We have audited the attached Balance Sheet of Kaveri Seed Company
 Limited, as at 31st March 2011 and also the Profit and Loss Account 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
 statemen tsarefreeofmaterialmisstatements. An a u d i t i nc I u des e
 x a min i ng on a tes t basi s, e vide nee 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.
 
 As required by the Companies (Auditors'' Report) Order, 2003 issued by
 the Central 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 &5of the said order.  Further
 toourcomments in the annexure referred toabove, 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 acount, as required by Law
 have been kept by the company, so far as appears from our examination
 of such books.  iii.  The balance Sheet, Profit & Loss Account and Cash
 Flow Statement referred to in this report are in agreement with the
 books of account.
 
 iv. In our opinion, the Balance sheet, Profit & 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.
 
 v. On the basis of written representations received from the Directors,
 and taken on record by the Board of Directors, we report that none of
 the Directors is disqualified as on 31st March 2011 from being
 appointed as director in terms of clause(g) of sub-section (1) Section
 274 of the Companies Act, 1956.
 
 vi. 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 trueand fair view inconformity with the accounting principles
 generally accepted in India.
 
 a. In thecase of the balancesheet, of the state of affairs of the
 Company asat 31st March 2011
 
 b. In thecase of the Profit & Loss Account, of the Profit for the year
 ended on that date and.
 
 c. In thecase of Cash Flow Statement, the cash flows of the Company for
 the year ended on that date.
 
 Annexure referred to in the Auditors'' Report to the Members of KAVERI
 SEED COMPANY LIMITED for the year ended 31 st March 2011, we report
 that:
 
 i. a. The Company has maintained proper records, showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b.  The management has conducted the physical verification of fixed
 assets during the year,
 
 c.  The Company has not disposed off substantial part of the fixed
 assets during the year under audit.
 
 ii. a. The inventory has 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 inventories followed by
 the management are reasonable and adequate in relation to thesize of
 theCompany and 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 not taken any loan, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 u/s301 of the Companies Act.  b. The company has not granted any loans,
 secured or unsecured, to companies, firms or cither parties covered in
 the register maintained u/s 301 of the Companies Act
 
 iv, i. In our opinion and according to the information and explanation
 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 the purchases of inventory, fixed assets and
 with regard to the sale of goods.
 
 During the course of audit, we have not observed any continuing failure
 to correct major weaknesses in internal controls.  v.  a. According to
 the information and explanations given to us, we are of the opinion
 that the transactions that need to be entered in the register
 maintained u/s.301 of the Companies Act, 1956 have been so entered.
 
 b. In ouropinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained u/s.301 of the
 Companies Act, 1956 and exceeding the value of Rs.5 Lakhs in respect of
 any party during the year have been made at prices, which arc
 reasonable, having regard to prevailing market prices at the relevant
 time.  vi.  TheCompany has not accepted any deposits from the public.
 
 vii.  In our opinion the Company has internal audit system commensurate
 with the size and nature of its business.  
 
 viii.  According to the information and explanations given to us,
 maintenance of cost records u/s.209(l)(d) of the Companies Act, 1956
 has not been prescribed by the Central Government for the Company.
 
 ix. a. The Company is regular in depositing with appropriate
 authorities undisputed statutory dues, including provident fund,
 employees'' state insurance, income tax, sales tax, wealth tax, customs
 duty, cess and other material statutory dues as applicable to it.
 
 b.  According to the information and explanations given to us no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, customs duty, and cess were in arrears, as at 31st March, 2011 for
 a period of more thansix months from the date they became payable.
 
 c.  According to the information and explanations given to us, there
 are no dues of sales tax, income tax, wealth tax which have not been
 deposited on account of any dispute.
 
 x.  The Provisions of Clause 4(x) of the Companies (Auditors'' Report)
 Order, 2003 are not applicable to the Company, since the Company has no
 accumulated losses at the end of the financial year.
 
 xi.  In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 financial institutions and Bank.
 
 xii. 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. 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 (Auditors'' Report) Order, 2003 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 are not applicable to theCompany.
 
 xv.  In our opinion and 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.  In our opinion, the term loans havebeen applied for the purpose
 for which they wereobtained.
 
 xvii. According to the information and explanations given to us and
 onan overall examination of the balance sheet of the company, we report
 that the no funds raised on short-term basis havebeen used for long-
 term assets except permanent working capital,
 
 xviii. According to the information and explanations given to us, the
 company has not made any preferential allotment of shares to the
 parties and companies covered in the register maintained u/s.301 of the
 companies Act, 1956.
 
 xix. The Company has not issued any debentures. Accordingly, the
 provisions of clause 4(xix) of the Companies (Auditor''s Report) Order,
 2003 are not applicable to the Company.
 
 xx.  The company has not raised any money by public issue during the
 year.
 
 xxi. According to the information and explanations given to us, no
 fraud on or by the company has been noticed or reported during the
 course of our audit.
 
                                            For P.R.REDDY & CO.,
 
                                   Firm Registration No.003268S
 
                                          CHARTERED ACCOUNTANTS
 
                                                          Sd/-
 
                                             P.RAGHUNADHA REDDY
 
 Place:   Hyderabad                                     Partner
 
 Date: 30th May 2011                        Membership No.23758