We have audited the attached Balance Sheet of GUJARAT ORGANICS LIMITED
 as at 31st March, 2011, the Profit and Loss Account of the Company and
 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. 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
 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.
 
 1). As required by the Companies - (Auditors'' Report) Order, 2003
 issued by the Company Law Board in terms of Section 227(4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraph 4 and 5 of the said order.
 
 2). 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 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 such
 books;
 
 c) The Balance Sheet, the Profit and Loss Account and the Cash Flow
 statement referred to in this report are in agreement with the books of
 account.
 
 d) In our opinion the Balance Sheet, the Profit and Loss Account and
 the Cash Flow statement referred to in this report comply with the
 Accounting Standards referred to in Section 211(3C) of the Companies
 Act, 1956;
 
 e) On the basis of the written representations received from the
 directors and taken on record by the Board of Directors, we report that
 the directors are not disqualified as on 31st March 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 Balance Sheet, the Profit and
 Loss Account and the cash flow statement, read together with the 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 Recounting 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  of
 the Company for the year ended on that date; and
 
 iii. In the case of Cash Flow statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE REFERRED IN PARAGRAH 3 OF THE AUDITORS'' REPORT TO THE MEMBERS
 OF GUJARAT ORGANICS LIMITED FOR THE YEAR ENDED 31st MARCH, 2011.
 
 1.  a) The Company has maintained proper records showing full
 particulars including quantitative details and location of the Fixed
 Assets.
 
 b) There is a regular program of physical verification, which in our
 opinion is reasonable, having regard to the size of the Company and the
 nature of fixed assets. No material discrepancies have been noticed in
 respect of the assets physically verified during the year.
 
 c) The Company has not disposed of substantial part of fixed assets
 during the year.
 
 2.  a) Inventories have 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 stocks followed by the
 management are adequate in relation to the size of the Company and the
 nature of the business.
 
 c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 books were not material and have been properly dealt with in the books
 of account.
 
 3.  a) The company has granted loans to two parties amounting to Rs.
 9.05 lacs covered in the register maintained under section 301 of the
 Companies Act, 1956.
 
 b) Based on the information received and the explanations given, the
 rate of interest (wherever applicable) and the terms and conditions of
 loan granted is prima facie not prejudicial to the interest of the
 Company.
 
 c) Interest and principal amount are receiving regularly.
 
 d) There is no overdue amount as on the 31st March 2011.
 
 e) The Company has accepted loans from two parties covered in the
 register maintained under section 301 of the Companies Act, 1956. There
 is an unsecured loan of Rs. 25.00 lacs outstanding in case of party
 covered in the register maintained under section 301 of the Companies
 Act, 1956.
 
 f) Based on the information received and the explanations given, the
 rate of interest and the terms and conditions of loan received is prima
 facie not prejudicial to the interest of the Company
 
 g) Interest and principal amount are repaid regularly.
 
 4.  In our opinion, and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business with regard to purchase of stores, raw material including
 components, packing material, plant and machinery, equipment and other
 assets and with regard to sale of goods. There is no major weakness in
 the internal control procedures.
 
 5.  a) The particulars of all contracts and arrangements referred to in
 section 301 of the Companies Act, 1956 have been properly entered in
 the register maintained under section 301 of the Act.
 
 b) In our opinion, and according to the information and explanations
 given to us, the contracts and arrangements entered in the register
 maintained under Section 301 of the Companies Act, 1956 have been made
 at prices which are reasonable having regard to the prevailing market
 prices.
 
 6.  In our opinion, and according to the information and explanations
 given to us, the Company has complied with the provisions of Section
 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance
 of Deposits) Rules, 1975.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  We are informed that the maintenance of cost records has not been
 prescribed by the Central Government under Section 209(1) (d) of the
 Companies Act, 1956, in respect of the Company''s products.
 
 9.  The Company is regular in depositing undisputed statutory dues
 including Provident Fund, Employees'' State Insurance, Income Tax, Sales
 Tax, Tax, Custom Duty, Excise Duty, Cess and other statutory dues with
 the appropriate authorities.
 
 10.  The Company has not incurred cash loss in the current year and in
 the immediate preceding financial year.
 
 11.  In our opinion , and according to the information and explanations
 given to us, the Company has not defaulted during the year in repayment
 of dues to its bankers or to any financial institution. The Company did
 not have any outstanding debentures or any outstanding loans from
 financial institutions during the year.
 
 12.  The Company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  In our opinion, and according to the information and explanation
 given to us, the Company is not a chit fund, nidhi, mutual benefit fund
 or society.
 
 14.  The Company has maintained proper records of the transactions and
 contracts of the investments traded and timely entries have been made
 therein. The shares, securities, debentures and other investments have
 been held by the Company in its own name except to the extent of the
 exemption granted under Section 49 of the Companies Act, 1956.
 
 15.  In our opinion the term loan have been applied for the purpose of
 which they were raised.
 
 16.  According to the information and explanation received, the Company
 has not applied short term borrowing for long term use.  
 
 17.  The Company has not made any preferential allotment of shares
 during the year.
 
 18.  The Company has not issued any debenture during the year.
 
 19.  The Company has not raised any money by way of public issue during
 the year.
 
 20.  As per the information and explanation given to us no material
 fraud on or by the Company has been noticed during the year.
 
 For DEEPAK SHAH & CO.
 Chartered Accountants
 FRN 102249W  
 
 D.N. SHAH
 Proprietor
 
 Mem. No. 030566
 
 Mumbai: 27th May, 2011