1.  We have audited the attached Balance sheet of CPEC LIMITED, as at
 31st March 2012 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 company''s
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We have 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
 financial statements are free of material statements. An audit
 includes, examining on 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 presentation of the financial
 statements. 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 the Central Government of India in terms of sub section (4A) of
 section 227 of the Companies Act, 1956, we enclose in the Annexure a
 Statement on the matters specified in paragraph 4 and 5 of the said
 order.
 
 4.  Further to comments in the Annexure referred to 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 purpose of our
 audit.
 
 b.  In our opinion, proper books of accounts, as required by law have
 been kept by the company so far as it appears from our examination of
 the books of accounts.
 
 c.  The Balance sheet, the Profit & Loss Account and the Cash flow
 statement dealt with by this Report are in agreement with the Books of
 Accounts.
 
 d.  In our opinion, the Balance sheet, the Profit & 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 2012, and taken on record by the Board of
 Directors, We report that none of the directors of the Company is
 disqualified as on 31st march 2012, from being appointed as a Director
 in terms of clause (g) of sub-section (1) 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 the 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 :
 
 In the case of the Balance sheet of the state of affairs of the company
 as at 31stMarch, 2012;
 
 In the case of Profit & Loss account of the loss for the year ended on
 that date, and
 
 In the case of cash flow statement of the cash flows for the year ended
 on that date.
 
                               
 
 
 Annexure referred to in paragraph 3 of our report of even date
 
 (i) (a) The company has only land as fixed assets and required records
 of the same are properly maintained.
 
 (ii) (a) There is no opening and closing inventory hence this clause is
 not applicable.
 
 (iii) (a) As informed to us, the company has granted advances in the
 nature of Loans to Associate Company and to companies in which
 Directors are interested as per register maintained under section 301
 of the Companies Act, 1956. The maximum amount outstanding is Rs.728.74
 lakhs and closing out standing balance is Rs.501.11 lakhs.
 
 (b) As informed to us, the company has not taken any advances in the
 nature of Loans from persons in which Directors are interested as per
 register maintained under section 301 of the Companies Act, 1956.
 
 (c) There is no stipulation for payment of interest. The other terms
 and Conditions of such loans are in our opinion, prima facie not
 prejudicial to the interest of the company.
 
 (d) The payment of principal amount is on demand.
 
 (e) There is no stipulation of principal repayment. Hence there is no
 overdue Amount.  ^
 
 (iv) In our opinion and according to the information and explanation
 given to us, there are adequate internal procedures commensurate with
 the size of the company and the nature of its business. During the
 course of our audit no major weakness has been observed in the internal
 controls.
 
 (v) (a) the particulars of contracts or arrangements referred to in
 section 301 of the Companies Act have been so entered in the register
 maintained.
 
 (b) In our opinion and according to the information and explanation
 given to us the company has purchased land from associate company and
 paid professional fees to director which exceeds Rs 5 lacs in respect
 of each such parties during the year. The same have been made at prices
 which are reasonable having regard to prevailing market prices at the
 relevant time.
 
 (vi) In our opinion and according to the information and explanation
 given to us, the Company has not accepted any public deposits with in
 the meaning of sections 58 and 58AA of the Companies Act, 1956 and the
 rules framed there under.
 
 (vii) In our opinion, the company has an adequate internal audit system
 commensurate with size and nature of its business.
 
 (viii) As informed to us, the maintenance of cost records has not been
 prescribed by the Central Government under clause (d) of sub - section
 (1) of section 209 of the Act.
 
 (ix) (a) The company is regular in depositing undisputed statutory dues
 including Provident Fund, Employees State *^ Insurance, Sales - tax,
 Custom Duty, Excise Duty, cess and any other statutory dues with
 appropriate authorities during the year except Payment of S.A Income
 Tax dues forA. Y.2011-12 provided but unpaid of Rs.3.64 Cr.
 
 (b) According to the information and explanations given to us, there
 are no dues payable on account of disputes with regards to sales tax,
 income tax, custom tax, wealth tax, excise duty, cess.
 
 (x) The company has no accumulated losses at the end of the financial
 year and it has incurred cash losses in this financial year but not
 incurred cash loss in the preceding financial year.
 
 (xi) According to the information and explanations given to us the
 company has not defaulted in repayment of dues to a financial
 institution or bank. Infact the company has no such borrowings.
 
 (xii) According to the information and explanations given to us the
 company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 (xiii) The company is not Chit fund or a Nidhi or Mutual benefit fund
 or society. Therefore the provisions of any special statutes are not
 applicable to the company.
 
 (xiv) According to the information and explanations given to us the
 company does not deal or trade in shares, securities, debentures and
 other investments and hence this clause is not applicable.
 
 (xv) In our opinion, the terms and conditions on which the company has
 given guarantee for loan taken by others from bank, are prima facie,
 not prejudicial to the interest of the company.
 
 (xvii) In our opinion and overall examination of the Balance Sheet of
 the company, we report that no funds raised on Short term basis have
 been used for long term investment.
 
 (xviii) The company has not made any preferential allotment of shares
 during the Year to parties and companies covered in the Register
 maintained under Section 301 of the Act.
 
 (xix) The company has not issued any debentures.
 
 (xx) The company has not raised any money through a public issue during
 the year.
 
 (xxi) Based on the audit procedures applied and information and
 explanations given to us, we report that no fraud on or by the company
 has been noticed or reported during the course of our audit.
 
                                    FOR VEDULA VIJAY AND RAMANATHAN 
                                    CHARTERED ACCOUNTANTS
 
                                    K. BODA PARTNER 
 Place : Mumbai                     M''Sh.NO. 106709
 
 Date : 30th May, 2012              Firm no : 106472W.