We have audited the attached Balance Sheet of Karuturi Global Limited,
 Bangalore as at 31st March 2011 and also the Profit and Loss Account
 and Cash Flow Statement of the Company 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 have 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 financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by the management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 In accordance with the provisions of Section 227 of the Companies Act,
 1956, we report that:
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 as
 amended by Companies (Auditor''s Report) (Amendment) Order, 2004, issued
 by the Central Government of India in terms of sub-section (4A) of
 Section 227 of the Companies Act, 1956, and on the basis of such checks
 of the books and records of the Company as we considered appropriate
 and according to the information and explanations given to us, we
 enclose in the Annexure a statement on the matters specified in
 paragraphs 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 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
 those books;
 
 c) the Balance Sheet, 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; and
 
 e) on the basis of the written representations received from the
 directors as on 31st March 2011, and taken on record by the Board of
 Directors, we report that none of the director is disqualified from
 being appointed as a Director of the Company in terms of clause (g) of
 Sub Section (1) of Section 274 of the Companies Act, 1956 as on 31st
 March 2011.
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the said accounts read together with
 significant accounting policies and the notes appearing thereon, give
 the information required by the Companies Act, 1956, in the manner so
 required and gives a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 1.  in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 2.  in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date; and
 
 3.  In the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 Annexure To The Auditors'' Report
 (Referred to paragraph (1) of our report of even date)
 
 I.  a) The Company is maintaining proper records to show full
 particulars including quantitative details and situation of fixed
 assets;
 
 b) The fixed assets have been physically verified by the management
 during the year in a phased periodical manner, which in our opinion is
 reasonable, having regard to the size of the Company and nature of its
 business. No material discrepancies were noticed on such physical
 verification.
 
 c) In our opinion, the Company has not disposed off any substantial
 part of fixed assets so as to affect its going concern status.
 
 II.  a) As explained to us, inventories have been physically verified
 by the management at reasonable intervals during the year. In our
 opinion, the frequency of verification is reasonable.
 
 b) As per the information given to us, the procedures of physical
 verification of inventory followed by the management are in our
 opinion, 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. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material.
 
 III.  a) The Company has granted unsecured interest free unsecured
 loans to four wholly owned subsidiary
 
 Companies listed in the Register maintained under section 301 of the
 Companies Act, 1956. The maximum amount involved during the year was Rs
 53,005.17 Lakhs and the year end balance was Rs 52,892.62 Lakhs.
 
 b) These loans are given to wholly owned subsidiaries, and hence we are
 of the opinion that the non- charging interest is prima facie not
 prejudicial to the interest of the company.
 
 c) Since the repayment schedule has not been fixed, we cannot comment
 whether there are any overdue and receipt of the principal amount is
 regular.
 
 d) The Company has taken unsecured interest free loan from four parties
 listed in the Register maintained under section 301 of the Companies
 Act, 1956. Amounting Rs 3,014.87 Lakhs The maximum amount involved
 during the year was Rs 3,951.02 Lakhs and the year end balance was Rs
 3,014.87 Lakhs.
 
 e) These loans are interest free in nature and hence we are of the
 opinion that they are prima facie not prejudicial to the interest of
 the company.
 
 f) Since the repayment schedule is not fixed we cannot comment whether
 repayment of the principal amount is regular.
 
 IV.  In our opinion and according to the information and explanations
 provided to us, there are adequate internal control systems for
 purchase of inventories, fixed assets and sale of goods and services,
 commensurate with the size of the Company and the nature of its
 business. With regard to the purchase of flowers and inventories the
 existing internal control system needs to be strengthened to make it
 commensurate with the size of company and the nature of its business.
 However we have neither come across nor have been informed of any
 continuing failure to correct major weaknesses in the aforesaid
 internal control system.
 
 V.  a) According to the information and explanations given to us, we
 are of the opinion that the particulars of contracts or arrangements
 that need to be entered in the Register maintained under Section 301 of
 the Companies Act, 1956 have been entered.  b) In our opinion and
 according to the information and explanations given to us, the
 transactions made in pursuance of such contracts or arrangements
 entered in the Register maintained under Section 301 of the Companies
 Act, 1956 in respect of any party during the year have been made at
 prices which are reasonable having regard to prevailing market prices
 at the relevant time.
 
