We have audited the attached Balance Sheet of Gujarat Terce
 Laboratories Limited as at 31st March 2012 and also the Statement of
 Profit & Loss and the 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.
 
 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 misstatement. An audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statements
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 As required by the Companies (Auditors''Report) Order 2003 issued by the
 Central Government of India in terms of Section 227 (4A) of the
 Companies Act, 1956 we enclose in the Annexure A Statement on the
 matters specified in paragraph 4 & 5 of the said order.
 
 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 our knowledge and belief, were necessary for the purposes of our
 audit.
 
 ii) 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 such
 books.
 
 iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow
 Statement referred to in this report are in agreement with the Books of
 Account.
 
 iv) In our opinion, the Balance Sheet, Statement of Profit & Loss and
 Cash Flow Statement read in conjunction with the notes on accounts,
 comply with the Accounting Standards referred to in sub-section (3C) of
 Section 211 of the Companies Act, 1956.
 
 v) On the basis of the written representations received from the
 Directors, 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
 3Tst March, 2012 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 together with the
 notes thereon, give the information as required by the Companies Act,
 1956, in the manner so required and give a true and fair view in
 conformity with the accounting principles generally accepted in India :
 
 i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2012
 
 ii) in the case of the Statement of Profit & Loss, of the profit of the
 company 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 to Auditor''s Report of even date on the accounts for the year
 ended 31st March, 2012 of Gujarat Terce Laboratories Limited
 
 1.  a.  The company has maintained proper records showing full
 particulars including quantitative details and situation of
 fixed assets.
 
 b.  As explained to us, fixed assets, according to the practice of the
 Company, are physically verified by the management at reasonable
 intervals, in a phased verification program which, in our opinion, is
 reasonable looking to the size of the company and the nature of its
 assets. No material discrepancies were noticed on such verification.
 
 c.  The Company has not disposed off any substantial part of its fixed
 assets during the year so as to affect its going concern status.
 
 2.  a.  As explained to us, inventories have been physically verified
 during the year by the management, except for inventories
 
 lying with outside parties, which have, however, been confirmed by
 them. In our opinion, the frequency of verification is reasonable.
 
 b.  The procedures explained to us, which were followed by the
 management for physical verification of inventories, are in our
 opinion, reasonable and adequate in relation to the size of the company
 and the nature of its business.
 
 c.  On the basis of our examination of the inventory records of the
 Company, we are of the opinion that, the Company is maintaining proper
 records of inventory. Discrepancies, which were noticed on physical
 verification of inventory as compared to book records, have been
 properly dealt with in the books of account.
 
 3.  a.  The Company has not given any loans, secured or unsecured to
 the companies, firms or other parties covered in the
 
 register maintained under section 301 of the Companies Act, 1956.
 Hence, clauses (iii)(b),(c) and (d) of the Order are not applicable.
 
 b. The Company has taken interest free unsecured loans from the one
 Director which is not prejudicial to the interest of the company.
 Maximum balance outstanding during the year is Rs. 993.20 lacs while
 the year end balance is Rs.  816.03 lacs.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are generally 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 sale
 of goods. During the course of our audit, no major weakness in internal
 control has come to our notice.
 
 5.  a.'' On the basis of the audit procedures performed by us, and
 according to the information, explanations and representations
 
 given to us, we are of the opinion that the transactions in which
 directors were interested and which were required to be entered 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 on the
 basis of our examination of the books of accounts, the company has not
 entered into any transactions exceeding the value of Five Lacs Rupees
 in respect of any party during the year that need to be entered in the
 Register in pursuance of Section 301 of the Companies Act, 1956.
 
 6.  The Company has not accepted any deposits from the public and thus,
 paragraph 4(vi) of the said order is not applicable
 
 7.  In our opinion, the company has an adequate internal audit system
 commensurate with the size of the Company and nature of its business.
 
 8.  We have broadly reviewed the books of accounts maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209(l)(d) of the Companies
 Act, 1956 in respect of the Company''s products to which the said rules
 are made applicable, and are of the opinion that prima facie the
 prescribed accounts and records have been made and maintained. We have,
 however, not made a detailed examination of the records with a view to
 determine whether they are accurate.
 
 9.  a.  The company has been generally regular in depositing with
 appropriate authorities undisputed statutory dues including
 
 provident fund, employees'' state insurance, income tax, sales tax,
 custom duty, excise duty, cess and other material statutory dues
 applicable to it, except in few cases there has been delay in
 depositing such dues. According to the information and explanations
 given to us, no undisputed amounts payable in respect of income tax,
 wealth tax, sales tax, customs duty, excise duty and cess were in
 arrears, as at 31st March, 2012 for a period of more than six months
 from the date they became payable.
 
 b.  According to the information and explanation given to us, the dues
 outstanding of sales tax, income tax, customs duty, wealth tax, excise
 duty and cess on any account of any dispute, are as follows:
 
 10.  The Company has neither accumulated losses at the end of the
 financial year nor has incurred cash losses in the financial year under
 report and in the immediately preceding financial year.
 
 11.  On the basis of the records examined by us and the information and
 explanations given to us, the company has not defaulted in repayment of
 dues to a financial institution or bank.
 
 12.  As explained to us, the Company has not granted any loans or
 advances on the basis of security by way of pledge of shares,
 debentures and any 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 are not applicable to the
 company.
 
 14.  The Company is not dealing or trading in shares, securities,
 debentures and other investments. Accordingly, the provisions of clause
 4(xiv) of the Companies (Auditor''s Report) Order are not applicable to
 the company.
 
 15.  According to information and explanations given to us and the
 representations m&de by the management, the Company has not given
 guarantees for loans taken by others from banks or financial
 institutions.
 
 16.  In our opinion, the term loans raised during the year 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. No long-term funds have been used to finance short-term
 assets except permanent working capital.
 
 18.  The Company has not made any preferential allotment of shares to
 the parties and companies covered in the register maintained in the
 Companies Act u/s 301 during the year.
 
 19.  The company has not issued any secured debentures during the year.
 
 20.  The Company has not raised any money by way of public issue during
 the year and therefore paragraph 4(xx) of the Order is not applicable.
 
 21.  According to the information and explanations given to us, and to
 the best of our knowledge and belief, no fraud on or by the company has
 been noticed or reported during the course of our audit during the
 year.
 
 22.  As per Accounting Standard (AS) 17 on Segment Reporting, segment
 information has been provided in the Notes on accounts.
 
                                           For, P A R Y & Co.
                                           Chartered Accountants
                                           FRN - 007288C
 
                                          (Sushil Goenka)
 
 Date : 30.07.2012                         Partner
 
 Place :   Ahmedabad                       M.No. 115465