Auditor Report of Transgene Biotek Ltd.

Mar 31, 2024

We have audited the accompanying Standalone financial statements of M/s. Transgene Biotek Limited ("The Company"), which comprise the Balance Sheet as at 31st March, 2024, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as "Standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31^stMarch, 2024 and its profit or loss including other comprehensive income, its cash flows and changes in equity for the year ended on that date.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the Key Audit Matters to be communicated in our report.

The Key Audit Matters	How our Audit addressed the key audit matter
SEBI ENQUIRY & ITS STATUS
Securities and Exchange Board of India (SEBI) had conducted preliminary inquiry on receiving certain complaints on the matter of GDRs issued by the Company and its utilization thereof, basically on the angle of protection of Investors'' interest. SEBI prima facie conducted that the GDR proceeds have been transferred by the Company, directly or indirectly, through foreign subsidiary for undisclosed purposes under the garb of consideration for technology transfer and consequently passed an interim order inter alia, retraining the Company from issuing any securities. The Company has appealed against the said order. The findings of the SEBI as per their order on the utilization/transfer of GDR proceeds for undisclosed purposes point out towards violations of the provisions of the Foreign Exchange Management Act as well as GDR approval conditions, the impact of which we are unable to quantify at this stage. Further on August 28th 2019 SEBI has issued its final order against Ref No WTM/AB/EFD-1/DRA-4/18/2019-20 confirming its ban on the company to access Securities Market in what so ever manner. Also it directed the company to recover GDR proceeds through its ongoing various measures within one year from the date of its order. A Representation was given by Dr K Koteswara Rao to SEBI on 22nd Aug 2020 requesting therein extension of time period to bring back the money, as directed in para 49(a) of the order, because the recovery of GDR funds have been completely blocked due to global lockdown as a result of global COVID-19 pandemic. SEBI considered the same representation and issued a revised order Further on August 31st 2020 revised order no WTM/AB/EFD-1/DRA-4/08/2020-21 dated 31st Aug 2020 directing the company to recover GDR proceeds	Principal Audit procedures performed: > We have verified the orders passed by the SEBI and appeal filed at SAT against the penalty order by SEBI and it is pending for hearing on 21/05/2024. > As per the documents made available to us, the management is seriously pursuing to recover GDR money. In this process they have appointed Lawyers internationally wherever the alleged parties involved in GDR scam are present. The case is forwarding in good speed.

through its ongoing various measures within one year from the date of its order.

The Adjudication officer in exercise of the powers conferred upon him under section 15I of the SEBI Act r/w rule 5 of the SEBI Adjudication Rules and 23I of the SCRA r/w rule 5 of the SCR Adjudication Rules, SEBI passed an Adjudication order on 27.06.2022 imposing monetary penalty on the Noticees for their violation of the provisions of law.

Penalty of Rs.38.00 Lakhs has been imposed on company.

Hence the company has filed appeal in SAT against the above mentioned order and as per as the company felt it unjust penalizing without consideration to the facts of the whole issue more specifically on the matter of passing an unfair and unjust order without taking into consideration and in defiance to the earlier passed SAT order dated August 27, 2017 Company filed an appeal at SAT once again which is currently pending for hearing on July 21, 2024.

GDR Issue:

There is an outstanding balance of Rs.2302.00 Principal Audit procedures performed: lakhs which pertains to advance given to a

party out of the proceeds of GDR. The > In our Audit procedure, we have verified the contention of the management is that the documents as relating the case and its payments were made without Company''s advancement and assessed management''s claim on authorization or knowledge, the same was the same.

submitted to SEBI during their investigations. > The company has been trying to recover this The Management has been stating all amount along with GDR proceeds from various through that the entire GDR fund of USD parties as discussed above.

40.5 mil except for USD 0.6 mil received by > However we are unable to opine whether this

the company into its account at Union Bank amount is recoverable or not as we are unable to

was siphoned out of its account at Investec obtain confirmation from the concerned party.

Bank. The amount shown in the account as

an ''Outstanding Balance'' is misleading and

factually incorrect as per the documents

made available through FINMA and all other

sources.

The Management is however trying to recover the lost GDR funds based on the factual documented evidences

However, the Management as a prudent measure, made full provision for the amount, in the Books of Account considering the facts.

INVESTMENTS:
Under the head Investment, an amount of Rs. 9220.10 Lakhs is made in the name of Wholly owned subsidiary company viz. Transgene Biotek HK Limited.	> In the absence of alternative methodologies to independently evaluate the same, we are unable to express an opinion whether the said sum as reflected under the above head is recoverable at the value at which it is stated.
Subsidiary Financial statements
As the subsidiary M/s Transgene Biotek HK Ltd is not in operations, the books of accounts have not been audited for many years.	> As we don''t have any data of the foreign subsidiary after 2015-16, the sameaudited figures in 2015-16 are being consolidated in financial statements till this financial year.
The company is not recognizing foreign gain of loss as there are no transactions incurred since many years. The last available figures are of 2015-16 and the same are being carried forward since then for consolidation of financials.	> As per the MCA data base, the company status is " Strike off" and consolidated financial statements does not include this company.
The Subsidiary M/s Peroral Bio Pvt Ltd has been applied for strike off of the company and it has been approved by the MCA during FY 2023-24. Hence there are no financials to consolidate as on 31/03/2024.

Information Other than the Standalone Financial Statements and Auditor''s report thereon

The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in Management Discussion and Analysis, Board''s Report including annexure thereto, Business Responsibility Report, Governance and shareholder''s information but does not include the standalone financial statements and our auditor''s report thereon.

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

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

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also include maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error,

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

The Board of Directors is responsible for overseeing the company''s financial reporting process.

Auditor''s responsibilities for the audit of the Standalone Financial statements

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

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

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

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

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

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

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

Materiality is the Magnitude of misstatements in the standalone financial statements, that individually or in aggregate, makes it probable that the economic decisions of a reasonably Knowledgeable user of the financial statements may be influenced, We consider quantitative materiality and qualitative matters in (i) planning the scope of our audit work and in evaluating the result of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

As required by Section 143(3) of the Act, we report to the extent applicable, that:

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.

a. 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.

b. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the relevant books of account and records maintained.

c. In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

d. On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors none of the directors is disqualified ason March 31, 2024 from being appointed as a director in terms of Section 164(2) of the Act.

e. 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". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the company''s internal financial controls with reference to Standalone Financial Statements.

f. With respect to the other matters to be included in the Auditor''s report in accordance with the requirements of section 197(16) of the Act, as amended:

a. In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions of section 197 of the Act.

