1.  We have audited the attached Balance Sheet of Sumeru Industries
 Ltd. (the Company) as at March 31 2011 and the related Profit and
 Loss Account and the Cash Flow Statement of the Company for the year
 ended on that date which we have signed under reference to this report.
 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 have 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
 (together the ''Order'') 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 as we considered
 appropriate and according to the information and explanations given to
 us, we set out 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 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 purposes of our
 audit;
 
 (b) 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;
 
 (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 sub-section (3C) of Section 211 of the Act;
 
 (e) on the basis of written representations received from the
 directors, as on March 31,2011, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2011 from being appointed as a director in terms of clause
 (g) of sub-section (1) of section 274 of the Act;
 
 (f) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts together with the notes
 thereon and attached thereto give in the prescribed manner the
 information required by the Act and give a true and fair view in
 conformity with the accounting principles generally accepted
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31,2011; (ii) in the case of the Profit and Loss
 Account, of the profit for the year ended on that date; and '' (in) in
 the case of the Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO AUDITOR''S REPORT
 
 [Referred to in paragraph 3 of the Auditor''s Report of even date to the
 members of Sumeru Industries Ltd. on the accounts for the year ended
 March 31, 2011]
 
 1.  Ca) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) According to the information and explanations given to us, the
 fixed assets of the Company were physically verified by the Management
 according to a phased program designed to cover all the items over a
 period of three years, which in our opinion, is reasonable having
 regard to the size of the Company and the nature of its assets. There
 were no discrepancies noticed during the year.
 
 (c) During the year, the Company has not disposed of any asset. In our
 opinion the status of the company continues to be going concern.
 
 2.  (a) The Company does not hold any physical inventory as at the end
 of the year. Hence, para 2(b),(c) are not applicable.
 
 3.  The company has neither granted nor taken loans, secured or
 unsecured to / from companies, firms or other parties covered in the
 register maintained under Section 301 of the Act. As the Company has
 not granted / taken any loans, secured or unsecured, to / from
 companies, firms etc., listed in the register maintained under Section
 301 of the Act, paragraphs 4(111) (a) to (g) of the Order, are not
 applicable.
 
 4.  in our opinion and according to the information and explanations
 given to us, having regard to the explanations, there is adequate
 internal control system commensurate with the size of the Company and
 the nature of its business for the purchase of inventory and fixed
 assets and for the sale of goods and/or services. Further, on the basis
 of our examination of the books and information and as per the
 explanations given to us, we have neither come across nor have we been
 informed of any instance of continuing failure to correct major
 weaknesses in the aforesaid internal control system.
 
 5.  Based on the audit procedures applied by us and according to the
 information and explanations provided by the management, we are of the
 opinion that no transactions need to be entered into the register
 maintained under Section 301 of the Act. Consequently, requirement of
 clause (v,b) of paragraph 4 of the order is not applicable.
 
 6.  The company has not accepted any deposits under the provision of
 Sections 58A and 58AA of the Act and the rules framed there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  To the best of our knowledge and as explained, the Central
 Government has not prescribed the maintenance of cost records under
 clause (d) of sub-section (1) of section 209 of the Companies Act, 1956
 for the products of the Company.
 
 9.  (a) According to the information and explanations given to us and
 according to the books and records examined by us, in our opinion, the
 Company wherever applicable, is generally regular in depositing the
 undisputed statutory dues In respect of provident fund, investor
 education and protection fund, employees state insurance, income-tax,
 sales-tax, wealth tax, customs duty, excise duty, cess, service tax and
 other material statutory dues as applicable with the 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,
 the same is not applicable to the company we, therefore, do not Comment
 upon its requirements.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
 Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears,
 as at March 31,2011 for a period of more than six months from the date
 they became payable.
 
 (c) According to the information and explanation given to us, The
 following Matters have been decided In favor of the company, although
 the Department has preferred appeals at higher level:
 
 
 Particular     Period to which    Forum where the         Amount 
                The amount relates dispute is pending      (Rs.)
 
 
 Interest Tax     1995-96             High Court           312003
 
 Interest Tax     1996-97             High Court           835549
 
 Interest Tax     1997-98             High Court           764757
 
 Total                                                    1912309
 
 10.  The Company does not have accumulated losses as at the end of the
 year and the Company has not incurred cash losses during the current
 year and immediately preceding financial year.
 
 11.  Based on the information and explanations given to us, the Company
 has not availed of any credit facilities from any financial
 institutions or banks during the year. The Company has not borrowed any
 sums through debentures. Accordingly, clause 4(xi) of the Order is not
 applicable.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  In our opinion, considering the nature of activities carried on by
 the Company during the year, the provisions of any special statute
 applicable to chit fund/nidhi/mutual benefit fund/societies are not
 applicable to the Company.
 
 14.  According to the information and explanations given by the
 management, the Company has not indulged in dealing or trading in
 shares, securities, debentures and other investments.
 
 15.  In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantees for loans taken
 by others from banks or financial institutions during the year.
 
 16.  The company has not obtained any term loan during the year.
 
 17.  According to the information and explanations given to us and on
 an overall examination of Balance Sheet of the Company/we report that
 the no funds raised on short-term basis have been used for long term
 investment. No long-term funds have been used to finance short term
 assets.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the Register maintained under Section
 301 of the Companies Act, 1956 during the year.
 
 19.  There are no debentures issued and outstanding at the year end.
 
 20.  The Company has not raised any money by public issue during the
 year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have been informed of such case by the Management.
 
                                            For Nitin K. Shah & Co.
 
                                            Chartered Accountants 
                                             Firm Reg. NO.107140W
 
                                                (Nitin K. Shah)
 
                                                  (Proprietor) 
                                                 M. No. 012398 
 Place: Ahmedabad
 
 Date: 22/07/2011