Florence Investech Ltd

to the members

We have audited the attached Balance Sheet of JK AGRI GENETICS LIMITED, as at 30^thSeptember, 2010 the Profit & Loss Account and also the Cash Flow Statement for theyear ended on that date annexed thereto. These financial statements are the responsibilityof the Company's management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 (as amended) (The order)issued by the Central Government of India in terms of section 227 (4A) of The CompaniesAct, 1956 (The Act), we enclose in the Annexure, a statement on the matters specified inparagraphs 4 & 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we reportthat:

(a) We have obtained all the information and explanations, which to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;

(c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with bythis Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash FlowStatement dealt with by this report comply with the Accounting Standards referred to insection 211(3C) of the Companies Act, 1956;

(e) As per the information & explanations given to us, none of the directors of theCompany is disqualified from being appointed as a director in terms of clause (g) ofsub-section (1) of section 274 of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts read together with Significant Accounting Policies andNotes thereon, give the information required by the Act in the manner so required and givea true and fair view in conformity with the accounting principles generally accepted inIndia,

(i) In the case of Balance Sheet, of the state of affairs of the Company as at 30^thSeptember, 2010;

(ii) In the case of Profit & Loss Account, of the profit for the year ended on thatdate; and

(iii) In the case of Cash Flow Statement, of the cash flows for the year ended on thatdate.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph (1) of our Report of even date of JK AGRI GENETICS LIMITEDfor the year ended 30th September, 2010)

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management according to theprogramme of periodical physical verification in phased manner which in our opinion isreasonable having regard to the size of the Company and the nature of its fixed assets.The discrepancies noticed on such physical verification were not material.

(c) As per the records and information and explanations given to us, fixed assetsdisposed off during the period were not substantial.

2. (a) The inventories of the Company have been physically verified by the managementat reasonable intervals. In respect of stock lying with third parties, they havesubstantially confirmed these.

(b) The procedures of physical verification of inventories followed by the Managementare reasonable and adequate in relation to the size of the Company and nature of itsbusiness.

(c) The Company is maintaining proper records of inventory. The discrepancies noticedon such physical verification of inventory as compared to book records were not material.

3. The Company has neither granted nor taken any loan secured or unsecured to and fromcompanies, firms or other parties covered in the register maintained under section 301 ofthe Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (b) to (d), (f)& (g) of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, thereare adequate internal control systems commensurate with the size of the Company and thenature of its business for the purchase of inventory and fixed assets and for the sale ofgoods and services. Based on the audit procedure performed and on the basis of informationand explanations provided by the management, during the course of audit, we have notobserved any continuing failure to correct major weaknesses in internal control system.

5. According to the information and explanations provided by the management and basedupon audit procedures performed, we are of the opinion that the particulars of contractsor arrangements referred to in section 301 of the Act have been entered in the registerrequired to be maintained under that section; and the transactions made in pursuance ofsuch contracts or arrangements (exceeding the value of Rs. 5 lacs in respect of each partyduring the financial year) have been made at prices which are generally reasonable havingregard to prevailing market prices at the relevant time.

6. According to the information and explanations given by the management, the Companyhas not accepted any deposits from the public covered under Section 58A and 58AA of theAct during the current year.

7. In our opinion, the Company has an internal audit system commensurate with the sizeof the Company and nature of its business.

8. According to the information and explanations given by the management, the CentralGovernment has not prescribed the maintenance of cost records under section 209(1)(d) ofthe Companies Act, 1956 in respect of the Company's products.

9. (a) According to the records of the Company and information and explanations givento us, the Company is generally regular in depositing undisputed statutory dues includingProvident Fund, Investor Education and Protection Fund, Employees' State Insurance, SalesTax, Wealth Tax, Income Tax, Service Tax, Custom Duty, Excise Duty, Cess and othermaterial statutory dues with the appropriate authorities to the extent applicable andthere were no material undisputed statutory dues payable for a period of more than sixmonths from the date they became payable as at 30^th September, 2010.

(b) According to the records and information & explanations given to us, there areno dues in respect of Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty andCess that have not been deposited with the appropriate authorities to the extentapplicable on account of any dispute and the dues in respect of Income tax that have notbeen deposited with the appropriate authorities on account of dispute and the forum wherethe dispute is pending are given below:-

10. The Company does not have accumulated losses at the end of the financial year andhas not incurred cash losses in the current financial year and has incurred cash losses inthe immediately preceding financial year.

11. In our opinion, on the basis of audit procedure and according to the informationand explanations given to us, the Company has not defaulted in repayment of dues tofinancial institutions or banks or debenture holders. (Read with note no.1 of Schedule 3).

12. According to the information and explanations given to us, the Company has notgranted 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 andtherefore, the provisions of clause 4 (xiii) of the said Order are not applicable to thecompany.

14. According to the information and explanations given to us, the Company is notdealing in or trading in shares, securities, debentures and other investments; thereforethe provisions of clause 4(xiv) of the said Order are not applicable to the Company.

15. According to the information and explanations given to us, the Company has notgiven any guarantee for the loans taken by others from banks or financial institutions.

16. On the basis of information and explanations given to us, term loan were appliedfor the purpose for which the loans were obtained.

17. On the basis of information and explanations given to us and on overall examinationof financial statements of the Company, we are of the opinion that no funds raised onshort-term basis have been used for long-term investment.

18. According to the information and explanations given to us, during the year theCompany has not made any preferential allotment of shares to any parties or companiescovered in the register maintained under section 301 of the Act.

19. The Company has not issued any debenture during the current year; however theCompany has outstanding Zero Coupon Non convertible Bonds of Rs. 4,250 lacs. Refer NoteNo.1 of schedule 3.

20. The Company has not raised any money through a public issue during the currentyear.

21. Based on the audit procedure performed and on the basis of information andexplanations provided by the management, no fraud on or by the Company has been noticed orreported during the course of our audit.