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 Auditor''s) Rules, 2014, in our opinion and to the best ofour information and according to the explanations given to us:

I. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements

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

III. There has been no delay in transferring amounts, required to be transferred to the investor Education and Protection fund by the company.

Based on our examination, which included test checks, the company has used accounting software for maintaining its books of accounts for the financial year ended 31^st March 2024 which has feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all the relevant transactions recorded in the software. Further during the course of our audit we did not come across any instance of audit trail feature being tampered with.

As proviso to Rule 3(1) of the companies (Accounts) Rules 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31,2024.

As required by the companies (Auditor''s Report) Order, 2020("the order"), issued by the central Government in terms of section 143 (11) of the Act, we give in "Annexure-B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

For VASAVI & CO Charted Accountants FRN 020965S

Sd/-

PLACE: HYDERABAD Vasavi Gollapudi

DATE: 30/05/2024 Proprietor

MRN: 249259 UDIN -24249259B KHJN S6174

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Mar 31, 2023

TRANSGENE BIOTEK LIMITED

Report on the Audit of Standalone Ind AS Financial Statements
Opinion

We have audited the accompanying Standalone Ind AS financial statements of M/s.Transgene
Biotek Limited ("The Company"), which comprise the Balance Sheet as at 31st March, 2023,
the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the
Cash Flow Statement and the Statement of Changes in Equity for the year ended and a summary
of the significant accounting policies and other explanatory information(herein after referred to
as “standalone Ind AS financial statements").

In our opinion and to the best of our information and according to the explanations given to us,
the aforesaid Standalone Ind AS Financial Statements give the information required by the Act
in the manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India including the Ind AS, of the financial position of the
Company as at 31^st March, 2023 and its financial performance including other comprehensive
income, its cash flows and changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under
section 143(10) of the Act. Our responsibilities under those Standards are further described in
the Auditor’s responsibilities for the audit of the Standalone financial statements section of our
report. We are independent of the Group in accordance with the ethical requirements that are
relevant to our audit of the Standalone financial statements in India in terms of the Code of
Ethics issued by ICAI and the relevant provisions of the Act, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the standalone financial statements of the current period. These matters were
addressed in the context of our audit of the standalone financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have determined the matters described below to be the Key Audit Matters to be communicated
in our report.

The Key Audit Matters	How our Audit addressed the key audit matter
SEBI ENQUIRY & ITS STATUS
	Principal Audit procedures performed:
Securities and Exchange Board of India	> The documents made available to us, the management is
(SEBI) had conducted preliminary inquiry on	seriously pursuing to recover GDR money. In this
receiving certain complaints on the matter of	process they have appointed Lawyers internationally wherever the alleged parties involved in GDR scam are
GDRs issued by the Company and its	present. The case is forwarding in good speed.
utilization thereof, basically on the angle of	> Further on August 28th 2019 SEBI has issued its final
protection of Investors’ interest. SEBI prima	order against Ref No WTM/AB/EFD-1/DRA-4/18/2019-
facie conducted that the GDR proceeds have	20 confirming its ban on the company to access
been transferred by the Company, directly or	Securities Market in what so ever manner. Also it directed the company to recover GDR proceeds through
indirectly, through foreign subsidiary for	its ongoing various measures within one year from the
undisclosed purposes under the garb of	date of its order.
consideration for technology transfer and	> A Representation was given by Dr K Koteshwar Rao to
consequently passed an interim order inter	SEBI on 22nd Aug 2020 requesting therein extension of
alia, retraining the Company from issuing any	time period to bring back the money, as directed in para 49(a) of the order, because the recovery of GDR funds
securities. The Company has appealed against	have been completely blocked due to global lockdown
the said order.	as a result of global COVID-19 pandemic.
The findings of the SEBI as per their order on	> SEBI considered the same representation and issued a
the utilization/transfer of GDR proceeds for	revised order Further on August 31st 2020 revised order no WTM/AB/EFD-1/DRA-4/08/2020-21 dated 31st
undisclosed purposes point out towards	Aug 2020 directing the company to recover GDR
violations of the provisions of the provisions	proceeds through its ongoing various measures within
of the Foreign Exchange Management Act as well as GDR approval conditions, the impact	one year from the date of its order.
of which we are unable to quantify at this	> The Board has been informed that the required amount
	of UKP 20,000 is yet to be transferred to Candey, law
stage.	firm at London due to paucity of funds. Once the amount is transferred to Candey and through Candey to
The Adjudication officer in exercise of the	SW at Zurich, another letter from a peer reviewed
powers conferred upon him under section 15I	Chartered Accountant shall be sent to SEBI explaining
of the SEBI Act r/w rule 5 of the SEBI	ongoing efforts taken by Transgene and Dr Rao for
Adjudication Rules and 23I of the SCRA r/w	recovering lost GDR funds.
rule 5 of the SCR Adjudication Rules, SEBI	> Notices to appear on May 10, 2023 through video in
passed an Adjudication order on 27.06.2022	front of the Adjudication officer have been received by
imposing monetary penalty on the Noticees	the company and its past directors connected with the
for their violation of the provisions of law.	GDR issue. Response letter has been sent, a copy of
Penalty of Rs.38.00 Lakhs has been imposed	which is presented to the Board to keep it on record. Outcome from the adjudication proceedings shall be
on company.	brought to the attention of the Board as and when it progresses.
	> In the meantime, our petition to set aside SEBI
	Adjudication proceedings is still pending at the Hon’ble High Court of Telangana.
	> All the compliances and instructions given by SEBI are being complied with like submission of certificates by PEER REVEIWED CA etc as and when asked for by the company.
	> As per the appeal filed with SAT, company felt it unjust penalizing without consideration to the facts of the whole issue more specifically on the matter of passing an unfair and unjust order without taking into consideration and in defiance to the earlier passed SAT

