1 We have audited the attached balance sheet of CHEMOPHARMA LABORATORIES
 LTD., as at31stMarch 2012, and the Statement of profit and loss of the
 company 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 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 of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and ,j:sdosures 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 basis for
 our opinion.
 
 3. As required by the Companies (Auditor''s Report) Order (Amendment)
 2004 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 hereto 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 in paragraph 3
 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, Statement of profit and loss dealt with by
 this report are in agreement with the books of account;
 
 (iv) In our opinion, the balance sheet and Statement of profit and loss
 dealt with by this report 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
 of the company as on 31st March 2012, and taken on record by the Board
 of Directors, we report that none of the directors is disqualified as
 on 31st March, 2012 from being appointed as a director in terms of
 clause (g) of sub-section (I) of section 274 of the Companies Act,
 1956.
 
 (vi) We draw attention to note number 13 in respect of preparation of
 accounts on Going Concern basis even though the business is suspended,
 note number 14 in respect of diminution in value of investments and
 note number 15 in respect of non-provision of inter corporate deposit
 
 vii) Subject to our comments in (vi) above, in our opinion and to the
 best of our information and according to the explanations given to us,
 the said accounts read together with the significant accounting
 policies and other 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 the balance sheet, of the state of affairs of the
 company as at 31st March 2012 and;
 
 (b) In the case of the Statement of profit and loss of the Profit for
 the year ended on that date.
 
 (c) In the case of the cash flow statement of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITOR''S REPORT.
 
 Annexure referred to in paragraph 4 of our report of even date
 
 1.  The Company has maintained proper records of fixed assets showing
 full particulars including quantitative details and situation of fixed
 assets. The management during the year has not carried out the physical
 verification of fixed assets.  As per the explanations given to us a
 substantial portion of fixed assets were not disposed of during the
 year.
 
 2.  In our opinion and as per the explanation given to us there is no
 inventory at close of the year so sub-clause (a), (b) and (c) of clause
 ii is not applicable.
 
 3.  (a) The company has granted interest free loan to one party covered
 in the register maintained under section 301 of the Companies Act, 1956.
 The yearend balance of loans granted was Rs. 31,40,000/- and the maximum
 amount involved during the year was Rs. 31,40,000/-
 
 (b) Since the loan given was interest free without repayment
 stipulation, we cannot comment about the regularity of repayment of
 principal, interest, overdue amount and whether the other terms and
 conditions of the loan given is prejudicial to the interest of the
 Company.
 
 (c) According to the information and explanations given to us the
 Company has not taken any loans from companies listed in the Register
 maintained under section 301 of the Act.
 
 4.  As the company has discontinued its operations so the clause in
 respect of Internal Control System for the purchase of inventory, fixed
 assets and for the sale of goods and services is not applicable.
 
 5.  a) According to the information and explanations given to us, we
 are of the opinion that the particulars of contracts or arrangements
 referred to in section 301 of the Companies Act, 1956 that need to be
 entered into the register maintained under Section 301 of the Companies
 Act, 1956 have been so entered.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 exceeding Rs. 5,00,000/- have been made at
 prices which are reasonable having regard to prevailing market prices
 at the relevant time. As explained to us, the Company has not entered
 in to any transactions for sale of goods, materials and services in
 pursuance to contracts or arrangements as aforesaid.
 
 6.  In our opinion and according to the information and explanations
 given to us, no fixed deposits were accepted during the period to which
 the provisions of Sections 58Aand 58AAor any other relevant provisions
 of the Act apply.
 
 7.  As company''s operations are suspended the internal audit is not
 required.
 
 8.  To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under clause
 (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the
 products of the Company.
 
 9.  (a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 investor education and protection fund, employees'' state insurance,
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty, cess and other material statutory dues applicable to it.
 
 (b) According to the information & explanations given to us, the dues
 in respect of sales tax, income tax, custom duties, wealth tax, excise
 duty, and cess that have been deposited with the appropriate
 authorities on account of dispute and the forum whether the disputes
 are pending are given below:
 
 Name of the      Nature of the dues    Amount       Forum where dispute
                                                     is pending
 
 statute                                (Rs.)
 
 Central Sales
  Tax             Central sales tax    18,05,093     Appeal before
                                                     sales tax
                                                     authority
 
 Maharashtra 
 Sales Tax
 
 Income Tax Act   Income tax           31,77,291     Appeal before ITAT
 
 Income Tax Act   Penalty Tax          60,47,659     Appeal before ITAT
 
 10.  There are accumulated losses at the end of the financial year
 which are not more than 50% of its net worth. The Company has not
 incurred cash loss during the year and in the immediately preceding
 financial year.
 
 11.  Based on our audit procedure and according to the information and
 explanations given to us by the management the company has defaulted in
 repayment of loan to SICOM - Deferred Sales Tax payable to the extent
 of Rs 11,96,976 for more than 5 years.
 
 12.  The Company has not granted loans and advances on the basis of
 security byway of pledge of shares, debentures and other securities.
 
 13.  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 (as amended) are not applicable to the
 Company.
 
 14.. In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 15.  In our opinion and according to the information and explanations
 given to us, the Company has not given guarantee for loans taken by
 others from banks or financial institutions during the period.
 
 16.  In our opinion and according to the information and explanations
 given to us, the Company has not raised any term loans.
 
 17.  Based on the information and explanations given to us and on an
 overall examination of the balance sheet of the Company, the Company
 has not raised funds on short-term basis.
 
 18.  During the year, 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.  The company has not issued any debentures during the year.
 
 20.  The Company has not raised any money by public issue during the
 period
 
 21.  Based on the audit procedures performed and information and
 explanations given to us, we report that no fraud on or by the company
 has been noticed or reported during the course of our audit.
 
 Place : MUMBAI                                For Batliboi & Purohit,
 
 Date  : 29th June, 2012                        Chartered Accountants
 
                                                 Firm Reg.No. 101048W
 
                                                                 Sd/-
 
                                                        Kaushal Mehta
 
                                                              Partner
 
                                                Membership No. 111749