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INDEPENDENT AUDITORS' REPORT

The Board of DirectorsCLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidiary of Claris Lifesciences Ltd. - India)11thFloor, City Tower, 122 Valero StreetSalcedo Village, Makati City

We have audited the accompanying financial statements of, CLARIS LIFESCIENCESPHILIPPINES, INC. (A Wholly Owned Subsidiary of Clans Lifesciences Ltd. - India), whichcomprise the Financial Position as at December 31, 2014 and 2013, and the Statements of Incomeand Deficits, and Statements of Cash Flows for the years then ended, together with a summaryof significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financialstatements in accordance with Philippine Financial Reporting Standards for Small andMedium-Sized Entities (PFRS for SMEs), and for such internal control as managementdetermines is necessary to enable the preparation of financial statements that are free frommaterial misstatement, whether due to fraud or error.

Auditors'Responsibilihj

Our responsibility is to express an opinion on these financial statements based on ouraudits. We conducted our audits in accordance with Philippine Standards on Auditing. Thosestandards require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of theentity's internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by Management, as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

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12th Floor, The Columbia Tower, Ortigas Avenue, Mandaluyong City -1550 PHILIPPINESTel it (+632) 726-7961 to 62; (+632) 722-9612 Fax it (+632) 723-9516 - www.acyatancpa.com

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Opinion

In our opinion, the financial statements present fairly, in all material respects, thefinancial position of, CLARIS LIFESCIENCES PHILIPPINES, INC. (A Wholly Owned Subsidiaryof Clans Lifesciences Ltd. - India), as at December 31, 2014 and 2013, and its financial performanceand cash flows for the years then ended, in accordance with Philippine Financial Reportin.g !

Standards for Small and Medium-Sized Entities (PFRSfor SMEs).

Report on the Supplementary Information Required

Our audit was conducted for the purpose of forming an opinion on the basic financialstatements taken as a whole. The supplementary information on Note 5 and Note 6 to thefinancial statements is presented for purposes of filing with the Bureau of Internal Revenue andis not a required part of the basic financial statements. Such supplementary information is theresponsibility of management and has been subjected to the auditing procedures applied in ouraudit of the basic financial statements. In our opinion, the supplementary information is fairlystated in all material respects in relation to the basic financial statements taken as a whole.

ACYATAN & CO., CPAsBOA/PRC Reg. No. 0141Issued on 09-27-2013Expiring on 12-31-2016SEC Accreditation No. 0246-FIssued on 05-24-12Expiring on 05-23-2015

A!JA~--~ARMINDA T. XCYATAN-GUERREROManaging PartnerCPA Certificate No. 085531SEC Accreditation No. 1226-AIssued on 05-24-12Expiring on 05-23-2015TIN 139-584-275BIRA.N. 07-000268-2-2014Issued on 8-18-14 Expiring on 8-17-2017PTR No. 2276389Issued on 1-05-2015 at Mandaluyong City

February 19, 2015Mandaluyong City-Philippines

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OUR SEAL

SUPPLEMENTAL STATEMENTOF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

(In compliance with SRC Rule 68)

The Board of Directors and StockholdersCLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidianj of Claris Lifesciences Ltd. - India)11th Floor, City Tower, 122Valero StreetSalcedo Village, Makati City

We have examined the financial statements of CLARIS LIFESCIENCESPHILIPPINES, INC. (A Wholly Owned Subsidiary of Claris Lifesciences Ltd. - India) for the yearended December 31, 2014, on which we have rendered the attached report dated February 19,2015.

In compliance with Securities Regulation Code Rule 68, we are stating that the saidcompany has a total number of one (1) stockholder owning one hundred (100) or more shareseach.

ACYATAN &CO.,CPAsBOA/PRC Reg. No. 0141Issued on 09-27-2013Expiring on 12-31-2016SECAccreditation No. 0246-FIssued on 05-24-12Expiring on 05-23-2015

AjA~--~ARMINDA T. ttYATAt;j--GUERREROManaging PartnerCPA Certificate No. 085531SECAccreditation No. 1226-AIssued on 05-24-12Expiring on 05-23-2015TIN 139-584-275BIRA.N. 07-000268-2-2014Issued on 8-18-14Expiring on 8-17-2017PTRNo. 2276389Issued on 1-05-2015at Mandaluyong City


12th Floor, The Columbia Tower, Ortigas Avenue, Mandaluyong City -1550 I'HILIPPINESTel If (+632) 726-7961 to 62; (+632) 722-9612 Fax If (+632) n3-9516 - www,acyatanc~'a,com

CLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidianj of Clans Lifesciences Ltd. - India)