	order dated August 27, 2017 Company filed an appeal at SAT once again which is currently pending for hearing on June 17, 2023.
GDR Issue:
There is an outstanding balance of Rs.2302.00 lakhs which pertains to advance given to a party out of the proceeds of GDR. The contention of the management is that the payments were made without Company’s authorization or knowledge, the same was submitted to SEBI during their investigations. The Management has been stating all through that the entire GDR fund of USD 40.5 mil except for USD 0.6 mil received by the company into its account at Union Bank was siphoned out of its account at Investec Bank. The amount shown in the account as an ‘Outstanding Balance’ is misleading and factually incorrect as per the documents made available through FINMA and all other sources. The Management is however trying to recover the lost GDR funds based on the factual documented evidences	> The company has been trying to recover this amount along with GDR proceeds from various parties as discussed above. > In our Audit procedure, we have verified the documents as relating the case and its advancement and assessed management’s claim on the same. > However we are unable to opine whether this amount is recoverable or not as we are unable to obtain confirmation from the concerned party.
However, the Management as a prudent measure, made full provision for the amount, in the Books of Account considering the facts.
INVESTMENTS:
Under the head Investment, an amount of Rs. 9220.10 Lakhs is made in Wholly owned subsidiary company viz. Transgene Biotek HK Limited. The Management has been stating all through that the entire GDR fund of USD 40.5 mil except for USD 0.6 mil received by the company into its account at Union Bank was siphoned out of its account at Investec Bank. The amount shown in the account as an ‘Outstanding Balance’ is misleading and factually incorrect as per the documents made available through FINMA and all other sources. The Management is however trying to recover the lost GDR funds based on the factual documented evidences	> In the absence of alternative methodologies to independently evaluate the same, we are unable to express an opinion whether the said sum as reflected under the above head is recoverable at the value at which it is stated.
As the subsidiary is not in operations, the books of accounts have not been audited since many years along with FY 2021-22. As this amount may not be recoverable, as a prudent measure, management made full provision in the books of account considering	> As we don’t have any data of the foreign subsidiary the same figures of audited in 2015-16 are being consolidated in Financial statements.

the above development. The company is not recognizing foreign gain	> There are no much significant transactions incurred in
of loss as there are no transactions incurred since many years. The last available figures are of 2015-16 and the same are being carried forward since then.	this subsidiary company in this financial year ending.
Under the head investments, an amount of Rs. 0.99 Lakhs is made in Wholly owned subsidiary company PerOral Bio Private Limited which was incorporated on 23.12.2020.

Information Other than the Standalone Financial Statements and Auditor’s report thereon

The Company’s Board of Directors is responsible for the preparation of the other information.
The other information comprises the information included in Management Discussion and
Analysis, Board’s Report including annexures thereto, Business Responsibility Report,
Governance and shareholder’s information but does not include the standalone financial
statements and our auditor’s report thereon.

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

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

Management’s responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the
Act with respect to the preparation of these standalone financial statements that give a true and
fair view of the financial position, financial performance, total comprehensive income, changes
in equity and cash flows of the company in accordance with the Ind AS and other accounting
principles generally accepted in India. This responsibility also include maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the assets of
the Company and for preventing and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and the design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the Standalone financial
statements that give a true and fair view and are free from material misstatement, whether due to
fraud or error,

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

The Board of Directors is responsible for overseeing the company’s financial reporting process.

Auditor’s responsibilities for the audit of the Standalone Financial statements

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

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

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

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

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

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

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

Materiality is the Magnitude of misstatements in the standalone financial statements, that
individually or in aggregate, makes it probable that the economic decisions of a reasonably
Knowledgeable user of the financial statements may be influenced, We consider quantitative
materiality and qualitative matters in (i) planning the scope of our audit work and in evaluating
the result of our work; and (ii) to evaluate the effect of any identified misstatements in the
financial statements.

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

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

From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the Standalone financial statements of the
current period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.

Report on other legal and regulatory requirements

As required by Section 143(3) of the Act, we report to the extent applicable, that:

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.

a. 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.

b. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including
other comprehensive income), Standalone Statement of Changes in Equity and the
Standalone Statement of Cash Flows dealt with by this Report are in agreement with the
relevant books of account and records maintained.

c. In our opinion, the aforesaid financial statements comply with the Accounting Standards
specified under Section 133 of the Act.

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

e. 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”. Our report expresses an unmodified opinion on the adequacy
and operating effectiveness of the company’s internal financial controls over financial
reporting.

f. With respect to the other matters to be included in the Auditor’s report in accordance
with the requirements of section 197(16) of the Act, as amended:

a. In our opinion and to the best of our information and according to the
explanations given to us, the remuneration paid by the company to its directors
during the year is in accordance with the provisions of section 197 of the Act.

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 Auditor’s) Rules, 2014, in our opinion and to
the best of our information and according to the explanations given to us:

I. The Company has disclosed the impact of pending litigations on its financial
position in its standalone financial statements

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

III. There has been no delay in transferring amounts, required to be transferred to the
investor Education and Protection fund by the company.

As required by the companies (Auditor’s Report) Order, 2016 (“the order”), issued by the
central Government in terms of section 143 (11) of the Act, we give in “Annexure-B” a
statement on the matters specified in paragraphs 3 and 4 of the Order.

For MANISHA DUBEY & ASSOCIATES

Charted Accountants
Firm Registration No. 010114S

Sd/-

PLACE : HYDERABAD Manisha Dubey

DATE :30-05-2023 Proprietor

MRN: 212664

UDIN: 23212664BGZHJT6056

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Mar 31, 2018

INDEPENDENT AUDITORS'' REPORT

To

The Members,

TRANSGENE BIOTEK LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS financial statements of M/s.Transgene Biotek Limited ("The Company"), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year ended and a summary of the significant accounting policies and other explanatory information(herein after referred to as "standalone Ind AS financial statements").

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the Financial Position, Financial Performance including Other Comprehensive Income, Cash Flows and the Statement of Changes in Equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards(lnd AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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

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

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

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Financial Statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31 March, 2018 and its financial performance including other comprehensive income, its cash flows and changes in equity for the year ended on that date.

Emphasis of Matter

1. Attention is brought to Note No.04 to the ''Notes forming part of the Standalone Financial Statements'' under the heading "Investments" amounting to Rs.9220.10 Lakhs made in the wholly owned subsidiary company viz. Transgene Biotek HK Limited (1,69,52,001 shares of US $ 1 each). The accounts of the said subsidiary have not been audited for the FY 201718. In the absence of alternative methodologies to independently evaluate the same, we are unable to express an opinion whether the said sum as reflected under the above head is recoverable at the value at which it is stated. Management, as a prudent measure, made full provision in the books of account considering the above development.

2. Attention is also brought to the fact that Securities and Exchange Board of India (SEBI) prima facie concluded on conducting Preliminary Enquiry during previous years that the GDR proceeds have been transferred by the Company, directly or indirectly, through foreign subsidiary for undisclosed purposes under the grab of consideration for technology transfer and consequently passed an interim Order inter alia, refraining the Company from issuing any securities. The Company has appealed against the said Order. We are unable to comment, at this stage, on the impact this Order will have on the Company as a going concern. We are also unable to quantify, at the stage, the financial impact of this Order on the Company, as the Management has informed us that the Company is in the process of taking steps for recovery of amounts raised in the GDR.

3. The findings of the SEBI as per their Order on the utilization/transfer of GDR proceeds for undisclosed purposes point out towards violations of the provisions of the Foreign Exchange Management Act as well as GDR approval conditions, the impact of which we are unable to quantify at this stage.

