1.  We have audited the attached Balance Sheet of Hatsun Agro Product
 Limited (''the Company'') as at March 31, 2011 and also the profit and
 loss account 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.
 
 2.  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.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 (as
 amended) (''the Order'') issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of the Companies Act, 1956
 (''the Act''), we enclose in the Annexure a statement on the matters
 specified in paragraphs 4 and 5 of the said Order.
 
 4.  As more fully described in Note 2(a) of Schedule 19 to the
 Financial Statements, certain income tax matters in respect of the
 financial year ended March 31, 1996 (financial estimate by the
 management of Rs. 15 million) are being contested by the Company and
 the matter is pending with the High Court of Judicature, Madras.
 Pending a final resolution of the uncertainties in this connection, no
 provision towards tax and other consequential adjustment relating to
 this matter, if any, have been considered in the financial statements.
 Audit report issued on the financial statements for the year ended
 March 31, 2010 was also qualified in respect of this matter.
 
 5.  Further to our comments in the Annexure referred to above, we
 report 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
 those books;
 
 iii. The balance sheet, profit and loss account and cash flow statement
 dealt with by this report are in agreement with the books of account;
 
 iv. 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 Act;
 
 v. On the basis of the 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 Act;
 
 vi. In our opinion and to the best of our information and according to
 the explanations given to us, subject to the effect of adjustments, if
 any, that may be required had the outcome of the matter referred to
 paragraph 4 above been known, the said accounts 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, 2011;
 
 b) in the case of the profit and loss account, of the profit for the
 year ended on that date; and
 
 c) in the case of cash flow statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO AUDITORS'' REPORT
 Annexure referred to in paragraph 3 of our report of even date Re:
 Hatsun Agro Product Limited (''the Company'')
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) All fixed assets have not been physically verified by the
 management during the year but there is a regular programme of
 verification 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) There was no disposal of substantial part of the fixed assets
 during the year.
 
 (ii) (a) The management has conducted physical verification of
 inventory at reasonable intervals during the year.
 
 (b) 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 and no
 material discrepancies were noticed on physical verification.
 
 (iii) (a) According to the information and explanations given to us,
 the Company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act.  Accordingly, the provisions of clause
 4(iii)(a) to (d) of the Order are not applicable to the Company and
 hence not commented upon.
 
 (b) According to information and explanations given to us, the Company
 has not taken any loans, secured or unsecured, from companies, firms or
 other parties covered in the register maintained under section 301 of
 the Act. Accordingly, the provisions of clause 4(iii)(e) to (g) of the
 Order are not applicable to the Company and hence not commented upon.
 
 (iv) In our opinion and according to the information and explanations
 given to us, 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.
 During the current year, the activities of the Company did not involve
 any sale of services. During the course of our audit, we have not
 observed any major weakness or continuing failure to correct any major
 weakness in the internal control system of the Company in respect of
 these areas.
 
 (v) According to the information and explanations provided by the
 management, we are of the opinion that there are no contracts and
 arrangements that need to be entered into the register maintained under
 section 301 of the Act during the period. Therefore, the provisions of
 clause (v)(a) and (v)(b) of para 4 of the Companies (Auditor''s Report)
 Order, 2003 (as amended are not applicable to the Company.
 
 (vi) In respect of deposits accepted, in our opinion and according to
 the information and explanations given to us, directives issued by the
 Reserve Bank of India and the provisions of sections 58A, 58AA or any
 other relevant provisions of the Act and the rules framed there under,
 to the extent applicable, have been complied with. We are informed by
 the management that no order has been passed by the Company Law Board,
 National Company Law Tribunal or Reserve Bank of India or any Court or
 any other Tribunal.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under clause
 (d) of sub-section (1) of section 209 of the Act for the products of
 the Company.
 
 (ix) (a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 investor education and protection fund, employees'' state insurance,
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty, cess and other material statutory dues applicable to it.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441A of the Act, we are not in a
 position to comment upon the regularity or otherwise of the company in
 depositing the same.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees'' state insurance, income-tax,
 wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
 other material statutory dues were outstanding, at the year end, for a
 period of more than six months from the date they became payable.
 
 (c) According to the records of the Company, there are no dues
 outstanding of income-tax, sales-tax, wealth-tax, service tax, customs
 duty, excise duty and cess on account of any dispute, other than the
 following:
 
                                  Amount    Period to 
                                            which     Forum where dispute
 Name of the
 Statute           NatureofDues   {Rs In 
                                  000 s)    the amount 
                                            relates    is  pending
 
 Income tax Act, 
 1961             Disallowance of    **    FY 1996-97  High Court of
                                                       Judicature,
                  non compete fees                     Madras
 
 The Tamil Nadu 
 General          Sales tax in 
                  dispute           932    FY 1996-97  Commercial Tax 
                                                       Officer 
 Sales Tax Act
 
 The Tamil Nadu 
 General          Sales tax in 
                  dispute          1,083   FY 1996-97   Appellate 
                                                        Assistant
 Sales Tax Act                                          Commissioner
 
 The Tamil Nadu 
 General          Penalty in 
                  dispute           *528    FY 2003-04  High Court of
                                                        Judicature,
 Sales Tax Act                                          Madras
 
 Income Tax Act, 
 1961             Disallowance 
                  of expense      #21,092   FY 2007-08   Commissioner 
                                                         Appeals
 
 * Net of Rs. 528K paid under protest
 
 #Net of Rs. 5,000K paid under protest
 
 ** - Refer to note 2(a) of Schedule 19 to the financial statements
 
 (x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current and immediately
 preceding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to a financial
 institution, bank or debenture holders.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi /
 mutual benefit fund / society. Therefore, the provisions of clause 4
 
 (xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are
 not applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4
 
 (xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are
 not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 (xvi) Based on information and explanations given to us by the
 management, term loans were applied for the purpose for which the loans
 were obtained.
 
 (xvii) According to the information and explanations given to us and on
 overall examination of the balance sheet of the Company, we report that
 the Company has used funds raised on short- term basis from banks and
 others to purchase certain fixed assets aggregating to Rs. 728 million.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties or companies covered in the register maintained under
 section 301 of the Act.
 
 (xix) The Company has unsecured debentures outstanding during the year
 on which no security or charge is required to be created.
 
 (xx) The Company has not raised any money by public issues during the
 year and accordingly, the provisions of clause 4(
 
 xx) of the Companies (Auditor''s Report) Order, 2003 (as amended) are
 not applicable.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the course of our audit.
 
 
 
                                       For S.R. BATLIBOI & ASSOCIATES
                                       Firm Registration No. 101049 W
                                                Chartered Accountants,
 
                                                                 Sd/-
 
 Place : Chennai per                                S Balasubrahmanyam
 Date : 25th May, 2011                                         Partner
                                                  Membership No.053315