Plethico Pharmaceuticals

We have audited the attached Balance Sheet of Plethico Pharmaceuticals
 Limited, as at 31st, December 2008 and the Profit & Loss Account of the
 Company for the year ended on that date annexed thereto and the cash
 flow statement for the year ended on that date and report that these
 financial statements are the responsibility of the Companys
 management.  Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 1.  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 amounts and
 disclosures in 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.
 
 2.  As required by the Companies (Auditors Report) Order, 2003 issued
 by the Central Government in terms of Section 227(4A) of the Companies
 Act, 1956, we enclose in the Annexure, a statement on the matters
 specified in paragraphs 4 and 5 of the said Order.
 
 3.  Further to our comments in the Annexure referred to in paragraph 2
 above, 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 purposes of our
 audit;
 
 (b) 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;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash flow statement
 dealt with by this report are in agreement with the books of account;
 
 (d) ln our opinion, the Balance Sheet, Profit and Loss Account and the
 cash flow statement dealt with by this report comply, with the
 requirement of the Accounting Standards referred to in sub-section (3C)
 of section 211 of the Companies Act, 1956.
 
 (e) Based on the representations made by the Directors of the Company
 and the information and explanation as made available to us, the
 Directors of the Company do not prima facie have any disqualification
 as referred to in clause (g) of sub section (1) of section 274 of the
 Companies Act, 1956.
 
 (f) In our opinion and according to information and according to the
 information and explanations given to us, the said accounts read with
 notes thereon give the information required by the Companies Act, 1956
 in the manner so required and give a true and fair view and are 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 December, 2008 and
 
 (ii) In the case of Profit and Loss Account, of the profit of the
 Company for the year ended on that date and 
 
 (iii) In so far as it relates to the cash flow statement, of the cash
 flow of the company for the year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 STATEMENT REFERRED TO IN PARAGRAPH II OF OUR REPORT OF EVEN DATE TO THE
 MEMBERS OF PLETHICO PHARMACEUTICALS LIMITED ON THE ACCOUNTS FOR THE
 YEAR ENDED ON 31ST DECEMBER, 2008.
 
 1.  FIXED ASSETS:
 
 (a) As per information & explanation provided to us, the company has
 maintained proper records showing full particulars, including
 quantitative details and situation of fixed assets.
 
 (b) As per information & explanation provided to us, fixed assets have
 been physically verified by the management at reasonable intervals. No
 material discrepancies were noticed on such verification.
 
 (c) During the year under review, no substantial part of fixed assets
 has been disposed off and the going concern status of the company is
 not affected.
 
 2.  INVENTORY:
 
 (a) As per information & explanation provided to us, the physical
 verification of inventories has been conducted at reasonable intervals
 by the management.
 
 (b) In our opinion and according to the information and explanation
 given to us, 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 inventories and as
 explained to us, the discrepancies noticed on physical verification of
 stock were not material and the same have been properly dealt within
 the books of account.
 
 3.  LOANS AND ADVANCES:
 
 (a) The company has not granted any loan, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act.
 
 (b) Since the company has not granted any secured or unsecured loan to
 companies, firm or other parties covered under section 301 of the Act,
 the question of rate of interest and other terms & conditions does
 notarise.
 
 (c) Since the company has not granted any secured or unsecured loan to
 companies, firm or other parties covered under section 301 of the Act,
 the question regarding receipt of principal and interest and overdue
 amount does notarise.
 
 (d) The Company has taken unsecured loans from parties covered in the
 register maintained under section 301 of the Act. The numbers of
 parties involved two and the maximum amount involved is Rs. 554.75 lacs
 and the year ending balance is Rs. 11.29 lacs.
 
 (e) As per the information and explanation provided to us, there are no
 terms and conditions with regard to rate of interest to be charged and
 repayment period, therefore, in view of the above, the same are not
 prima facie prejudicial to the interest of the company.
 
 (f) As per the information and explanation provided to us, since there
 are no terms & conditions with regard to rate of interest chargeable
 and repayment period, the question of regularity of payment of interest
 and repayment of principal does not arise.
 
 4.  INTERNAL CONTROL SYSTEMS:
 
 In our opinion and according to the information & explanation provided
 to us, there is an adequate internal control system commensurate with
 the size of the company and the nature of its business, for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness in internal controls.
 