4. Attention is brought to the fact that there is an outstanding balance of Rs. 2302.00 lakhs which pertains to advance given to a Party out of the proceeds of GDR. Consequent to the order of the SEBI as aforesaid and the contention of the management that the payments were made without Company''s authorization or knowledge, we are unable to opine whether this amount is recoverable or not as we are unable to obtain confirmation from the concerned Party. However, the Management as a prudent measure, made full provision for the amount,

in the Books of Accounts considering the above facts.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act, we give in the "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the order, to the extent applicable.

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, Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of Written Representation received from the directors as on 31 st March 2018, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2018 from being appointed as a director in terms of Subsection 2 of Section 164 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" to this report; and

(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 information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

ii. There is no requirement for any provision as required by any act or Accounting standards for material for foreseeable losses, if any on long term contracts including derivative contracts.

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

Annexure referred to in paragraph 3 and 4 of the Independent Auditor''s Report of even date of

TRANSGENE BIOTEK LIMITED, Hyderabad on the Standalone Financial Statements for year ended March 31, 2018 :

1) In terms of the information and explanations sought by us and given by the company and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state the following:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. ln case of Technology item, we have been informed that certain balancing components are yet to be received without which the technology is incomplete for the full effective intended usage. Subject to this, the other fixed assets have been physically verified by the management and this revealed no material discrepancies.

b) All the assets have been physically verified by the management during the year and there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c) According to information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds/lease deeds of immovable properties included in Property, Plant and Equipment are held in the name of the Company.

2) Inventory:

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 inventories 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 is maintaining proper records of inventory. No material discrepancies were noticed on verification of the physical stocks with the records.

3) As informed to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. Thus clause (iii) of Companies (Auditor''s Report) Order, 2016 is not applicable.

4) As informed to us, the Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under section 185 and 186 of the Act. Therefore, clause (iv) of Companies (Auditor''s Report) Order, 2016 is not applicable.

5) According to the information and explanations given to us, the Company has not accepted deposits against the terms of directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under. Hence clause (v) of Companies (Auditor''s Report) Order, 2018 is not applicable.

6) The central government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the company Thus clause (vi) of Companies (Auditor''s Report) Order, 2018 is not applicable

7) a) The company is not regular in depositing undisputed statutory dues. The amount of arrears, as at 31 st March, 2018 outstanding for a period of more than six months from the date they became payable are as mentioned below:

Income tax (Asst year 2009-2010)	Rs. 7.61 lakhs
Income Tax (Asst Year 2011-2012)	Rs. 3.86 lakhs
Income tax in the nature of TDS	Rs. 10.03 lakhs
PF Payable	Rs. 0.65 lakhs
ESI Payable	Rs. 1.92 lakhs
PT Payable	Rs. 0.42 lakhs
Income Tax Demand (Asst year 2009-2010)	Rs. 0.68 lakhs
Income Tax Demand (Asst year 2013-2014)	Rs. 73.36 lakhs

b) According to the information and explanations given to us, there are no dues of sales tax, income tax and excise duty which have not been deposited on account of any dispute except the following:

Nature of Dues	Amount (Rs.)	Period	Forum where dispute is pending
Customs Duty demand raised for Non-fulfillment of Export Obligation.	59.37 lakhs	2002	CESTAT, Chennai
Service Tax liability due to difference of opinion on classification of service.	76.15 lakhs	2011-12	Chief Commissioner of Customs, Excise & Service, Hyderabad.
Service Tax liability due to difference of opinion on, classification of service	7.36 lakhs	2010-11	Chief Commissioner of Customs, Excise & Service, Hyderabad.

8) The company does not have any outstanding dues to financial institutions, banks or debenture holders during the year. Thus clause (viii) of Companies (Auditor''s Report) Order, 2016 is not applicable.

9) The company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Thus clause (ix) of the Companies (Auditor''s Report) Order, 2016 is not applicable.

10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year

11) According to the information and explanations given to us the company has not provided for any managerial remuneration as mandated under the provisions of Section 197, read with Schedule V of the act.

12) As the company is not a Nidhi Company and the Nidhi Rules 2014 are not applicable to it, the provisions of clause (xii) of the Companies (Auditor''s Report) Order, 2016 are not applicable to the Company

13) In our opinion and according to the information and explanations given to us, the company has not entered into any transaction with the related parties. Thus clause (xiii) of Companies (Auditor''s Report) Order, 2016 is not applicable.

14) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully convertible debentures during the year. Accordingly, the clause (xiv) of Companies (Auditor''s Report) Order, 2016 is not applicable.

15) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him. Thus clause (xv) of Companies (Auditor''s Report) Order, 2018 is not applicable.

16) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company

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

We have audited the internal financial controls over financial reporting of M/s. TRANSGENE BIOTEKLIMITED as on March 31,2018 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

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

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, as specified under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Financial Statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with 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

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

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 31,2018, 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.

For Lakshmi and Associates

Chartered accountants,

Firm Registration No. 012482S

N.LAKSHMI

PLACE : HYDERABAD Partner

DATE : 14.11.2018 M.No:223790

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Mar 31, 2015

We have audited the accompanying financial statements of TRANSGENE BIOTEK LIMITED("the Company"), which comprise the Balance Sheet as at March 31,2015, the Statement of Profit and Loss and the Cash Flow Statement for the year ended , 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 these financial statements that give a true and fair view of the financial position, financial performance and Cash Flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities, selection and application of 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 :

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

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion :

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2015; and

b) in the case of the Profit and Loss Account, of the Loss for the period ended March 31,2015.

c) in the case of the cash flow statement, of the Cash Flows, for the period ended March 31,2015.

Emphasis of Matter

1. Attention is brought to Note No.10 to the Notes on Accounts under the heading "Non-Current Investments" amounting to Rs.9220.10 Lakhs made in the wholly owned subsidiary company (1,69,52,001 shares of US $ 1 each). Keeping in view the comments of the Auditor of the Subsidiary Company, in the Independent Auditor's Report wherein they commented that they are unable to express an opinion on the financial statements of the said Subsidiary Company and also in the absence of alternative methodologies to independently evaluate the same, we are unable to express an opinion whether the said sum as reflected under the above head is recoverable at the value at which it is stated. Management, as a prudent measure, made full provision in the books of accounts considering the above development.

2. Attention is also brought to the fact that Securities and Exchange Board of India (SEBI) had conducted Preliminary Inquiry on receiving certain complaints on the matter of GDRs issued by the Company and its utilization thereof, basically on the angle of protection of Investors' interest.

