Auditor Report of Twilight Litaka Pharma Ltd.

Jun 30, 2014

We have audited the accompanying financial statements of Twilight Litaka Pharma Ltd. (the Company), which comprise the Balance Sheet as at June 30th, 2014, and the Statement of Profit and Loss and the cash flow statement for the year ended on that date, 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 of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (the Act). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and presentation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Adverse Opinion

(i) As explained in note 32 provisional liquidator has been appointed by the Honorable Bombay High Court to take charge of the Company''s movable and immovable assets and properties, books of account and passed other restraints on the Directors. Company''s application against the aforesaid order is pending.

(ii) As explained in note 33 Company has filed application to BIFR for being classified as a sick undertaking and the matter is pending.

(iii) As explained in note 31 secured lenders have issued notice under section 13 of the SARFAESI Act and further majority of the lenders have assigned their receivables in favor of Asset Reconstruction Company.

(iv) As explained in note 35 & 37, the company is negotiating with unsecured lenders and creditors for waiver of interest and grant of time for repayment of dues. Due to ongoing one time settlement negotiations with secured lenders, the management is of the view that the provision for interest in books of account along with principle outstanding is adequate to meet proposed settlement. We are informed by the company that due to ongoing negotiation, bank balances are subject to confirmation and reconciliation.

(v) As explained in note 34 Company is in the process of filing recovery suits against debtors aggregating to Rs 195 Crs. These are considered good by the management and no provision is made in respect thereof in the accounts.

(vi) As stated in Note 30 of notes to financial statements, disputed sales tax of interest of Rs. 5,44,297 and Income tax demand of Rs. 92 Crores that are pending in appeal are considered by the management as contingent in nature.

(vii) We are unable to express any opinion on recoverability of loans & advances and statutory dues.

(viii) The company has neither obtained a valuation report regarding accrued employee retirement benefits from approved Actuary nor has provided for these benefits under Accounting Standards - 15.

The above are significant to the overall financial statements and these would materially affect the preparation and presentation of financial statements.

Adverse Opinion

The significance of the matter described in the Basis for Adverse Opinion paragraph indicate the existence of a material uncertainty that may cast doubt about the company''s ability to continue as a going concern and in our opinion the financial statements do not 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 June 30, 2014;

(b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date: and

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. in our opinion, except for matters described in basis for adverse opinion paragraph, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement, comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on June 30, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

ANNEXURE TO THE AUDITORS'' REPORT

Referred to in Paragraph 1 of "Report on Other Legal and Regulatory Requirements" section of our Independent auditors Report of even date for the period ended 30th June 2014:

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

(b) According to the information and explanations given to us, the Company has formulated a regular program of verification by which all assets of the company shall be verified in phased manner, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. To the best of our knowledge, no material discrepancies were noticed on verification conducted during the period as compared with the book records.

(c) There was no disposal of a substantial part of fixed assets.

2 (a) The stock of finished goods and raw material has been physically verified during the period by the Management. The Company has a perpetual inventory system in respect of stores and spare parts. In our opinion, the frequency of verification is reasonable. In the case of material lying with the third parties, certificates confirming stocks have been received in respect of a substantial portion of the stocks held.

(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 were reasonable and adequate in relation to the size of the Company and 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. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company.

31 During the period the company has neither taken nor granted any loans, secured or unsecured from/to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4] In our opinion and according to the information and explanation given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventories and fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any major weakness in the internal controls.

5 (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) Transaction made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6 In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public during the period. Therefore, the provisions of clause 4(vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

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

8] According to the information and explanations given to us, the Central Government has prescribed under Section 209(1)(d) of the Companies Act, 1956, the maintenance of cost records in respect of certain products. We have broadly reviewed the books of account maintained and in our opinion, the prescribed accounts and records have prima facie been made and maintained by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9] (a) There have been delays in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, TDS, Service Tax, Excise Duty and other statutory dues during the period. At the end of the Financial Period, arrears of outstanding statutory dues for a period of more than 6 months from the date they become payable is as under:

Nature of Amount Period Due Date Date of Dues (Rs.) Payment

Advance tax 15,83,69,999 FY 2009-10 15th of last month Not under Income FY 2010-11 in each quarter Paid Tax Act, 1961