STATEMENTS OF FINANCIAL POSITIONAs of December 31, 2014 and 2013

(In Philippine Pesos) Notes 2014 2013

ASSETS

CURRENT ASSETS

Cash

Trade and Other Receivables

Inventories

Other Current Assets

4.1

4.2

4.3

4.4

2,617,484 7,244,432

22,276,088 9,752,285

19,916,386 25,976,426

5,931,075 5,607,895

50,741,033 48,581,038

NON-CURRENT ASSETS

Property and Equipment, Net

Other Non-Current Assets

4.54.6

76,360

274,064

82,007

274,064

350,424 356,071

TOTAL ASSETS 51,091,457 48,937,109

LIABILITIES AND CAPITAL DEFICIENCY

CURRENT LIABILITIES

Trade and Other Pay ables 4.7 51,125,810 50,142,318

Income Tax Payable 4.15 290,434

TOTAL LIABILITIES 51,125,810 50,'132,751

CAPITAL DEFICIENCY

Share Capital 4.8 10,200,000 10,200,000

Share Premium 4.8 170,561 170,561

Deficit 4.8 (10,404,914) (11,866,203)

(34,353) (1,495,643)

TOTAL LIABILITIES AND CAPITAL DEFICIENCY 51,091,457 48,937,109

(See Accompanying Notes to Financial Statements)

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CLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidiary of Claris Lifesciences Ltd. - India)

STATEMENTS OF INCOME AND DEFICITSFor the Years Ended December 31, 2014 and 2013

(In Philippine Pesos) Notes2014 2013

NET SALES 4.9 295,755,072 138,288,594

COST OF SALES 4.10 (285,874,752) (130,194,680)

GROSS PROFIT 9,880,320 8,093,914

OTHER INCOMF/(LOSS) 4.11 (404,081) (744,437)

TOTAL INCOME 9,476,238 7,349,477

OPERATING EXPENSES

Salaries, Wages and Allowances 2,913,450 2,990,531

Taxes and Licenses 1,082,270 1,251,497

Professional Fee 222,307 558,252

Rental 4.13 396,000 352,800

Bank Charges 646,382 226,730

Utilities 66,745 213,702

Communication 105,233 152,899

Stationeries and Supplies 37,424 43,078

Depreciation 27,250 41,144

Selling and Marketing 22,570 20,155

Other Expenses 4.12 1,862,057 1,010,844

7,381,688 6,861,633

PROFIT BEFORE TAX 2,094,550 487,844

INCOME TAX EXPENSE 4.15 (633,261) (462,905)

PROFIT FOR THE YEAR 1,461,289 24,940

DEFICITS AT JANUARY 1 (11,866,203) (11,891,143)

DEFICITS AT DECEMBER 31 (10,404,914) (11,866,203)


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CLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidianj of Claris Lifesciences Ltd. - India)

ST ATEMENTS OF CASH FLOWSFor the Years Ended December 31, 2014 and 2013

(In Philippine Pesos) Notes2014 2013

CASH FLOWS FROM OPERATING ACTIVITIES

Profit Before Tax 2,094,550 487,844

Adjustments for:

Depreciation Expense 4.5 27,250 41,144

Operating Income Changes in Assets and Liabilities 2,121,800 528,989(Increase)/ Decrease in Assets:

Trade and Other Receivables 4.2 (12,523,803) (170,992)

Inventories 4.3 6,060,040 (21,779,221)

Other Current Assets 4.4 (323,181) (1,216,712)

Increase/ (Decrease) in Liabilites

Trade and Other Payables 4.7 983,492 28,886,499

Cash Generated/ (Used) from Operation (3,681,651) 6,248,563

Income Tax Paid (923,695) (406,865)

Net Cash Provided/ (Used) by Operating Activities (4,605,346) 5,841,698

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of Property and Equipment 4.5 (21,602) (29,732)

(Acquisition)of Non-Current Assets 4.6 (90,490)

Net Cash Used in Investing Activities (21,602) (120,222)

NET INCREASE IN CASH (4,626,948) 5,7'21,476

CASH BALANCE AT BEGINNING OF YEAR 7,244,432 1,522,956

CASH BALANCE AT END OF YEAR 2,617,484 7,244,432


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CLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subeidiarv of Claris Lifesciences Ltd.- India)

NOTES TO FINANCIAL STATEMENTSDecember 31, 2014 and 2013

NOTE 1- CORPORATE INFORMATION

1.1 Corporate Information

CLARIS LIFESCIENCES PHILIPPINES, INC. (the Company) was registered with theSecurities and Exchange Commission on August 24, 2006 with SEC Registration No.CS200613301. The Company was incorporated primarily to engage in trading of medicinesand pharmaceutical products.

The Company's parent company is Claris Lifesciences Ltd. which is registered and withprincipal office based in Ahmedabad - INDIA.

The principal office of Claris Lifesciences Philippines, Inc. is located at 11th Floor, CitylandTower, 122 Valero Street, Salcedo Village - MAKATI CITY.