SEBI prima facie concluded that the GDR proceeds have been transferred by the Company, directly or indirectly, through foreign subsidiary for undisclosed purposes under the garb of consideration for technology transfer and consequently passed an interim Order inter alia, refraining the Company from issuing any securities. The Company has appealed against the said Order. We are unable to comment, at this stage, on the impact this Order will have on the Company as a going concern. We are also unable to quantify, at the stage, the financial impact of this Order on the Company, as the Management has informed us that the Company is in the process of taking steps for recovery of amounts raised in the GDR.

3. The findings of the SEBI as per their Order on the utilization/transfer of GDR proceeds for undisclosed purposes point out towards violations of the provisions of the Foreign Exchange Management Act as well as GDR approval conditions, the impact of which we are unable to quantify at this stage.

4. Attention is brought to the fact that there is an outstanding balance of Rs. 2302.00 lakhs which pertains to advance given to a Party out of the proceeds of GDR. Consequent to the order of the SEBI as aforesaid and the contention of the management that the payments were made without Company's authorization or knowledge, we are unable to opine whether this amount is recoverable or not as we are unable to obtain confirmation from the concerned Party. However, the Management as a prudent measure, made full provision for the amount, in the Books of Account considering the above facts.

Report on Other Legal and Regulatory Requirements :

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act 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 explanation given to us, we give in the Annexure a statement on the matters specified in the paragraphs 3 and 4 of the Order to the extent applicable to the company.

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

a. We sought and 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, 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 Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014.

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

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

i. The Company has disclosed the impact of pending litigation on its financial position in its financial statements.

ii. In our opinion and as per the information and explanations provided to us, the Company has not entered into any long term contracts including derivate contracts, requiring provision under applicable laws or accounting standards for material foreseeable losses, and

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

ANNEXURETO THE INDEPENDENT AUDITOR'S REPORT

Re: TRANSGENE BIOTEK LIMITED

Referred to in Paragraph 1 under section (Report on other Legal and Regulatory Requirements of our Report of even date)

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.In case of Technology item, we have been informed that certain balancing components are yet to be received without which the technology is incomplete for the full effective intended usage. Subject to this, the other fixed assets have been physically verified by the management and this revealed no material discrepancies.

(b) All the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (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 inventories 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 is maintaining proper records of inventory. No material discrepancies were noticed on verification of the physical stocks with the records.

(iii) The company has not granted any loan to the parties covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business 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.

(v) According to the information and explanations given to us, the Company has accepted deposits against the terms of directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under. During the year deposits accepted to the tune of Rs. 34.00 lakhs.

(vi) The maintenance of cost records has not been prescribed by the Central Government under sub section (1) of section 148 of the Companies Act, 2013 for the activities of the Company.

(a) The company is not regular in depositing undisputed statutory dues . The amount of arrears, as at 31st March, 2015 outstanding for a period of more than six months from the date they became payable are as mentioned below:

Nature of Dues Amount(Rs) Period Forum where dispute is pending

Customs Duty demand raised 59.37 lakhs 2002 CESTAT, Chennai for Non-fulfillment of Export Obligation

(c) In our opinion and according to the information and explanations given to us, there are no amounts required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under.

(vii) In our opinion, the company has accumulated losses as on 31st March, 2015 to the tune of Rs.13862.25 lakhs. The Company has incurred cash losses during the financial year covered by our audit and also in the immediately preceding financial year.

(viii) In our opinion and according to the information and explanations given to us, the company has defaulted in repayment of dues to financial institutions and banks.

The Company is not regular in repayment of Term loans within due date and the loan accounts with Union bank of India and SIBRI are classified as Non-Performing Asset by the banks due to non-payment as per payment schedule of Term loan and non-application of interest on the loan account after the account becoming NPA. In the absence of confirmation of the loan balance, we are not in a position to quantify the exact arrears at the year end.

(b) According to the information and explanations given to us, there are no dues of sales tax, income tax an excise duty which have not bee deposited on account of any dispute except the following :

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

(x) According to the information and explanations given to us, the company has not obtained any Term Loans during the period under audit.

(xix) Based upon the audit procedures performed and 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.

As per our report attached For GOPAL & RAJAN Chartered Accountants Firm Regd. No. 000953S

Sd/- K.Goutham Subbaiah Partner (M. No. 203237)

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Mar 31, 2014

We have audited the accompanying financial statements of M/S. TRANSGENE BIOTEK LIMITED ("the Company") which comprises the Balance sheet as at 31st March 2014, the Statement of Profit and Loss for the year ended on that date and the Cash fFlow Statement for the year and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the position, financial performance and cash flows of the company in accordance with the accounting standards notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, subject to our comments under the heading "Emphasis of Matter" and in para (a) and para (b) (4) of ''Report on other Legal and Regulatory requirements'' mentioned hereunder:

a) In the case of Balance sheet, of the State of affairs of the Company as at 31 st March 2014;

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

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

Emphasis of Matter

1. Attention is bought to Note No. 10 to the Notes on Accounts under the heading "Non-Current Investments" amounting to Rs.9220.10 Lakhs made in the wholly owned subsidiary company (1,69,52,001 shares of US $ 1 each). Keeping in view the comments of the Auditor of the Subsidiary Company, in the Independent Auditor''s Report wherein they commented that they are unable to express an opinion on the financial statements of the said Subsidiary Company and also in the absence of alternative methodologies to independently evaluate the same, we are unable to express an opinion whether the said sum as reflected under the above head is recoverable at the value at which it is stated or not. Management, as a prudent measure, made full provision in the books of accounts considering the above development.

2. Attention is also bought to the fact that the regulator, Securities and Exchange Board of India had conducted Preliminary Inquiry on receiving certain complaints on the matter of GDR''s issued by the Company in the past and its utilization thereof, basically on the angle of protection of Investors'' interest, . and SEBI prima facie concluded that the GDR proceeds have been transferred by the Company, directly or indirectly, through foreign subsidiary for undisclosed purposes under the garb of consideration for technology transfer and consequently passed an interim Order, after the end of the financial year but before this reporting date, inter alia, refraining the Company from issuing any securities. Management has informed us that the Company is in the process of conducting its own inquiry into the matters mentioned in the Order and taking steps for protection of amounts raised in the GDR. We are unable to quantify, at the moment, the financial impact of this Order on the Company, as the Company is yet to quantify and make any provision towards this purported loss. We are also unable to comment, at this stage, on the impact this Order will have on the Company as a going concern.

3. The findings of the SEBI as per their Order on the utilization/transfer of GDR proceeds for undisclosed purposes point out towards violations as per the provisions of the Foreign Exchange Management Act as well as GDR approval conditions, the impact of which we are unable to quantify at the moment.

