1.  We have audited the attached Balance Sheet of PVP Ventures Limited
 as at 31st March 2012, the Statement of Profit and Loss and also the
 Cash Flow Statement for the year ended on that date annexed there to.
 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 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.
 
 3.  As required by the Companies (Auditors'' 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, 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 Annexure referred to above, we
 report that:
 
 (a) We have obtained all 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 such
 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, the Statement of Profit and Loss
 and the Cash Flow Statement dealt by this report, comply with the
 Accounting Standards referred to in Sub-section (3C) of Section 211 of
 the Companies Act, 1956;
 
 (e) On the basis of written representation received from the Directors
 and taken on records by the Board of Directors, we report that, none of
 the Directors is disqualified as on 31/03/2012 from being appointed as
 a Director in terms of clause (g) of sub-section (1) of section 274 of
 the Companies Act, 1956;
 
 (f) Attention is drawn to the following material matters:
 
 (i) Note 12 in notes on accounts, with regard to the investment in
 Equity shares and debentures of Subsidiary Companies. The carrying
 value of these investment and debentures as at the balance sheet date
 is Rs 49192.00 lakhs ( cost Rs 79552. TO lakhs less provision already
 made Rs 30360.10 lakhs). The management considers these investments as
 long term and not provided for the diminution in value of these
 investments. In the absence of materials, we are not expressing any
 opinion on the amount of investments and provisions carried in the
 balance sheet.
 
 (ii) Note 13 in notes on accounts, with regard to the advances given to
 subsidiaries. The carrying value of these loans and advances as at the
 balance sheet date is Rs 35377.77 lakhs (Loans and advances Rs 40537.93
 lakhs less provision already made Rs 5160.16 lakh). The management
 considers these loans and advances as long term and not provided for
 the diminution in value of these loans and advances. In the, absence
 of materials, we are not expressing any opinion on these amounts of
 loans and advances and the provisions.
 
 (iii) Further we invite the attention of the members to the following
 material matters given in notes relating to the status of project at
 Perambur, Chennai, interest waiver on debentures issued and received,
 non providing of interest on loans obtained to the extent of Rs 336.72
 lakhs and contingent liabilities shown for the disputed income tax
 demands.
 
 (g) In our opinion and to the best of our information and according to
 the explanations given to us, subject to the effect on the financial
 statements on the matters referred to in the preceding paragraph, the
 said accounts read with the 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 Statement of Profit and Loss, 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.
 
 1.  a. In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 b.  As per the information and explanations provided to us, the Company
 has physically verified the fixed assets during this year and there is
 no material discrepancies noticed on such verification.
 
 c.  As per the information and explanation provided to us, substantial
 parts of fixed assets have not been disposed off during the year, which
 affects the going concern.
 
 2.  a. According to the information and explanations given to us, the
 management has conducted physical verification of inventory at
 reasonable intervals.
 
 b.  According to the information and explanations given to us, the
 procedures of physical verification of inventory followed by the
 management is reasonable and adequate in relation to the size of the
 Company and nature of its business.
 
 c.  According to the information and explanation given to us, the
 Company is maintaining proper records of inventory and there are no
 material discrepancies were noticed on physical verification.
 
 3.  a. According to the information and explanations given to us, the
 Company has granted, unsecured interest free loans to seven group
 companies, the parties covered in the register maintained under section
 301 of the Companies Act, 1956. It is informed that these advances are
 recoverable on demand. The total outstanding as on the balance sheet
 date is Rs 40571.91 lakhs. In the absence of materials available, we are
 unable to ascertain whether the rate of interest, terms and conditions
 of loans, receipt of principal and overdue amounts are there or not.
 
 b. According to the information and explanations given to us, the
 Company has taken unsecured interest free loans from three subsidiary
 companies, the parties covered in the register maintained under section
 301 of the Act. It is informed that these loans are repayable on demand
 and total outstanding as on the balance sheet date is Rs 4750.57 lakhs.
 Therefore the rate of interest, terms and conditions, repayment are not
 applicable.
 