Advance tax 31,22,730 FY 2011-12 Upto September Not under Income 2012 Paid Tax Act, 1961

TDS under 93,89,496 Up to FY 07th Of Not Income Tax 2011-12 Every Month Paid Act 1961 42,50,770 FY 2012-13

10,67,120 FY 2013-14

Employees State 40,77,851 Upto FY 15th Of Every Not Insurance 2011-12 Month Paid 12,99,343 FY 2012-13

Provident Fund 67,85,394 Upto FY 15th Of Every Not 2011-12 Month Paid 65,47,863 FY 2012-13 18,93,674 FY 2013-14

Sales Tax 3,10,82,255 Upto FY 21st Of Every Not 2011-12 Month Paid 1,20,36,105 FY 2012-13 19,76,097 FY 2013-14

(b) Based on the information and explanation given to us, there are no dues towards Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty or Cess which are disputed and not deposited.

Disputed dues on account of sales tax not deposited with appropriate authorities are given below.

Name of Nature of Amount Period to Forum where the the Dues (Rs.) which dispute pending Statute the amount relates

Sales Tax Interest 5,44,297 2003-04 Sales Tax Tribunal, Mumbai

Income Demand 92,89,00,000 From AY 06-07 CIT (A), Pune Tax to AY 12-13

10] The Accumulated losses of the company as on balance sheet date are not more than fifty percent of its net worth. Company has incurred cash losses during the financial period covered by our audit however it has not incurred cash losses in the immediately preceding financial year.

11] The Company has defaulted in repayment of loan and interest as on 30th June 2014. According to the information and explanation given to us, the Company is negotiating for one time settlement for several lenders which are pending finalization.

12] Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14] In our opinion and according to the information and explanation given to us, the Company is not dealing in shares, securities and debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

15] The Company has not given corporate guarantee for loan taken by others.

16] In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17] In our opinion and according to the information and explanation given to us, and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on the short-term basis have been utilized for long-term investment.

18] According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19] In our opinion and according to the information and explanation given to us, the company has not issued any secured debentures during the period covered by our report. Accordingly, the provisions of clause (xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

20] As informed to us, during the period covered by our Audit report, the Company has not raised any money by public issue.

21] To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the course of our Audit.

For V. Sankar Aiyar & Co. Chartered Accountants Firm Regn No: 109208W

V Mohan Place : Mumbai Partner Date : 29th August, 2014 Membership No. 17748

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Jun 30, 2013

We have audited the accompanying financial statements of Twilight Litaka Pharma Ltd. (the Company), which comprise the Balance Sheet as at June 30th, 2013, and the Statement of Profit and Loss and the cash flow statement for the period ended on that date, 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 of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (the Act). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial statements 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.

Emphasis of Matter

We draw your attention to note 30 on Going Concern assumption, note 31 on notice from secured l3enders under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, and note 32 on provision for contingent interest liability to secured lenders.

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 June 30, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit for the period ended on that date: and

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

Report on Other Legal and Regulatory Requirements

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

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

a. As stated in Note 29 of notes to financial statements, disputed sales tax against levy of interest of Rs. 5,44,297 are considered by the management as contingent in nature. We are unable to comment on the ultimate outcome of these matters.

b. As stated in notes to financial statements, balances of Rs. 20,21,627.38 included in Current assets are subject to confirmation and reconciliation. Hence we are unable to comment on adjustments, if any, which may arise on receipt of balance confirmation and its consequent effect on loss for the period and net worth of the company;

3. Without qualifying our report, we draw attention to Note 30 of notes to financial statements regarding going concern assumption.

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

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

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

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

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

e. on the basis of written representations received from the directors as on June 30, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to in Paragraph 1 of "Report on Other Legal and Regulatory Requirements" section of our Independent auditors Report of even date for the period ended 30th June 2013:)

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

(b) According to the information and explanations given to us, the Company has formulated a regular program of verification by which all assets of the company shall be verified in phased manner, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. To the best of our knowledge, no material discrepancies were noticed on verification conducted during the period as compared with the book records.

(c) There was no disposal of a substantial part of fixed assets.