4. Attention is bought to the fact that there is an outstanding balance of Rs.2684.08 Lakhs which pertains to advance given out of the proceeds of GDR. Consequent to the order of the SEBI as aforesaid and of the counter contention of the CMD as to transfer of payments were made unauthorizedly without his knowledge and also considering the fact that confirmation from the party could not be obtained, we are unable to opine whether this amount is recoverable or not. However, the Management as a prudent measure, made full provision in the books of accounts considering the above development.

Report on Other Legal and Regulatory

Requirements

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

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

1. 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, except loan balance confirmations and others stated elsewhere in our report.

2. 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.

3. 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.

4. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956, except the compliance of Accounting Standard 15 & 22, the effect of which we are unable to determine.

5. On the basis of written representations received from the Directors as on March 31st 2014, and taken on record by the Board of Directors, none of the Directors are disqualified as on March 31st 2014 from being appointed as Director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

6. The Company had neither provided nor paid for cess payable u/s 441A of the Companies Act, 1956 since the aforesaid section is not yet be made effective by the Central Government.

ANNEXURE REFERREDTO IN ''REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS'' OF AUDIT REPORT OF EVEN DATE ON THE ACCOUNTS OF TRANSGENE BIOTEK LIMITED (''THE COMPANY'') FOR THE YEAR ENDED 31 ST MARCH 2014

1. (a) As per the information and explanations given to us, the Company is in the process of updating its records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As per the information and explanations given to us, the fixed assets have been physically verified by the management during the year. In case of Technology item, we have been informed that certain balancing components are yet to be received without which the technology is incomplete for the full effective intended usage. Subject to this, the other fixed assets have been physically verified by the management and this revealed no material discrepancies. the Company had carried out the physical verification of the Fixed Assets during the year under review and we have been informed that such verification did not reveal any material discrepancies.

(c) As per the information & explanations given to us, the Company has not disposed off any fixed assets during the year, which will affect the going concern status of the company.

2 (a) As per the information & explanations given to us, the inventory has been physically verified during the year by the management at periodical intervals. In our opinion the frequency of verification appears to be reasonable.

(b) Based on the information & explanations to given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its present business.

(c) As per the information & explanations given to us, the Company is maintaining records of inventory and no material discrepancies have been noticed by the management on the physical verification done by them.

3. (a) As per the information and explanations given to us, as the company has not granted any loans, secured or unsecured to Companies, Firms or other parties covered in the register maintained under Section 301 of the Act, and accordingly, the provisions of Clause 4(iii) (a) to 4 (iii)

(d) are not applicable to the Company for the current year.

(b) According to the information and explanations given to us, the Company had taken interest free unsecured loan from three parties listed in the register maintained under Section 301 of the Act. The amount involved is Rs. 306.28 1249.52 Lakhs and the maximum outstanding balance during the year was Rs. 1259.59 Lakhs.

(c) In our opinion, terms and conditions of unsecured loan taken from the parties listed in the register maintained under Section 301 of the Act, being interest free, are not prima facie prejudicial to the interest of the Company.

(d) According to the information and explanations given to us, no specific terms have been stipulated for payment of the principal amount and interest thereon. Hence we are not in a position to make any specific comment as to whether the company is regular in payment of the principal amount and interest thereon.

4. Based on the information & explanations given to us, we are of the opinion that the matters as to adequacy of the internal control procedures regarding purchase of inventory and fixed assets and sale of goods and services as compared to the size of the Company and nature of its business needs to be strengthened. However, we have not come across instances of continuing major weaknesses, apart from strengthening the existing internal controls during the year under review.

5. According to the information and explanation given to us and as confirmed by the Management, there are no transactions with the parties which need to be entered into the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4 (v) (a) & (b) are not applicable for the year under review.

6. As the Company has not accepted any deposits from public covered by the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AAA or any other relevant provisions of the Act, the provisions of clause 4(vi) of the Order are not applicable to the Company for the current year.

7. As per information and explanation given to us, the Company does not have Internal Audit system commensurate with the size and nature of the business.

8. According to information and explanation given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act, for any of the activities of the company, and accordingly the provisions of clause 4(viii) of the order is not applicable to the Company for the current year.

9. (a) According to the information and explanations given to us, the Company is not regular in depositing undisputed statutory Statutory dues of Income Tax, Service Tax and other statutory dues. The amount of arrears of outstanding dues as on 31st March 2014, outstanding for a period of more than six months from the date they became payable are Income Tax Rs. 554.11 Lakhs, Fringe Benefit Tax Rs.0.58 Lakhs, Income tax in the nature of Tax deducted at source Rs.24.16 Lakhs, Service Tax Rs.8.37 Lakhs.

(b) As per the records and according to the information and explanation given to us, there are no dues of Sales tax, Income Tax, Wealth Tax, Excise duty and Cess which have not been deposited on account of any dispute as on 31.03.2014, except a disputed claim of Customs Duty net of amount paid under protest, as per the details given below

Nature of Dues Amount (Rs) Period Forum where Dispute is pending

Customs Duty demand raised for Non-fulfilment of Export obligation 59.37 Lakhs 2002 CESTAT, Chennai

10. According to the information and explanation given to us and overall examination of the financial statements of the Company, we report that the Company does not have any accumulated losses at the end of the current financial year. The Company had incurred cash losses during the year as well as in the immediately preceding financial year.

11. The Company is not regular in repayment of Term loans within due date and the account is classified as Non Performing Asset by the bank during the year under review. Due to non- repayment as per payment schedule of Term loan and non- application of interest on the loan account after the account becoming NPA, and In the absence of confirmation of the loan balance, we are not in a position to quantify the exact arrears at the end of the year.

12. According to the information and explanation 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, the provisions of clause 4 (xii) of the Order are not applicable to the Company for the current year.

13. In our opinion, The Company is not a Chit Fund/Nidhi/Mutual Benefit Fund/Society. Therefore the provisions of clause 4(xiii) of the Order are not applicable to the Company for the current year.

14. In our opinion, as the Company is not dealing or trading in shares, securities, debentures and other investments, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

15. According to information and explanations given to us the Company has not given any Guarantee to any banks / financial institutions during the year under review for the loan taken by any third party, the provisions of Clause 4 (xv) of the Order are not applicable to the Company

16. As per information and explanations given to us, no fresh term loans have been raised by the Company and the as per the past records of the Company, the earlier term loans have been applied for the purpose for which they were raised.

17. 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 investment purposes.

18. According to the Information and explanations given to us, the Company had made preferential allotment of shares to one party covered under the register maintained under Section 301 of the Act during the year under review, which has been made at price which is not prejudicial to the interest of the Company.

19. As the Company has not issued any debentures during the year, which requires creation of security or charge, the provisions of clause 4 (xix) of the Order, are not applicable to the Company for the current year.

