1.  We have audited the accompanying financial statements of GRAVITA
 INDIA LIMITED which comprise the Balance Sheet as at 31st March 2012,
 the Statement of Profit and Loss and the Cash Flow Statement for the
 year then ended and a summary of significant accounting policies and
 other explanatory information. Management is responsible for the
 preparation of these financial statements that give a true and fair
 view of the financial position, financial performance and cash flows of
 the Company in accordance with the Accounting Standards referred to in
 Sub-Section (3C) of Section 211 of the Companies Act, 1956 (the Act).
 This responsibility includes the design, implementation and maintenance
 of internal control relevant to the preparation and presentation of the
 financial statements that give a true and fair view and are free from
 material misstatement, whether due to fraud or error.
 
 2.  Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free
 from material misstatement. An audit involves performing procedures to
 obtain audit evidence about the amounts and disclosures in the
 financial statements. The procedures selected depend on the auditor''s
 judgment, including the assessment of the risks of material
 misstatement of the financial statements, whether due to fraud or
 error. In making those risk assessments, the auditor considers internal
 control relevant to the Company''s preparation and fair presentation of
 the financial statements in order to design audit procedures that are
 appropriate in the circumstances. An audit also includes evaluating the
 appropriateness of accounting policies used and the reasonableness of
 the accounting estimates made by management, as well as evaluating the
 overall presentation of the financial statements. We believe that the
 audit evidence we have obtained is sufficient and appropriate to
 provide a basis for our audit opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order), as amended, issued by the Central Government of India in terms
 of Sub-Section (4A) of Section 227 of the Act, we give in the Annexure
 a statement on the matters specified in paragraphs 4 and 5 of the
 Order.
 
 4.  Further to our comments in annexure referred to in paragraph 3
 above as required by Section 227(3) of the Act, 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 appears from our examination of those
 books;
 
 c.  The Balance Sheet, Statement of Profit and Loss and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account;
 
 d.  In our opinion the Balance Sheet, Statement of Profit and Loss and
 Cash Flow Statement comply with the Accounting Standards referred to in
 Sub-Section (3C) of Section 211 of the Companies Act, 1956; and
 
 e.  On the basis written representations received from the directors as
 on 31st March 2012, and taken on record by the Board of Directors, none
 of the directors is disqualified as on 31st March 2012, 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 financial statements read together
 with the Significant Accounting Policies and notes thereon 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.
 
 i.  In the case of Balance Sheet, of the state of affairs of the
 Company as at 31st March 2012;
 
 ii.  In the case of Profit & Loss Account, of the profit of the Company
 for the year ended on that date; and
 
 iii. In the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 (i) In respect of fixed assets:
 
 (a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of its fixed assets on the
 basis of available information.
 
 (b) As explained to us, fixed assets have been physically verified by
 the management in a phased periodical manner 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 per the explanations provided to us
 
 (c) In our opinion and according to the information and explanation
 given to us, there is no substantial disposal of fixed assets during
 the year.
 
 (ii) In respect of its inventories:
 
 (a) As explained to us, the inventories have been physically verified
 by the management during the year. In our opinion, the frequency of
 verification is reasonable having regard to the size of the Company and
 the nature of its business.
 
 (b) In our opinion and according to the information and explanations
 given to us, 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) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories. As explained to us no material discrepancies were noticed
 on verification between the physical stocks and the book records.
 
 (iii) In respect of loans secured or unsecured, taken or granted by the
 Company to/from companies, firms or other parties covered in the
 register maintained u/s 301 of the Companies Act, 1956:
 
 (a) As per information and explanations provided to us, the Company has
 given loan to subsidiary namely Gravita Exim Limited of Rs905.44 lacs
 Maximum amount outstanding at any time during the year being Rs421.23
 lacs and balance at the year end being Rs287.06 lacs.
 
 (b) In our opinion, the rate of interest, where applicable and other
 terms & conditions on which loans have been given to the parties listed
 in the register maintained u/s 301 of the Companies Act, 1956 are not
 prima facie prejudicial to the interest of the Company.
 
 (c) In our opinion and according to the information and explanations
 given to us the receipt of the principal amount and interest as per
 terms of the agreement are regular.
 
 (d) The loan is receivable on demand hence there is no overdue amount
 in excess of Rs1 Lacs in respect of loans granted to companies, firms or
 other parties listed in the register maintained under Section 301 of
 Companies Act, 1956.
 
 (e) According to the information and explanations given to us, the
 Company has taken unsecured loan of Rs2.00 crore from Jalousies India
 (P) Limited which is a Company in which directors are interested during
 the year and also repayment was made of the same amount which is
 covered in the register maintained under Section 301 of the Companies
 Act, 1956.
 
