We have audited the attached Balance Sheet of THE ANDHRA SUGARS
 LIMITED, as at 31st March 2011, its Profit and Loss account and also
 the 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.
 
 We conducted our audit in accordance with auditing standards generally
 accepted in India, which require that we plan and perform the audit to
 obtain reasonable assurance that the financial statements are free from
 material misstatement. An audit includes examining, on a test basis,
 evidence supporting the amounts and disclosures in the financial
 statements. An audit also includes an assessment of the accounting
 principles used and significant estimates made by management, as well
 as evaluating the overall financial statements presentation. We believe
 that our audit provides a reasonable basis for our opinion.
 
 As required by the Companies (Auditors'' Report) Order, 2003 issued by
 the Government of India in terms of sub-Section (4A) of Section 227 of
 the Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 Attention is invited to the Para No. 14(b) of the notes forming part of
 accounts regarding change in treatment of valuation of Hydrochloric
 Acid from Joint Product to By-product, resulting in increase in profit
 by Rs.4.94 lacs and consequently increases in inventories to the
 extent of the Company during the year under report.  Further to our
 comments in the Annexure referred to above, 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 purposes 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 such
 books;
 
 c.  The Balance Sheet and Profit and Loss Account and Cash-flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 d.  In our opinion, the Balance Sheet, 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 ;
 
 e.  On the basis of written representations received from the
 Directors, as on March 31, 2011, and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 March 31, 2011 from being appointed as a Director in terms of clause
 (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
 
 f.  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 and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India;
 
 I.  in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 II.  in the case of the Profit and Loss Account, of the Profit for the
 year ended on that date, and
 
 III.  in the case of the Cash-flow Statement, of the cash-flows of the
 Company for the year ended on that
 
 
                                               For BRAHMAYYA & CO.,
 
                                               Chartered Accountants
 
 Camp : TANUKU
 
                                              (Firm Regn. No. 000513S)
 
 Date : 28th July, 2011                            T.V. RAMANA
 
                                                      Partner
                                               (Membership No. 200523)