 5.  TRANSACTION WITH PARTIES UNDER SECTION 301 OF THE COMPANIES ACT
 1956:
 
 (a) According to the information & explanation provided to us, the
 particulars of contracts or arrangements referred to in Section 301 of
 the Act have been entered in the register required to be maintained
 under that section.
 
 (b) According to information and explanation provided to us,
 transactions made in pursuance of such contract or arrangements have
 been made at prices which are reasonable having regard to the
 prevailing market prices at the relevant time where such market prices
 are available with the company or the prices at which transactions for
 similar goods or services have been made with other parties.
 
 6.  FIXED DEPOSITS:
 
 As per the information and explanation provided to us, the Company has
 neither invited nor accepted any deposits from the public during the
 year under review.
 
 7.  INTERNAL AUDIT:
 
 In our opinion, the company has an internal audit system commensurate
 with the size of the Company and the nature of its business.
 
 8.  COST RECORDS:
 
 We have broadly reviewed the books of account 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 and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained.  However, we have
 not made a detailed of the records with a view to determine whether
 they are accurate or complete.
 
 9.  STATUTORY DUES:
 
 (a) According to the records of the company and the information and
 explanations provided to us the company is generally regular in
 depositing undisputed statutory dues including provident fund, investor
 education and protection fund, Employees State Insurance, Income Tax,
 Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty and any
 other statutory dues with the appropriate authorities.  According to
 the information and explanations given to us, there are no undisputed
 amounts payable in respect of Income Tax, Sales Tax, Wealth Tax,
 Service Tax, Custom duty, Excise Duty were outstanding as at December
 31, 2008 for a period of more then six month from the date they become
 payable.
 
 (b) According to the information and explanation given to us.  There
 are no disputed statutory dues that have not been deposited with the
 relevant authorities.
 
 10.  POTENTIALLY SICK COMPANY:
 
 The company has no accumulated losses, however as per the information
 and explanation provided to us, the company has not incurred cash
 losses during the financial period covered by our audit and there were
 no cash losses incurred in the immediately preceding financial period.
 
 11.  REPAYMENT OF DUES:
 
 According to the information and explanation provided to us, we have
 been intimated that the company has not defaulted in repayment of dues
 to financial institutions or banks
 
 12.  LOAN AND ADVANCES GRANTED ON THE BASIS OF SECURITIES:
 
 According to the records of the company and according to the
 information and explanations provided to us, the company has not
 granted loans and advances on basis of security by way of pledge of
 shares, debentures & other securities.
 
 13.  CHIT FUND/NIDHI/MUTUAL BENEFIT SOCIETY:
 
 In our opinion, the company has not a chit fund or Nidhi mutual benefit
 fund/society. Therefore, clause 4 (XIII) of the companies (Auditors
 Report) order 2003 is not applicable to the company.
 
 14.  INVESTMENT COMPANY:
 
 The company has maintained proper records, transaction and contracts in
 respect of dealing in securities and timely entries have been made
 therein. All such securities have been held by the Company in its own
 name.
 
 15.  GUARANTEES GIVEN:
 
 According to the information and explanations provided to us, the
 Company has given a corporate guarantee for loan taken by a company
 from bank.
 
 16.  TERM LOANS:
 
 According to the records of the company and according to the
 information and explanation provided to us, on an overall basis, the
 term loan have been applied for the purposes for which they were
 obtained.
 
 17.  SOURCES AND APPLICATION OF FUNDS:
 
 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 the purpose of
 long term investment.
 
 18.  PREFERENTIAL ALLOTMENT:
 
 The company has not made any preferential allotment of shares during
 the year under review to parties and companies covered in the Register
 Maintained under section 301 of the Act.
 
 19.  DEBENTURE:
 
 The company has not issued/raised any money by issue of debentures
 during the period under review.
 
 20.  PUBLIC ISSUE:
 
 The Company has not raised any money by a public issue during the year
 under review.
 
 21.  FRAUD:
 
 Based upon the audit procedures performed and the information and
 explanations provided to us by the management, we report that no fraud
 on or by the company has been noticed or reported during the course of
 our audit.
 
                                                 For N.R Gandhi & Co.
                                                Chartered Accountant
 
                                                        N. P. Gandhi
                                                          Proprietor
                                                          M.No.44294
 
 Indore, 
 March 31, 2009