ఆడిటర్ నివేదిక Emergy Phaarma Ltd.

Sep 30, 2008

1. We have audited the attached Balance Sheet of Emergy Phaarma Limited, as at 30th September, 2008 and the Profit and Loss Account of the company for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. 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 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 by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. 4, Further to our comments in the Annexure referred to in para (3) 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 account 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, subject to note no. II (a) (i), (ii) & (iii) of schedule 11 regarding non- provision of unquote Rife amount of retirement benefits, deferred taxes and Impairment of Assets, comply with accounting standards referred to in Section 211 (3C) of the Companies Act, 1956, to the extent applicable; e) on the basis of written representations received from the directors, as on 30th September, 2008 and taken on record by the board of directors, we report that none of the directors is disqualified as on 30th September, 2008 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; f) in our opinion and to the best of our information and according to the explanations given to us, the accounts subject to paragraph 4 (d) above and note II (b) (ii) & (Hi) of schedule 11 regarding non-provision of interest, overdue charges, unconfirmed balances of secured loans and read together with the other notes thereon, 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: i) in the case of the Balance Sheet, of the state of affairs of the company as at 30th September, 2008 ii) in the case of the Profit and Loss Account, of the Profit of the company for the year ended on that date, and iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. ANNEXURE TO AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE i a. The Company has not updated it's Fixed Assets Register. b. The management has not physically verified the fixed assets hence discrepancies, if any, have not been dealt with in the books of account. c. In our opinion, the company has not disposed off substantial part of fixed assets during the yea and therefore do not affect the going concern status of the company. ii During the year the company has no inventory, Accordingly, clause 4 (ii) of the Companies (Auditor's Report) Order, 2003 is not applicable. iii a. 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 Companies Act, 1956. Accordingly, clauses 4 (iii) (a), (b), (c), & (d) of the Companies (Auditor's Report) Order, 2003 is not applicable. e. The Company had taken unsecured loan, from four parties covered in the register maintained under Section 301 of the Companies Act, 1956 and the maximum amount outstanding was Rs. 3,93,89,620 /- and the year end balance of loan taken from such parties was Rs. 3,93,89,620 /-. f. In our opinion and according to the information and explanations given to us, the loans taken by the company are interest free and other terms and conditions are not prima facie prejudicial to the interest of the company. g. In respect of unsecured loans taken by the company from the above parties, the principal amount is repayable on demand, hence the question of overdue amount does not arise. iv In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the company and the nature of its business. v a. In our opinion and according to the information and explanations given to us, there are no transactions (excluding the loans reported in the Para (iii) above) that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956, b. According to the information and explanations given to us, there are no transactions (excluding the loans reported in the Para (iii) above) in excess of Rs. 5,00,000 in respect of any party and hence the question of reasonable prices in respect of such transactions regards to the prevailing market prices does not arise, vi The Company has not accepted any deposits from the public. Hence, the provisions of section 58A and 58AA of the companies Act, 1956 and the companies (Acceptance of the deposits ) Rules, 1975, do not apply. vi i The company does not have a separate internal audit system. viii As explained to us, no records, as specified in section 209 (1) (d) of the companies act, 1956, were maintained by the company as there are no commercial activities taken place during the year. ix a. According to the information and explanations given to us and the records of the Company examined by us, the company has generally been regular in depositing the undisputed statutory dues inducing Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Sales tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues, except Income Tax of Rs. 26,59,466/-, Tax Deducted at Source of Rs.1,30,262 and Fringe Benefit Tax of Rs. 182 /- were outstanding as at 30th September, 2008 for a period of more than six months from the date of becoming payable. b. According to the information and explanations given to us and the records of the company examined by us, the particulars of Customs Duty as at 30th September, 2008 which have not been deposited on account of disputes pending and not recognized in the books of account are given below: Particulars Amount Period to which the Forum where dispute is pending I amount relates Excise / 41,73,499 1995-96, 96-97 & 97-98 Before the Commissioner of Customs, Excise and Customs Duty Service Tax (Appeals), Visakhapatnam. x According to the records of the company, its accumulated losses at the end of the financial year are more than fifty percent of its net worth. The company has incurred cash losses in the financial year under report and in the immediately preceding financial year. xi According to the information and explanation given to us, the company has not defaulted in repayment of dues to financial institutions and bank. However, during the year the company has settled the long outstanding dues to IDBI Bank under One Time Settlement (OTS) Scheme. xii In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4 (xii) of the Companies (Auditor's Report) Order, 2003 is not applicable. xiii In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund/society. Accordingly, clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable. xiv In our opinion and according to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 is not applicable. xv According to the information and explanations given to us and records examined by us, the company has not given any guarantee for loans taken by others from banks or financial institutions. Accordingly, clause 4 (xv) of the Companies (Auditor's Report) Order, 2003 is not applicable. xvi The company has not raised any new term loans during the year under report. The term loans outstanding at the beginning of the year were applied for the purposes for which they were obtained. xvii 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 investments. xviii 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. Accordingly, clause 4 (xviii) of the Companies (Auditor's Report) Order, 2003 is not applicable. xix The Company has not issued any secured debentures during the year. Accordingly, clause 4 (xix) of the Companies (Auditor's Report) Order, 2003 is not applicable. xx The company has not raised any money by public issues during the year. Accordingly, clause 4 (xx) of the Companies (Auditor's Report) Order, 2003 is not applicable. xxi According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year. for Visweswara Rao & Asociates Chartered Accountances (Mehldhare S G) Partner Membership No.216463 Place: Hyderabad Date:21-02-2009

