1.  We have audited the attached Balance Sheet and Profit & Loss
 Account of REI AGRO LIMITED as at 31st March, 2011 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 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 Companies (Auditor''s Report) Order, 2003, (as
 amended) issued by the Central Government of India in terms of Section
 227(4A) of the Companies Act, 1956, and we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order, to the extent applicable to the Company.
 
 4.  Further to our comments in the Annexure referred to in paragraph 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 purpose of our
 audit;
 
 b) In our opinion, proper books of accounts 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 dealt with by this report comply with the Accounting
 Standards referred to in Section 211(3C) of the Companies Act, 1956;
 
 e) On the basis of written representations received from the directors
 as on 31stMarch,2011 and taken on record by the Board of Directors, we
 report that none of the directors is 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;
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with the
 Significant Accounting Policies as per Schedule 20 and Notes thereon as
 per Schedule 21, 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;
 
 1) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31stMarch,2011;
 
 2) in the case of Profit and Loss Account, of the Profit of the Company
 for the year ended on that date, and
 
 3) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT (Referred to in paragraph 3 of our
 report of even date)
 
 i) In respect of its Fixed Assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 (b) In our opinion, the company has a regular programme of physical
 verification of fixed assets which, in our opinion, is reasonable
 having regards to the size of the company and nature of its assets. In
 accordance with this programme, fixed assets were physically verified
 by the management during the year and that no material discrepancies
 were noticed on verification.
 
 (c) There was no substantial disposal of its fixed assets during the
 year, which may have any impact on the going concern nature of the
 Company.
 
 ii) In respect of its Inventories:
 
 (a) As explained to us the Inventories have been physically verified by
 the management at reasonable intervals. In our opinion the frequency of
 verification is reasonable.
 
 (b) The procedures of physical verification 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 has maintained proper records of its inventories and no
 material discrepancies were noticed on physical verification of
 Inventories as compared to the book records.
 
 iii) (a) According to the information and explanations given to us, 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 the provisions of other sub
 - clauses are not applicable to the Company.
 
 (b) The Company has not taken any loans secured or unsecured from
 companies covered in the register maintained under Section 301 of the
 Companies Act, 1956.
 
 iv) 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
 regards to the purchase of inventories, fixed assets and for the sale
 of goods. There is no sale of services. During the course of our audit
 no major weakness has been noticed in the internal control system in
 respect of these areas.
 
 v) (a) According to the information and explanations given to us, we
 are of the opinion that the particulars of contracts or arrangements
 referred to in section 301 of the Companies Act, 1956 that need to be
 entered into the register have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of Rupees Five Lacs in
 respect of any party were made at prices which were reasonable having
 regard to the prevailing market prices at the relevant times.
 
 vi) The company has not accepted any deposits from the public during
 the year. Hence the provisions of clause 4 (vi) of the order are not
 applicable.
 
 vii) In our opinion, the company has an internal audit system
 commensurate with the size of the company and nature of its business.
 
 viii) We have broadly reviewed the Books of Accounts maintained by the
 Company in respect of generation of electricity from wind power where
 pursuant to the rules made by the Central Government of India, the
 maintenance of Cost Records have been prescribed u/s 209(l)(d) of the
 Act 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 the records with a view to determine whether
 they are accurate or complete.
 
 ix) (a) On the basis of examination of records of the Company,
 undisputed statutory dues including Provident fund, Employee''s State
 Insurance, Investor Education and Protection Fund, Income Tax, Wealth
 Tax, Service Tax, Sales tax, Custom Duty, Excise, Cess and any other
 material statutory dues have been generally regularly deposited with
 the appropriate authorities during the year.
 
 (b) No undisputed amounts payable were outstanding at the year end, for
 a period of more than six months from the date they became payable.
 
 (d) According to the information and explanations given to us and the
 records of the Company examined by us, there are no undisputed amounts
 of statutory dues, which have not been deposited. The details of
 disputed dues as at 31 st March, 2011 in respect of income tax that
 have not been deposited by the Company, are as follows:-
 
 Name of the    Nature of     Amount     Period to      Forum where
 statute        Dues         (Rs. in 
                               Lacs)      which the     dispute is
                                          amount 
                                          relates       pending
 
 Income Tax     Income      Rs.149.52       AY           CIT (A),
 
 Act, 1961       Tax          Lacs        2008-09        Kolkata
 
 x) The Company has no accumulated losses as at the end of the year and
 it has not incurred cash losses during the current and in the
 immediately preceding financial year.
 
 xi) Based on -our audit procedures and on the basis of information and
 explanations given to us, we are of the opinion that the company has
 not defaulted in the repayment of dues to any financial institution, or
 Bank, or debenture holders.
 
 xii) According to the information and explanations given to us, the
 company has not granted any loans or advances on the basis of security
 by way of pledge of shares, debentures and other securities,
 accordingly paragraph 4 (xii) of the Order is not applicable.
 
 xiii) The company is not a Chit Fund/Nidhi/Mutual Benefit Fund/Society.
 Therefore the provisions of Paragraph 4 (xiii) of the Order are not
 applicable to the company.
 
 xiv) The Company has in our opinion maintained proper records and
 contract notes with respect to its investments and timely entries have
 been made therein. All investments at the close of the year are held in
 the name of the Company.
 
 xv) The Company has given guarantees for loans taken by others from
 banks and financial institutions. According to the information and
 explanations given to us, we are of the opinion that the terms and
 condition thereof are not prima facie prejudicial to the interest of
 the Company.
 
 xvi) In our opinion and according to the information and explanation
 given to us, the term loans were applied for the purpose for which
 these were raised.
 
 xvii) According to the Cash Flow Statement and other records examined
 by us and the information and explanations given to us, on an overall
 basis, funds raised on short term basis have, prima facie, not been
 used during the year for long term investment.
 
 xviii) The Company has not made any preferential allotment of shares
 during the year to parties or companies covered in the Register
 maintained under Section 301 of the Companies Act, 1956.
 
 xix) The Company has issued during the year secured non convertibles
 debentures amounting to Rs.99 crores and has created securities /
 charges in respect of secured debentures issued.
 
 xx) The Company has raised monies through Right issue during the year
 to the extent of Rs.1245.38 Crores.
 
 xxi) Based upon the audit procedures performed and information and
 explanation given by the management, we report that no material fraud
 on or by the Company has been noticed or reported during the course of
 our audit.
 
                                                 ForP.K.LILHA&CO.
 
                                           Chartered Accountants
 
                                            Firm Reg.No.:307008E
 
                                                     (CAPK.LILHA)
 
 Place: Kolkata                                          Partner
 
 Date: 21/05/2011                                    M.No.011092