1.  We have audited the attached Balance Sheet of RAJKUMAR FORGE
 LIMITED as at 31st March, 2012, and the related Profit and Loss Account
 and Cash Flow Statement of the Company for the year 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. These Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 Financial Statements are free of material misstatements. 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, issued
 by the Central Government of India in terms of Section 227 (4A) of the
 Companies Act, 1956, we enclose in 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 are in compliance with the
 Accounting Standards referred to in Section 211 (3C) of the Companies
 Act, 1956 subject to note 16;
 
 (e) On the basis of the written representations received from the
 Directors as on 31st March, 2012 we report that none of the Directors
 are disqualified as on 31st March, 2012 from being appointed as a
 Director in terms of Section 274 (1)(g) 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 Financial Statements read with
 Sr. no. 3C, 3D, 3E, 4, and 5 of note 23–notes forming part of Financial
 Statements 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 the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2012;
 
 ii) In the case of the Profit and Loss Account, of the Profit for the
 year ended on that date and
 
 iii) In the case of the Cash Flow Statement, of the cash flows of the
 Company for the year 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 records showing full particulars
 including quantitative details and situation of fixed assets.  However,
 these records need further improvement.
 
 b) According to the information and explanations given to us, the fixed
 assets are physically verified by the management during the year as per
 a regular programme of verification. In our opinion, the frequency of
 verification is reasonable having regard to the size of the company and
 the nature of its assets. To the best of our knowledge and as
 represented to us by the management, no material discrepancies were
 noticed in respect of assets verified during the year.
 
 c) In our opinion and according to the information and explanations
 given to us, no substantial part of fixed assets has been disposed off
 by the Company during the year.
 
 2.  a) The inventory (excluding stocks with third parties) has been
 physically verified by the management during the year. In respect of
 inventory lying with third parties, these have been substantially
 confirmed by them. In our opinion, the frequency of verification is
 reasonable.
 
 b) The procedures of physical verification of inventory followed by the
 management are reasonable and adequate in relation to the size of the
 Company and the nature of its business.
 
 c) On the basis of our examination of the records of inventory, in our
 opinion, the Company is maintaining proper records of inventory.  The
 discrepancies noticed on physical verification of stock as compared to
 the records were not material.
 
 3.  a) 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) 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 is an adequate internal control procedure
 commensurate with the size of the Company and the nature of its
 business for the purchase of inventory and fixed assets and for sale of
 goods and services. As per the information given to us, no major
 weaknesses in the internal controls have been identified by the
 management or the internal auditors of the Company during the year.
 During the course of our audit, nothing has come to our notice that may
 suggest a major weakness in the internal control system of the Company.
 
 5. In respect of transactions entered in the register maintained in
 pursuance of section 301 of the Companies Act, 1956.
 
 a) To the best of our knowledge and belief and according to the
 information and explanations given to us, the transactions that needed
 to be entered into the register have been so entered.
 
 b) According to the information and explanations given to us where each
 of such transactions is in excess of Rs.5,00,000/- (Rupees Five Lacs
 Only) in respect of any party, the transactions have been made at
 prices which are prima facie reasonable having regard to the prevailing
 market prices at the relevant time based on the circumstances explained
 by the Company.
 
 6.  The Company has not accepted deposits from the public. Hence, the
 question of the Company complying with the provisions of section 58A
 and 58AA of the Companies Act, 1956 and the rules framed there under,
 does not arise.
 
 7.  In our opinion, the internal audit system carried out by an
 independent firm of Chartered Accountant is generally commensurate with
 the size of the Company and the nature of its business.
 
 8.  We have broadly reviewed the books of accounts maintained by the
 Company in respect of products where, pursuant to the Rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause (d) of sub section (1) of Section 209 of the
 Act, and are of the option that prima facie, the prescribed accounts
 and records have been made and maintained. We have not, however, made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.
 
 9 a) According to the information and explanations given to us and
 records of the company examined by us, in our opinion, the Company is
 regular in depositing the undisputed statutory dues including Provident
 Fund, Investor Education and Protection Fund, Employees State
 Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
 Excise Duty, Cess and other material statutory dues as applicable with
 the appropriate authorities except in case of repayment of Deferred
 Sales Tax amounting to Rs. 17.14 Lakhs as declared by the Company.
 
 b) According to the information and explanations given to us and the
 records of the Company, the following dues of Excise Duty, Sales Tax
 and Income Ta x have not been deposited on account of dispute:
 
 Sr.  Name of      Nature of          Amount        Forum where
 no.  Statute      disputed          (Rs)           dispute is
                   Statutory dues                   pending
 
 1    Sales Tax    ''C'' Forms and      92,72,102     Maharashtra Sales
      1995-96      Chapter Heading                  Tax Tribunal,
                                                    Mumbai
 
 
 2    Sales Tax    ''C'' Forms and      50,18,168     Deputy
      1996-97      Chapter Heading                  Commissioner of
                                                    Sales Tax Pune
 
 3    Sales Tax    ''C'' Forms and      24,33,912     Deputy
      1997-98      Chapter Heading                  Commissioner of
                                                    Sales Tax Pune
 
 4    Sales Tax    ''C'' Forms and      56,32,305     Maharashtra Sales
      1998-99      Chapter Heading                  Tax Tribunal,
                                                    Mumbai
 
 10.  The Company has no accumulated losses as at 31st March 2012 and it
 has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank as at the
 balance sheet date. The Company has not issued any debentures upto the
 balance sheet date.
 
 12.  The Company has not granted any loans or advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit
 fund/nidhi/mutual benefit fund/societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  According to the information and explanations given to us , the
 Company has given guarantee for loans taken by others from bank or
 financial institutions , the terms and conditions whereof in our opinion
 are not prima facie prejudicial to the interest of the Company.
 
 16.  The Term Loan was applied for the purpose for which it was
 obtained.
 
 17.  Based on the information and explanations given to us and on an
 overall examination of the balance sheet of the Company, in our
 opinion, funds raised on short term basis have not been used for long
 term investments.
 
 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.  The Company has not issued any debentures.
 
 20.  The Company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books of account
 carried out in accordance with the generally accepted auditing
 practices in India, we have neither come across any instance of fraud
 on or by the Company, either noticed or reported during the year, nor
 have we been informed of such case by the Management.
 
 
                                             FOR BAPAT AND COMPANY
 
                                             Chartered Accountants
 
                                     Firm Registration no. 100997w
 
 
                                                       A. n. Bapat
 
 Place: Pune                                               Partner
 
 Date : 12/05/2012                             Membership no. 7524