20. According to the Information and explanations given to us and on overall examination of the books of accounts of the company, the Company has not raised any money by public issue during the year under review. However, the Company had, in the preceeding year(s), have issued Global Depository Receipts outside India and the majority proceeds of GDRs have been utilized through wholly owned subsidiary abroad, which is not audited by us and accordingly, we are unable to express any opinion on the end use of moneys raised through GDRs. Further, during the current year, the auditor who conducted the audit in respect of overseas subsidiary also could not express his opinion regarding the existence, valuation of the deposits and prepayments/advances and technical know how, as stated in his audit report.

21. During the course of examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and as per the representation given by the Company and relied on by us, we have neither come across any instance material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such cases by the management. Attention is bought to the fact that after the end of the financial year and before the issue of our Audit Report, SEBI had passed an order against the Company as well as promoters/directors wherein it has alleged that there is a prima facie case of acts, omissions and concealment by the Company and its promoters/Directors which amount to ''Fraud'' within the meaning of regulation 2(1 )(c ) of the SEBI (Prohibition of Fraudulent and UnfairTrade Practices relating to Securities Market) Regulations 2003. SEBI further stated that the Company and the promoters/directors have violated the provisions of Regulations 3(a), (c) and (d), read with regulation 4(1) and 4 (2)(f) of the above regulations as well as Section 12A(b) and (c ) of SEBI Act, 1992. Accordingly, we are unable to quantify the impact of the above Order in financial terms and further unable to state whether this affects the going concern of the Company.

For Sarath & Associates

Chartered Accountants Firm Regd. No. 005120S

Sd/-

PLACE: HYDERABAD P. Sarath Kumar

DATE: 06.12.2014 Partner (M. No. 021755)

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of TRANSGENE BIOTEK LIMITED ("the Company") as at 31 st March 2011, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report.

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted bur audit in accordance with the 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 basts for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of Sub- section (4A) of Section 227 of the Companies Act, 1956("Act") and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable;

e. The Company has neither paid nor provided for the Cess payable under section 441A of the Companies Act,1956 since the aforesaid section is not yet been made effective by the Central Government of India;

f. On the basis of 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 31 st 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;

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

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2011;

ii. in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

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

ANNEXURE REFERRED TO IN PARAGRAPH- 3 OF AUDIT REPORT OF EVEN DATE ON THE ACCOUNTS OF TRANSGENE BIOTEK LIMITED FOR THE YEAR ENDED 31 ST March, 2011.

I a The Company is in the process of updating its records showing full particulars including quantitative details and situation of Fixed Assets.

b As informed to us, the Company had carried out the physical verification of Fixed Assets during the year under review and such verification did not reveal any material discrepancies.

c The Company has not disposed off any fixed assets during the year, which will affect the going concern status of the Company.

II a As explained to us, inventories have been physically verified at reasonable intervals during the year by the management.

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

c As informed to us, no material discrepancies were noticed on such verification of inventories as compared to book records.

III a As per the information and explanations given to us, as the Company has not granted any loans, secured or unsecured, to Companies, Firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, the Provisions of Clause 4(iii) (a) to 4 (iii) (d) are not applicable to the Company for the current year.

b The Company has taken interest free unsecured loan from one party listed in the register maintained under Section 301 of the Act, amounting to Rs. 10,05,41,788/- and the maximum amount involved during the year Rs. 10,92,10,470/-.

c In our opinion, the rate of interest and other terms and conditions of unsecured loan taken from the party listed in the register maintained under Section 301 of the Act, are not prima facie prejudicial to the interest of the Company.

d The Company is regular in repayment, where applicable, of principal amount of loan taken from the party listed in the register maintained under Section 301 of the Companies Act, 1956.

IV In our opinion, the adequacy of internal control systems for the purchase of inventory and fixed assets and for the sale of goods and services as compared to the size of the Company and the nature of its business needs to be strengthened. However, we have not come across any continuing major weakness in the overall internal control system existed in the Company during the current year.

V a According to the information and explanations given to us and as confirmed by the Managing Director of the Company, the transactions of the Company which need to be entered into the register maintained under Section 301 of the Act, have been entered.

b In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act and exceeding the value of Rs.5,00,000/- in respect of each party during the year.

VI As the Company has not accepted any deposits from public covered by the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and rules framed there under, the provisions of Clause 4(vi) of the Order are not applicable to the Company for the current year.

VII In our opinion, the Company does not have an internal audit system commensurate with its size and nature of its business.

VIII According to information and -explanation given to us, the maintenance of cost records has not been prescribed by the Central Government under Clause (d) of Sub- section (1) of Section 209 of the Act.

IX a As per the information and explanations give to us, the Company is generally regular in depositing undisputed statutory dues of Provident fund, Investor Education Fund, Employee State Insurance, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities and in respect of these dues there are no dues outstanding for a period of more than six months from the date they became payable;

The Company is not regular in depositing the undisputed statutory dues of Income Tax and Service Tax and the arrears of outstanding dues as on 31st March,2011 outstanding for a period of more than six months from the date they became payable are Income Tax is Rs. 7,37,373/-, Income Tax in the nature of Tax Deducted at Source is Rs. 12,50,285/'- and Service Tax is Rs. 9,08,750/-;

b As per the records and according to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute as on 31.03.2011, except a disputed claim of Custom Duty net of amount paid under protest, as per the details given below:

NATURE OF DUES AMOUNT PERIOD FORUM WHERE RS DISPUTE IS PENDING

Customs Duty Demand raised by the CESTAT, Chennai for non- 59.37 Lakhs 2002 CESTAT, Chennai fulfillment of export obligation

X As per the information and explanation given to us and on overall examination of the financial statements of the Company, we report that the Company does not have any accumulated losses at the end of the Current financial year nor incurred cash losses in the current and immediately preceding financial year.

XI The Company is not regular in repayment of term loans with in the

- due date, however there are no outstanding arrears at the end of the year.

XII As the Company had not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other securities to anybody during the year, the provisions of Clause 4(xii) of the Order are not applicable to the Company for the current year.

XIII As the Company is not a Chit Fund or a Nidhi or Mutual Fund or Society, the provisions of Clause 4(xiii) of the Order are not applicable to the Company for the current year.

XIV As the Company is not dealing or trading in shares, securities, debentures and other investments, the provisions of Clause 4(xiv) of the order are not applicable to the Company for the current year.

XV As the Company has not given any guarantee for loans taken by others from banks or financial institutions, the provision of Clause 4(xv) of the Order are not applicable to the Company for the current year.

XVI As per records of the Company, the term loans have been applied for the purposes for which they were obtained.

XVII 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 investment purposes.

