1.  We have Audited the attached Balance Sheet of Combat Drugs Limited
 the Company'' for the period 1st October 2011 to 31st March 2012 and
 also the Statement of Profit and Loss and the Cash Flow Statement for
 the year ended on that date annexed thereto. These financial statements
 are the responsibility of tire 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 lest 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 (Auditor''s Report) Order. 2003 issued
 by (he Centre! Government in terms of Section 227 (4A) of the Companies
 Act. 1956.  we annex hereto a statement on the matters specified in
 paragraphs A and 5 of the said Order.
 
 4. Further to our comments in the annexure inferred to in paragraph 3
 above, we report that:
 
 b) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 c) In bur opinion proper books of account as required by law have been
 kept by the company so far as appears from our examination of those
 books,
 
 d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
 Cash Flow Statement dealt with by this report comply with requirements
 of the accounting standards referred to in Sub-section (3C) of section
 211 of the Companies Act, 1956
 
 e) The Balance Sheet, Statement of Profit and Loss Account and Cash
 flow statement dealt with by this report are in agreement with the
 books of account;
 
 f) On the basis of written representations received from the directors
 and taken on record by the Board of Directors, we report that none of
 the directors is disqualified from being appointed as a director of the
 Company under clause (g) of sub-section (1) of Section 274 of the
 Companies Act. 1956;
 
 a) In Our opinion and to the best of our information and according to
 the explanations given to us, they said accounts read together with the
 Significant Accounting Policies and 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 Affairs of the
 Company as at 31st March 2012;
 
 ii.  In the ease of the Statement of Profit and Loss, of the Loss of
 the company for the year ended on that date, and
 
 iii.  In the case of Cash Flow Statement, of the Cash Flows for the
 year ended on that date.
 
 Annexure to Auditors'' Report
 
 Referred to in paragraph 3 of our report of even date
 
 xvii. (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The Fixed assets have been physically verified by the management
 during the year. No material Discrepancies were noticed on such
 physical verification.
 
 (c) The Company as not disposed of any substantial part of its fixed
 assets during the year.
 
 xviii. (a) As per the information and explanations given to us,
 physical verification of inventories is carried out by the Company at
 regular intervals during the year.  In our opinion the frequency of
 verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventory
 followed by the management are reasonable and adequate in relation to-
 the, size of the company and nature of its business.
 
 (c) The Company is maintaining proper records of inventory. As informed
 by the management, the discrepancies noticed on verification between
 the physical stocks and the book records were not material,
 
 xix. (a) The company has not granted any loans, secured or unsecured,
 to companies, firms or other parties covered in the register maintained
 under Section 301 of the Companies Act, 1956 which are not prejudicial
 to the company
 
 (b) The company has taken an interest free loan from one party covered
 in the register maintained under Section 301 of the Companies Act.
 T95S. The maximum amount involved during the year is Rs 3.54 Lakhs and
 the year-end balance is Rs. 2.S8 Lakhs.
 
 (c) The company is regular in repaying the principal amounts as
 stipulated.
 
 XX. 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, fixed assets and for the sale
 of goods. During the course of our audit, no major weakness has been
 noticed in the internal control system in respect of these areas.
 
 xxi. (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, 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.
 
 ix. The Company has not accepted deposits from the public within the
 meaning of section 58A and 5&AA or any other relevant provisions of
 the Companies Act, 1956 and the rules framed there under. We are
 informed that no order has been passed by the Company Law Board or
 National Company Law Tribunal or the Reserve Bank of India or any Court
 or any other Tribunal.
 
 x. In our opinion, the Company has an internal audit system which is
 commensurate with the size and nature of its business.
 
 xi. Maintenance of cost records by the company has not been prescribed
 by the Central Government of India under Section 209(I) (d) of the
 Companies Act, 1956
 
 xii. (a) According to the information and explanations given to us, and
 on the basis of our examination of books of account, the Company is
 generally regular in -.depositing with the appropriate authorities
 undisputed statutory dues including provident fund, employee state
 insurance, sales tan, customs duty, health tax service tax, Excise
 duty, Cess and other statutory dues applicable to 1C /According to the
 information and explanations given to us, the company has period
 remitted Tax deduction at source Rs 4,25,740. and Professional Tax Rs.
 35,590/- to the appropriate authorities
 
 (b) According to the information and explanations given to us, there
 are no disputed statutory dues pending as on31siMarch, 2012.
 
 xiii. The company has appropriated an amount of Rs. 2,24,40,0007- under
 a Scheme of Arrangement towards reduction of share capital sanctioned
 by the Humble High Court of A.P. vide its order no. 9 of 2011 dated
 26th July 2011 and henceforth the accumulated losses have been set off.
 Therefore the Company does not have any accumulated tosses as at 31M
 March 2012,
 
 xiv. In our opinion and1 according to the information and explanations
 given to us, the company has not defaulted in repayment of dues to
 financial institutions, banks or debenture holders.
 
 xv. According to the information and explanation given to us and based
 on the documents and records produced to us, the company has not
 granted loans and advances on the basis of securities by way of pledges
 of shares, debentures and other securities.
 
 xvi. In our opinion, the company is not a chit fund or a nidhi/mutual
 benefit fund/society. Accordingly the provisions of clause 4 (xiii) of
 the Companies (Auditor''s Report) Order, 2003 are hot applicable to the
 Company.
 
 i.  In our opinion'' and according to the information and explanations
 given to us, 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 (Auditors report) order.
 2003 are not applicable to the company.
 
 
 ii. In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions. Accordingly, the
 provisions of Clause A (xv) of the companies (Auditor''s report) order.
 2003 are not applicable to the company.
 
 iii. The company has not taken any term loans; hence this Clause is not
 applicable.
 
 iv. in our opinion and according to the information and explanations
 given to list and on an overall examination of the balance sheet of the
 company, we report that no funds raised on short term basis were
 applied for long-term investment
 
 v. According to the information and explanations given to us-, the
 company has not made any preferential allotment of shares to parties
 and companies covered in register maintained under section 301 of the
 Companies Act. 1956 and hence this clause is-not applicable
 
 vi.  According to the information and explanations given to us, there
 were no o debentures issued by the company during the period.
 Accordingly, Clause 4 (xix) of Companies [Auditor''s Report) Order. 2003
 is not applicable.
 
 vii. According to the information and explanations given to us, the
 Company has not raised any funds on public issue and hence disclosure
 on the end use of money raised by the public issue is not applicable to
 the Company.
 
 viii.  Based upon the audit procedures performed for the purpose of
 reporting-this true and fair view of the financial statements and as
 per the information and explanations given 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 M. Artandam & Co..
 
                                         Chartered Accountants
 
                                         (Firm Regn.No.000125S)
 
                                                            Sd/-
 
                                                 A.V. SADASIVA
 
                                                       Partner
 
 Place; Seconderabad                               M.No: 16404
 
 Date : 7th Sep 2012