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Auditor Report of Nagarjuna Agritech Ltd.

Mar 31, 2014

Report on the Financial Statements:

We have audited the accompanying financial statements of NAGARJUNA AGRI TECH LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory Information.

Management''s Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company In accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs In respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control 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:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 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 control relevant to the Company''s preparation and fair presentation of the financial statements In order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

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, 2014;

(b) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

1 As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give In the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2 As required by section 227(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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account

d in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956, .

Annexure to Auditor''s Report NAGARJUNA AGRI TECH LIMITED

Referred to in Paragraph 1 of our report of even date

i) a) The Company has maintained proper records, showing full particulars, Including quantitative details and situation of fixed assets.

b) The management has conducted the physical verification of fixed assets during the year under audit, 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,

c) The company has not disposed substantial part of the fixed assets during the year under audit.

ii) The company does not have any inventory during the period under audit

iii) During the year the company has not granted any loans to parties covered in the register maintained under section 301 of the Companies Act, 1956. During the year the company has taken interest free unsecured loan from one party covered in the register maintained under section 301 of the Companies Act, 1956 and the maximum amount involved was Rs.8,00,000/- and the year end outstanding balance was Rs. Nil. According to the information and explanations given to us the terms and conditions of the loan are not prima facie prejudicial to the interests of the company.

iv) In our opinion and according to the Information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business with regard to the purchases of inventory, fixed assets and with regard to the sale of goods. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) During the year the company has not entered into any transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

vi) The company has not accepted any deposits from the public. Accordingly, the provisions of clause 4(vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

vii) As per the information and explanations given to us by the Management, the company''s internal control procedure together with the internal checks conducted by the Management staff during the year can be considered as an internal audit system commensurate with the size and nature of its business.

viii) According to the information and explanations given to us, maintenance of cost records under section 209(l)(d) of the Companies act, 1956 are not applicable to the activities carried on by the company.

ix) a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues applicable to it.

b) According to the information and explanations given to us no undisputed statutory dues applicable to it were outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable.

c) According to the Information and explanations given to us, there are no statutory dues which have not been deposited on account of any dispute.

x) In our opinion, the accumulated losses of the company are not more than fifty percent of its net worth. The company has incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

xi) The company does not have any dues payable to financial institutions or banks or debenture holders. Accordingly, the provisions Of clause 4(xi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xii) The company has not granted any loans and advances on the basts of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xiii) In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/ Society. Accordingly, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks or Financial Institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xvi) The company has not obtained any term loans from banks and financial institutions during the year under audit. In our opinion and according to the information and explanations given to us the term loans obtained in the earlier years have been applied for the purpose for which they were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that funds raised on short-term basis have not been used for long-term Investment.

xviii) According to the Information and explanations given to us, the company has not made any preferential allotment of shares to the parties and companies covered in the register maintained U/Sec,301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor''s Report) Order are not applicable to the company.

xix) The company has not Issued any debentures. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xx) During the current financial year under review and in the immediately preceding financial year the company has not raised any money by way of public issue and there was no unutilized money raised through public issues at the beginning of the period covered by the audit report. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

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

For AMAR & RAJU CHARTERED ACCOUNTANTS Firm Registration No: 000092S



Place: Hyderabad (G. AMARANATHA REDDY) Date: 30-05-2014 Partner Membership No: 019711


Mar 31, 2013

We have audited the accompanying financial statements of M/s. NAGARJUNA AGRI TECH LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control 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:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

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, 2013;

(b in the case of the Profit and Loss Account, of the loss for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

1 As required by the Companies (Auditor, fs Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2 As required by section 227(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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

i) a) The Company has maintained proper records, showing full particulars, including quantitative details and situation of fixed assets.

b) The management has conducted the physical verification of fixed assets during the year under audit, 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.

c) The company has not disposed substantial part of the fixed assets during the year under audit.

ii) a) The inventory has been physically verified during the year by the management. 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 nature of its business.

c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii) During the year the company has not granted any loans to parties covered in the register maintained under section 301 of the Companies Act, 1956. During the year the company has taken interest free unsecured loan from one party covered in the register maintained under section 301 of the Companies Act, 1956 and the maximum amount involved was Rs.13,00,000/- and the year end outstanding balance was Rs.8,00,000/-. According to the information and explanations given to us the terms and conditions of the loan are not prima facie prejudicial to the interests of the company.

iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business with regard to the purchases of inventory, fixed assets and with regard to the sale of goods. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) During the year the company has not entered into any transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

vi) The company has not accepted any deposits from the public. Accordingly, the provisions of clause 4(vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

vii) As per the information and explanations given to us by the Management, the company''s internal control procedure together with the internal checks conducted by the Management staff during the year can be considered as an internal audit system commensurate with the size and nature of its business.