1.2 Going Concern

The Company's operation for the current year resulted to a net income of P 1,461,289. Thepreviously accumulated losses of P 11,866,203 decreased to P 10,404,914 as of December 31,2014. Significant losses were incurred in prior years but have generated positive results (netincome) from operations over the current period due to developments in the business. TheManagement believes that the Company will continue to have positive results in the nearcoming years. Furthermore, the Parent Company of Claris Lifesciences Philippines, Inc.,Claris Lifesciences Ltd.-India has committed to provide financial support to the Company,whenever necessary, to enable the Company to meet its liabilities as and when they falldue.

As of December 31,2014, the Company's Total Liabilities exceeded its Total Assets by P34, 353.

The financial statements have been prepared on a going concern basis. These financialstatements do not include any adjustments relating to the recover ability and classifications ofcarrying amounts of assets and liabilities that might result, should the company may beunable to continue as going concern.

1.3 Approval for Issuance of Audited Financial Statements

On February 19, 2015, the Board of Directors of Claris Lifesciensces Philippines, Inc. approvedand authorized the issuance of these audited financial statements as of and for the year endedDecember 31,2014 (including the comparatives for the year ended December 31, 2013).

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies that have been used in the preparation of these financialstatements are summarized below. The policies have been consistently applied to all the yearspresented, unless otherwise stated.

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CLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidianj of Claris Lifesciences Ltd. - India)Notes to Financial Statements

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2.1 Basis of Preparation of Financial Statements

Statement of Compliance

The financial statements of the Company have been prepared in conformity with thePhilippine Financial Reporting Standards for Small and Medium-sized Entities (PFRS forSMEs).

Presentation of Financial Statements

The financial statements are presented in accordance with the Philippine Financial ReportingStandards for Small and Medium-sized Entities (PFRS for SMEs). The Company opted topresent a single statement of income and deficits, as the only change in equity arose fromprofit or loss only.

Functional and Presentation Currency

These financial statements are presented in Philippine Peso, which is the Company'sfunctional and presentation currency and all values absolute amounts except when otherwiseindicated.

Items included in the financial statements of the Company are measured using its functionalcurrency. Functional currency is the currency of the primary economic environment in whichthe Company operates.

2.2 Cash

Cash includes currency or cash items for deposits, petty cash fund, and cash in banks. Cash inBank consists of peso and US dollar currency deposit in banks with variousdepository/drawee banks, which are unrestricted and immediately available for use in currentoperations of the Company. Cash in foreign currency are valued at peso amounts using theclosing exchange rate as of the financial reporting date. For purposes of the cash flowstatements, cash comprises cash on hand and deposits held at call with banks.

2.3 Trade and Other Receivables

Trade receivables, which are based on normal credit terms and do not bear interest, arerecognized and carried at original invoice amounts. Where credit is extended beyond normalcredit terms, receivables are measured at amortized cost using the effective interest method,At the end of each reporting period, the carrying amounts of trade and other receivables arereviewed to determine whether there is any objective evidence that the amounts are notrecoverable. If so, an impairment loss is recognized immediately in profit or loss.

If there is objective evidence that an impairment loss on trade and other receivables have beenincurred, the amount of the loss is measured as the difference between the asset's carryingamount and the present value of estimated future cash flows (excluding future credit lossesthat have not been incurred) discounted at the financial asset's original effective interest rate(i.e. the effective interest rate computed at initial recognition). The carrying amount of theasset shall be reduced either directly or through the use of an allowance account. The amountof the loss shall be recognized in profit or loss.

CLARISLIFESCIENCESPHILIPPINES, INC.(A Wholly Owned Subsidianj of Claris Lifesciences Ltd. - India)Notes to Financial Statements

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2.4 Inventories

Inventories are stated at the lower of cost and selling price less costs to complete and sell. Costis determined using the first-in, first-out (FIFO) method.

At each reporting date, inventories are assessed for impairment. If inventory is impaired, thecarrying amount is reduced to its selling price less costs to complete and sell; the impairmentloss is recognized immediately in profit or loss.

2.5 Prepaid Expenses

Prepaid Expenses were incurred against future service potential or assets that may extendbeyond the accounting period in which payment was made and/ or service was availed of.These are expenses already paid by the Company but were not yet actually/fully incurred asof the Financial reporting date.

These prepaid expenses are capitalized and are amortized over specified periods until suchaccounts are fully charged to operations.

2.6 Property and Equipment

Property and equipment are carried at cost less accumulated depreciation, amortization andimpairment losses, if any.

The initial cost of property and equipment comprises its purchase price and any directlyattributable costs of bringing the asset to working condition and location for its intended use.

Such cost includes the cost of replacing part of such property, plant and equipment when thatcost is incurred if the recognition criteria are met. It excludes the costs of day-to-day servicing.

An item of property, plant and equipment is derecognized upon disposal or when no futureeconomic benefits are expected from its use or disposal. Any gain or loss arising fromderecognition of the asset (calculated as the difference between the net disposal proceeds andthe carrying amount of the asset) is included in profit or loss in the year the asset isderecognized.