 (f) In our opinion, the rate of interest, where applicable and other
 terms & conditions on which loans have been taken from the parties
 listed in the register maintained u/s 301 of the Companies Act, 1956
 are not prima facie prejudicial to the interest of the Company.
 
 (g) In our opinion and according to the information and explanations
 given to us the payment of the principal amount was repaid in full
 along with interest as per terms of the agreement.
 
 (iv) In our opinion, and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and nature of its business for the
 purchase of inventory and fixed assets and 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 such internal control
 system.
 
 (v) In respect of Register maintained under Section 301 of the
 Companies Act, 1956:
 
 (a) Based on the information and explanations given to us, the
 transactions pertaining to contracts and arrangements that need to be
 entered into a register in pursuance of Section 301 of the Companies
 Act, 1956 have been so entered.
 
 (b) According to information and explanation given to us, there are
 transactions of purchases and sales entered in the register maintained
 under Section 301 of the Companies Act, 1956 and prices of such are
 reasonable having regard to prevailing market prices at the relevant
 time as explained to us.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted deposit from Public and
 companies, therefore burden of Compliance of the provisions the Section
 58A and 58AA [clause 4(vi)of the Order] of the Companies Act, 1956 do
 not arise.
 
 (vii) In our opinion, the Company has internal audit system
 commensurate with the size of the Company and nature of its business.
 
 (viii) As informed to us, Company is maintaining the cost records as
 prescribed under Section 209(1) (d) of the Companies Act, 1956 by the
 Central Government for the products of the Company. We have not,
 however, carried out the detailed examination of the same.
 
 (ix) According to the information and explanations given to us and on
 the basis of our examination of the books of accounts, the Company has
 been regular in depositing undisputed statutory dues including Income
 Tax, TDS, Sales-tax, VAT, Custom Duty, Excise Duty, Educational Cess
 and any other dues during the year with the appropriate authorities
 except in three cases.
 
 Sl 
 No  Particulars                     Amount 
                                     Involved   Forum Where dispute 
                                                is pending
                                    (Rs in 
                                     Lacs)
 
 1.  The Sales Tax exemption 
     claimed by the                    20.20    Assistant Commissioner,
                                                Commercial Taxes 
     Company has been withdrawn 
     and interest                               Department Special 
                                                Circle-II Jaipur 
     of Rs 8.69 Lacs was levied by
     expatriate order.
 
 2.  Rejection of Central Excise 
     rebate of Rs 4.70 lacs             4.75    Central Excise Appellate
                                                Tribunal, 
     and refund of  Rs0.05 lacs on 
     exported goods                             Delhi (CEGAT) 
     u/s 11B of Central Excise 
     Act 1944
 
 3.  Scrutiny Assessment 
     Proceedings U/s 143(3)             1.55*   CIT (Appeals) III Jaipur
     for F.Y 2007-08 A.Y 2008-09
 
 *The Company has paid Rs1.55 Lacs against the same on protest
 
 (x) The Company does not have any accumulated losses at the end of the
 financial year and has not incurred cash losses during the financial
 year covered by our audit and also in the immediately preceding
 financial year.
 
 (xi) 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 and the
 banks during the year.
 
 (xii) 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.
 
 (xiii) The Company is not a chit fund / nidhi / mutual benefit fund /
 society. Therefore, the provisions of the clause 4(xiii) of the Order
 are not applicable to the Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments. Accordingly, the
 provisions of clause 4(xiv) of the Order are not applicable to 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
 conditions thereof are not prima facie prejudicial to the interest of
 the Company.
 
 (xvi) According to the information and explanation given to us, and on
 an overall examination of the Balance Sheet of the Company, the Company
 has raised four term loans during the year and has applied for the
 purpose for which they have been raised.
 
 (xvii) 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,
 prima facie, have been used for the long term investment nor the long
 term loan have been used to finance short term assets except for
 permanent working capital.
 
 (xviii) During the year the Company has not allotted equity shares on
 preferential basis to the parties covered in the register maintained
 u/s 301 of the Companies Act, 1956.
 
 (xix) According to the information and explanation given to us, during
 the period covered by our audit report, the Company has not issued any
 debentures. Accordingly, no security/charge has been created in respect
 of debentures issued.
 
 (xx) The Company has issued 36,00,000/- Equity Shares of Face value of
 Rs10/- each at a premium of Rs115/- per share during the Financial Year
 2010-2011. The end use of proceeds of the fund raised by public issue
 has been disclosed by the management in the notes to the accounts which
 is duly verified by us.
 
 (xxi) 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.
 
 For Rajvanshi & Associates
 
 Chartered Accountants
 
 Firm Regn. No. : 005069C
 
 Vikas Rajvanshi
 
 Partner
 
 Membership No. : 073670
 
 Place : Jaipur
 
 Date : 25th May 2012