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Sep 30, 2007

1. We have audited the attached Balance Sheet of Emergy Phaarma Limited, as at 30th September, 2007 and the Profit and Loss Account of the company for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. 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 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 by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in para (3) 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 account 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, subject to note no. II (a) (i), (ii) & (iii) of schedule 10 regarding non- provision of unquantifiable amount of retirement benefits, deferred taxes and Impairment of Assets, comply with accounting standards referred to in Section 211 (3C) of the Companies Act, 1956, to the extent applicable;

e) on the basis of written representations received from the directors, as on 30th September 2007 and taken on record by the board of directors, we report that none of the directors is disqualified as on 30th September, 2007 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f) the accounts of the company have been drawn up on going concern basis. We are of the opinion that the going concern basis is questionable in view of the adverse financial conditions and also due to non-continuation of operations for substantial/ period. We are unable to express an opinion in this regard and also it's likely impact on the operations and on the assets and liabilities of the company.

g) in our opinion and to the best of our information and according to the explanations given to us, the accounts subject to paragraph 4 (d) & (f) above and note II (b) (i) (ii) & (iii) of schedule 10 regarding non-provision of interest, overdue charges, unconfirmed balances of secured loans and read together with the other notes thereon, 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:

i) in the case of the Balance Sheet, of the state of affairs of the company as at 30th September, 2007

ii) in the case of the Profit and Loss Account, of the loss of the company for the year ended on that date, and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

i a. The Company has not updated it's Fixed Assets Register.

b. The management has not physically verified the fixed assets hence discrepancies, if any, have not been dealt with in the books of account.

c. The company has not disposed off substantial part of fixed assets during the year, however the going concern status is questionable in view of adverse financial conditions and non- continuation of operations for a substantial period.

ii During the year the company has no inventory. Accordingly, clause 4 (if) of the Companies (Auditor's Report) Order, 2003 is not applicable.

iii a. 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 Companies Act, 1956. Accordingly, clauses 4 (iii) (a), (b), (c), & (d) of the Companies (Auditor's Report) Order, 2003 is not applicable.

e. The Company had taken unsecured loan, from Four parties covered in the register maintained under Section 301 of the Companies Act, 1956 arid the maximum amount outstanding was Rs. 2,94,96,870 /- and the year end balance of loan taken from such parties was Rs. 2,94,96,870 /-.

f. In our opinion and according to the information and explanations given to us, the loans taken by the company are interest free and other terms and conditions are not prima facie prejudicial to the interest of the company.

g. In respect of unsecured loans taken by the company from the above parties, the principal amount is repayable on demand, hence the question of overdue amount does not arise.