Depreciation is computed on the straight-line basis, net of any estimated residual value overthe estimated useful lives of the assets, as follows:

Useful Life

Furniture and FixtureData Processing EquipmentLeasehold Improvements

5 years5 years5 years

2.7 Impairment of Assets

At each reporting date, items of Property and Equipment and other non-current assets arereviewed to determine whether there is any indication that those assets have sufferedimpairment loss. If there is an indication of possible impairment, the recoverable amount ofany affected asset (or group of related assets) is estimated and compared with its carryingamount.

CLARISLIFESCIENCESPHILIPPINES, INe.(A Wholly Owned Subsidian) of Claris Lifesciences Ltd. - India)Notes to Financial Statements

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If estimated recoverable amount is lower, the carrying amount is reduced to its estimatedrecoverable amount, and an impairment loss is recognized immediately in profit or loss.

Similarly, at each reporting date, inventories are assessed for impairment by comparing thecarrying amount of each item of inventory (or group of similar items) with its selling price lesscosts to complete and sell. If an item of inventory (or group of similar items) is impaired, itscarrying amount is reduced to selling price less costs to complete and sell, and an impairmentloss is recognized immediately in profit or loss.

If an impairment loss subsequently reverses, the carrying amount of the asset (or group ofrelated assets) is increased to the revised estimate of its recoverable amount (selling price lesscosts to complete and sell, in the case of inventories), but not in excess of the amount thatwould have been determined had no impairment loss has been recognized for the asset (groupof related assets) in prior years. A reversal of an impairment loss is recognized immediately inprofit or loss.

2.8 Trade and Other Payables

These are liabilities to pay for supplies or services that have been received or supplied andhave been invoiced or formally agreed with the supplier. These payables are non-interestbearing and are stated at their original invoice amount since the effect of discounting isimmaterial.

Payables are recognized initially at the transaction price and subsequently measured atamortized cost using the effective interest method. Accruals are liabilities to pay for goods orservices that have been received or supplied but have not been paid, invoiced or formallyagreed induding amounts due to employees. It is necessary to estimate the amount or timingof accruals, however, the uncertainty is generally much less than for provisions.

2.9 Provisions and Contingencies

Provisions are recognized when an entity obligation (legal or constructive) is incurred as aresult of a past event and when it is probable that an outflow of resources embodyingeconomic benefits will be required to settle the obligation and a reliable estimate can be madein the amount of the obligation.

Contingent Liabilities are not recognized in the financial statements but are disclosed in thenotes to financial statements unless the possibility of an outflow of resources embodyingeconomic benefits is remote. Contingent asset are not recognized in the financial statementsbut are disclosed when an inflow of economic benefits is virtually certain.

2.10 Equity

Share Capital - is determined using the nominal value shares that have been issued and fullypaid. The costs of acquiring Company's own shares are shown as a deduction from equityattributable to the Company's equity holders until the shares are cancelled or reissued. Whensuch shares are subsequently sold or reissued, any consideration received net of directlyattributable incremental transaction costs and the related income tax effects, is included inequity attributable to the Company's equity holders.


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Share Premium - includes any premiums received on the initial issuing of capital stock. Anytransaction costs associated with the issuing of shares are deducted from additional paid-incapital, net of any related income tax benefits.

Deficit - includes all current and prior periods' negative results of operations as disclosed inthe Statement of Income and Deficits.

2.11 Revenue and Expense Recognition

Revenue is recognized when it is probable that the economic benefits associated with thetransaction will flow to the Company and the amount of the revenue can be measuredreliably.

• Sale of goods is recognized when the risks and rewards of ownership of the goods havepassed to the buyer. This is generally when the customer has taken undisputed deliveryof goods.

• Interest Income and Other Income is recognized when earned.

Cost and Expenses are recognized in the profit or loss upon utilization of the goods or servicesor at the date they are incurred.

2.12 Foreign Currency Transactions and Translation

Transactions in foreign currencies are recorded using the exchange rate at the date of thetransactions. Outstanding monetary assets and liabilities denominated in foreign currenciesare restated using the closing exchange rate at the financial reporting date. Foreign exchangegains and losses are taken to the statement of income.

2.13 Related Parties

Related party transactions are transfer of resources, services or obligations between theCompany and its related parties, regardless whether a price is charged.

Parties are considered to be related it one party has the ability to control the other party orexercise significant influence over the other party in making financial and operating decisions.This includes: (a) individual owning, directly or indirectly through one or moreintermediaries, control or are controlled by, or under common control with the Company; (b)associates; and (c) individuals owning, directly or indirectly, an interest in the voting power ofthe Company that gives them significant influence over the Company and close membersfamily of any such individual.

In considering each possible related party relationship, attention is directed to the substance ofthe relationship and not merely on the legal form.

2.14 Leases - Company as Lessee

Leases, which do not transfer to the Company substantially all the risk and benefits ofownership of the assets, are classified as operating leases. Operating lease payments arerecognized as expenses in profit or loss on a straight-line basis over the lease term. Associatedcosts, such as maintenance and insurance, are expensed as incurred.


