We have audited the attached Balance Sheet of M/s KAPPAC PHARMA LIMITED
 as at 31st March 2012 and also the Profit & Loss Account and Cash Flow
 Statement of the company for the year ended on that date annexed there
 to. 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.
 
 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 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.
 
 As required by the Companies (Auditor Report) Order, 2003 issued by the
 Department of Company Affairs in terms of Section 227(4A) of the
 Companies Act 1956, we give in the Annexure a statement on the matters
 specified in the said order to the extent applicable.
 
 1.  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.
 
 2.  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
 such books.
 
 3.  The Balance sheet and Profit and Loss Account dealt with by the
 report are in agreement with the books of accounts.
 
 4.  In our opinion, the Profit & Loss Account and the Balance Sheet
 comply with the accounting standards referred to in sub section (3C) of
 section 211 of the Companies Act, 1956 subject to notes to accounts.
 
 5.  On the basis of representation received from the directors of the
 company and according to the information and explanation given to us,
 none of the directors of the company are prima facie as at 31st March
 2012, disqualify from being appointed as directors of the Company under
 clause (g) of sub section (1) of section 274 of the Companies Act,
 1956.
 
 6.  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 accounting policies and the notes thereon, give the information
 required by the Companies Act, 1956 in the manner so required, and give
 a true and fair view: -
 
 (i) In the case of Balance Sheet, of the state of affairs of the
 company as at 31st March 2012.
 
 (ii) In the case of the Profit and Loss Account, of the Loss for the
 year ended on that date.
 
 (iii) In the case of cash flow Statement, of the cash flows for the
 year ended on that date.
 
 1.  The company does not have any Fixed Assets. Hence, clause (i) (a),
 (b) & (c) are not applicable to the company.
 
 2.  As there is no inventory this clause is not applicable to the
 company.
 
 3.  (a) As per the information and explanation given to us, the company
 has not granted any unsecured loan to any party covered in the register
 maintained under section 301 of the Companies Act, 1956. Hence clause
 (iii) (b)(c)and (d)are not applicable.
 
 (b) As per information and explanation given to us, the company has not
 taken loans from parties covered in the register maintained under
 section 301 of the Companies Act, 1956. hence, clause (iii) (e) , (iii)
 (f) and (iii) (g) 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 procedures commensurate
 with the size of the company and the nature of its business for the
 purchase of inventory and fixed assets and also for the sale of goods
 and services. During the course of our audit we have not observed any
 continuing failure to correct major weakness in internal controls.
 
 5.  In respect of transactions entered in the register maintained in
 pursuance of Section 301 of the Companies Act 1956,
 
 (a) To the best of our knowledge and belief and according to the
 information and explanation given to us, transaction that needed into
 the register have been so entered.
 
 (b) According to the information and explanations given to us, such
 transactions have been made at prices, which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 6.  The company has not accepted any deposits from public within the
 meaning of provisions of section 58A & Section 58 AA of the Companies
 Act, 1956.
 
 7.  In our opinion the company has an adequate internal audit system
 commensurate with the size and nature of its business.
 
 8.  As informed to us the company is not required to maintain cost
 accounts and records as prescribed by Central Government under section
 290 (1)(d) of the Companies Act 1956.
 
 9.  According to the information and explanations given to us, and on
 the basis of our examination of the books of accounts, the company has
 been regular in depositing undisputed statutory dues including Income
 Tax and other statutory dues with the appropriate authorities. There
 were no arrears of such dues as on 31st March, 2012 for a period of
 more than six months from the date they became payable.
 
 10.  The accumulated losses of the Company are not more than fifty
 percent of the net worth. The company has incurred cash loss of
 Rs.271609/- in current financial year. The Company has also incurred
 cash loss in the previous financial year.
 
 11.  Based on our audit procedures and as per the information and
 explanations given by the management, the Company has not defaulted in
 repayment of dues to any 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 the provisions of clauses (xiii) of the
 Companies (Auditor''s Report) Order, 2003 are not applicable to the
 Company.
 
 14.  In our opinion the Company has maintained records of transactions
 and contracts in respect of investment in shares, mutual funds and
 other investments and generally timely entries have been made therein.
 All the shares, mutual funds and other investments held by the
 companies are in its own name except to the extent of the exemption
 granted under section 49 of the Companies Act, 1956.
 
 15.  In our opinion the company has not given any guarantee for loans
 taken by others from banks or financial institutions.
 
 16.  The Company has not raised any new term loans during the year.
 
 17.  On the basis of an overall examination of the Balance Sheet of the
 Company and according to the information and explanations given to us,
 in our opinion, funds raised on short term basis have not been used
 during the year for long term investment and vice versa.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Act during the year.
 
 19.  The Company has not issued any debentures till date.
 
 20.  The Company has not raised any money by public issue during the
 year.
 
 21.  During the course of our examination of the books and records of
 the company, carried out in accordance with the generally accepted
 audit practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, not
 have we been informed of such case by the management.
 
                                                        For, Y. D. & Co 
                                                  CHARTERED ACCOUNTANTS 
                                                           FRN: 018846N
 
 PLACE: LUDHIANA
 
 DATE: 03.08.2012
 
                                                         CA RAKESH PURI
                                                                PARTNER
                                                         M. No.: 092728