 VI.  The Company has not accepted any deposits from the public and
 hence provisions of Section 58A and 58AA of the Companies Act, 1956 and
 Companies (Acceptance of Deposit) Rules, 1975 are not applicable to the
 Company for the year under review.
 
 VII.  In our opinion, the internal audit system of the Company needs to
 be strengthened to make it commensurate with the size and nature of its
 business.
 
 VIII.  The Central Government has not prescribed maintenance of cost
 records under clause (d) of sub- section (1) of Section 209 of the
 Companies Act, 1956 in respect of any of the activities of the Company.
 
 IX.  a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is generally regular in depositing with undisputed statutory dues
 including provident fund, investor education and protection fund,
 employees state insurance, income tax, sales tax, wealth tax, service
 tax, custom duty, excise duty, cess and other material statutory dues
 as applicable with the appropriate authorities.  There are no arrears
 of outstanding statutory dues as at 31st March 2011 for a period of
 more than six months from the date they became payable.  b) According
 to the records of the company and the information and explanations
 given to us, there are no dues in respect of Sales tax, Income tax,
 Custom duty, wealth tax, Excise duty and Cess, Service Tax that have
 not been deposited on account of any dispute other than as stated here
 in under:
 
 Name of 
 the         Nature of    Amount un  Period to 
                                      which        From where 
                                                   disputing 
                                                   is pending
 
 Statute     dues         paid       the 
                                     amounts 
                                     relates
 
                          Rs in 
                          lakhs      (Assessment 
                                      Year)
 Income Tax
   
 Act,1961    Income Tax   219.00      2006-07      Commissioner of 
                                                   IncomeTax (Appeals)
                                                   -IBangalore    
 
 Karnataka 
 Tax         Entry Tax      2.50      Financial    The Deputy Commercial
                                                   of Commercial Taxes,
                                                   Audit -13, VAT
                                                   Division -1
                                      Year 
 on Entry 
 of                                   2006-07 and
                                      2007-08 
 Goods Tax 
 Act
 
 Finance 
 Act,1994    Service Tax  172.62      2005-06      Commissioner/ CESTAT
                                                   (Appeals)
 
 X.  The Company has no accumulated losses as at 31st March 2011 and it
 has not incurred cash losses in the financial year ended on that date
 or in the immediately preceding financial year.
 
 XI.  Based on our audit procedures and according to the information and
 explanation given to us, the Company has not defaulted in repayment of
 dues to any financial institution or bank as at the Balance Sheet date.
 
 XII.  Based on our examination and according to the information and
 explanations given 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, during the year.
 
 XIII.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund / societies are not applicable to the
 Company.
 
 XIV.  In our opinion and according to the information and explanations
 given to us, the Company is not a dealer or trader in securities. The
 Company has not invested in any securities in its own name.
 
 XV.  As per the information furnished to us, the corporate guarantee
 given by the Company for loans taken by an erstwhile 100%subsidiary
 from a bank is continuing even after the sale of entire holdings by the
 Company. Further the Company has given guarantees for the loans availed
 by the wholly owned subsidiaries from banks and financial institutions.
 In our opinion the terms and conditions of this guarantee are prima
 facie not prejudicial to the interest of the Company.
 
 XVI.  In our opinion and according to the information and explanations
 given to us, and on overall basis, the term loans taken by the Company
 have been applied for the purpose for which they 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 funds raised on short term basis have, prima facie, not been used
 during the year for long term investments.
 
 XVIII.  According to the information and explanations given to us, the
 company has made preferential allotment of shares to parties and
 companies covered in the register maintained under section 301 of the
 Act. In our opinion, the price at which shares have been issued is not
 prejudicial to the interest of the Company.
 
 XIX.  During the year under review, the Company has not issued any
 debentures. Hence, this clause is not applicable.
 
 XX.  We have verified the end use of money raised by the issue of
 Global Depository Receipts during the year under review as disclosed in
 the notes to the financial statements.
 
 XXI.  During the course of our examination of the books and records of
 the Company, carried out with the generally accepted auditing practices
 in India, and according to the information and explanations given to us
 by the management, we have neither come across any instances of
 material fraud on or by the Company, noticed or reported during the
 year, nor we have been informed of such case by the management..
 
 For Ishwar & Gopal,
 Chartered Accountants
 
 K V Gopalakrishnayya 
 Membership No.: 021748 
 Firm Registration No.:001154S
 
 Place: Bangalore 
 
 Date : August 12, 2011