Aries Agro

i. We have audited the attached Balance sheet of ARIES AGRO LIMITED, as
 at 31st March, 2008 and also the Profit & Loss Account of the Company
 for the period ended on that date annexed thereto.  These financial
 statements are responsibility of the company management. Our
 responsibility is to express an opinion on these financial statements
 based on our audit.
 
 ii. 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
 
 (a) examining, on a test basis, evidence to support the financial
 statement amounts and disclosures in the financial statement
 
 (b) assessing the accounting principles used in the preparation of
 financial statements
 
 (c) assessing significant estimates made by the management in the
 preparation of the financial statements and
 
 (d) Evaluating overall financial statement presentation.
 
 We believe that our audit provides a reasonable basis for our opinion
 iii. As required by the Companies (Auditor’s Report) Order, 2003 issued
 by the Central Government in terms of section 227(4A) of the Companies
 Act, 1956, we give in the Annexure a statement on the matters specified
 in paragraphs 4 and 5 of the said Order.  Further to our comments in
 the Annexure referred to in paragraph (3) 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 accounts as required by law, have
 been kept by the Company so far as appears from our examination of the
 books of the Company;
 
 c.  The Balance Sheet and the Profit and Loss Account referred to in
 this report are in agreement with the books of accounts of the Company
 
 d.  In our opinion, the Balance Sheet and Profit & Loss Accounts dealt
 with by, this report comply with all material respects with the
 accounting standards referred to in sub- section (3C) of section 211 of
 the Companies Act, 1956 except as under:
 
 Non provision for Gratuity - as per Accounting Standard 15 (See Note 3
 to notes to accounts).
 
 e.  On the basis of written representations received from the
 directors, and taken on record by the Board of Directors, in our
 opinion, none of the directors is disqualified from being appointed as
 director u/s. 274(l)(g) of Companies Act, 1956;
 
 f.  The company is not a sick company within the meaning of section
 3(1) (o) of the SICA Act, 1985. Hence there is no question of payment
 of cess as required under section 441 A of Companies Act;
 
 g.  In our opinion and to the best of our information and according to
 the explanations given to us, the said Balance Sheet and the Profit &
 Loss Account, together with notes thereon, 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, 2008, and 
 
 ii.  In the case of the Profit and Loss Account, of the profit of the
 Company for the period ended on that date.
 
 ANNEXURE TO THE AUDITORS’ REPORT
 
 (This is the Annexure referred to in our Report of even date) In terms
 of the information and explanations given to us and the books and
 records examined by us in the normal course of audit and to the best of
 our knowledge and belief, we state as under:
 
 i. a. The Company has maintained proper records showing full
 particulars including quantitative details and situation of its fixed
 assets.
 
 b.  These fixed assets were physically verified by the management
 during the period. We have been informed that no material discrepancies
 were noticed on such physical verification.
 
 c.  Substantial parts of fixed assets have not been disposed off during
 the period, which will affect its status as going concern.
 
 ii. a. The stock of inventory has been physically verified during the
 period by the management at reasonable intervals.
 
 b.  In our opinion, the procedures of physical verification of
 inventory followed by the management are reasonable and adequate in
 relation to the size of the company and the nature of its business.
 
 c.  The company is maintaining proper records of inventory. No
 discrepancies were noticed on physical verification of stocks as
 compared to book records and hence the question of whether the same
 have been properly dealt with the books of accounts does not arise.
 
 iii. a. The company has not taken any loan from parties covered in the
 register maintained under section 301 of the Companies Act, 1956.  The
 Company has given interest free advances to Four parties covered in the
 Register maintained under Section 301 of the Companies Act, 1956. The
 maximum amount outstanding during the period ended 31/03/2008 is Rs.
 1,45,83,321/- (Previous Year Rs.  1,28,01,761/-) and closing balance as
 on 31/03/ 2008 is Rs. 1,02,97,965/- (Previous Year Rs.  1,20,29,408/-)
 
 The Company has given loan of Rs.  14,66,19,200/- to its subsidiary to
 fund its expansion / operation. The interest cost on loan taken by the
 Company to fund such loans granted is being reimbursed by such
 subsidiary.
 
