] The Company has taken unsecured loans from various parties covered in the register maintained under section 301 of the Companies Act, 1956. The Company has paid interest to one party on the said unsecured loan. The interest amount paid and the terms of the loans, prima facie, are not prejudicial to the interest of the Company. The repayment of the loan was not specified by the company.

iv. In our opinion and according to the information given to us, the Company has adequate internal control procedures, commensurate to the size of the Company and nature of its business for the purchase of inventory and fixed assets and for sale of goods. Further based on our examinations and according to the information and explanations given to us, we have neither come across nor have we been informed of any major weakness in the internal control.

v. To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered. We are of the opinion that each of these transactions have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. During the year, the Company has accepted deposits from the public to which the directives issued by the Reserve Bank of India

and the provisions of section 58Aand 58AAof the Act and the rules framed there under are applicable has been complied with vii. In our opinion, the Company has an internal audit system commensurate with the size and nature its business.

viii. As explained to us, the Central Government has not prescribed maintenance of cost records under section 209 [1] [d] of the Companies Act, 1956, for any of the products of the Company.

ix. In respect of statutory dues:

[a] According to the records of the Company and information and explanation given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with appropriate authorities.

[b] According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31,2011 for a period of more than six months from the date on which they became payable.

x. The Company has no accumulated loss at the end of financial year and has not incurred cash loss during the financial year covered by our audit and the immediately preceding financial year.

xi. On the basis of our examination and according to the information and explanation given to us, we are of the opinion that during the year the Company has defaulted in repayment of dues to bank or financial institution mainly on account of non tie-up of long term funds for its Baddi Project. Therefore, in the month of January, 2011 the company made a reference to CDR cell for restructuring of its existing debts by deferring the repayment schedule by two years at reduced rate of interest. The Company has not obtained any borrowings by way of debentures.

xii. Based on our examination of records and according to the information and explanations given to us, 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 [xiii] of Paragraph 4 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. Accordingly, provisions of clause [xiv] of Paragraph 4 of the Companies [Auditors Report] Order, 2003 relating to maintenance of proper records, timely entries and holding investments in own name are not applicable to the Company.

xv. According to the information and explanation given to us and records examined by us, the Company has not given any corporate guarantee for loans taken by others from banks or financial institutions.

xvi. In our opinion and according to the information and explanations given to us, the Company has applied the term loans for the purpose for which they were obtained

xvii. In our opinion and on the basis of our examination and according to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that in order to avail benefits of excise and income-tax, the Company had to complete its expansion project and start commercial production on time. Since there was no tie-up of long term funds, the Company had to utilise the funds borrowed on short term basis for long term purpose.

xviii. The Company has not 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 during the year. Therefore, the question of creating security in respect of debentures does not arise.

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

xxi. To the best of our knowledge and belief and according to information and explanations given to us, there have been no cases of fraud on or by the Company noticed or reported during the year.

For M.G.Vashi & Co.

Firm Registration No 128557W

Chartered Accountants

C A.M.G.Vashi

Place: Mumbai Proprietor

Date : September03, 2011 ICAI M. No. 030217

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Mar 31, 2010

1. We have audited the attached Balance Sheet of ANKUR DRUGS AND PHARMA LIMITED as at March 31, 2010, the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto [together referred to as Financial Statements]. These Financial Statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these Financial Statements based on our audit.

2. We have conducted our audit in accordance with the Auditing Standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatement. An audit includes 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 Statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies [Auditors Report] Order, 2003 issued by the Government of India in terms of sub-section [4A] of section 227 of the Companies Act, 1956, and on the basis of such checks of the books and records as we considered necessary and appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph 3 we report that :

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

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

[c] The Balance Sheet and Profit and Loss Account, dealt with by this report are in agreement with the books of account.

[d] In our opinion the Balance Sheet and Profit and Loss Account and the Cash Flow Statement comply with Accounting Standard referred to sub-section [3C] of section 211 of the Companies Act, 1956.

[e] On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31, 2010 from being appointed as a Director of the Company under clause [g] of sub-section [1] of Section 274 of the Companies Act, 1956.

[f] In our opinion and to the best of our information and according to the explanations given to us, the said Financial Statements, read together with the statement on significant accounting policies and notes on accounts, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

[i] in the case of the Balance Sheet, of the State of Affairs of the Company, as at March 31, 2010;

[ii] in the case of the Profit 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 of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT [Referred to in para 3 of our Report of even date]

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

[b] The fixed assets are physically verified by the Management at reasonable intervals having regard to size of the Company and nature of its assets. We have been informed that no material discrepancies were noticed during such physical verification.

[c] The Company has not disposed off any significant part of fixed assets during the year and accordingly going concern status of the Company is not affected.

ii. In respect of inventories :

[a] As explained to us, physical verification of inventory was carried out at reasonable intervals by the Management.

[b] In our opinion and according to the information and explanation given to us, 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] In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventory and the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

iii. [a] In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to any company, firm or parties covered in the register maintained under section 301 of the Companies Act, 1956.

[b] The Company has taken unsecured loans from five parties covered in the register maintained under section 301 of the Companies Act, 1956. The Company has paid interest to one party on the said unsecured loan. The interest amount paid and the terms of the loans, prima facie, are not prejudicial to the interest of the Company. The repayment of the loan was not specified by the company.

iv. In our opinion and according to the information given to us, the Company has adequate internal control procedures,

commensurate to the size of the Company and nature of its business for the purchase of inventory and fixed assets and for sale of goods. Further based on our examinations and according to the information and explanations given to us, we have neither come across nor have we been informed of any major weakness in the internal control.

v. To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered. We are of the opinion that each of these transactions have been made at the 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 to which the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA of the Act and the rules framed there under are applicable.

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

viii. As explained to us, the Central Government has not prescribed maintenance of cost records under section 209 [1] [d] of the Companies Act, 1956, for any of the products of the Company. ix. In respect of statutory dues:

[a] According to the records of the Company and information and explanation given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with appropriate authorities.

[b] According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31, 2010 for a period of more than six months from the date on which they became payable.

x. The Company has no accumulated loss at the end of financial year and has not incurred cash loss during the financial year covered by our audit and the immediately preceding financial year.

xi. On the basis of our examination and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to any bank or financial institution. The Company has not obtained any borrowings by way of debentures.

xii. Based on our examination of records and according to the information and explanations given to us, 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

[xiii] of Paragraph 4 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. Accordingly, provisions of clause [xiv] of Paragraph 4 of the Companies [Auditors Report] Order, 2003 relating to maintenance of proper records,timely entries and holding investments in own name are not applicable to the Company.

xv. According to the information and explanation given to us and records examined by us, the Company has not given any corporate guarantee for loans taken by others from banks or financial institutions.

xvi. In our opinion and according to the information and explanations given to us, the Company has applied the term loans for the purpose for which they were obtained.

xvii. In our opinion and on the basis of our examination and according to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the Company has prima facie used part of the funds borrowed on short term basis during the year for long term investments.

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 during the year.

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

xxi. To the best of our knowledge and belief and according to information and explanations given to us, there have been no cases of fraud on or by the Company, noticed or reported during the year.

For M. G. Vashi & Co.

Firm Registration No 128557W

Chartered Accountants

CA. M. G. Vashi

Place : Mumbai Proprietor

Date : September 01, 2010 ICAI M. No. 030217