XVIII According to the information and explanations given to us and on overall examination of the balance sheet of the Company, as 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 during the year, the provisions of Clause 4(xviii) of the Order are not applicable to the Company for the current year.

XIX As the Company has not issued any debentures during the year, which requires creation of security or charge, the provisions of Clause 4(xix) of the Order, are not applicable to the Company for the current year.

XX According to the information and explanations given to us and on overall examination of the books of accounts of the Company, the Company has disclosed the end use of money raised by issue of Global Depositary Receipts in the Note No: 3 of Schedule XX - Notes to Accounts.

XXI During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and as per the representation given by the Company and relied on by us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we informed of such cases

For SARATH & ASSOCIATES,

Firm Regn.No.005120S

Chartered Accountants

P. Sarath Kumar

Place : Hyderabad Partner

Date : 05.09.2011 Membership No: 021755

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Mar 31, 2010

1. We have audited the attached Balance Sheet of TRANSGENE BIOTEK LIMITED (the Company") as at 31st March, 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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 auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatements. 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. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, (the Order) issued by the Central Government of India in terms of section 227 (4A) of The Companies Act, 1956, (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Act, to the extent applicable.

(e) On the basis of written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

(f) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read in conjunction 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 31 st March, 2010;

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

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

Annexure to the Auditors Report

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDIT REPORT OF EVEN DATE ON THE ACCOUNTS OF TRANSGENE BIOTEK LIMITED (THE COMPANY) FOR THE YEAR ENDED 31ST MARCH, 2010

1.(a) The Company is in the process of updating its records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As informed to us, the Company had carried out the physical verification of Fixed Assets during the year under review and such verification did not reveal any material discrepancies.

(c) The Company has not disposed off any fixed assets during the year, which will affect the going concern status of the Company.

2.(a) As per the information and explanations given to us, the inventory has been physically verified during the year by the management at periodical intervals. In our opinion the frequency of verification appears to be reasonable.

(b) As per the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its present business.

(c) As informed to us, no material discrepancies were noticed on such verification of inventories as compared to book records.

3.(a) As per the information and explanations given to us, as the company has not granted any loans, secured or unsecured, to Companies, Firms or other parties covered in the register maintained-under section 301 of the Act, the provisions of Clause 4(iii)(a) to 4(iii)(d) are not applicable to the Company for the current year.

(b) The Company, during the year, has taken unsecured loan from one party listed in the register maintained under Section 301 of the Act, amounting to Rs. Rs. 3,46,71,553/- and the maximum amount outstanding at the end of the year is Rs,10,58,44,469/-

(c) In our opinion, the rate of interest and other terms and conditions of unsecured loan taken from the party listed in the register maintained under Section 301 of the Act, are not prima facie prejudicial to the interest of the Company.

(d) The Company is regular in repayment, where applicable, of principal amount and interest on unsecured loan taken from the party listed in the register maintained under Section 301 of the Act.

4. In our opinion, the adequacy of internal control systems for the purchase of inventory and fixed assets and for the sale of goods and services as compared to the size of the Company and the nature of its business needs to be strengthened. However, we have not come across any continuing major weaknesses in the overall internal control system existed in the Company during the current year.

5.(a) According to the information and explanations given to us and as confirmed by the Managing Director of the Company, the transactions of the company which need to be entered into the register maintained under Section 301 of the Act, have been entered in the register maintained Under Section 301 of the Ac.

(b) According to the information and explanations given to us, there were no transactions made in pursuance of such contracts or arrangement during the year.

6. As the Company has not accepted any deposits from public covered by the directives issued by the Reserve Bank of India and the provisions of Section 58A,58AA or any other relevant provisions Act, the provisions of clause 4(vi) of the Order are not applicable to the Company for the current year.

7.In our opinion, the Company does not have an internal audit system commensurate with its size and nature of its business.

8.According to information and explanation given to us, the maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

9. (a) According to the information and explanations given to us, the Company is not regular in depositing undisputed statutory dues including provident fund, Employees State Insurance, Income Tax, Cess, Excise Duty and other appropriate statutory dues with the appropriate authorities. The amount of the arrears of outstanding statutory dues as at the last day of the financial year concerned for more than six months from the date they became payable pertaining to Income Tax Deducted At Source is Rs. 12.96 lakhs and Income Tax is Rs.16.87 lakhs.

(b) As per the records and according to the information and explanations given to us, there are no dues of Sales Tax / Income Tax / Wealth Tax / Excise Duty / Cess which have not been deposited on account of any dispute as on 31.03.2010, except a disputed claim of Custom Duty as per the details given below:

Name of the Statue Nature of Dues Amount Rs. Period Forum where pending

Customs Act, 1962 Customs Duty Demand raised by the CESTAT, Chennai for non-fulfillment of export obligation 59.37 Lakhs 2002 CESTAT, Chennai



10. As per the information and explanation given to us and on overall examination of the financial statements of the Company, we report that the Company does not have any accumulated losses at the end of the current financial year nor incurred cash losses in the current and immediately preceding financial yea .

11. As the Company has neither availed any loan from any financial institution or from any bank, nor issued any debentures, the provisions of Clause 4(xi) of the Order are not applicable to the Company for the current year.

12. As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, the provisions of Clause 4(xii) of the Order are not applicable to the Company for the current year.

13. In our opinion, as the company is not a chit fund, nidhi or a mutual benefit fund/ society, the provisions of Clause 4(xiii) of the Order are not applicable to the company for the current year.

14. In our opinion, as the company is not dealing in or trading in shares, securities, debentures and other investments, the provisions of Clause 4 (xiv) of the Order are not applicable to the company.

15. As per the information and explanations given to us, as the company has not given any guarantees for loans taken by others from bank or financial institution, the provisions of Clause 4(xv) of the Order are not applicable to the Company for the current year.

16. As the company has not raised any term loans during the current year, the provisions of Clause 4 (xvi) of the Order are not applicable to the company for the current year.

17. 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 investment purposes*.

18. According to the information and explanations given to us and on overall examination of the balance sheet of the company, as 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 during the year, the provisions of Clause 4(xviii) of the Order are not applicable to the Company for the current year..

19. As the Company has not issued any debentures during the year, which requires creation of security or charge, the provisions of Clause 4(xix) of the Order, are not applicable to the Company for the current year.

20. According to the information and explanations given us and on an overall examination of the books of accounts of the Company, the Company has not raised any money by public issue during the year under review.

21. During the course of examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and as per the representation given by the Company and relied on by us, we have neither come across any instance material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such cases by the management.



For/Sarath & Associates

Firm Registration NO.005120S

Chartered Accountants

Sd/-

P.Sarath Kumar

Place : Hyderabad Partner

Date : 04.09.2010 (M.No.21 755)