We have audited the Balance Sheet of SHREE RENUKA SUGARS LTD as at
 September 30, 2010, the profit and Loss Account and Cash Flow Statement
 for the year ended as on that date both annexed thereto. These
 financial statements are the responsibility of the Companys
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 1.  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 mis-statement. 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 the management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 2.  As required by The Companies (Auditors Report) Order 2003, 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
 hereto a statement on the matters specifed in paragraphs 4 and 5 of the
 said Order.
 
 3.  Further to our comments in the Annexure referred to in paragraph 2
 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 account as required by law have been
 kept by the Company, so far as it 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 and profit and Loss Account and
 Cash Flow Statement dealt with by this report comply with the mandatory
 Accounting Standards referred in sub-section (3C) of section 211 of the
 Companies Act, 1956;
 
 e) In our opinion, and based on information and explanations given to
 us, none of the directors are disqualifed as on September 30, 2010 from
 being appointed as directors 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 and other notes thereon give the
 information required by the Companies Act, 1956 in the manner so
 required, and present a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 (i) In so far as it relates to the Balance Sheet of the state of
 affairs of the Company as at September 30, 2010.
 
 (ii) In so far as it relates to the profit and Loss Account of the
 profit of the Company for the year ended on that date; and
 
 (iii) In so far as it relates to the Cash Flow Statement, of the cash
 fows of the Company for the year ended on that date.
 
 Annexure to Auditors Report Referred to in Paragraph 2 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 on the basis of available information.
 
 b.  As explained to us, all fixed assets have been physically verifed
 by the management during the year in a phased periodical manner, which
 in our opinion is reasonable, having regard to the size of the Company
 and nature of its assets. No material discrepancies were noticed on
 such physical verifcation.
 
 c.  In our opinion, the Company has not disposed of substantial part of
 fixed assets during the year and the going concern status of the
 Company is not affected.
 
 2.  a.  As explained to us, inventories have been physically verifed by
 the management at regular intervals.
 
 b.  In our opinion and according to the information and explanations
 given to us, the procedures of physical verifcation of inventories
 followed by the management is reasonable and is adequate in relation to
 the size of the Company and nature of its business .
 
 c.  The Company has maintained proper records of inventories. As
 explained to us, there were no material discrepancies noticed on
 physical verifcation of inventory as compared to the book records.
 
 3.  In respect of the loans, secured or unsecured granted or taken by
 the company to / from companies, frms or other parties covered in the
 Register maintained under section 301 of the Companies Act, 1956:
 
 a.  The company has not taken any loans during the year.
 
 b.  The Company has given loans to four subsidiary companies.  In
 respect of the said loan, the maximum amount outstanding at any time
 during the year was Rs. 1,169.67 Million and the year- end balance is
 Rs. 927.86 Million.
 
 c.  In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions, are
 not prima facie prejudicial to the interest of the company.
 
 d.  The principal amount is repayable on demand and there is no
 repayment schedule. The company is regular in payment and receipt of
 interest.
 
 e.  In respect of the said loan, the same is repayable on demand and
 therefore the question of overdue amount does not arise. In respect of
 interest there is no over due amount.
 
 4.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control procedure
 commensurate with the size of the Company and nature of its business
 for the purchase of inventory, fixed assets and also for the sale of
 goods and services. During the course of our audit, we have not
 observed any continuing failure to correct major weaknesses in internal
 control.
 
 5.  a.  In our opinion and according to the information and
 explanations given to us, the transactions made in pursuance of
 contracts or arrangements, that needed to be entered in the register
 maintained under section 301 of the Companies Act, 1956 have been so
 entered.
 
 b.  In our opinion and according to the information and explanations
 given to us where such transaction is in excess of Rs. 5 Lakhs, the
 transaction has been made at prices which is prima facie reasonable
 having regard to the prevailing market prices at the relevant time and
 they are not prejudicial in the interest of the Company.
 
 6.  According to the information and explanations given to us, the
 company has not accepted any deposits from the public within the
 meaning of provisions of Section 58A and 58AA of the Companies Act,
 1956 and the rules framed thereunder. Hence clause (vi) of the order is
 not applicable.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  The Central Government has prescribed maintenance of cost records
 under Section 209(1) (d) of the Companies Act, 1956 for some products
 of the company. We have broadly reviewed these records of the company
 and we are of the opinion that prima facie the prescribed accounts and
 records have been made and maintained. However, we have not carried out
 a detailed examination of such records.
 
 9.  a.  According to the records of the Company and as per the
 information and explanations given to us, the Company does not have any
 undisputed statutory dues including ESI, Provident Fund, Income Tax,
 Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and
 any other statutory dues which are outstanding for a period in excess
 of six months as on September 30, 2010.The Company is not having
 Investor Education and Protection Fund.
 
 b.  According to the information and explanations given to us and as
 per the records examined by us, there were no disputed amounts due in
 respect of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty
 and Cess as on September 30, 2010.
 
 10.  The Company has no accumulated losses and has not incurred any
 cash losses during the financial year covered by our audit or in the
 immediately preceding financial year.
 
 11.  Based on our audit procedures and according to the information and
 explanations given to us, we are of the opinion that the Company has
 not defaulted in repayment of dues to financial institutions or banks
 or debenture holders.
 
 12.  In our opinion and according to the explanations given to us and
 based on the information available, 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.
 
 13.  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 (Auditors Report) Order 2003 are not applicable to the
 Company.
 
 14.  The Company is trading in shares, securities and other
 investments. In our opinion proper records have been maintained of the
 transactions and contracts entered by the Company and timely entries
 have been made therein. These investments are held by the Company in
 its own name.
 
 15.  The Company has given guarantees for loans taken by others from
 banks or financial institutions. According to the information and
 explanations given to us, we are of the opinion that the terms and
 conditions thereof are not prima facie prejudicial to the interests of
 the company.
 
 16.  The term loans borrowed during the year have been utilised for the
 purposes for which they were raised.
 
 17.  According to the information and explanation given to us and on an
 overall examination of the Balance Sheet of the Company, we are of the
 opinion that there are no funds raised on short-term basis that have
 been used for long-term investment.
 
 18.  a.  The Company has made preferential allotment of shares to
 companies/parties covered in the register maintained under section 301
 of the Companies Act, 1956.
 
 b.  As per the information and explanations given to us the price at
 which such preferential allotment of shares made is not prejudicial to
 the interest of the Company.
 
 19.  During the year covered by our Audit Report, the Company has not
 issued any Debentures.
 
 20.  The company has not raised any money by way of public issues
 during the year.
 
 21.  In our opinion and according to the information and explanations
 given to us, no fraud on or by the company has been noticed or reported
 during the year that causes the financial statements to be materially
 mis-stated.
 
 For Ashok Kumar, Prabhashankar & Co.
 Chartered Accountants
 
 Firm Regn No. 004982S
 
 K. N. Prabhashankar
 Partner
 Membership No. 19575
 
 Place: Mumbai
 Date : February 11, 2011