Zuari Global Ltd

The Members of Zuari Industries Limited

1. We have audited the attached balance sheet of Zuari Industries Limited ('theCompany') as at March 31, 2011 and also the profit and loss account and the cash flowstatement for the year ended on that date annexed thereto. These financial statements arethe responsibility of the Company's management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. 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 th e financial statements are free of material misstatement. 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.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued bythe Central Government of India in terms of sub-section (4A) of Section 227 of theCompanies Act, 1956, we enclose in the Annexure a statement on the matters specified inparagraphs 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 ourknowledge 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 theCompany so far as appears from our examination of those books.

iii. The balance sheet, profit and loss account and cash flow statement dealt with bythis report are in agreement with the books of account.

iv. In our opinion, the balance sheet, profit and loss account and cash flow statementdealt 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 the written representations received from the directors, as on March31, 2011, and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on March 31, 2011 from being appointed as a director in termsof 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 explanationsgiven to us, the said accounts 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 accountingprinciples generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March31, 2011;

b) in the case of the profit and loss account, of the profit for the year ended on thatdate; and

c) in the case of cash flow statement, of the cash flows for the year ended on thatdate.

Re: Zuari Industries Limited

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

(b) The fixed assets are physically verified by th e management in a phased manner overa period of two years and accordingly, part of the fixed assets were physically verifiedduring the year and the discrepancies observed on such verification, as compared to thebook records, were not material. In our opinion, the frequency of physical verification isreasonable having regard to the size of the company and the nature of the assets.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonableintervals during the year.

(b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) The Company is maintaining proper records of inventory and no materialdiscrepancies were noticed on physical verification.

(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 theCompanies Act, 1956. Therefore, the provisions of paragraph 4 (iii) (a), (b), (c) and (d)of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to theCompany.

(b) The Company has not taken any loans, secured or unsecured from companies, firms orother parties covered in the register maintained under Section 301 of the Companies Act,1956 and as such, clauses 4 (iii) (e) to 4 (iii) (g) of the Companies (Auditor's Report)Order, 2003 (as amended) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us,there is an adequate internal control system commensurate with the size of the Company andthe nature of its business, for the purchase of inventory and fixed assets and for thesale of goods. During the course of our audit, no major weakness has been noticed in theinternal control system in respect of these areas. During the course of our audit, we havenot observed any continuing failure to correct major weakness in internal control systemof the Company. Due to the nature of its business, the Company is not required to sell anyservices.

(v) According to the information and explanations provided by the management, we are ofthe opinion that there are no transactions that need to be entered into the registermaintained under Section 301 of the Companies Act, 1956. Therefore, the provisions ofclause 4(v) of the Companies (Auditor's Report) Order, 2003 (as amended) are notapplicable to the Company.

(vi) In respect of deposits accepted in earlier years, in our opinion and according tothe information and explanations given to us, directives issued by the Reserve Bank ofIndia and the provisions of Sections 58A, 58AA or any other relevant provisions of theCompanies Act, 1956 and the rules framed thereunder, to the extent applicable, have beencomplied with. We are informed by the management that no order has been passed by theCompany Law Board, National Company Law Tribunal or Reserve Bank of India or any Court orany other Tribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with thesize and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records underSection 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, theprescribed accounts and records have been made and maintained.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund, investor education and protection fund,employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty,excise duty and other material statutory dues applicable to it.

Further, since the Central Governent has till date not prescribed the amount of cesspayable under section 441 A of the Companies Act, 1956, we are not in a position tocomment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amountspayable in respect of provident fund, investor education and protection fund, employees'state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, exciseduty, cess and other material undisputed statutory dues were outstanding, at the year end,for a period of more than six months from the date they became payable.

(c) According to the records of the Company, there are no dues outstanding ofincome-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess onaccount of any dispute, other than the following:

(x) The Company has no accumulated losses at the end of the financial year and it hasnot incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given bythe management, we are of the opinion that the Company has not defaulted in repayment ofdues to banks. The Company did not have any outstanding debentures and loan from financialinstitution during the year.

(xii) According to the information and explanations given to us and based on thedocuments and records produced to us, the Company has not granted loans and advances onthe 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 (Auditor's Report)Order, 2003 (as amended) 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 theCompanies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has givenguarantee for loans taken by others from bank or financial institutions, the terms andconditions whereof in our opinion are not prima-facie prejudicial to the interest of theCompany.

(xvi) Based on information and explanations given to us by the management, term loanswere applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company, we report that no funds raised onshort-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties orcompanies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and as per the information and explanationsgiven by the management, we report that no fraud on or by the Company has been noticed orreported during the course of our audit.