1.  We have audited the attached Balance Sheet of Sanghi Industries
 Limited (''the Company'') as at June 30, 2011 and also the Profit and
 Loss account and the Cash Flow Statement for a period of 15 months
 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 (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 sub-section (4A)
 of Section 227 of ''The Companies Act, 1956'' of India (the ''Act'') and on
 the basis of such checks of the books and records of the Company as we
 considered appropriate and according to the information and
 explanations given to us, we give 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 paragraph 3 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
 those 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 and Loss Account and Cash
 Flow Statement dealt 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 June 30, 2011, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 June 30, 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 June 30, 2011;
 
 b) in the case of the Profit and Loss Account, of the loss for the
 period ended on that date; and
 
 c) in the case of Cash Flow Statement, of the cash flows for the period
 ended on that date.
 
 ANNEXURE TO THE AUDITORS'' REPORT
 
 (Referred to in paragraph 3 of our report of even date)
 
 1) a] The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b] As informed to us, the assets have been physically verified by the
 management during the period and there is a regular programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. No material
 discrepancies were noticed on such verification as compared with books
 of accounts.
 
 c] According to the information and explanations given to us, the
 Company has not disposed off any substantial part of fixed assets
 during the year.
 
 2) a] According to the information and explanations given to us, the
 inventory has been physically verified during the period by the
 management. In our opinion, the frequency of verification is
 reasonable.
 
 b] In our opinion, 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] According to the information and explanations given to us, the
 Company is maintaining proper records of inventory.  The discrepancies
 noticed on verification between the physical stocks and the book
 records were not material.
 
 3) 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.
 
 b] According to the information and explanations given to us, the
 Company has not taken any loans, secured or unsecured, from Companies,
 firms or other parties covered in the register maintained under Section
 301 of the Companies Act, 1956.
 
 4) 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 regard
 to purchase of inventory, fixed assets and with regard to the sale of
 goods & services. During the course of our audit, we have not observed
 any continuing failure to correct major weakness in internal control
 system.
 
 5) There are no Contracts or arrangements referred to in Section 301 of
 the Companies Act, 1956 that need to be entered in the register
 maintained under this section. Accordingly, Clause (v) (b) of paragraph
 4 of the Order is not applicable to the Company.
 
 6) In our opinion and according to the information and explanations
 given to us, the Company has not accepted deposits from public.
 Therefore, the provisions of the Clause (vi) of paragraph 4 of the
 Order are not applicable to the Company.
 
 7) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8) We have broadly reviewed the books of account relating to the
 material, labour and other item of cost maintained by the Company
 pursuance to the rules made by the Central Government for the
 maintenance of cost records under Section 209(1)(d) of the Companies
 Act, 1956 and we are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained.
 
 9) a] According to the records of the Company, undisputed statutory
 dues including Provident Fund, Employees'' State Insurance, Income Tax,
 Sales Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty, Cess and
 any other statutory dues have been generally regularly deposited with
 the appropriate authorities. No undisputed amounts payable were
 outstanding as on 30th June,2011 for a period more than six months from
 the date they became payable.
 
 b] According to the information and explanations given to us, there
 have been no dues of Income Tax, Wealth Tax, Customs Duty, Excise Duty,
 Service Tax, Cess and Sales Tax, that have not been deposited on
 account of any dispute, except as under
 
                                                        (Rs in crore)
 Name of the
 statute       Name of dues     Amount    Period to 
                                          which        Forum where
                                                       dispute is
                                                       pending
                                          the amount
                                          relates
 
 Central
 Excise        Excise Demand     42.00    Various 
                                          years       Custom, Excise &
                                                      Service tax
                                                      Appellate
 Act,1944                                             Tribunal Ahmedabad
                                                      &  Commissisoner/
                                                      Commissionor
                                                      Appeals ( Rajkot)
 
 Customs
 Act,1962      Custom Demand      1.52    2005-2010   Custom, Excise &
                                                      Service Tax
                                                      Appellate
                                                      Tribunal
                                                      Ahmedabad
 Service 
 Tax 
 Act,1994      Service Tax        5.64    Various
                                          years       Custom, Excise &
                                                      Service Tax
                                                      Appellate
               Demand                                 Tribunal  
                                                      Ahmedabad  and 
                                                      Commissioner
                                                      Appeals (Rajkot)
 
 Electricity 
 Act,1958      Duty on
               generation         3.30    Various 
                                          years       Gujarat High Court
               from DG Set
 
 Bombay Land   Land  
               Revenue  on        1.17    Various
                                          years       Gujarat High Court
 Revenue 
 Code 1879     Leasehold Land
 
 10) The Company does not have any accumulated losses at the end of the
 financial period and has not incurred cash losses during the financial
 period covered by our audit and in the immediately preceding financial
 year.
 
 11) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to a
 financial institution or bank.
 
 12) In our opinion, the term loans have been applied for the purpose
 for which the loans were raised.
 
 13) To the best of our knowledge and belief and according to the
 information and explanations given to us, and on an overall examination
 of the Balance Sheet of the Company, funds raised on short term basis
 have, prima facie, not been used during the period for long term
 investment.
 
 14) Based on audit procedures performed and information and
 explanations 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.
 
 15) The clauses iii(b), (c), (d), (f), (g) (xii), (xiii), (xiv), (xv),
 (xviii), (xix) and (xx) of paragraph 4 and 5 of the Order are not
 applicable to the Company and hence not reported upon.
 
 For Ankit & Co.                             For Haribhakti & Co.
 
 Chartered Accountants                     Chartered Accountants
 
 FRN No. 000181S                                 FRN No. 103523W
 
 S . Brij Kumar                               Prashant Maharishi
 
 Partner                                                 Partner
 
 Membership No. 19357                       Membership No. 41452
 
 Place : New Delhi
 
 Date  : 11th November, 2011