Replies to post #11129 on First China Pharmaceutical Group Inc (fka FCPG)

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"Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

Audit Committee’s Conclusion as to Non-Reliance on Previously Issued Financial Statements

On April 26, 2012, the Audit Committee of the Company’s Board of Directors, after consultation with management of the Company, including the Company’s Chief Financial Officer, concluded that the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K/A for the year ended March 31, 2011 (“2011 Annual Report”) filed with the Securities and Exchange Commission on December 2, 2011, should be restated to correct certain errors and should no longer be relied upon.

The Company’s Audit Committee, in consultation with management, concluded that the financial statements included with the 2011 Annual Report contained certain errors, including: (i) the identification of more inventory than reported in the 2011 Annual Report financial statements; (ii) the incorrect recording of placement costs as an expense rather than offsetting proceeds; (iii) the incorrect recording of warrants issued in a private placement in additional paid-in-capital, rather than the recording of the warrants under ASC 815-10; (iv) the incorrect recording of cash and cash equivalents of $2,003,488 as a prepayment; and (v) an inaccurate calculation of a discount on convertible notes from equity into convertible promissory notes in the amount of $113,747.

The Company’s Audit Committee discussed the foregoing issues, findings and conclusions with Parker Randall CF (H.K.) CPA Limited, the Company’s former independent certifying accountant (“Parker Randall”).

In conjunction with Parker Randall, the Company is working diligently to complete the restatement of the above-referenced 2011 Annual Report. The Company expects to file an amended 2011 Annual Report, containing restated financial statements, by no later than June 30, 2012. However, there can be no assurance that such filing will be made within this period.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits."