1.  We have audited the attached balance sheet of Gujarat Ambuja
 Exports Limited as at March 31, 2011 and also the related profit & loss
 account and 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 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 [Auditors'' Report] Order, 2003 (CARO
 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 specified in
 paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 1
 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 the
 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 & loss account and cash
 flow statement dealt with by this report comply with 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 31st March 2011, and taken on record by the Board of
 Directors, we report that none of the directors are disqualified 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 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 & loss account, of the ‘Profit'' of the
 company for the year ended on that date.  and
 
 (c) In the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH (3) OF THE AUDITORS'' REPORT OF EVEN
 DATE TO THE MEMBERS OF GUJARAT AMBUJA EXPORTS LIMITED, ON THE FINANCIAL
 STATEMENTS FOR THE YEAR ENDED 31st MARCH 2011.
 
 On the basis of the records produced to us for our verification /
 perusal, such checks as we considered appropriate, and in terms of
 information and explanations given to us on our enquiries, we state
 that :-
 
 (i) (a) The company has generally maintained proper records showing
 full particulars including quantitative details and situation of fixed
 assets.
 
 (b) The company''s management has provided us with a representation that
 it has a phased programme of verification of fixed assets (i.e.  once
 in a two years) and in accordance with such programme, the company has
 carried out a physical verification of certain fixed assets during the
 year and no material discrepancies were noticed on such verification.
 
 (c) The company has not disposed off during the year substantial part
 of its fixed assets.
 
 (ii) (a) Physical verification at reasonable intervals has been carried
 out by the management in respect of inventory except for the stocks in
 transit and stocks lying with the clearing agents, which have been
 confirmed by the parties. In our opinion, the frequency of verification
 is reasonable.
 
 (b) The procedures of physical verification of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the company and nature of its business.
 
 (c) The company has maintained proper records of inventory and the
 discrepancies noticed on such physical verification as compared to book
 records were not material and have been adequately dealt with in the
 books of accounts.
 
 (iii) The company has not granted or taken any loan, secured or
 unsecured to or from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956. And
 hence, paragraphs 4(iii) (a to g) of the order are not applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us during the course of the audit, the company has a generally
 adequate internal control system commensurate with the size of the
 company and the nature of its business with regard to the purchase of
 inventory and fixed assets and with regard to the sale of goods and
 services. During the course of our audit, we have not observed any
 continuing failure to correct major weakness in internal control system
 of the company.
 
 (v) In respect of contracts or arrangements referred to in section 301
 of the Companies Act, 1956:
 
 (a) In our opinion, the particulars of contracts or arrangements
 referred to in section 301 of the Act have been entered in the register
 required to be maintained under that section.
 
 (b) According to the information and explanations given to us where
 each such transaction made in pursuance of such contracts or
 arrangements in excess of Rs.5 lakhs in respect of any party, the
 transactions have been made at the prices, which are prima facie
 reasonable, having regard to the prevailing market prices available
 with the company for such transactions or prices at which transactions
 for similar goods have been made with other parties at the relevant
 time.
 
 (vi) The company has not accepted deposits from public during the year
 under audit, hence the directives issued by Reserve Bank of India and
 provisions of section 58A & 58AA of the Companies Act, 1956 or any
 other relevant provisions of the Act and the rules framed there under
 are not applicable.
 
 (vii) In our opinion, the company has an Internal Audit System
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of accounts maintained by the
 company in respect of products where, pursuant to the rules made by the
 Central Government of india, the maintenance of cost records has been
 prescribed under section 209(1)(d) of the Companies Act, 1956, and are
 of the opinion that prima facie, the prescribed accounts and records
 have been made and maintained. We have not, however made a detailed
 examination of records with a view to determine whether they are
 accurate or complete.
 
 (ix) (a) The company is generally regular in depositing Provident Fund,
 Investor Education & Protection Fund, Employees State Insurance, Income
 Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess
 and Other material statutory dues to appropriate authorities.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441A of the Companies Act,1956, we
 are not in a position to comment upon the regularity or otherwise of
 the company in depositing the same.
 
