1.  We have audited the attached Balance Sheet of RAJVIR INDUSTRIES
 LTD. as at 31st March 2012 and also the Statement of Profit and Loss
 and the Cash Flow Statement 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. 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 (and
 amended by The Companies (Auditor''s 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 annex hereto 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 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, Statement of Profit and Loss and Cash Flow
 Statement referred to in 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 dealt with by this report comply with the
 accounting standards as referred to in sub-section (3C) of Section 211
 of the Companies Act, 1956
 
 e.  On the basis of written representations received from the
 directors, as on 31st March 2012, and taken on record by the Board of
 directors, we report that none of the directors of the Company is
 disqualified as referred to in terms of clause (g) of sub-section (1)
 of Section 274 of the Companies Act, 1956.
 
 5.  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 Notes on accounts gives 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 the Balance Sheet, of the state of affairs of the
 Company as at 31st March 2012;
 
 (ii) in the case of the Statement of Profit and Loss, of the loss 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) The Company has maintained proper records showing full
 
 particulars including quantitative details and situation of its fixed
 assets;
 
 b) As explained to us, the fixed assets have been physically verified
 by the management at reasonable intervals, in a phased verification
 programme, which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of the assets. According to the
 information and explanations given to us, discrepancies noticed on
 physical verification have been properly dealt with in the books of
 account;
 
 c) The Company has not disposed off any substantial fixed assets which
 effect the going concern status of the Company.
 
 2.  a) As explained to us, inventories have been physically verified by
 management at reasonable intervals during the period. In our opinion,
 the frequency of such verification is reasonable.
 
 b) As per the information given to us, the procedure of physical
 verification of inventories followed by management are, in our opinion,
 reasonable and adequate in relation to the size of the Company and
 nature of its business.
 
 c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material.
 
 3.  a) The Company had not granted any loans, secured or unsecured to
 companies, firms and other parties covered in the register maintained
 under Section 301 of the Companies Act, 1956.
 
 b) In view of our comment in paragraph 3(a) above, reporting under
 clause 4(iii)(b), (c) & (d) of the aforesaid order are not applicable
 to the Company.
 
 c) During the period, the Company has taken unsecured loans from 8
 parties covered in the register maintained under section 301 of
 Companies Act, 1956 and the maximium amount involved during the period
 was Rs.1034.38 Lakhs (Previous year Rs.1055.03 Lakhs) and the year end
 balance is Rs.353.50 Lakhs (Previous year Rs.871.53 Lakhs)
 
 d) In our opinion the rate of interest and other terms and conditions
 on which loans have been taken from the other parties listed in the
 register maintained under section 301 of
 
 the Companies Act, 1956 are not prima facie prejudicial to the interest
 of the Company. The Company is generally regular in payment of
 principal and interest due thereon as per terms.
 
 4.  In our opinion and according to the information and explanation
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business, with regard to purchase of inventory, 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 the
 internal control system.
 
 5.  a) According to the information and explanation given to us, we are
 of the opinion that the transactions that need 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, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 in respect of any party during the period, have
 been made at prices which are reasonable having regard to the
 prevailing market prices at the relevant time
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the provision of Sec 58A and
 58AA and other relevant provisions of the Companies Act,1956 and the
 Companies(Acceptances of Deposits) Rules,1975 with regard to the
 deposits accepted from the public. No order has been passed by the
 Company Law Board or National Company Law Tribunal or Reserve Bank of
 India or any court or any other Tribunal.
 
 7.  On the basis of internal audit reports broadly reviewed by us, we
 are of the opinion that the internal audit work carried out by an
 independent Chartered Accountant appointed by management is
 commensurate with the size of the Company and nature of business.
 
 8.  We have broadly reviewed the books of account relating to
 materials, labour and other items of cost maintained by the Company
 pursuant to the rules made by the Central Government for the
 maintenance of cost records under section 209(1)(d) of the Companies
 Act,1956 and we are of the opinion that the prima facie the prescribed
 accounts and records have been made and maintained .
 
 9.  a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including Provident Fund,
 Employee''s State Insurance, Income-tax, Sales-tax, Wealth tax, Service
 tax, Custom duty, Excise duty, cess and other material statutory dues
 applicable to it.
 
 b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income-tax, wealth tax,
 service tax, sales tax, custom duty, excise duty and cess were in
 arrears, as at 31st March 2012 for a period of more than six months
 from the date they became payable.
 
 10.  In our opinion, the accumulated losses of the Company are not more
 than fifty percent of its net worth. Further the Company has not
 incurred cash losses during the current financial year covered by an
 audit and the immediately preceeding financial year.
 
 11.  The Company has delayed in making payment of dues to banks for a
 short period of 2-3 months during the year. The balance overdue to the
 banks at the close of the year towards principal of Rs.492.78 lakhs and
 interest of Rs.148.54 lakhs, which are since paid by the Company.
 
 12.  As per the information and explanation given to us the Company has
 not granted loans and advances 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 (Auditor''s Report) Order, 2003 are not applicable to the
 Company.
 
 14.  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 Companies (Auditor''s Report) Order,
 2003 are not applicable to the Company.
 
 15.  According to the information and explanations 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 explanations
 given to us, the term loans were applied for the purpose for which the
 loans were raised.
 
 17.  Based on information and explanations given to us and on an
 overall examination of Balance Sheet of the Company, in our opinion,
 funds raised on a long term basis have not been used for short term
 investment.
 
 18.  According to the information and explanation given to us, the
 Company has made preferential allotment of preference shares to parties
 covered in the register maintained under section 301 of the Act. In our
 opinion, the price at which preference shares have been issued is not
 prejudicial to the interest of the Company.
 
 19.  The Company has not issued any fresh Debentures during the year.
 The Company has created security in respect of debenture issued.
 
 20.  According to the information and explanations given to us, the
 Company has not raised money by public issues during the period.
 
 21.  According to the information and explanations given to us, no
 fraud on or by the Company has been noticed or reported during the
 course of our audit.
 
 For S.DAGA & CO.
 
 Chartered Accountants
 (F.No.000669S)
 
 T.V. Subba Rao
 
 Partner
 
 Membership No.: 9636
 
 Place: Hyderabad
 Date : 14.08.2012