viii) According to the information and explanations given to us, maintenance of cost records under section 209(1)(d) of the Companies act, 1956 are not applicable to the activities carried on by the company.

ix a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues applicable to it.

b) According to the information and explanations given to us no undisputed statutory dues applicable to it were outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, there are no statutory dues which have not been deposited on account of any dispute.

x) In our opinion, the accumulated losses of the company are not more than fifty percent of its net worth. The company has incurred cash loss during the financial year covered by our audit and the company has not incurred cash loss in the immediately preceding financial year.

xi) The company does not have any dues payable to financial institutions or banks or debenture holders. Accordingly, the provisions of clause 4(xi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xiii) In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/ Society. Accordingly, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks or Financial Institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xvi) The company has not obtained any term loans from banks and financial institutions during the year under audit. In our opinion and according to the information and explanations given to us the term loans obtained in the earlier years have been applied for the purpose for which they were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that funds raised on short-term basis have not been used for long-term investment.

xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to the parties and companies covered in the register maintained U/Sec.301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor''s Report) Order are not applicable to the company.

xix) The company has not issued any debentures. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

xx) During the current financial year under review and in the immediately preceding financial year the company has not raised any money by way of public issue and there was no unutilized money raised through public issues at the beginning of the period covered by the audit report. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

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

For AMAR & RAJU CHARTERED ACCOUNTANTS

Firm Registration No: 000092S

Place: Hyderabad (P. VENKATA RAMANA)

Date: 31-05-2013 Partner

Membership No: 203346


Mar 31, 2012

We have audited the attached Balance Sheet of M/s. NAGARJUNA AGRI TECH LIMITED, as at 31st March, 2012 and also the Statement of Profit & Loss and the Cash Flow Statement 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 misstatements. 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.

I. As required by the Companies (Auditor's Report) order, 2003 issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we report that:

i) a) The Company has maintained proper records, showing full particulars, including quantitative details and situation of fixed assets.

b) The management has conducted the physical verification of fixed assets during the year under audit, 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.

c) The company has not disposed substantial part of the fixed assets during the year under audit.

ii) a) The inventory has been physically verified during the year by the management. 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 nature of its business.



c) The company is maintaining proper records o f inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii) The company has neither granted nor taken any loans, secured or unsecured to/ from companies, firms or other parties covered in the register maintained U/Sec.301 of the Act. Accordingly sub-clauses b, c, d, f & g of clause-(iii) of paragraph-4 of the order are not applicable to the company.

iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business with regard to the purchases of inventory, fixed assets and with regard to the sale of goods. During the course o f audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) During the year the company has not entered into any transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

vi) The company has not accepted any deposits from the public. Accordingly, the provisions of clause 4(vi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

vii) As per the information and explanations given to us by the Management, the company's internal control procedure together with the internal checks conducted by the Management staff during the year can be considered as an internal audit system commensurate with the size and nature of its business.

viii) According to the information and explanations given to us, maintenance of cost records under section 209(1)(d) of the Companies act, 1956 are not applicable to the activities carried on by the company.

ix) a) The company is regular in depositing with appropriate authorities undisputed statutory dues applicable to it.

b) According to the information and explanations given to us no undisputed statutory dues applicable to it were outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, there are no statutory dues which have not been deposited on account of any dispute.

x) In our opinion, the accumulated losses of t h e company are not more than fifty percent of its net worth. The company has not incurred cash loss during the financial year covered by our audit and the company has incurred cash loss in the immediately

xi) The company does not have any dues payable to financial institutions or banks or debenture holders. Accordingly, the provisions of clause 4(xi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

xxii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

xiii) In our opinion, the Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/ Society. Accordingly, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks or Financial Institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xvi) The company has not obtained any term loans from banks and financial institutions during the year under audit. In our opinion and according to the information and explanations given to us the term loans obtained in the earlier years have been applied for the purpose for which they were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that funds raised on short-term basis have not been used for long-term investment.

xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to the parties and companies covered in the register maintained U/Sec.301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor's Report) Order are not applicable to the company.

xix) The company has not issued any debentures. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

xx) During the current financial year under review and in the immediately preceding financial year the company has not raised any money by way of public issue and there was no unutilized money raised through public issues at the beginning of the period covered by the audit report. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

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

i. Subject to above comments and notes forming part of accounts we further state 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 such books.

iii) The Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of account.

iv) In our opinion, the Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub-section (3C) of section 211 of the Companies Act, 1956.

v) On the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as director in terms of clause (g) of sub- section (1) Section 274 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 give the information required by the Companies Act, 1956 in the manner so required, read together with notes there on 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 31st March, 2012 and

b) In the case of the Statement of Profit & Loss, of the Loss for the year ended on that date.