 (b) According to the information and explanations given to us, no
 undisputed amount in respect of aforesaid statutory dues were
 outstanding as at 31st March, 2011 for the period of more than six
 months from the date they become payable except,
 
 Sr. Nature of the statute Nature of dues  Amount(In Rs.) Period to which 
                                                        amount relates
 
 1   Mandi Tax, Akola      Mandi Tax         7,17,757       2010-11
 
 (c) According to the information and explanations given to us and on
 the basis of our examination of the records of the company, the details
 of disputed amounts in respect of Sales Tax, Income Tax, Wealth Tax,
 Service Tax, Custom Duty, and Excise Duty / Cess not deposited with the
 appropriate authorities are as follow:
 
 Sr Nature of the 
    statute        Nature of dues         Amount  Period to 
                                                  which      Forum
                                                             where the
 No.                                      in Rs.    amount 
                                                  relates    dispute is
                                                             pending
 
 1. The Income Tax 
    Act, 1961      Disallowances of
                   expenses            16,64,435 A.Y.1995-96 ITAT
 
                   Disallowances of
                   claims            1,93,73,234 A.Y.2005-06 ITAT
 
                                        3,66,568 A.Y.2006-07 CIT(A)
 
                                       31,92,738 A.Y.2007-08 CIT(A)
 
                                    11,88,91,326 A.Y.2008-09 CIT(A)
 
                                    14,48,30,767 A.Y.2009-10 CIT(A)
 
 2. The Bombay 
 Sales of Motor 
 Spirit Taxation 
 Act, 1958        Exemptions            1,71,732     1997-98 Tribunal
 
 3. The Central 
 Excise Act, 1944 Classification     4,34,43,083     2004-05
                                                    &2005-06 CESTAT
 
                  Additional 
                  Demand                2,99,272     2004-05 
                                                   & 2005-06 CESTAT
 
                  Additional Demand       50,461     2006-07 CESTAT
 
 4. The Customs 
 Act, 1962        Differential Duty     3,59,056     2003-04 Commissioner
                                                             of Customs
 
                  Differential Duty     2,38,021     2006-07 CESTAT
 
                  DEPB license         19,79,518     2005-06 Asst. 
                                                             Commissioner 
                                                             of Customs
 
                                     1,31,58,158     2008-09 Commissioner
                                                             (A)
 
 5. Indian Stamp 
 Act, 1899 (MP)   Stamp duty           58,60,000     2001-02 Board of
                                                             Revenue
 
 6. Indian Stamp 
 Act, 1899 
 (Gujarat)        Stamp Duty            1,25,290     1997-98 High Court
 
 7. Krishi Upaj 
 Mandi Adhiniyam,
 1972             Mandi Tax             2,27,600     2001-02 High Court
 
 8. The Gujarat 
 Sales Tax Act, 
 1969             Sales Tax             3,45,323     1996-97 Tribunal
 
                  Purchase Tax          4,23,464     1997-98 High Court
 
                  Disallowance of
                  sales & levy of      66,09,672     2004-05 Commissioner
                                                            (Appeals)
                  interest & penalty
 
 9. Central Sales 
    Tax Act, 1956 Disallowance of 
                  sales,
                  non-Production of 
                  ‘C'' Forms            99,51,959     2004-05 Commissioner
                                                             (Appeals)
 
 10. Gujarat 
 Value Added Tax 
 Act,2003         Reversal of Credit
                  on Consignment
                  sales                50,88,830     2006-07 Commissioner
                                                             (Appeals)
 
 11. The Bombay 
 Electricity Duty 
 Act, 1958        Additional Demand
                  charges              62,19,917     2008-09 
                                                   & 2009-10 Consumer
                                                             Grievances
                                                             Forum
 
 (x) The company has no accumulated losses and has not incurred cash
 losses during the current financial year and immediately preceding
 financial year.
 
 (xi) The company has not defaulted in repayment of dues to the banks or
 to the financial institutions. The company has not obtained any
 borrowing by way of debentures.
 
 (xii) The company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 (xiii) The company has given guarantee for loans taken by subsidiary
 company. In our opinion and based on the information and explanations
 given to us, the terms and conditions are not prejudicial to the
 interests of the company.
 
 (xiv) On the basis of our examination of documents and records and
 according to the information and explanations given to us, we are of
 the opinion that the company has deployed the term loan funds for the
 purpose for which they were obtained.
 
 (xv) According to the information and explanations given to us, on an
 over all 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.
 
 (xvi) During the year, the company has not made preferential allotment
 of shares to parties and companies covered in register maintained under
 section 301 of the Companies Act, 1956.
 
 (xvii) The Company has not issued any debentures during the year.
 
 (xviii) The company has not raised any money by way of public issue
 during the year.
 
 (xix) To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the company
 was noticed or reported during the year.
 
 (xx) In our opinion and according to the information and explanations
 given to us, the nature of the company''s business / activities during
 the year are such that paragraphs:
 
 4(xiii) provisions of any special statute applicable to chit fund,
 
 4(xiv) dealing or trading in shares, securities, debentures and other
 investments of company (Auditors'' Report) Order, 2003 are not
 applicable to the company.
 
 
                                            For KANTILAL PATEL & CO.,
 
                                               CHARTERED ACCOUNTANTS
 
                                               [Firm Reg.No.104744W]
 
                                                     [Rajesh G Shah]
 
 Place : Ahmedabad                                           Partner
 
 Date  : May 27, 2011                          Membership No.: 36782