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The Company determines whether an arrangement is, or contains a lease based on thesubstance of arrangement is dependent on the use of a specific asset or assets and thearrangement conveys a right to use the asset.

2.15 Employee Benefits

Short- Term BenefitsThe Company recognizes a liability net of amounts already paid and an expense for servicesrendered by employees during the accounting period. Said benefits are measured at theundiscounted amount expected to be paid in exchange for services rendered.

Short-term benefits given by the Company to its employees include salaries and wages, staffbenefits, social security contributions and 13th month pay.

Retirement BenefitsAs of December 31, 2014, the Company does not have a formal retirement plan for itsemployees.

2.16 Income Taxes

Tax expense recognized in profit or loss comprises the sum of deferred tax and current tax notrecognized in other comprehensive income or directly in equity, if any.

Current tax assets or liabilities comprise those claims from, or obligation to authorities relatingto the current or prior reporting period, that are uncollected or unpaid at the reporting period.They are calculating using the tax rates and tax laws applicable the period to which they arerelate, based on the taxable profit for the year. All changes to current tax assets or liabilities arerecognized as a component of tax expense in profit or loss.

Deferred tax is the tax expected to be payable or recoverable on differences between thecarrying amount of assets and liabilities in the financial statements and the corresponding taxbasis used in the computation of taxable profit, and is accounted for using the balance sheetliability method.

Deferred tax liabilities are generally recognized for all taxable temporary differences anddeferred tax assets are recognized to the extent that it is probable that taxable profits will beavailable against which deductible temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at each date of the Statement ofFinancial Position and reduced to the extent that it is no longer probable that sufficient taxableprofit will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when theliability is settled or the asset is realized. Deferred tax is charged or credited in the statementof income, except when it relates to items charged or credited directly to equity, in which casethe deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by thesame taxation authority and the Company intends to settle its current tax assets and liabilitieson a net basis.

CLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidiunj of Claris Lifesciences Ltd. - India)Notes to Financial Statements

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2.17 Events after Financial Reporting Date

Any event after the financial reporting date that provides additional information about theCompany's position at financial reporting date (adjusting event) are reflected in the financialstatements. Any event after the financial reporting date that is not an adjusting event isdisclosed in the notes to the financial statements when material.

NOTE 3 - SIGNIFICANT ACCOUNTING JUDGMENTS,ESTIMATES AND ASSUMPTIONS

The Company's financial statements prepared in accordance with the Philippine FinancialReporting Standards for Small and Medium-sized Entities (PFRS for SMEs) requiremanagement to make judgments and estimates that affect the amounts reported in thefinancial statements and related notes. Judgment and estimates are continually evaluated andare based on historical experience and other factors, including expectations of future eventsthat are believed to be reasonable under the circumstances. Actual result may ultimately varyfrom these estimates, and the effect of any change in estimates will be adjusted in the financialstatements when they become reasonably determinable.

3.1 Critical Management Judgment in Applying Accounting Principles

Management makes judgments in the process of applying the Company's accounting policies.Judgments that have the most significant effect on the reported amounts in the financialstatements are discussed below:

Operating Lease

The Company entered into a lease agreement as a lessee for its principal office. The Companyhas determined that it does not retain all the significant risks and rewards of ownership of theleased premises.

3.2 Key Sources of Estimation Uncertainty

The following are the key assumptions concerning the future, and other key sources ofestimation uncertainty at the end of the reporting period, that have a significant risk ofcausing a material judgment to the carrying amounts of resources and liabilities within thenext financial year:

Useful life of Property and Equipment

The Company estimates the useful lives of property and equipment based on the period overwhich the assets are expected to be available for use. The estimated useful lives of the propertyand equipment are reviewed periodically and are updated if expectations differ from previousestimates due to physical wear and tear, technical or commercial obsolescence and legal orother limits on the use of the assets.

The carrying amounts of the property and equipment are analyzed in Note 4.5. Based onManagement's assessment as at December 31, 2014, there is no change in estimated usefullives of property and equipment during the year. Actual results, however, may vary due tochanges in estimates brought about by changes in factors mentioned above.

CLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned SubsidianJ of Claris Lifesciences Ltd. - India)Notes to Financial Statements

Page 8

Impairment of Inventory

The Company recognizes impairment on inventories whenever net realizable value ofinventories become lower than cost due to damage, physical deterioration, obsolescence,changes in price levels or other causes. The impairment is reviewed on a monthly basis toreflect the accurate valuation in the financial records.

There was no write-down of inventories in 2014.

Asset Impairment

The Company assesses impairment on its property, plant and equipment whenever events orchanges in circumstances indicate that the carrying amount of an asset may not berecoverable. The factors considered by the Company which could trigger an impairmentreview include significant underperformance relative to expected historical or projected futureoperating results and significant changes in the manner of use of the acquired assets.

