1.  We have audited the attached Balance Sheet of NAVA BHARAT VENTURES
 LIMITED, HYDERABAD (A.P) as at 31st March, 2011, the profit and Loss
 Account and also 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 the 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 signifcant 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 (Auditors’ Report) Order, 2003 (as
 amended), 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 specifed in paragraphs 4 and
 5 of the said Order.
 
 4.  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
 Companies Act, 1956.
 
 v) On the basis of 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 Directors is disqualifed 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;
 
 vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read in conjunction
 with the Schedules annexed therewith 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:
 
 a) in the case of the balance sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 b) in the case of the profit and loss account, of the profit of the
 Company for the year ended on that date; and
 
 c) in the case of cash fow statement, of the cash fows for the year
 ended on that date.
 
                                               for Brahmayya & Co.
 
                                             Chartered Accountants
 
                               Firms Registration Number: 000513S
 
                                                  (P Chandramouli)
 
 Place: Hyderabad                                          Partner
 
 Date : 28th May, 2011                   Membership Number: 025211
 
 
 
 Annexure to the Auditors Report
 
 referred to in paragraph 3 of our report of even date
 
 Re: Nava Bharat Ventures Limited, Hyderabad.
 
 1.  a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b) As explained to us, the management has physically verifed most of
 the fixed assets during the year and there is a regular programme of
 verifcation which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of the assets. As informed, no
 material discrepancies were noticed on such verifcation.
 
 c) The plant and machinery disposed off during the year by the Company
 is not substantial and hence, it has not affected the going concern
 status of the Company.
 
 2.  a) The inventory has been physically verifed during the year by the
 management. In our opinion, the frequency of verifcation is reasonable.
 
 b) In our opinion, the procedures of physical verifcation of
 inventories 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. The
 discrepancies noticed on physical verifcation between the physical
 stocks and book records were not material.
 
 3.  a) During the year, the Company has neither granted nor taken any
 loans, secured or unsecured to/ from Companies, frms or other parties
 covered in the register maintained under Section 301 of the Companies
 Act, 1956.
 
 b) In view of our comment in paragraph 3(a) above, (III) (b), (c), (d),
 (e) and (f) of paragraph 4 of the aforesaid order are not applicable to
 the Company.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business with regard
 to purchase of inventory and fixed assets and with regard to sale of
 goods and services. During the course of our audit, we have not
 observed any continuing failure to correct major weaknesses in internal
 control system.
 
 5.  a) According to the information and explanations given to us by the
 Management, we are of the opinion that the particulars of contracts or
 arrangements referred to in Section 301 of the Companies Act, 1956 have
 been entered in the register to be maintained under that section
 
 b) In respect of the transactions made in pursuance of such contracts
 or arrangements exceeding value of Rupees fve Lakhs entered into during
 the financial year, in the absence of any comparable quotes, we are
 unable to comment whether the transactions were made at prevailing
 market prices at the relevant time.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 58A and 58AA and other relevant provisions of the Companies Act, 1956
 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to
 the deposits accepted from the public.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  We have broadly reviewed the books of account relating to
 materials, labour and other items of cost maintained by the Company
 pursuant to the Rules made by the Central Government for the
 maintenance of cost records under Section 209 (1) (d) of the Companies
 Act, 1956 in respect of sugar, distillery, power and ferro chrome and
 are of the opinion that prime facie the prescribed accounts and records
 have been made and maintained. The Central Government has not
 prescribed the maintenance of cost records under Section 209 (1) (d) of
 the Companies Act, 1956 for any other products of the Company.
 
 9.  a) According to the records, the Company is generally 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, Custom Duty, Excise Duty, Cess and other material statutory dues
 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, Excise Duty and Cess were in arrears as at March 31,
 2011 for a period of more than six months from the date they became
 payable except the following
 
                                  Period to which 
 Name of the  Nature of   Amount                               Date of
 
                                     the amount     Due Date
 
 Statute      the dues      (Rs)                                payment
 
                                      relates
 
 The A.P.                             2003-04 
 Electricity 
 Duty         Electricity  72,60,282    to        15-04-2008 Not yet paid
 
 Act 1939     Duty
 
                                      2007-08 
 (as amended)
 
 -do-           -do-        4,07,520  2008 - 09   30-04-2009 Not yet paid
 
                            4,37,520  May 2010    30-06-2010
 
                            2,51,868  Jun 2010    31-07-2010
 
 -do-           -do-                                         Not yet paid
 
                            5,35,680  July 2010   31-08-2010
 
                            5,14,944  Aug 2010    30-09-2010
 
 GoAP        Water Cess       28,460  2008 - 09        -     Not yet paid
 
 APPCB
 
 GoAP        Water          3,04,945  2008 - 09   30-04-2009 Not yet paid 
 
 (I & CAD 
 Dept)       Charges        1,56,781  2009 - 10   30-04-2010
 
              Land 
 AP AL(CFNAP) Conversion   64,66,061  2010 - 11         -    Not yet paid
 
 ACT 2006     Tax
 
 Orissa       Electricity 
 Electricity 
 Duty                      10,91,227   2008- 09   30-04-2009 Not yet paid
 
              Duty 
 Act 
 
 1961
 
             Electricity 
 -do-                       3,20,936   2009 -10   30-04-2009 Not yet paid
 
              Duty
 
                              52,560   2008 - 09  30-04-2009
 
 OSPCB       Water Cess                                      Not yet paid
 
                            1,08,226   2009 - 10  30-04-2010
 
 Customs     Customs       17,61,860   1985 - 87      -      Not yet paid
 
 Act,1962    Duty
 
 Central 
 
 Excise      Service Tax      25,287   Aug 2010   30-09-2010 Not yet paid
 
 Act, 1944
 
 The Company has no accumulated losses as at the end of the financial
 year. The Company has not incurred any cash losses during the financial
 year covered by our audit and the immediately preceding financial year.
 
 11.  In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to any
 financial institutions and Banks.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  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.
 
 14.  The Company is not dealing or trading in shares, securities,
 debentures and other investments. Therefore, the provisions of clause
 4(xiv) of the Companies (Auditor’s Report) Order, 2003 are not
 applicable to the Company.
 
 15.  In our opinion, the terms and conditions on which the Company has
 given guarantees for the loans taken by Others from banks and financial
 institutions are not prima facie prejudicial to the interest of the
 Company.
 
 16.  In our opinion and according to the information and explanations
 given to us the term loans were applied for the purpose for which the
 loans were raised.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, we report
 that no funds raised on short- term basis have been used for long-term
 investment.
 
 18.  During the year, the Company has not made any preferential
 allotment of shares to parties and Companies covered in the Register
 maintained under section 301 of the Companies Act, 1956.
 
 19.  During the year, the Company has not issued any debentures ,
 therefore the question of creating security or charge in respect
 thereof does not arise.
 
 20.  During the year, the Company has not made any public issue and
 therefore the question of disclosing the end use of money raised by
 public issue does not arise.
 
 21.  Based upon the audit procedures performed and according to the
 information and explanations given to us, we report that no fraud on or
 by the Company has been noticed or reported during the year.
 
                                                 for Brahmayya & Co.
  
                                              Chartered Accountants
 
                                Firms Registration Number: 000513S
 
                                                   (P Chandramouli)
 
 Place: Hyderabad                                           Partner
 
 Date : 28th May, 2011                    Membership Number: 025211