1.  We have audited the attached Balance Sheet of ASTEC
 LIFESCIENCES LTD. as at 31 st March'' 2011, the Profit and Loss Account
 and cash flow statement for the year ended on that date annexed
 thereto. These financial statements are the responsibility of the
 company''s management. Our responsibility is to express an opinion on
 these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. These Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amount 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 statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors Report) Amendment Order,
 2003 issued by the Central Government of India in terms of sub-section
 (4A) of Section 227 (4A) of the Companies Act, 1956, and in the basis
 of such checks of the books and records, as we understand appropriate
 and according to the information and explanation given to us during the
 course of audit, we enclose 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 explanation, which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit.
 
 b.  In our opinion, proper books of accounts as required by law have
 been kept by the company as far as appears from our examination of
 books.
 
 c.  The Balance Sheet, the Profit and Loss Account and cash flow
 statement dealt with by this report are i n agreement with the books of
 accou nt mai ntai ned by the company.
 
 d.  On the basis of written representation received from the Directors
 as on 31 st March 2011 and taken on records by the Board of Directors
 we report that none of the Directors is disqualified as on 31st March
 2011 from being a appointed as a Director in terms of clause (g) of
 subsection (1) of Section 274 of the Companies Act, 1956,
 
 e.  In our opinion the Balance Sheet, the 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
 thecompanies Act'' 1956.
 
 f.  In our opinion and to the best of our information and according to
 the explanations given to us, the said Balance Sheet, the Profit and
 Loss Account and cash flow statement read 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 principles generally accepted in India:
 
 i.  In case of Balance Sheet of the state of affairs of the company as
 at 31st March 2011.
 
 ii.  In the case of 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 flows for the
 year ended on that date.
 
 Annexure referred to the Auditors'' Report
 
 1.  a. The company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed 
 assets.
 
 b.  We have been informed that the management during the year has
 physically verified the fixed assets. In our opinion the frequency of
 verification is reasonable having regard to the size of the company and
 the nature of its assets. According to information and explanation
 given to us, no material discrepancies were noticed on such physical
 verification.
 
 c.  The company has not disposed off any major part of the Assets d u
 ring the year.
 
 2.  a. As explained to us, inventories have been physically verified by
 the Management at reasonable
 
 intervals during the year, the frequency of such Verification is
 reasonable.
 
 b.  As per information given to us, the procedures of physical
 verification of inventory followed by the management are, in our
 opinion, reasonable and adequate in relation to the size of the company
 and the natu re of its busi ness.
 
 c.  In our opinion and according to the information and explanations
 given to us, the company is maintaining proper record of inventory. The
 discrepancies noticed on verification between the Physical stocks and
 the book records were not material and have been properly dealt with in
 the books of account.
 
 d.  The valuation of stock is fair and proper and is in accordance with
 the generally accepted accounting principles.
 
 3.  a. 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 company has taken unsecured loans from directors,
 companies covered in the register maintained under section 301 of the
 Companies Act, 1956. The maximum amount involved during the year was
 Rs. 1,76,47,174/- and the year end balance of loans taken from such
 person was Rs. 1,47,17,701 /-
 
 b.  In our Opinion and according to the information given to us, the
 terms and conditions are not prima facie prejudicial to the interest of
 the company.
 
 c.  As the loans taken by the company are repayable on demand the
 question of overdue amounts does notarise.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with size of the company and natu re of its business with
 regard to purchase of inventory, fixed assets and sale of goods and
 services. During the course of audit, we have not observed any conti nu
 ing fai lure to correct major weakness in internal control.
 
 5.  a.  In our opinion and according to the information and
 explanations given to us the transactions
 
 made in pursuance of contracts or arrangements that needed to be
 entered into in the register maintained under Section 301 of the
 Companies Act, 1956 have been so entered.
 
 b. According to the information and explanations given to us, and
 having regard to the explanations that some of the items purchased,
 sold or services availed are of a special nature for which comparable
 alternative price are not available, the transactions made in pursuance
 of contracts or arrangements entered in the registers maintained under
 section 301 of the Companies Act, 1956 during the year have been made
 at prices which are considered reasonable.
 
 6.  As per the information and explanation given to us, the company has
 not accepted any public deposits with i n the pu rview of section 58 A
 of the Companies Act.
 
 7.  In our opinion, the company has an internal
 auditsystemcommensuratewiththesizeand natureof its business.
 
 8.  We are informed that the central government has not prescribed mai
 ntenance of cost records under section 209 {1) (d) of the Companies
 Act, 1956, in respect of the products manufactured by the company.
 
 9.  a.  The company is regular in depositing with appropriate
 authorities undisputed statutory dues
 
 including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service
 Tax, Customs Duty, Excise Duty, Cess and other material statutory dues
 applicable.
 
 b. According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
 Tax, Service Tax, Customs Duty, Excise Duty, Cess were in arrears, as
 at 31st march 2011 for a period of more than six month from trie dates
 they became payable.
 
 10.  The company has no accumulated losses and has not incurred cash
 losses during the financial year covered by our audit and the
 immediately preceding financial year.
 
 11.  In our opinion and accordingtothe information and explanations
 given to us, the company has not defaulted in repayment of dues to a
 financial institution or banks.
 
 12.  According to our examinations of the records of the company 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 pi
 edge of shares, debentures and other securities.
 
 13.  According to informations & explanations given to us, the company
 has given guarantee for loans taken by subsidiary from banks. The terms
 & conditions whereof in our opinion are not prim facia prejudiciary to
 the interest of the company.
 
 14.  In our opinion, the term loans have been applied for the purpose
 for which they were raised.
 
 15.  According to the information and explanations provided to us by
 the management, we are of the opinion that, funds raised for short-term
 sources were not utilised for long-term investments and funds raised on
 long-term basis have not been used for short-term investments.
 
 16.  Accordingtothe information and explanations given to us, the
 company has not made preferential allotment of shares to parties and
 companies covered in the register maintained under Section 301 of the
 Act.
 
 17.  The company has not issued any secured debentures during the year
 and accordingly the provision of clause 4(xix) of the Companies
 (Auditors Report) Amended Order, 2004 are not applicable.
 
 18.  The company is not a sick industrial company within the meaning of
 clause (O) of sub section (1) of section 3 of the Sick Industrial
 Companies (Special Provisions) Act, 1985 (1 of 1986).
 
 19.  During the course of our examination of the books and records of
 the company carried out in accordance with the generally accepted
 practice in India, and in accordingtothe information and explanations
 given to us, we have neither come across any instance of material fraud
 on or by the company, noticed or reported during the year, nor we have
 been informed such case by the management..
 
                                           For P. M. Kathariya & Co.  
                                           Chartered Accountants
 
                                           Firm Reg. No.104922W
 
                                           CA. P. M. Kathariya
 Date: 27th May, 2011                        (Proprietor)
 
 Place: Mumbai                               M.No: 31315