No impairment loss was recognized in 2014 and 2013.

Recognition of Deferred Tax Asset

The Company reviews the carrying amounts of Deferred Tax Asset at each financial reportingdate and reduces the same to the extent it is no longer probable that sufficient taxable profitwill be available to allow all or part of the Deferred Tax Asset to be utilized. SignificantManagement judgment is required to determine the amount of Deferred Tax Asset that can berecognized, based upon the likely timing and level of future taxable profit together with futuretax planning strategies.

NOTE 4 - SUPPORTING INFORMATION FOR ITEMSPRESENTED IN THE FINANCIAL STATEMENTS

4.1 Cash

This account consists of:

Cash on hand

Cashin bank

2014 2013

12,978 29,097

2,604,507 7,215,335

2,617,484 7,244,432

Cash includes currency or cash items that are for deposit, and peso and dollar deposits inbanks which are unrestricted and immediately available for use in current operations. Cash inbanks earn interest at the respective bank deposit rates

CLARISLIFESCIENCESPHILIPPINES, INC.(A Wholly Owned Subsidianj of Claris Lifesciences Ltd. - India)Notes to Financial Statements

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4.2 Trade and Other Receivables

This account consists of:2014 2013

Account receivable - Trade - Net

Loans and Advances

Advances to Related Parties

15,149,782

5,917

7,120,389

2,677,200

19,808

7,055,278

22,276,088 9,752,285

Advances to Related Parties are short-term, non-interest bearing loans granted to ClarisInjectables Ltd. (CIL - India). As of December 31, 2014 the balance of said advances in USDollar amounts to $ 159,352.

4.3 Inventories

As of December 31, 2014, the Inventories of the Company are stated at cost. Cost isdetermined using the first-in, first-out (FIFO) method. The entire inventory pertains to theGoods in Transit in line with the Company's implementation of Just in Time (JIT) system, thatis, there is no ending inventory at hand.

No allowance for inventory obsolescence was provided by Management as of December 31,2014 (See Note 3). The balance of Inventories as of December 31, 2014 amounted to P19,916,386 (P 25,976,426 as of December 31,2013).

The Company procures its inventories solely from its Parent Company - Claris LifesciencesLtd.-India.

4.4 Other Current Assets


Input VatPrepaid Rent

Prepaid Tax

2014 2013

4,723,073 5,562,895

45,000 45,000

1,163,002

5,931,075 5,607,895

CLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidian; of Claris Lifesciences Ltd. - India)Notes to Financial Statements

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4.5 Property and Equipment, net

This account consists of:Beginning Disposals/ Ending

Costs Balance Additions Adjustments Balance

Furniture and Fixtures 73,806 17,143 90,949

Data Processing Equipment 176,547 4,460 181,007

Leasehold Improvements 46,299 46,299

296,652 21,602 318,254

Accumulated Depreciation

Furniture and Fixtures 37,843 12,590 50,433

Data Processing Equipment 130,503 14,660 145,163

Leasehold Improvements 46,299 46,299

214,645 27,250 241,895

Book Value 82,007 76,360

Management has reviewed the carrying values of its Property and Equipment as of December31,2014 for any impairment. Based on its evaluation, there were no indications that the assetsare impaired. Depreciation Expense included in the statement of income and deficitsamounted to P 27,250 in 2014 and P41,144 in 2013.

4.6 Other Non-Current Assets

This account consists refundable deposit pertains to rental deposits. The amount is refundableon customer's request upon termination of service, provided that certain terms and conditionare met. The balance of this account as of December 31, 2014 and December 31, 2013 are bothamounted to P 274, 064.

4.7 Trade and Other Payables


2014 2013

Accounts Payable - TradeAdvances from Customers

Accrued Expenses

Advances from Customer Duties and Taxes

47,967,098

3,025,376

122,08511,251

46,832,857

3,241,467

57,09810,896

51,125,810 50,142,318

Accounts Payable includes obligations/amounts due to the Parent Company USD 379,369 (PhP16,951,497) as a result of purchases of materials and supplies in the ordinary course ofbusiness, and to its Affiliate, Claris Injectables Ltd. USD 694,119 (Php 31,015,600), as a resultof transfer of Balances in Slump Sale by the Parent to its Wholly Owned Subsidiary. Thebalance of this account is stated at the amount of the obligation contracted less paYlllentsmade.

CLARIS LlFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidianj of Claris Lifesciences Ltd. - India)Notes to Financial Statements

Page 11

Accrued Expenses pertain to expenses already incurred as of financial reporting date but whichare not yet paid including taxes withheld subject for remittance on the next period. Theseexpenses are stated at face value, or at the amounts for which they are to be paid.

