We have audited the attached Balance Sheet of RSWM Limited as at 31st
 March, 2011, and also the Profit and Loss Account 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.
 
 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.
 
 As required by the Companies (Auditor''s Report) Order, 2003 issued by
 the Central Government of India in terms of sub- section (4A) of
 Section 227 of the Companies Act, 1956, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 Further to our comments in the Annexure referred to above, we report
 that :
 
 i) 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.
 
 ii) 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.
 
 iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 iv) 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
 Companies Act, 1956;
 
 v) On the basis of written representations received from the Directors,
 as on 31st March, 2011, and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st March,
 2011 from being appointed as a director in terms of clause (g) of
 sub-Section (1) of Section 274 of the Companies Act, 1956;
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the said accounts read together with 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:
 
 a) In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011.
 
 b) In the case of the Profit and Loss Account, of the profit for the
 year ended on that date; and
 
 c) In the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 Annexure to the Auditors Report
 
 Annexure referred to in paragraph 3 of our report of even date to the
 Shareholders of RSWM Limited on accounts for the year ended 31st March,
 2011.
 
 i) a) The Fixed Assets registers showing full particulars including
 quantitative details and situation of the assets are being maintained
 at respective units, up-dation of which are under completion.
 
 b) The Fixed Assets are physically verified by the Management in a
 phased programme designed to cover all the Assets over a period of
 three years, which in our opinion, is reasonable having regards to the
 size of the Company and the nature of its assets. Pursuant to the said
 programme, a portion of Fixed Assets has been physically verified by
 the Management during the year and no serious discrepancies were
 noticed on such verification between the book records and physical
 inventory.
 
 c) The Company had not sold any substantial part of Plant & Machinery
 during the year.
 
 ii) a) The Inventories have been physically verified during the year by
 the management. In our opinion the frequency of verification is
 reasonable.
 
 b) In our opinion and according to information and explanation given to
 us, the procedure of physical verification of inventory followed by the
 Management is reasonable and adequate in relation to the size of the
 Company and the nature of its business.
 
 c) The Company is maintaining proper records of inventory and the
 discrepancies noticed on physical verification have been dealt
 adequately in the Books of Accounts.
 
 iii) a) The Company has granted unsecured loan to 2 parties covered in
 the register maintained under Section 301 of the Companies Act, 1956.
 The amount outstanding at the end of the year is Rs.1200 lac and the
 maximum amount outstanding during the year was Rs.2044.37 lac.
 
 b) Loan to wholly owned overseas subsidiary of Rs.640.17 lacs was
 interest free and being irrecoverable has been written off as normal
 trading losss (Refer Note No:6 of Notes on Accounts Schedule 16 B).
 In respect of the other Loans granted these are repayable on demand,
 the rate of interest and other terms and conditions are prima-facie not
 prejudicial to the interest of the Company.
 
 c) The payment of interest on such loans is regular, wherever
 applicable. The payments of principal amount are also regular, wherever
 demanded during the year.
 
 d) There is no overdue amount outstanding as at the Balance Sheet date.
 
 e) The Company had not taken any loan from any party covered in the
 register maintained under Section 301 of the Companies Act, 1956.
 
 iv) On the basis of selective checks carried out during the course of
 audit and explanations given to us, adequate internal control systems
 commensurate with the size of the Company and nature of its business,
 for purchase of inventory and fixed assets and for sale of goods and
 services have been devised by the management and is being generally
 followed.  Further on the basis of our examination of the books and
 records of the Company, and according to information and explanations
 given to us, we have neither come across nor have been informed of any
 continuing failure to correct major weakness in the aforesaid internal
 control system.
 
 v) a) On the basis of our examination and as per information given to
 us all the contracts or arrangements are needed to be entered into the
 register maintained in pursuance of Section 301 of the Companies Act,
 have been recorded in the register.
 
 b) On the basis of our examination and as per information and
 explanation given by the management, the price of the goods and
 materials purchased and / of sale of goods, materials and services made
 pursuant to contracts entered in register maintained under Section 301
 of the Companies Act, 1956, in respect of each party is reasonable
 having regard to the prevailing market price at the relevant time.
 