2] (a) The stock of finished goods and raw material has been physically verified during the period by the Management. The Company has a perpetual inventory system in respect of stores and spare parts. In our opinion, the frequency of verification is reasonable. In the case of material lying with the third parties, certificates confirming stocks have been received in respect of a substantial portion of the stocks held.

(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 were reasonable and adequate in relation to the size of the Company and 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. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company.

3] During the period the company has neither taken nor granted any loans, secured or unsecured from/to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4] In our opinion and according to the information and explanation given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventories and fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any major weakness in the internal controls.

5] (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) Transaction made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6] In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public during the period. Therefore, the provisions of clause 4(vi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

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

8] According to the information and explanations given to us, the Central Government has prescribed under Section 209(1)(d) of the Companies Act, 1956, the maintenance of cost records in respect of certain products. We have broadly reviewed the books of account maintained and in our opinion, the prescribed accounts and records have prima facie been made and maintained by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9] (a) There have been delays in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, TDS, Service Tax, Excise Duty and other statutory dues during the period. At the end of the Financial Period, arrears of outstanding statutory dues for a period of more than 6 months from the date they become payable is as under:

Nature of Amount Period Due Date of the Dues Date(s) Payment

Advance tax 15,83,69,999 FY 2009-10 15th of last month Not Paid under Income FY 2010-11 in each quarter

Tax Act, 1961 Advance tax 31,22,730 FY 2011-12 Upto September Not Paid under Income 2012

Tax Act, 1961 TDS under Act, 93,89,496 Up to FY 07th Of Every Not Paid Income Tax 1961 2011-12 Month

42,50,770 FY 2012-13

Employees State 40,77,851 Upto FY 15th Of Every Not Paid 2011-12 Month

12,99,343 FY 2012-13

Provident Fund 67,85,394 Upto FY 15th Of Every Not Paid 2011-12 Month

65,47,863 FY 2012-13

Sales Tax 3,10,82,255 Upto FY 1st Of Every Month Not Paid

2011-12

12,036,105 FY 2012-13

(b) Based on the information and explanation given to us, there are no dues towards Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty or Cess which are disputed and not deposited.

Disputed dues on account of sales tax not deposited with appropriate authorities are given below.

Name of Nature of Amount. Period to Forum where Statute the Dues Rs which dispute pending the amt relates

Sales Tax Interest 5,44,297 2003-04 Sales Tax Tribunal, Mumbai

10] The Accumulated losses of the company as on balance sheet date are not more than fifty percent of its net worth. Company has incurred cash losses during the financial period covered by our audit however it has not incurred cash losses in the immediately preceding financial year.

11] According to the information and explanation given to us, the Company has defaulted in repayment of dues to any financial institution or bank. Details of Default as on June 30,2013 is as under

Nature of Dues Amount (Rs.)

Principle 22,17,58,356

Interest 22,52,34,837

12] Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14] In our opinion and according to the information and explanation given to us, the Company is not dealing in shares, securities and debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

15] The Company has not given corporate guarantee for loan taken by others.

16] In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17] In our opinion and according to the information and explanation given to us, and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on the short-term basis have been utilized for long-term investment.

18] According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19] In our opinion and according to the information and explanation given to us, the company has not issued any secured debentures during the period covered by our report. Accordingly, the provisions of clause (xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

20] As informed to us, during the period covered by our Audit report, the Company has not raised any money by public issue.

21] To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the course of our Audit.

For V. Sankar Aiyar & Co.

Chartered Accountants

Firm Regn No: 109208W

V Mohan

Place:Mumbai Partner

Date : 5thDecember, 2013 Membership No. 17748

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Mar 31, 2011

1] We have audited the attached Balance Sheet of Twilight Litaka Pharma Ltd. as at 31st March, 2011 and also the Profit & Loss Account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date. 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 our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4] Further to our comments in the Annexure referred to above, we report that:- i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

iii) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with books of account.

iv) In our opinion the Balance Sheet and Profit and Loss account comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

v) 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 are disqualified as on 31st March, 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read 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 accepted in India:

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

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

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

ANNEXURE TO THE AUDITOR'S REPORT (Referred to in paragraph 3 of our Report of even date)

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

(b) According to the information and explanations given to us, the Company has formulated a regular programme of verification by which all assets of the company shall be verified in phased manner, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. To the best of our knowledge, no material discrepancies were noticed on verification conducted during the year as compared with the book records.