4.8 Equity

Share Capital

Authorized SharesShares

Common Shares

SubscribedBalance, at the Beginningof the yearIssued During the YearBalance, End of the year

102,000

102,000 102,000

Paid-up Capital

Share PremiumBalance at the Beginningof the yearAdditions During the YearBalance at the end of the year

Amount in Pesos2014 201310,200,000 10,200,000

10,200,000

10,200,000 10,200,000

10,200,000 10,200,000

170,561 170,561

170,561 170,561

As of December 31, 2014, the Company has only one (1) stockholder owning 100 or moreshares each of the Company's share capital.

Deficit

During the year ended December 31,2014 the deficit decreased from P 11,866,203 to P10,404,914 as a result of the generated net income for the year amounting to P 1,461,289.

4.9 Net Sales


Gross SalesSales Discount/ Return

295,815,022

59,950

138,747,272

458,678

Net Sales 138,288,594295,755,072

CLARIS LlFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidianj of Clans Lifesciences Ltd. - India)Notes to Financial Statements

Page 12

4.10 Cost of Sales


Inventory - BeginningAdd: Purchases - netCustom and Other ChargesLess: Credit Note (Claris Lifesciences Ltd.)

2014 2013

25,976,426 4,197,205266,067,108 146,921,25913,747,604 7,050,358

(1,997,716)

305,791,138 156,171,10619,916,386 25,976,426

285,874,752 130,194,680

TotalLess: Inventory - End

Total

4.11 Other Income/(Loss)


Forex gain (loss)Unrealized Forex gain (loss)Interest Income from Bank

Other Miscellaneous IncomeBad Debts Recovery

(387,762)(16,744)

425

59,261(930,157)

23245,98080,247

(404,081) (744,437)

4.12 Other Expenses


2014 2013

Courier ExpenseAssociation duesOffice Miscellaneous ExpensesTransportation ChargesPenaltyRepresentation Expenses

Expat Expenses

96,46153,45741,965

399,521

106,51753,55373,597

252,097113,284411,796698,772

571,881

1,862,057 1,010,844

CLARISLIFESCIENCESPHILIPPINES, INC.(A Wholly Owned Subsidian) of Claris Lifesciences Ltd. - India)Notes to Financial Statements

Page 13

4.13 Commitments and Contingencies

Leases - Company as Lessee

The Company leases the office space at RM. 1108, 11F, Cityland Herrera Tower 98 V.A. Rufinocorner Valero Streets Salcedo Village, 1227 Makati City. for a period of one (1) year (up toJanuary 14, 2014), renewable at the option of the Company under certain terms andconditions. On January 2015 the lease contract was renewed for another one year and suchlease agreements were recognized under the same operating lease method. Total rentalpayments for the year reported in the Statement of Income and Deficits amounted to P 396,000in December 31,2014 (P352,800 as of 2013).

Others

There are commitments and contingencies that arise in the normal course of the Company'soperations that are not reflected in the financial statements. As of December 31, 2014,Management is of the opinion that losses from these commitments and contingencies will nothave a material effect on the Company's financial statements.

4.14 Related Party Transactions

In the normal course of business, the Company has transactions with its related parties. Asummary of the significant transactions for the year 2014 with related parties is as follows:

Outstanding Balance

Amount/ Advances d fA vances romCategory To Related Terms ConditionsNote Volume Party Related Party

Advances toAffiliate( Claris

InjectablesLtd.)

No fixed term;non-interest

bearing

Unsecured;No

impairment4.14.a7,120,389

Total 7,120,389

a. The Company has temporary advances to its Affiliate (Claris Injectables Ltd - India)which are non-interest bearing and payable within the Company's operating cycle.The balances as of December 31, 2014 and 2013 amounted to P 7,120,389 (US $159,352)in 2014 and P nil in 2013.

b. The Company sources all of its inventories from the Parent Company. Outstandingpayable for purchases as of December 31,2014 amounted to P 16,951,497 (US$ 379,369)and P46,832,857 (US$ 1,057,776.82) in 2013.

c. Due to a restructuring activity made within the Parent Company, the AccountsPayable of P 31,015,600 (U5$ 694,119) and Loan Advances of P 7,120,439 (U5$ 159,353)by the Company to the Parent Company have been assigned in the Slump Sale to aGroup Company named as, Claris Injectables Ltd., India.

d. Key officers are provided with allowances while managing the Company's operationsin the Philippines. Total allowance given during the year and reported in theStatements of Income and Deficits amount to P 1,667,639 in 2014 and ~571,747 in 2013.

CLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidiarf of Claris Lifesciences Ltd. - India)Notes to Financial Statements

Page 14

4.15 Income Tax

The Company is subject to Minimum Corporate Income Tax (MOT) which is computed at 2%of gross income, as defined under the tax regulations or to regular corporate income tax,whichever is higher. In 2014, the company is liable for RCIT amounting to P 633,261 as it isRCIT is higher than MCIT.

