1.  We have audited the attached Balance Sheet of Hester Biosciences
 Ltd. as at 31 March, 2012 and also the Statement of Profit and Loss and
 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 (the
 order), as amended, issued by the Government of India in terms of
 Section 227 (4A) of the Companies Act, 1956 and on the basis of such
 checks as we considered appropriate and according to the information
 and explanations given to us, we enclose 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:
 
 i.  We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 ii.  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.
 
 iii. The Balance Sheet, Statement of Profit & Loss and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account.
 
 iv.  In our opinion, the Balance Sheet, Statement of Profit & Loss and
 Cash Flow Statement dealt with by this report comply, in all material
 respects, with the applicable accounting standards referred to in
 Section 211 (3C) of the Companies Act, 1956.
 
 v.  On the basis of written representations received from the directors
 of the Company and taken on record by the Board of Directors, we report
 that none of the directors is disqualified as on 31 March, 2012 from
 being appointed as a director in terms of Section 274(1)(g) of the
 Companies Act, 1956;
 
 vi.  In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with the statement
 on Significant Accounting Policies and Notes to the financial
 statements 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;
 
 a.  in the case of the Balance sheet, of the state of affairs of the
 Company as at 31 March, 2012;
 
 b.  in the case of the Statement of Profit and Loss, of the profit of
 the Company for the year ended on that date; an
 
 c.  in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 As required by the Companies (Auditors'' Report) Order, 2003 issued by
 the Central Government under section 227(4A) of the Companies Act, 1956
 and in terms of the information and explanations given to us and also
 on the basis of such checks as we considered appropriate, we further
 report that:
 
 1) In respect of its fixed assets:
 
 i) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 
 ii) All the assets have not been physically verified by the management
 during the year but there is a regular programme of verification which,
 in our opinion, is reasonable having regard to the size of the Company
 and the nature of its assets. No material discrepancies were noticed on
 such verification.
 
 iii) In our opinion, the Company has not disposed of substantial part
 of fixed assets during the year and the going concern status of the
 Company is not affected.
 
 2) In respect of its inventories:
 
 i) The inventory has been physically verified during the year as also
 at the end of the year by management. In our opinion, the frequency of
 verification is reasonable.
 
 ii) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 iii) On the basis of our examination of the records of inventory, we
 are of the opinion that the Company is maintaining proper records of
 inventory. The discrepancies noticed on verification between the
 physical stocks and the book records were not material.
 
 3) In respect of loans granted or taken to / from companies, firms or
 other parties in the Register maintained under Section 301 of the
 Companies Act, 1956:
 
 i) The Company has granted interest free loans to two Companies listed
 in the register maintained under Section 301 of the Companies Act,
 1956. Outstanding balance of loans granted at the year end was Rs.
 2,036,444/-(Rs. 1,069,829/-). Maximum outstanding at any time during the
 year of loans granted was Rs. 2,142,799/-(Rs. 1,088,557/-).
 
 ii) In our opinion and according to the information and explanations
 given to us, terms and conditions on which interest free loans have
 been granted to companies / other parties listed in the register
 maintained under Section 301 of the Companies Act,1956 are not, prima
 facie, prejudicial to the interest of the Company.
 
 iii) The interest free loans granted by the Company are repayable on
 demand.
 
 iv) The Company has not taken any loans, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act. Accordingly, paragraphs (iii) (e) to (g)
 of the Order are not applicable to the Company.
 
 4) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business with regard
 to purchase of inventory, fixed assets and with regard to the sale of
 goods and services. During the course of our audit, we have not
 observed any continuing failure to correct major weakness in the
 internal controls system.
 
 5) In respect of transactions entered in the register maintained in
 pursuance of Section 301 of the Companies Act, 1956; to the best of our
 knowledge and belief and according to the information and explanation
 given to us:
 
 i) 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.
 
 ii) There are no transactions, which are made in pursuance of contracts
 or arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and are exceeding the value of rupees five
 lakhs in respect of any party during the year.
 
 6) The Company has not accepted any deposits from the public.
 
 7) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8) We have broadly reviewed the books of account, relating to materials
 and other items of cost maintained by the Company in respect of product
 where pursuant to the rules made by the Central Government, the
 maintenance of Cost Records has been prescribed under section 209(1)(d)
 of the Companies Act, 1956. We are of the opinion that prima facie the
 prescribed accounts and records have been maintained and are being made
 up. The same have been examined and audited by an independent cost
 accountant.
 
 9) In respect of statutory and other dues :
 
 i) The Company is generally regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 Investor Education and Protection Fund, Employees'' state insurance,
 Income- tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, cess and
 other statutory dues applicable to it, during the year.
 
 ii) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth-tax,
 sales-tax, customs duty, excise duty and cess were outstanding, as at
 31 March, 2012 for a period of more than six months from the date they
 became payable.
 
 iii) According to the information and explanations given to us, there
 are no dues in respect of income tax, sales tax, wealth tax, excise
 duty, service tax or cess that have not been deposited with appropriate
 authority on account of dispute.
 
 10) The Company does not have accumulated losses at the end of the
 financial year. The Company has not incurred any cash losses during the
 financial year covered by our audit and the immediately preceding
 financial year.
 
 11) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to a financial
 institution, bank or debenture holders.
 
 12) In our opinion and according to the information and explanation
 given to us, no loans and advances have been granted by the Company on
 the basis of security by way of pledge of shares, debentures and other
 securities.
 
 13) In our opinion, the Company is not a chit fund or a nidhi /mutual
 benefit fund/society. Therefore, clause 4(xiii) of the Companies
 (Auditor''s Report) Order 2003(as amended) is not applicable to the
 Company.
 
 14) The Company is not dealing or trading in shares, securities,
 debentures and other investments.
 
 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 institution.
 
 16) In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purpose for which
 they were raised.
 
 17) According to the information and explanations given to us and on an
 overall examination of the balance sheet of the Company, we report that
 the no funds raised on short-term basis have been used for long-term
 investment.
 
 18) During the year company allotted Equity Shares to parties and
 companies covered in the register maintained under section 301 of the
 Act, by conversion of equity warrants preferentially allotted to such
 parties and companies in the immediate preceding previous year at a
 price not prejudicial to the interest of the Company.
 
 19) During the period covered by our audit report, the Company has not
 issued any debentures.
 
 20) The Company has not raised money through a public issue during the
 year. Accordingly clause 4(xx) of the order is not applicable.
 
 21) Based upon the audit procedures performed and 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 SHAH NARIELWALA & CO
 
                                                 Chartered Accountants 
 
                                                         [FRN: 109708W]
 
                                                     (Naishadh H. Shah)
 
 Place : Ahmedabad                                             Partner
 
 Date : August 14, 2012                         Member ship No: 042323