 b.  As per information and explanation provided to us, the loans
 granted by the Company are interest free. However other terms and
 conditions on which such loans and advances given to Companies, Firms
 or Other Parties listed in the Register maintained under section 301
 are not, prima facie, prejudicial to the interest of the Company.
 
 c.  The Company is regular in repaying the principal amounts as
 stipulated and has been regular in the payment of interest wherever
 applicable
 
 d.  As per the information given by the management, in case of overdue
 amount more than Rs. 1.00 lakh, the reasonable steps have been taken by
 the company for recovery of the principal and Interest.
 
 iv.  In our opinion, there is an adequate internal control
 
 system commensurate with the size of the Company and the nature of its
 business, for the purchase of inventory and fixed assets and for the
 sale of goods. In our opinion, there is no continuing failure to
 correct major weaknesses in internal control.
 
 v.  a.  According to the information and explanation provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements that need to be entered in the Register maintained under
 section 301 have been so entered.
 
 b.  The transactions made in pursuance of contracts or arrangements
 entered in the Register maintained under section 301 and exceeding
 value of Rupees Five Lakhs in respect of any party during the period
 have been made at prices which are reasonable having regard to the
 prevailing market prices at the relevant time.
 
 vi.  The Company has not accepted deposits from the public. Hence, the
 question of complying the directives issued by the Reserve Bank of
 India and the provisions of sections 58A and 58AA of the Act and the
 rules framed there under, where applicable, does not arise.
 
 vii.  The company has appointed a firm of Chartered Accountants for
 carrying out the internal audit, whose scope of work, according to our
 information, is commensurate with the size of the Company and nature of
 its business.
 
 viii.  We have broadly reviewed the books of account maintained by the
 company pursuant to the rules made by the central government for the
 maintenance of the cost records under section 209 (1) (d) of the act
 and are of the opinion that Prima facie the prescribed accounts and
 records have been made and maintained by the company. We have not,
 however made a detailed examination of the same.
 
 ix.  a.  The company is generally regular in depositing statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Employee State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
 Tax, Custom Duty, Excise Duty, Cess and any other statutory dues except
 some occasional delays. As per the information given by the management
 and apparent from the records, there were no undisputed statutory dues
 outstanding as on 31st March, 2008.
 
 b.  Details of disputed liability in respect of tax dues on account of
 Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess
 together with the status and the Forum before which such dispute is
 pending as on 31st March, 2008 is as per annexure attached to this
 report and forming part of this report.
 
 x.  The company has no accumulated losses. The company has not incurred
 cash losses in the financial period under report and in the financial
 period immediately preceding such financial period.
 
 xi.  The company has not defaulted in repayment of dues to a financial
 institution or bank. The Company has not obtained any borrowings by way
 of debenture.
 
 xii.  According to the records of the company, the company has not
 granted any loans and advances on the basis of security by way of
 pledge of Shares, debentures and other securities.
 
 xiii.  The company is not a chit fund, Nidhi or mutual benefit
 fund/society.  xiv.  The company is not dealing or trading in Shares,
 securities, debentures and other investments. The Shares held by the
 Company have been held by the Company in its own name.  xv.  The
 company has not given any guarantee to a Bank for granting a loan.
 xvi.  The company has taken a term loan which has been utilized for the
 purpose for which such loans were obtained.
 
 xvii. The funds raised on short-term basis have not been used for long
 term investment and vice versa.
 
 xviii. According to the records of the Company and the information and
 explanation provided by the management, 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.
 
 xix. The Company has not issued any debentures hence the clause XIX of
 the said order is not applicable to the company.
 
 xx. The end use of money raised by public issue as disclosed in the
 financial statements has been verified by us and found to be in order.
 
 xxi. During the checks carried out by us, any fraud on or by the
 Company has not been noticed or reported during the period under
 report.
 
                                        For Kirti D. Shah & Associates
                                        Chartered Accountants
 
                                              Sd/- 
                                           Kirti D. Shah
 Place : Mumbai                           Proprietor
 Date  : 30th June, 2008                  Membership No. 32371
 
 53, Juhu Supreme Shopping Center,
 JVPD Scheme, Vile Parle (W),
 Mumbai - 400 049.