iv In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the company and the nature of its business.

v a. In our opinion and according to the information and explanations given to us, there are no transactions (excluding the loans reported in the Para (iii) above) that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956.

b. According to the information and explanations given to us, there are no transactions (excluding the loans reported in the Para (iii) above) in excess of Rs. 5,00,000 in respect of any party and hence the question of reasonable prices in respect of such transactions regards to the prevailing market prices does not arise.

vi The Company has not accepted any deposits from the public. Hence, the provisions of section 58A and 58AA of the companies Act, 1956 and the companies (Acceptance of the deposits ) Rules, 1975, do not apply.

vii The company does not have a separate internal audit system.

viii As explained to us, no records, as specified in section 209 (1) (d) of the companies act, 1956, were maintained by the company as there are no commercial activities taken place during the year.

ix a. According to the information and explanations given to us and the records of the Company examined by us, the company has generally been regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Sales tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues, except Income Tax of Rs. 26,59,466/-, Tax Deducted at Source of Rs. 1,30,262/- and Fringe Benefit Tax of Rs. 97 /- were outstanding as at 30th September, 2007 for a period of more than six months from the date of becoming payable.

b. According to the information and explanations given to us and the records of the company examined by us, the particulars of Customs / Excise Duty as at 30th September, 2007 which have not been deposited on account of disputes pending and not recognized in the books of account are given below:

Particulars Amount Period to which the Forum where dispute is pending amount relates

Excise / 41,73,499 1995-96, 96-97 & 97-98 Before the Customs, Excise and Gold (Control) Customs Duty Appellate Tribunal, South Regional Bench Bangalore

x According to the records of the company, its accumulated losses at the end of the financial year are more than fifty percent of its net worth. The company has incurred cash losses in the financial year under report and in the immediately preceding financial year.

xi The company has defaulted in repayment of dues to financial institutions and bank. The overdue amount and period is not ascertainable as the loans were became non-performing from a long period.

xii In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4 (xii) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xiii In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund/society. Accordingly, clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xiv In our opinion and according to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xv According to the information and explanations given to us and records examined by us, the company has not given any guarantee for loans taken by others from banks or financial institutions. Accordingly, clause 4 (xv) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xvi The company has not raised any new term loans during the year under report. The term loans outstanding at the beginning of the year were applied for the purposes for which they were obtained.

xvii 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 investments.

xviii 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, z1956. Accordingly, clause 4 (xviii) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xix The Company has not issued any secured debentures during the year. Accordingly, clause 4 (xix) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xx The company has not raised any money by public issues during the year. Accordingly, clause 4 (xx) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xxi According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

for Visweswara Rao & Assocates

Chartered Accountants

(Mahidhan. G)

Partner

Membership No.16463

Place: Hyderabad

Date : 22-02-2008

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Sep 30, 2006

1. We have audited the attached Balance Sheet of Emergy Phaarma Limited, as at 30th September,'2006 and the Profit and Loss Account of the company for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. 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 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 by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in para (3) 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 account 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, subject to note no. II (a) (i), (ii) & (iii) of schedule 12 regarding non- provision of unquantifiable amount of retirement benefits , deferred taxes and Impairment of Assets, comply with accounting standards referred to in Section 211 (3C) of the Companies Act, 1956, to the extent applicable;

e) on the basis of written representations received from the directors, as on 30th September, 2006 and taken on record by the board of directors, we., report that none of the directors is disqualified as on 30th September, 2006 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f) the accounts of the company have been drawn up on going concern basis. We are of the opinion that the going concern basis is questionable in view of the adverse financial conditions and also due to non-continuation of operations for substantial period. We are unable to express an opinion in this regard and also it's likely impact on the operations and on the assets and liabilities of the company.

g) in our opinion and to the best of our information and according to the explanations given to us, the accounts subject to paragraph 4 (d) & (f) above and note II (b) (i) (ii) & (iii) of schedule 12 regarding non-provision of interest, overdue charges, unconfirmed balances of secured loans and read together with the other notes thereon, 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:

i) in the case of the Balance Sheet, of the state of affairs of the company as at 30th September, 2006

ii) in the case of the Profit and Loss Account, of the loss of the company for the year ended on that date, and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN

