Torrent Pharmaceuticals

1.  We have audited the attached Balance Sheet of Torrent
 Pharmaceuticals Limited as at 31st March, 2009 and also the Profit and
 Loss Account and the Cash Flow Statement for the year ended on that
 date, annexed thereto. 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.
 
 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 required by the Companies (Auditors Report) Order, 2003 (the
 Order) 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 & 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in Paragraph 3
 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
 the 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.  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 the
 Companies Act, 1956;
 
 e.  On the basis of written representations received from the Directors
 as on 31st March, 2009 and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st March,
 2009 from being appointed as a Director in terms of clause (g) of
 sub-section (I) of Section 274 of the Companies Act, 1956;
 
 f.  In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with 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 :
 
 (i) in the case of the Balance Sheet of the state of the affairs of the
 Company as at 3 Ist March, 2009;
 
 (ii) in the case of the 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 to the Auditors Report
 
 (Referred to in paragraph 3 of our report of even date)
 
 1.  The nature of the Companys business / activities during the year
 is such that the requirements of clause (xiii) and (xiv) of paragraph 4
 of the Order are not applicable to the Company.
 
 2.  (a) The Company has maintained proper records showing full
 particulars, including quantitative details and
 
 situation of fixed assets.
 
 (b) The Company has a programme of physical verification of its fixed
 assets over a period of three years, which in our opinion, is
 reasonable having regard to the size of the Company and the nature of
 its assets.  In accordance with this programme, certain fixed assets
 have been physically verified by the management during the year and
 according to the information and explanations given to us,
 discrepancies noticed on such verification have been properly dealt
 with in the books of account.
 
 (c) The Company has not disposed off a substantial part of fixed assets
 during the year.
 
 3.  (a) As explained to us, inventories were physically verified during
 the year by the management at reasonable
 
 intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on such physical
 verification.
 
 4.  The Company has neither granted nor taken any loans secured /
 unsecured to or from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956.
 
 5.  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 for the purchase of inventory and fixed assets and for the
 sale of goods and services and we have not observed any continuing
 failure to correct major weaknesses in such internal controls.
 
 6.  In respect of transactions that need to be entered in the register
 maintained in pursuance of section 301 of the Companies Act, 1956:
 
 (a) The particulars of contracts or arrangements referred to in section
 301 of the Companies Act, 1956, have been so entered;
 
 (b) The transactions have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 7.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of sections
 58A, 58AA or any other relevant provisions of the Companies Act, 1956
 and the rules framed there under, where applicable. The Company has not
 accepted public deposits as defined under section 58A of the Companies
 Act, 1956 during the year under review. No order has been passedby the
 Company Law Board or National Company Law Tribunal or Reserve Bank of
 India or any Court or any other Tribunal.
 
 8.  In our opinion, the Company has an adequate internal audit system
 commensurate with the size and nature of its business.
 
 9.  We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for
 maintenance of cost records under section 209 (I) (d) of the Companies
 Act, 1956 for the Companys products to which the said rules are made
 applicable and are of the opinion that prima facie the prescribed
 accounts and records have been maintained. We have not, however, made a
 detailed examination of the said records.
 
 10.  (a) According to the information and explanations given to us, 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 and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax / value added tax (VAT), customs duty and excise duty were
 outstanding as at 31st March 2009 for a period of more than six months
 from the date they became payable.
 
 (c) According to the information and explanations given to us, details
 of amounts in respect of the income tax, excise duty, service tax,
 sales tax / VAT and employees state insurance which have not been
 deposited as
 
 on 3 Ist March, 2009 on account of any dispute are given below :
 
 Name of Statute                Nature of Dues
 
 West Bengal                     Demand of Tax
 Commercial Tax Act
 & Central Sales Tax,
 1956
 
 Maharashtra Sales Tax           Demand of Tax
 West Bengal VAT Act             Demand of Tax
 Central Sales Tax               Demand of Tax
 Central Excise Act,             Service Tax
 
                              Input Service Credit
 
                                 Demand of Duty
                                 Cenvat Credit
                                 Demand of Refund
                                 Demand of Duty
                                 Demand of Interest
                                 Demand of Interest
 E.S.I Act, 1948                 E.S.I Contribution
 
 Amount            period            Forum where the Dispute
                 which the                       
 (Rs. in lacs)                       is Pending
                 amount relates
 16.09              2004-05          Additional Commissioner of
 
                                     Commercial Tax,
                                     West Bengal
 0.95              2003-04           Sr. Dy. Commissioner of
                                     Sales Tax (Assessment),
                                     Maharashtra
 5.21              2005-06           Additional Commissioner of
                                     Commercial Tax, West Bengal
 0.75              2005-06           Additional Commissioner of
                                     Commercial Tax, West Bengal
 6.09              2001-02           Commissioner (Appeals)
 0.69              2006-07           CESTAT
 
 0.70           05-06 and 06-07      Assistant Commissioner
                                     (Ankleshwar)
 
 1.47              2006-07           Commissioner of Central
                                    Excise, Ahmedabad - III
 12.33             2008-09          Commissioner (Appeals)   
 1.55              2005-06          Dy. Commissioner of Central
                                    Excise, Kalol
 3.02           2001-02 and         Dy. Commissioner of Central
                  2002-03           Excise, Kalol
 0.28             2006-07           Commissioner (Appeals)
 248.71          1993-2007          Gujarat High Court
 
 11. The Company has no accumulated losses at the end of the financial
 year and it has not incurred any cash losses in the financial year
 under report and the immediately preceding financial year.
 
 12.  In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 financial institutions or banks. The Company has not issued any
 debentures.
 
 13.  The Company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 14.  In our opinion, the terms and conditions on which the Company has
 given guarantees for loans taken by others from banks or financial
 institutions are not prejudicial to the interest of the Company.
 
 15.  In our opinion, the term loans have been applied for the purpose
 for which they were raised except to the extent the funds deployed
 temporarily elsewhere pending application for the specified purpose.
 
 16.  According to the information and explanations given to us, and on
 an overall examination of the balance sheet of the Company, funds
 raised on short term basis have, prima facie, not been used during the
 year for long term investment.
 
 17.  The Company has not made preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 18.  The Company has not issued any debentures during the year.
 
 19.  The Company has not raised money by public issue during the year.
 
 20.  To the best of our knowledge and belief and according to the
 information and explanations given to us, no material fraud on or by
 the Company was noticed or reported during the year.
 
 
 
                                      For C. C. Chokshi & Co.
                                       Chartered Accountants
                                            (Gaurav J. Shah)
 
 Ahmedabad                                          Partner
 15th May, 2009                         Membership No.35701