1.  We have audited the attached Balance Sheet of M/s. Dolphin Medical
 Services Limited, as at 31st March, 2011, the Profit and Loss Account
 and also 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 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 (Auditor''s Report) Order, 2003 as
 amended by the companies (Auditor''s Report) Order (Amendment) 2004,
 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 paragraphs 4 and 5 of the said
 order.
 
 4.  Further to our 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 account as required by law have been
 kept by the company so far as appears from our examination of those
 books;.
 
 c) The Balance Sheet and Profit & Loss account dealt with by this
 report are in agreement with the books of account.
 
 d) In our opinion, the Balance Sheet and Profit and Loss Account dealt
 with by this report comply with the accounting standards referred in
 sub-section (3C) of section 211 of the Companies Act, 1956;
 
 e) On the basis of written representation received from the directors,
 as on 31st March, 2011, and taken on record by the Board of Directors,
 we report that none of the directors is disqualified as on 31st March,
 2011, 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 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, 2011;
 
 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 REPORT OF THE AUDITORS 
 Referred to in Paragraph 1 of our report of even date.
 
 1.1.  The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 1.2.  The fixed assets have been physically verified by the management
 during the period and no serious discrepancies have been noticed on
 such verification.
 
 1.3.  The Company not disposed substantial part of the fixed assets
 during the period and hence do not affect going concern status of the
 company.
 
 2.1.  The stock of inventory have been physically verified during the
 year by the management. In our opinion, the frequency of verification
 is reasonable.
 
 2.2.  In our opinion, the procedures of physical verification of
 inventory followed by the management are reasonable and adequate
 considering the size of the Company and the nature of its business.
 
 2.3.  No material discrepancies have been noticed on physical
 verification of stocks as compared to book records in so far as appears
 from our examination of the books.
 
 03.  According to the information and the explanations given to us, the
 Company has not granted any loans secured or unsecured to companies,
 firms or other parties to be listed in the Register to be maintained
 under section 301 of the Companies Act, 1956. Accordingly the
 provisions of clauses 4(iii)(b), 4(iii)(c) & 4(iii)(d) order are not
 applicable.
 
 04.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control system 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.  During the course of our audit, we have not observed any
 continuing failure to correct major weaknesses in internal controls
 system.
 
 05.  According to the information and explanations given to us, we are
 of the opinion that the company has not purchased any goods, materials
 and had not sold goods, materials and services in pursuance of
 contracts or arrangements to be entered in the register to be
 maintained U/S 301 of the Companies Act, 1956. Accordingly clause
 4(v)(b) is not applicable.
 
 06.  In our opinion and according to the information and explanations
 given to us and as shown by the books of accounts, the Company has not
 accepted deposits within the meaning Section 58A, 58AA or any other
 relevant provisions of the Companies Act, 1956. Hence compliance of
 provisions of Section 58A, 58AA or any other relevant provisions of the
 Companies Act, 1956 does not arise.
 
 07.  In our opinion that the Company has an Internal Audit system
 commensurate with its size and nature of its Business.
 
 08.  We have been informed by the Company that the Central Government
 had not prescribed any cost records U/s. 209(1)(d) of the Companies
 Act, 1956 and hence the Company did not maintain any cost records.
 
 9.1 According to the books and records examined by us and the
 information and explanations given to us, the company is regular in
 depositing with appropriate authorities the undisputed statutory dues
 payable in respect of Income-tax, Wealth-tax, Sales-tax, Service-tax,
 customs duty and excise duty which have remained outstanding as at 31st
 March, 2011 for a period exceeding six months from the date they became
 payable.
 
 9.2 According to the books and records examined by us and the
 information and explanations given to us, there were no disputed
 amounts which are not deposited payable in respect of Income-tax,
 Wealth-tax, Sales-tax, Services-tax, customs duty and excise duty which
 have remained outstanding as at 31st March, 2011 for a period exceeding
 six months from the date they became payable.
 
 10.  The Company has accumulated losses at the end of the financial
 year. Further the Company has not incurred any cash losses during the
 financial year and in the immediately preceding financial year.
 
 11.  In our opinion and according to the information and explana-tions
 furnished to us by the Company, there were no defaults in repayment of
 its dues to financial institution during the year. The Company has not
 issued any debentures.
 
 12.  According to the books and accounts examined by us and the
 information and explanations given to us, the Company has not granted
 any loans and advances against security by way pledge of shares,
 debentures and other securities.
 
 13.  The company is not a chit fund, nidhi, mutual benefit fund or a
 society. Accordingly, the provisions of clause 4(xiii) of the Order is
 not applicable.
 
 14.  According to the information and explanations given to us, the
 company is not dealing or trading in shares, securities, debentures and
 other investments. Accordingly, the provisions of clause 4(xiv) of the
 Order, is not applicable.
 
 15.  According to the information and explanations given to us, the
 company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 16.  According to the books and records examined by us, and information
 and expiations given to us, the company has obtained term loan of
 Rs.665.45 lakhs from Canara Bank and the same was utilized for the
 purpose for which they have been sanctioned.
 
 17.  According to the information and explanations given to us, and
 books and records examined by us, no funds raised on short-term basis
 have been utilised for long-term investment.
 
 18.  According to the information and explanations given to us, and
 books and records examined by us, the company has not made any
 preferential allotment of shares to parties and compa- nies covered in
 the register maintained under Section 301 of the Act during the year.
 
 19.  According to the information and explanations given to us, the
 company has not issued deben- tures during the period under audit.
 Accordingly, the provisions of clause 4(xix) of the Order, is not
 applicable.
 
 20.  The company has not issued any money by public issues during the
 year.
 
 21. During the course of our examination of the accounts of the Company
 in accordance with generally accepted auditing practices, we have not
 come across any instances of fraud on or by the Company, nor we have
 been informed by the management, of any such instance being the noticed
 or reported during the year.
 
                                               for PINNAMANENI & Co., 
                                               Chartered Accountants,
 
                                                                 Sd/- 
                                                  P.V.V.SATYANARAYANA 
                                                              Partner
 
 Place  Vijayawada 
 Date   14.08.2011