(c) There was no disposal of a substantial part of fixed assets.

2] (a) The stock of finished goods and raw material has been physically verified during the year by the Management. The Company has a perpetual inventory system in respect of stores and spare parts. In our opinion, the frequency of verification is reasonable. In the case of material lying with the third parties, certificates confirming stocks have been received in respect of a substantial portion of the stocks held.

(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 were reasonable and adequate in relation to the size of the Company and 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. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company.

3] (a) During the year 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.

(b) During the year, the Company has taken interest free unsecured loan of Rs. 9,84,93,921 from one of the party listed in the register maintained under section 301 of the Companies Act, 1956 and interest bearing loan of Rs. 16,09,77,667/- from one company covered in the register maintained under section 301 of the Companies Act, 1956. These loans along with other existing loans from parties / Companies covered in the register maintained under section 301 of the Companies Act, 1956 have maximum amount of Rs. 26,06,65,521/- outstanding at any time during the year and the year end balance is Rs. 5,08,19,987/- as on 31st March 2011.

(c) In our opinion and according to information and explanation given to us, terms and conditions of the loans taken by the company from parties listed in register maintained under section 301 of the Companies Act, 1956, are not prima facie, prejudicial to the interest of the company.

(d) Principle is repayable only on demand. No demand for repayment of principal was made by lenders during the year. The company has been regular in paying interest wherever applicable.

4] In our opinion and according to the information and explanation given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventories and fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any major weakness in the internal controls.

5] (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) Transaction made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6] In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public during the year. Therefore, the provisions of clause 4(vi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

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

8] According to the information and explanations given to us, the Central Government has prescribed under Section 209(1)(d) of the Companies Act, 1956, the maintenance of cost records in respect of certain products. We have broadly reviewed the books of account maintained and in our opinion, the prescribed accounts and records have prima facie been made and maintained by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9] (a) There have been delays in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, TDS, Service Tax, Excise Duty and other statutory dues during the year. At the end of the Financial Year arrears of outstanding statutory dues for a period of more than 6 months from the date they become payable is as under :

Name of Nature of Amount Period to Due Date of the the Dues (Rs.) which Date Payment Statute the amt. relate

Income Advance 7,41,66,546 FY 15.09.10 Not Paid Tax Act, Tax 2010-11 1961

(b) Based on the information and explanation given to us, there are no dues towards Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty or Cess which are disputed and not deposited.

Disputed dues on account of sales tax not deposited with appropriate authorities are given below.

Name of the Nature of Amount. Period to Forum where Statute the Dues (Rs.) which dispute pending the amt relates

Sales Tax Interest 5,44,297 2003-2004 Sales Tax Tribunal, Mumbai

10] In our opinion, the Company does not have any accumulated losses at the end of the year, and has no cash losses in the current and immediately preceding financial year.

11] Based on our audit procedures and according to the information and explanation provided to us, the Company has not defaulted in repayment of dues to any financial institution or bank. However, there were certain delay in the repayment of dues to bank/financial institution.

12] Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14] In our opinion and according to the information and explanation given to us, the Company is not dealing in shares, securities and debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

15] The Company has given corporate guarantee for loan taken by subsidiary from banks. According to information and explanation provided, the terms and conditions are not prejudicial to the interest of the Company.

16] In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17] In our opinion and according to the information and explanation given to us, and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on the short-term basis have been utilized for long-term investment.

18] According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19] In our opinion and according to the information and explanation given to us, the company has not issued any secured debentures during the period covered by our report. Accordingly, the provisions of clause (xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

20] As informed to us, during the period covered by our Audit report, the Company has not raised any money by public issue.

21] To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the course of our Audit.

For V. SANKAR AIYAR & CO.

CHARTERED ACCOUNTANTS

Firm Regn No. : 109208W

V MOHAN

Place : Mumbai PARTNER

Date : 27th August, 2011 Membership No. 17748

---

Mar 31, 2010

1] We have audited the attached Balance Sheet of Twilight Litaka Pharma Limited as at 31st March, 2010 and also the Profit & Loss Account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on ouraudit.

2] We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit providesa reasonable basisforouropinion.