DATE

i a. The Company has not updated it's Fixed Assets Register.

b. The management has not physically verified the fixed assets hence discrepancies, if any, have not been dealt with in the books of account.

c. The company has not disposed off substantial part of fixed assets during the year, however the going concern status is questionable in view of adverse financial conditions and non- continuation of operations for a substantial period.

ii During the year the company has no inventory. Accordingly, clause 4 (ii) of the Companies (Auditor's Report) Order, 2003 is not applicable.

iii a. 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 Companies Act, 1956. Accordingly, clauses 4 (iii) (a), (b), (c), & (d) of the Companies (Auditor's Report) Order, 2003 is not applicable.

e. The Company had taken unsecured loan, from three parties covered in the register maintained under Section 301 of the Companies Act, 1956 and the maximum around outstanding was Rs. 2,67,21,870 /- and the year end balance of loan taken from such parties was Rs. 2,67,21,870/-.

f. In our opinion and according to the information and explanations given to us, the loans taken by the company are interest free and other terms and conditions are not prima facie prejudicial to the interest of the company.

g. In respect of unsecured loans taken by the company from the above parties, the principal amount is repayable on demand, hence the question of overdue amount does not arise.

iv In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the company and the nature of its business.

v a. In our opinion and according to the information and explanations given to us, there are no transactions (excluding the loans reported in the Para (iii) above) that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956.

b. According to the information and explanations given to us, there are no transactions (excluding the loans reported in the Para (iii) above) in excess of Rs, 5,00,000 in respect of any party and hence the question of reasonable prices in respect of such transactions regards to the prevailing market prices does not arise.

vi The Company has not accepted any deposits from the public. Hence, the provisions of section 58A and 58AA of the companies Act, 1956 and the Companies (Acceptance of the deposits ) Rules, 1975, do not apply.

vii The company does not have a separate internal audit system.

viii As explained to us, no records, as specified in section 209 (1) (d) of the companies act, 1956, were maintained by the company as there are no commercial activities taken place during the year.

ix a. According to the information and explanations given to us and the records of the Company examined by us, the company has generally been regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Sales tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues, except Income Tax of Rs. 26,59,466/- and Tax Deducted at Source of Rs.1,30,262 were outstanding as at 30th September, 2006 for a period of more than six months from the date of becoming payable.

b. According to the information and explanations given to us and the records of the company examined by us, the particulars of Customs Duty / Excise Duty as at 30th September, 2006 which have not been deposited on account of disputes pending and not recognized in the books of account are given below:

Particulars Amount Period to which the Forum where dispute is pending amount relates

Excise / 64,70,159 1995-96,96-97 & 97-98 Before the Customs, Excise and Gold (Control) Customs Duty Appellate Tribunal, South Regional Bench Bangalore

x According to the records of the company, its accumulated losses at the end of the financial year are more than fifty percent of its net worth. The company has incurred cash losses in the financial year under report and in the immediately preceding financial year.

xi The company has defaulted in repayment of dues to financial institutions and bank. The overdue amount and period is not ascertainable as the loans were became non-performing from a long period.

xii In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4 (xii) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xiii In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund/society. Accordingly, clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xiv In our opinion and according to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xv According to the information and explanations given to us and records examined by us, the company has not given any guarantee for loans taken by others from banks or financial institutions. Accordingly, clause 4 (xv) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xvi The company has not raised any new term loans during the year under report. The term loans outstanding at the beginning of the year were applied for the purposes for which they were obtained.

xvii 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 investments.

xviii 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. Accordingly, clause 4 (xviii) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xix The Company has not issued any secured debentures during the year. Accordingly, clause 4 (xix) of the Companies (Auditor's Report) Order, 2003 is not applicable,

xx The company has not raised any money by public issues during the year. Accordingly, clause 4 (xx) of the Companies (Auditor's Report) Order, 2003 is not applicable.

xxi According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

for Visweswara Rao & Associates

Chartered Accountants

Membership No: 16463

Place: Hyderabad

Date : 22-02-2007