Prism Medico & Pharmacy Ltd

To

The Members of

WOOLITE MERCANTILE COMPANY LIMITED

We have audited the attached balance sheet of M/s Woolite Mercantile Company Limitedas at 31^st March 2011, the profit and loss account and also the cash flowstatement for the year ended on that date annexed thereto. These financial statements arethe responsibility of the Company's management. Our responsibility is to express anopinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted inIndia. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free to material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting Principlesused and significant estimates made by the management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

As required by the Companies (Auditors' Reports) Order, 2003 (as amended) issued by theCentral Government of India in terms of sub-section (4A) of section 227 of the CompaniesAct, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4and 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 of ourknowledge 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 theCompany so far as appears from our examination of those books;

iii. The Balance Sheet, Profit and Loss Account and Cash flow Statements dealt with bythis report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statementsdealt 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 the written representation received from the Directors, as on 31^stMarch 2011, and taken on record by the Board of Director, we report that none of theDirector is disqualified as on 31^st March 2011 from being appointed as aDirectors 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 explanationsgiven to us, the said accounts read with the notes thereon give the information asrequired by the Companies Act, 1956, in the manner so required and give a true and fairview 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 31^stMarch 2011

(b) in the case of Profit and Loss Account, of the loss for the year ended on thatdate.

(c) In the case of cash flow statement, of the cash flow for the year ended on thatdate.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBER OF WOOLITEMERCANTILE COMPANY LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31st March 2011.

1. a. The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

b. As explained to us, the fixed assets have been physically verified by the managementduring the year, which in our opinion is reasonable, having regard to the size of thecompany and nature of its assets. No material discrepancies were noticed on such physicalverification.

c. During the year, the company has not disposed off substantial part of fixed assets.

2. a. The management has conducted physical verification of inventory held as stock intrade at reasonable intervals

b. The procedure of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.

c. The company is maintaining proper records of inventory and no material discrepancieswere noticed on physical verification.

3. As informed, the company has neither granted nor taken any loans secured orunsecured to/from companies, firms or other parties covered in the register maintainedunder Section 301 of the Companies Act, 1956,

4. In our opinion and according to the information and explanations give to us, thereare adequate internal control procedures commensurate with the size of the Company and thenature of its business, with regard to purchase of inventory and fixed assets and withregard to sale of goods and services. During the course of our audit, we have not observedany major weaknesses in internal control

5. Based on the audit procedures applied by us and according to the information andexplanations provided by the management to us, we are of the opinion that there is notransaction that needs to be entered into the register maintained under section 301.Accordingly, the provision of Clause v (b) of the paragraph 4 of the Order is notapplicable to the company.

6. The Company has not accepted any deposits during the year from the public within themeaning of the provisions of Sections 58A, 58AA, or any other relevant provision of theCompanies Act, 1956 and rules made there under. Hence, the clause (vi) of the order is notapplicable.

7. The Company does not have an internal audit system. However, in our opinion andaccording to the representations made by the management, the level of operations andtransactions of the Company, by itself, do not require a formal internal audit system.

8. The Central Government has not prescribed maintenance of cost record under section209(1)(d) of the Companies Act, 1956 for the products of the Company.

9. a) According to the information and explanations given to us, in our opinion, thecompany is regular in depositing undisputed statutory dues including Provident Fund,Investors Education and Protection Fund, Employees' State Insurance, Sales Tax, WealthTax, Service Tax, Custom Duty, Excise Duty, cess and other statutory dues to the extent asapplicable to it with the appropriate authorities except Income Tax dues where there isdelay in depositing. According to the information and explanations given to us, noundisputed amount payables in respect of statutory dues as aforesaid were outstanding, asat 31^st March 2011 for a period of more than six months from the date ofbecoming payable.

b) According to the information and explanations given to us, there are no dues of saletax, Income tax, customs duty, wealth tax, service tax, excise duty and cess which havenot been deposited on account of any dispute.

10. The Company has accumulated losses at the end of the financial year. The Companyhas incurred cash losses during the financial year covered by our audit also there werecash losses during the immediately preceding financial year.

11. The Company has no borrowings from financial institutions, banks or debentureholders.

12. According to the information and explanations given to us and based on thedocuments and records produced to us, the Company has not granted loans and advances onthe basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund and nidhi / mutual benefit fund/society.

14. The company is not dealing in or trading in shares, securities, debentures andother investments. Therefore, the Provisions of clause (xiv) of paragraph 4 of the Orderare not applicable.

15. According to the information and explanations given to us, the Company has notgiven any guarantee for loans taken by others form banks or financial institutions duringthe year.

16. The Company has not raised any term loans during the year covered by our audit.

17. According to the information and explanations given to us, and on an overallexamination of the balance sheet of the company, we report that no funds raised onshort-term basis have been used for long term investment.

18. The Company has not made any preferential allotment of shares during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issue during the year.

21. According to the information and explanations given to us, we report that no fraudon or by the company has been noticed or reported during the course of our audit.