Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility for the Financial Statements Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls.

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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 March 31, 2015;

b) In the case of the Statement of Profit and Loss, of the loss for the period ended on that date.

c) In the case of Cash Flow Statement, of the cash flows of the company for the period ended on that date.

Report on Emphasis of Matter(s) (EOM)

There is no Emphasis of matters to report upon.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section 11 of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act, 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 the Statement of Profit and Loss and the Cash Flow, dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements, comply with the Accounting Standards referred to in of Section 133 of the Companies Act, 2013, read with Rule 7 of the Company (Accounts) Rules 2014.

e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of sub-section (2) of Section 164 of the Companies Act, 2013.

f) With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us:

i) The Company does not have any pending litigations which would impact its financial position except dispute regarding the premises.

ii) The Company has not entered into any long-term contracts including derivatives contracts requiring provision under applicable laws or accounting standards, for material foreseeable losses and

iii) No amount is required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 2013. Hence delay in depositing the amounts to the said fund is not applicable.

ANNEXURE TO THE AUDITORS' REPORT

The Annexure referred to in our Independent Auditor's Report of even date to the members of DOLPHIN MEDICAL SERVICES LIMITED on the financial statements of the Company for the period ended 31st March, 2015.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. Fixed Assets

(a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

2. Inventories:

a. The inventories have been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

b. 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.

c. In our opinion and on the basis of our examination of the records, the company is generally maintaining proper records of its inventories. No material discrepancies were noticed on physical verification of inventories as compared to book records

3. Loans:

According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company has not granted any loans to companies, firms or other parties listed in the register maintained under Section 189 of the Companies Act, 2013. Consequently, the provisions of clauses iii (a), iii(b) of the Order are not applicable to the Company.

4. Internal Controls

In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of stores, raw materials, plant and machinery, equipment, other assets, for the sale of goods and in respect of its regular operations. During the course of the audit, we have not observed any major weakness in the internal control system.

5. Public Deposits

The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013.

6. Cost Records

As per the information & explanation given by the management, the maintenance of cost records has not been prescribed by the Central Government under sub-section (1) of Section 148 of the Act.

7. Statutory Dues:

a) According to the records of the company, there are no undisputed statutory dues including Provident Fund, Income-tax, Sales-tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities.

b) According to the information and explanations given to us, there are no amounts payable in respect of income tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

c) There is no such amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

8. Profit and Loss

The company has been registered for more than five years. The Company has accumulated losses to the extent of Rs.498.79 lakhs at the end of the financial year. The Company has incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

9. Payments to Banks, Financial Institutions etc

According to the books and records examined by us, and information and explanations given to us, Canara Bank has assigned its rights on the loan of Rs.804.58 lakhs favoring Edelweiss Asset Reconstruction Company Ltd (EARC). On 18.03.2015 the EARC has granted a Negotiated Settlement (NS) of dues at a total consideration of Rs.250.00 lakhs payable in installments specified therein. In terms of the NS the company has paid an amount of Rs.25.00 lakhs as Upfront payment. The company has not issued any debentures.

10. Guarantees

According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

11. Term Loans

The company has not taken any term loans during the year and therefore the application thereof does not arise.

12. Fraud

According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

PINNAMANENI & CO.,

CHARTERED ACCOUNTANTS

F.R.No. 002661S

Sd/-

CA PVV SATYANARAYANA

Partner

M.No. 026600

Place: Hyderabad

Date: 30.05.2015