 vi) We are explained that during the year the Company has not accepted
 deposits from public to which the provisions of Section 58A of the
 Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975
 apply.
 
 vii) In our opinion, the Company has an Internal Audit System
 commensurate with its size and nature of its business.
 
 viii) We have broadly reviewed the records including the books of
 accounts made and maintained by the Company pursuant to the Rules made
 by the Central Government for maintenance of Cost records under Section
 209 (1) (d) of the Companies Act, 1956, and are of the opinion that
 prima-facie the prescribed accounts and records have been made and
 maintained.
 
 ix) a) According to the information and explanation given to us and the
 records examined by us, the Company is regular in depositing undisputed
 statutory dues including Provident Fund, Investor Education and
 Protection Fund, Employee''s State Insurance, Income-Tax, Sales-Tax,
 Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other
 statutory dues with the appropriate authorities. Further, there were no
 undisputed arrears of statutory dues outstanding as at 31st March,
 2011, for a period of more than six months from the date they became
 payable.
 
 b) According to the records of the Company and information given to us,
 the particulars of statutory dues of the Sales Tax, Income Tax, Customs
 Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on
 account of disputes and the forum where the dispute is pending are
 given hereunder:
 
                                                    ( Rs. in lac)
 
 i) EXCISE DUTY
 
 CESTAT, New Delhi                                         8.51
 
 II)  SERVICE TAX
 
 A)  CESTAT, New Delhi                                   183.75
 
 B)  Commissioner (Appeals), Jaipur                       15.30
 
 III) CESS
 
 Appellate Tribunal, Mumbai                               17.25
 
 IV) OCTROI
 
 Rajasthan High Court, Single Bench, Jaipur              167.90
 
 V)  Entry Tax
 
 Rajasthan High Court, Double Bench, Jodhpur             687.11
 
 x) There are no accumulated losses in the Company as on 31st March,
 2011. Further, the Company has not incurred cash losses during the
 financial year covered by our audit.
 
 xi) Based on our examination of books and records of the Company and on
 the basis of information and explanation given by the Management the
 Company has been regular in repayment of its dues to the financial
 institutions or banks.
 
 xii) On the basis of examination of records of the Company and
 information and explanation given to us, the Company has not granted
 any loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 xiii) In our opinion, the Company is not a chitfund or nidhi / mutual
 benefit fund / society. Therefore, the provisions of clauses 4 (xiii)
 of the Companies (Auditor''s Report) Order, 2003 are not applicable to
 the Company.
 
 xiv) On the basis of examination of books and records of the Company
 and information and explanation given by the Management, the Company is
 not dealing or trading in shares, securities, debentures and other
 investment.
 
 xv) As per information and explanation given by the Management the
 terms & conditions on which the Company has given Guarantee for loans
 taken by others from banks or financial institutions are prima-facie
 not prejudicial to the interest of the Company.
 
 xvi) As per information and explanation given by the Management, the
 term loans have been applied for the purposes they were raised.
 
 xvii) According to the information and explanation given to us and on
 an overall examination of the Cash Flow Statement of the Company for
 the year, we report that no funds raised on short-term basis have been
 used for long term investment.
 
 xviii) The Company has not made any preferential allotment of shares to
 parties or Companies covered in the register maintained under section
 301 of the Act.
 
 xix) The Company has not issued any debentures whether secured or
 unsecured during the year.
 
 xx) The Company has not raised any money through public issue during
 the year covered by our report.
 
 xxi) As per the information and explanation given to us, no fraud by
 the Company has been noticed or reported during the year covered by our
 Report.
 
 For S. Bhargava Associates                  For A. L. Chechani & Co.
 
 Chartered Accountants                          Chartered Accountants
 
 Firm Reg. No.: 003191C                          Firm Reg. No:005341C
 
 Sunil Bhargava                                          Sunil Surana
 
 Partner                                                      Partner
 
 Membership No. : 70964                        Membership No. : 36093
 
 Place: Noida
 
 Dated: 28th April, 2011