The components of Income tax expense as reported in profit or loss is as follows:

Current Income TaxDeferred Income Tax

2014633,261

Income Tax Expense (Benefit) 633,261 462,905

The reconciliation of tax computed at the applicable statutory rates to tax expense attributableto continuing operations follows:

2014 2013

Tax on pretax profit at 30%

Adjustment for income subject to final tax

Tax effect of:--Non-Deductible Expense

Unrealized Forex LossInterest Income from Bank

628,365 146,354

5,023(128)

279,047(70)

Current Income Tax 633,261 425,331

Tax effect of temporary DifferencesNon- Deductible Expense 37,574

Deferred Income Tax 37,574Income Tax Expense(Benefit) 633,261 462,905

The Company's Income Tax Payable is computed as follows:

2014 2013Income Tax Due (RCIT/MCIT)Less: Tax CreditUnused MCIT

Creditable Withholding Tax - 2307

Prepaid Tax - Quarterly Payments

633,261 ~t25,331

1,243,443

552,820

47,86787,031

Income Tax Payable (Prepaid Income Tax) (1,163,002) 290,439

CLARIS LIFESCIENCES PHILIPPINES, INC.(A VVholly Owned Subsidianj of Claris Lifesciences Ltd. - India)Notes to Financial Statements

Page 15

NOTE 5 - SUPPLEMENTARY INFORMATION UNDER RR 15 -2010

As required by Revenue Regulations 15-2010 issued by the Bureau of Internal Revenue, thedetails on taxes, duties and licenses fees paid or incurred during the taxable year is as follows:

a. Output Vat for 2014

The Company is a VAT-registered company with VAT output tax declaration of P 35,490,609for the year based on the amount reflected in the Sales Account of P 295,755,072. TheCompany has no zero-rated/ exempt sale.

b. Input VAT for 2014

Beginning BalanceCurrent input tax from purchases/payments for:

Domestic Purchase of Goods other than Capital GoodsImportation of Goods Other than Capital GoodsDomestic Purchase of Services

Input charged against Output during the year

5,562,895

28,05834,570,736

51,993(35,490,609)

Ending Balance 4,723,073

c. Withholding Tax

Withholding Tax on Compensation

Withholding Creditable Withholding Tax( Expanded)

621,404

24,641

Total 646,045

d. Taxes and Licenses

Mayor's Business PermitProduct Registration FeeOther Government Fees and Licenses

FDADangerous Drug BoardBureau of ImmigrationIntellectual Property OfficeOthers

540,693244,462

124,95729,18024,04291,16327,773

Total Taxes and Licenses

Less: Total Taxes & Licenses charged to sales

1,082,270

Total Taxes and Licenses charged to operating expenses 1,082,270

e. Importation

The landed cost of the Company's importations amounted to P 288,089,947 for the year, withpaid/accrued amount ofP 13,747,604 as customs duties.

CLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned SubsidianJ of Claris Lifesciences Ltd. -Lndia)Notes to Financial Statements

Page 16

f.Excise Tax

The Company does not have excise taxes accrued since it does not have any transactionssubject to excise tax.

g. Deficiency Tax Assessment and Tax Cases

The Company has no tax cases outstanding or pending in courts or bodies with the BIR in anyof the other open years.

-00000-

...•

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTSTO ACCOMPANY INCOME TAX RETUlRNS

The Board of Directors and StockholdersCLARIS LIFESCIENCES PHILIPPINES, INC.(A Wholly Owned Subsidiary of Claris Lifesciences Ltd. - India)11thFloor, City Tower, 122Valero StreetSalcedo Village, Makati City

We have audited the accompanying financial statements of CLARIS LIFESCIENCESPHILIPPINES, INC. (A Wholly Owned Subsidiaru of Clans Lifesciences Ltd. - India), whichcomprise the Statements of Financial Position as at December 31, 2014 and 2013, and theStatements of Income and Deficits and Statements of Cash Flows for the years then ended, onwhich we have rendered the attached report dated February 19, 2015.

In compliance with Revenue Regulations No. V-020,we are declaring the following:

1. The supplementary information on taxes and licenses is presented in Note 5 tothe financial statements.

2. No partner of our Firm is related by consanguinity or affinity to the Chairman,Board of Directors, President, Managers, and Stockholders of the Company.

ACYATAN &CO.,CPAsBOA/PRC Reg. No. 0141Issued on 09-27-2013Expiring on 12-31-2016SECAccreditation No. 0246-FIssued on 05-24-12Expiring on 05-23-2015

AjA~~ g.~jARMINDA T. A'tYATAM-GUERREROManaging PartnerCPA Certificate No. 085531SECAccreditation No. 1226-AIssued on 05-24-12Expiring on 05-23-2015TIN 139-584-275BIRA.N. 07-000268-2-2014Issued on 8-18-14Expiring on 8-17-2017PTRNo. 2276389Issued on 1-05-2015at Mandaluyong City


12thFloor, The Columb ia Tower, Ortigas Avenue, Mandaluyong City - 1550 PHILIPPINESTel # (+632) 726-7961 to 62; (+632) 722-9612 Fax # (+632) 723-9516 - www.acvatancpa.com

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