1.  We have audited the attached Balance Sheet of ORTIN LABORATORIES
 LIMITED, as at 31st March, 2011 the Profit and Loss account and also
 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.
 
 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 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 basis for
 our opinion.
 
 3.  As stated in Note 2, Schedule – S Notes on Accounts, Vineet
 Laboratories Pvt. Ltd.  (VLPL) was amalgamated with Ortin Laboratories
 Ltd. with effect from October 1, 2010, in accordance with a Scheme of
 Amalgamation sanctioned on June 29, 2011, by the Honourable High Court
 of Andhra Pradesh. The opening balances of the erstwhile VLPL as on
 October 01, 2010 have been adopted as per the amalgamation scheme.
 
 4.  Without qualifying our opinion attention is drawn to Note 2,
 Schedule – S Notes on Accounts regarding the scheme of amalgamation
 approved by the Honorable High Court of Andhra Pradesh whereby the
 Assets and Liabilities of the erstwhile Vineet Laboratories Private
 Limited have been taken over and recorded at their book values as on
 01st October, 2010 as per the audited financial statements. The share
 capital of the erstwhile VLPL (Transferor Company) before amalgamation
 was Rs. 720.00 lacs.  According to the scheme of amalgamation, the
 Equity Share Capital to be allotted to the Shareholders of VLPL is Rs.
 1,224.00 lacs. The difference of Rs. 504.00 lacs between the Equity
 Share Capital to be allotted to the Shareholders of VLPL the Transferor
 Company and its Equity Share Capital prior to Amalgamation has been
 adjusted against Share Premium to the extent of Rs. 168.90 Lacs and the
 balance of Rs. 335.10 Lacs against Profit & Loss Account as per the
 Amalgamation Scheme.
 
 5.  As required by the Companies (Auditors'' Report) order, 2003, as
 amended by Companies (Auditor''s Report) (Amendment) Order, 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, to extent applicable to the Company.
 
 6.  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 it appears from
 our examination of those books (iii) The Balance Sheet, Profit and Loss
 account and cash flow statement dealt with by this report are in
 agreement with the books of account
 
 (iv) 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
 Companies Act, 1956.
 
 (v) On the basis of written representations received from the
 directors, as on 01st September, 2011 and taken on record by the Board
 of Directors, we report that none of the directors is disqualified as
 on 31st March, 2011 from being appointed as a directors 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 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 the case of the Profit and Loss Account, of the profit, 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.
 
 ANNEXURE
 Re: ORTIN LABORATORIES LIMITED
 
 Referred to in Paragraph 3 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.
 
 (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.
 
 (c) During the year, the company has not disposed off a major part of
 the plant and machinery.
 
 (ii) (a) The inventory has been physically verified during the year by
 the management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) 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) The company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material.
 
 (iii) (a) The company has not taken loans from the parties covered in
 the register maintained under section 301 of the Companies Act, 1956.
 
 (b) The company has granted loan during the previous year to one
 company covered in the register maintained under section 301 of the
 Companies Act, 1956 and an amount of Rs. 1,11,000/- is outstanding as
 on 31st March, 2011.
 
 (c) In our opinion, the rate of interest and other terms and conditions
 on which loans have been taken/granted from the parties listed in the
 register maintained under section 301 of the Companies Act are not,
 prima facie, prejudicial to the interest of the company.
 
 (d) The company is regular in repaying/recovering the principal amounts
 as stipulated and has been regular in the payment/receiving of
 interest.
 
 (e) There was no overdue amount of loans taken from or granted to
 companies, firms or other parties listed in the register maintained
 under section 301 of the Companies Act, 1956.
 
 (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) (a) According to the information and explanations given to us, we
 are of the opinion that the transactions 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 contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of rupees five lakhs in
 respect of any party during the year have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the company has not accepted any deposits from the public.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account relating to
 materials, labour and other items of cost maintained by the company
 pursuant to the Rules made by the Central Government for the
 maintenance of cost records under section 209 (1) (d) of the Companies
 Act, 1956 and we are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained.  
 
 (ix) (a) The company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund, ESI,
 income tax, sales tax, excise duty and other material statutory dues
 applicable to it.  
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, sales tax and
 excise duty were in arrears, as at 31st March, 2011 for a period of
 more than six months from the date they became payable.
 
 (c) According to the information and explanation 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.  (x) In our opinion, the company
 did not have the accumulated loss as on 31st March, 2011.
 
 The Company has not incurred cash losses during the financial year
 covered by our audit and the immediately preceding financial year.  
 
 (xi) In our opinion and according to the information and explanations
 given to us, the company has not defaulted in repayment of dues to a
 financial institution and banks.
 
 (xii) We are of the opinion that the company has not granted loans and
 advances on the basis of security by way of pledge of shares,
 debentures and other securities. Hence no need to maintain the said
 records.
 
 (xiii) 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.
 
 (xiv) 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 are not applicable to the company.
 
 (xv) In our opinion, the company has not given guarantees for loans
 taken by others from banks or financial institutions.
 
 (xvi) In our opinion, the term loans have been applied for the purpose
 for which they were raised.
 
 (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 the 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.
 
 (xviii) According to the information and explanations given to us, the
 company has not raised any fresh share capital by way of public issue
 or by any other mode during the financial year. Hence, the question of
 preferential allotment of shares to parties and companies covered in
 the register maintained under section 301 of the Act does not arise.
 
 (xix) According to the information and explanations given to us, the
 company has not issued any debentures in the history of the company.
 Hence the creation of securities does not arise.
 
 (xx) During the year the company has not raised money by way of public
 issues, hence the verification of end use of money does not arise.
 
 (xxi) 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.
 
                                                 For MATHESH & RAMANA
 
                                                CHARTERED ACCOUNTANTS
 
 Place: Hyderabad                                       Sd/-
 
 Dated: 01.09.2011                                B.V. RAMANA REDDY
 
 PARTNER                                        Membership No. 026967
                                                Firm Reg. No. 002020S