 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, for
 purchases of inventory and fixed assets and for sale of goods and
 services. During the course of our audit, we have not observed any
 continuing failure to correct major weaknesses in internal controls
 systems.
 
 5.  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 have been entered
 in the register maintained under that section.
 
 b. In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements have been made at prices which are reasonable having
 regard to prevailing market prices at the relevant time. 
 
 6.  In our opinion and according to the information and explanation
 given to us, the Company has not accepted deposits from public during
 this year. Therefore the provisions of section 58A, 58AA of the Act and
 any contravention of these provisions for the year under audit are not
 applicable.
 
 7.  The Company has an internal audit system commensurate with its size
 and nature of its business.
 
 8.  As per the information and explanation given to us the maintenance
 of cost records has not been prescribed by the Central Government under
 clause (d) of sub-section (1) of section 209 of the Act.
 
 9.  a. According to the information and explanation given to us, the
 Company is depositing undisputed statutory dues with appropriate
 authorities, like Provident Fund, Investor Education and Protection
 Fund, Employee''s State insurance, Income-tax, Sales-tax, Wealth-tax,
 Service tax, Customs Duty, Excise Duty, Cess, wherever applicable,
 except few delays in depositing TDS remittances.  There are no
 undisputed Statutory outstanding dues as at 31st March 2012 for a
 period of more than six months from the date they become payable.
 
 b. According to the information and explanation given to us, there are
 no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
 Duty, Excise Duty, Cess which have not been deposited on account of any
 dispute, except the Income Tax demands disputed before the CIT
 (Appeals), Chennai for the Asst year 2008-09 Rs 16497.15 lakhs, disputed
 before the CIT(Appeals), Hyderabad for the Asst year 2007-08 Rs  346.01
 lakhs and disputed before ITAT, Hyderabad for the Asst year 2007-08 Rs 
 473.30 lakhs.
 
 10.  In our opinion and according to the information and explanation
 given to us, the accumulated loss the Company as at the end of the
 financial year is more than 50% of its networth. The Company has not
 incurred cash losses during the financial year covered by our audit and
 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 the
 financial institutions or banks or debenture holders.
 
 12. In our opinion and according to the information and explanations
 given to us, the Company has not granted loans and advances on the
 basis of securities by way of pledge of shares, debentures and other
 securities.
 
 13. In our opinion and according to the information and explanation
 given to us, the Company is not a chit fund or a nidhi / mutual benefit
 fund / society. Therefore, the provision of clause 4 (xiii) of the
 Companies (Auditor''s Report) (Amendment) Order, 2004 are not applicable
 to the Company.
 
 14.  In our opinion and according to the information and explanation
 given to us, the Company is not dealing in or trading in shares,
 securities, debentures and other investments. Accordingly, the
 provisions of clause 4 (xiv) of the Companies (Auditor''s Report)
 (Amendment) Order, 2004 are not applicable to the Company.
 
 15.  In our opinion and according to the information and explanation
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions.
 
 16.  In our opinion and according to the information and explanation
 given to us, the Company has not obtained any term loans during the
 year.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that the no funds raised on short-term basis have been used for
 long-term investment.
 
 18.  According to the information and explanation given to us, the
 Company has not made allotment of shares during the year.
 
 19.  According to the information and explanation given to us, the
 Company has not issued any debentures during the year and hence
 creation of security for issue of debenture does not arise.
 
 20.  According to the information and explanation given to us, the
 Company has not raised money by public issue during the year and
 disclosure of end use of public issue does not arise.
 
 21.  According to the information and explanation given to us, no fraud
 on or by the Company has been noticed or reported during the course of
 our audit. Attention is invited to the note relating to the status of
 CBI investigation and as represented by the management, these
 investigations shall not have any impact on the financials for the
 year.
 
                                              For M/s CNGSN & ASSOCIATES
 
                                                   CHARTERED ACCOUNTANTS
 
 
                                                       R.THIRUMALMARUGAN
 
                                                                 PARTNER
 
                                                    Membership No.200102 
 
                                           Firm Registration No. 004915S
 
 Place: Chennai
 
 Date: 30th May, 2012