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

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

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes ofouraudit. ii) 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. iii) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with books of account.

iv) In our opinion the Balance Sheet and Profit and Loss account comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

v) 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 are disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 ofthe Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read 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 accepted in India:

a) In the case of Balance Sheet, ofthe state of affairs ofthe Company as at 31st March, 2010;

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our Report of even date)

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

(b) According to the information and explanations given to us, the Company has formulated a regular programme of verification by which all assets of the company shall be verified in phased manner, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. To the best of our knowledge, no material discrepancies were noticed on verification conducted during the year as compared with the book records.

(c) There was no disposal of a substantial part of fixed assets.

2] (a) The stock of finished goods and raw material has been physically verified during the year by the Management. The Company has a perpetual inventory system in respect of stores and spare parts. In our opinion, the frequency of verification is reasonable. In the case of material lying with the third parties, certificates confirming stocks have been received in respect of a substantial portion of thestocksheld.

(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 were reasonable and adequate in relation to the size of the Company and 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. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company.

3] (a) During the year the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained undersection301ofthe Companies Act, 1956.

(b) The Company has taken interest free unsecured loan from 2 companies and interest bearing loan from 2 companies covered in the register maintained under Section 301 of the Companies Act, 1956 having maximum balance of Rs. 1,78,85,946/-during the year and closing balance of Rs. 1,73,45,946/-as on 31st March, 2010.

(c) In our opinion and according to information and explanation given to us, terms and conditions of the loans taken by the company from parties listed in register maintained under section 301 of the Companies Act, 1956, are not prima facie, prejudicial to the interest of the company.

(d) Principle is repayable only on demand. No demand for repayment of principal was made by lenders during the year. The company has been regular in paying interest wherever applicable.

4] In our opinion and according to the information and explanation given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources do not exist forobtaining comparable quotations, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventories and fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any major weakness in the internal controls.

5] (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) Transaction made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market pricesatthe relevant time.

6] In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public during the year. Therefore, clause 4(vi) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

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

8] According to the information and explanations given to us, the Central Government has prescribed under Section 209(1)(d) of the Companies Act, 1956, the maintenance of cost records in respect of certain products. We have broadly reviewed the books of account maintained and in our opinion, the prescribed accounts and records have prima facie been made and maintained by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9] (a) There have been delays in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, TDS, Service Tax, Excise Duty and other statutory dues during the year. At the end of the Financial Year arrears of outstanding statutory dues for a period of more than 6 months from the date they become payable is as under; Name of Nature of Amount Period to Due Date of

the the Dues (Rs.) which Date Payment

Statute the amt.

relate

Income Advance 1,00,01,132/- June,09 15.06.09 21.07.10 Tax Act, Tax &

1961 29.07.10

Income Advance 99,11,610/- Sept.09 15.09.09 06.08.10 Act, Tax &

1961 13.08.10

(b) Based on the information and explanation given to us, there are no dues towards Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty or Cess which are disputed and not deposited. Disputed dues on account of sales tax not deposited with appropriate authority as under;

Name of the Nature of Amount. Period to Forum where

Statute the Dues (Rs.) which dispute pending

the amt relates

Sales Tax Interest 5,44,297 2003-2004 Sales Tax Tribunal, Mumbai

10] In our opinion, the Company does not have any accumulated losses at the end of the year, and has no cash losses in the current and immediately preceding financial year.

11] According to the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank.

12] Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and othersecurities.

13] In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

14] In our opinion and according to the information and explanation given to us, the Company is not dealing in shares, securities and debentures and other investments. Therefore, clause 4(xiv) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

15] In our opinion and according to the information and explanation given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions. Therefore, clause 4(xv) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

16] In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17] In our opinion and according to the information and explanation given to us, and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on the short-term basis have been utilized for long-term investment.

18] According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19] In our opinion and according to the information and explanation given to us, the company has not issued any secured debentures during the period covered by our report. Accordingly, clause (xix) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

20] As informed to us, duringthe period covered by our Audit report, the Company has not raised any money by public issue.

21] To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the company has been noticed or reported duringthe course of our Audit.

For V. SANKARAIYAR&CO.

CHARTEREDACCOUNTANTS

FirmRegn No. : 109208W

V MOHAN

PARTNER

Membership No. 17748 Place : Mumbai

Date : 20th August, 2010