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



For AMAR & RAJU

CHARTERED ACCOUNTANTS

Firm Registration No: 000092S

(G. AMARANATHA REDDY)

Partner

Membership No: 19711

Place: Hyderabad,

Date: 04.09.2012


Mar 31, 2011

We have audited the arched Balance Sheet of M/s. NAGARJUNA AGRI TECH LIMITED as at 31st March, 2011 and also the Profit & Loss Account for the year ended on that date annexed thereto and the Cash flow statement for the year ended on the date. 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 that audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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.

I. As required by the companies (Auditor's Report) order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the companies Act, 19S6, we report that: i) a)The Company has maintained proper records, showing full particulars, including quantitative details and situation of feed assets.

b) The management has conducted the physical verification of fixed assets during the year under audit, 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.

c) The company has not disposed substantial, part of the fixed assets during the year under audit.

ii) a) The Inventory has been physically verified during the year by the management. 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 nature of its business.

c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii) The company has neither granted nor taken any loans, secured or unsecured to/ from companies, firms or other parties covered in the register maintained U/Sec.301 of the Act. Accordingly sub-clauses b, c, d, f & g of clause-(iii) of paragraph-4 of the order are not applicable to the company,

iv) In our opinion and according to the information and explanations given to us, there is adequate Internal control system commensurate with the size of the company and the nature of its business with regard to the purchases of inventory, fixed assets and with regard to the sale of goods. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control system,

v) During the year the company has not entered into any transactions that need to be entered Into the register maintained under Section 301 of the Companies Act, 1956.

vi) The company has not accepted any deposits from the public. Accordingly, the provisions of clause 4(vi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

vii) As per the information and explanations given to us by the Management, the company's internal control procedure together with the Internal checks conducted by the Management staff during the year can be considered as an Internal audit system commensurate with the size and nature of its business.

viii) According to the information and explanations given to us, maintenance of cost records U/Sec. 209(l)(d) the Companies Act, 1956 have not been prescribed by the Central Government for the company.

ix) a) The company Is regular in depositing with appropriate authorities undisputed statutory dues applicable to it.

b) According to the information and explanations given to us no undisputed statutory dues applicable to It were outstanding as at 31st March, 2011 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, there are no statutory dues which have not been deposited on account of any dispute.

x) In our opinion, the accumulated losses of the company are not more than fifty percent of its net worth. The company has incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

xi) The company does not have any dues payable to financial institutions or banks or debenture holders. Accordingly, the provisions of clause 4(xi) of the companies (Auditor's Report) order,2033 are not applicable to the company.)

xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, Accordingly, the provisions of clause 4(xii) of the companies (Auditor's Report) order, 2003 are not applicable to the company.

xiii) In our opinion, the company is not a chit Fund or a Nidhi/Mutual Benefit Fund/ society. Accordingly, the provisions of caluse 4(xiii) of the companies (Auditor's Report) order,2003 are not applicable to the company.

xiv) In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the companies (Auditor's Report) order, 2003 are not applicable to the company.

xv) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others form Banks or Financial Institutions. Accordingly, the provisions of clause 4(xv) of the companies (Auditor's Report) order, 2003 are not applicable to the company.

xvi) The company has not obtained any term loans from banks and financial Institutions during the year under audit. In our opinion and according to the information and explanations given to us the term loans obtained in the earlier years have been applied for the purpose for which they were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that funds raised on short-term basis have not been used for long-term investment.

xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to the parties and companies covered in the register maintained U/Sec.301 of the companies Act, 1956. Accordingly, the provisions of clause 4(xviii) of the companies (Auditor's Report) order are not applicable to the company.

xix) The company has not issued any debentures. Accordingly, the provisions of clause 4(xix) of the companies (Auditor's Report) order, 2003 are not applicable to the company.

xx) During the current financial year under review and in the immediately preceding financial year the company has not raised any money by way of public issue and there was no unutilized money raised through public issues at the beginning of the period covered by the audit report. Accordingly, the provisions of clause 4(xx) of the companies (Auditor's Report) order, 2003 are not applicable to the company.

xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit. II. Subject to above comments and notes forming part of accounts we further state that:

1) 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 such books.

iii) The Balance Sheet, the Profit & Loss Account and Cash Flow Statement referred to In this report are In agreement with the books of account.

iv) In our opinion, the Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub-section (3C) of section 211 of the Companies Act, 1956.

v) On the basis of written representations received from the directors, 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 director In terms of clause (g) of sub- section (1) Section 274- 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 give the Information required by the Companies Act, 1956 In the manner so required, read together with notes there on 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 31st March, 2011 and

b) In the case of the Profit & Loss Account, of the Loss for the year ended on that date.

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



For AMAR & RAJU CHARTERED ACCOUNTANTS

Firm Registration No: 0000925

(G. AMARANATHA REDDY)

Partner

Membership No: 19711