1) We have audited the attached Balance Sheet of RTS POWER CORPORATION
 LIMITED (the Company) as at 31st March, 2012 and also the annexed
 Profit & Loss Statement and Cash Flow Statement for the year ended on
 that date annexed hereto. 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 examination, 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 (Auditors'' Report) Order, 2003 issued
 by the Central Government of India in terms of Sub Section (4a) of
 Section 227 of the Companies Act, 1956 and on the basis of such checks
 as we considered appropriate and according to the information and
 explanations given to us during the course of our audit, we enclose in
 the Annexure a statement on the matters specified in paragraphs 4 and 5
 of the said Order as far as applicable:
 
 4) Further to above -
 
 i) 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.
 
 ii) In our opinion, proper books of accounts as required by law have
 been kept by the Company so far as appears from our examination of the
 books.
 
 iii) The Branch Auditor''s Report of branches not visited by us, have
 been properly dealt with in preparing our report.
 
 iv) The Balance Sheet, the Profit & Loss Statement and Cash Flow
 Statement dealt with by the report are in agreement with the books of
 accounts of the Company.
 
 v) In our opinion, the Profit and Loss Statement, Balance Sheet and
 Cash Flow Statement comply with the mandatory Accounting Standards
 referred to in Section 211(3C) of the Companies Act, 1956 to the extent
 applicable.
 
 vi) 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 is disqualified as on 31st March,
 2012 from being appointed as a Director in terms of Section 274(1)(g)
 of the Companies Act, 1956.
 
 vii) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with significant
 accounting policies & 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, 2012
 
 b) In the case of the Profit & Loss Statement, of the Profit for the
 year ended on that date AND
 
 c) In the case of the Cash Flow Statement, of the Cash Flows for the
 year ended on that date
 
 ANNEXURE TO THE AUDITORS'' REPORT REFERRED TO IN OUR REPORT OF EVEN DATE
 
 i) The Company is maintaining proper records showing full particulars,
 including quantitative details and situation of fixed assets. The
 management has physically verified fixed assets during the year- end
 and no discrepancy was noticed on such verification. In our opinion,
 the frequency of verification is reasonable. There was no substantial
 disposal of fixed assets during the year.
 
 ii) Physical verification of inventory has been conducted at reasonable
 intervals by the management. In our opinion, 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. The Company is maintaining proper records of inventory.
 Discrepancies noticed on physical verification as compared to books
 records, which were not material, have been properly dealt with in the
 books of accounts.
 
 iii) a) As informed , the Company has not granted any loan, secured or
 unsecured, to companies, firms
 
 or parties listed in the register maintained under Section 301 of the
 Companies Act, 1956.  Consequently, the requirements of Clauses (iii)
 (b), (iii) (c) and (iii) (d) of paragraph 4 of the Order are not
 applicable
 
 b) The Company has taken unsecured loan from a party and fifteen
 companies covered in the register maintained under Section 301 of the
 Companies Act 1956. The maximum amount involved during the year was Rs.
 1748.93 lacs & the year-end balance of such loan taken was Rs. 1277.49
 lacs.
 
 c) In our opinion and according to information and explanation given to
 us, the rate of interest and other terms and conditions on which loan
 has been taken from companies and a party listed in register maintained
 under Section 301 of the Companies Act 1956 are not prima facie
 prejudicial to the interest of the Company.
 
 d) The Company is regular in repayment of principal as per
 stipulations, wherever made and is regular in payment of Interest.
 
 iv) 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 nature of its business
 for 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 weakness in internal control.
 
 v) a) In our opinion and according to the information and explanations
 given to us, the particulars of
 
 contracts or arrangements referred to in Section 301 of the Companies
 Act, 1956 have been duly entered in the register required to be
 maintained under the Section.
 
 b) In our opinion and according to information and explanations given
 to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of Rs. 5,00,000/- in respect of
 each party during the year have been made at prices which are
 reasonable having regard to the prevailing market prices at the
 relevant time except in cases where comparison could not be made in
 absence of similar transactions with other parties.
 
 vi) In our opinion & according to the information and explanations
 given to us, the Company has not accepted any deposit from public
 during the year and therefore, the provisions contained in Section 58A,
 58AA or any other relevant provisions of the Act and Rules framed
 thereunder are not applicable to the Company.
 
 vii) In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 viii) According to the information given to us, the Central Government
 has prescribed maintenance of cost records under Section 209 (1) (d) of
 the Companies Act, 1956 for products of the Company. We have broadly
 reviewed the accounts and records of the Company in this connection and
 are of the
 
 opinion, that prima-facie, the prescribed accounts and records have
 been made and maintained. We have not, however, carried out a detailed
 examination of the same to determine whether they are accurate and
 complete.
 
 ix) a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues
 
 including provident fund, employees state insurance, income tax, sales
 tax, customs duty, service tax, cess and other statutory dues
 applicable to it. According to the information and explanations given
 to us, no undisputed amounts payable in respect of income tax, wealth
 tax, sales tax, customs duty, excise duty, service tax or cess were in
 arrears, as at the close of the year for a period of more than six
 months from the date they became payable.
 
 b) According to the information and explanations given to us, there are
 no dues of sales tax, income tax, customs duty, wealth tax, excise
 duty, service tax and cess, which have not been deposited on account of
 any dispute except the following :
 
 Name of       Nature of     Amount      Period       From where
 Statute       Due           (Rs.)                    dispute is
                                                      pending
 
 Rajasthan 
 Tax          Entry Tax    11,34,451/-   For            
                                         Previous     Hon''ble
 on Entry of  
 Years                                                Rajasthan High
 Goods in                                             Court Stayed
 Local Area                                           50% hence
 Act, 1999                                            50% deposited 
                                                      during the year.
 
 Rajasthan 
 Tax          Entry Tax   22,38,619/-    For 
                                         Previous     H''ble Rajasthan
 on Entry of                             Years        High Court
 Goods in                                             Judgement for
 Local Area                                           50% deposit
 Act, 1999
 
 Income 
 Tax          Income Tax  20,57,170/-    A.Y. 
                                         2009-2010    Before
 Act, 1961                                            Commissioner of
                                                      Income Tax
                                                     (Appeals)
 
 Income Tax   Income Tax  22,104/-       A.Y.  
                                         2008-2009    Before
 Act, 1961                                            Commissioner of
                                                      Income Tax
                                                     (Appeals)
 
 x) The Company does not have any accumulated losses. The Company has
 not incurred any cash losses in the current financial year and in the
 immediately preceding financial year.
 
 xi) As per the information and explanations furnished to us and our
 verification of records of the Company, the Company has made delays in
 repayment of dues to banks. The period and amount of delay are as
 follows :
 
 Nature 
 of dues            Period of Delay          Amount (Rs.)
 
 Interest            30 to 90 Days             510,797
 
 Interest            90 to 180 Days            149,512
 
 The Company has no dues to financial institutions. The Company has no
 debenture holders.
 
 xii) As informed and explained 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 and according to the information and explanations
 given to us, the nature of activities of the Company does not attract
 any special statute applicable to chit fund/nidhi/mutual benefit
 fund/society.
 
 xiv) The Company does not have any dealing or trading in shares,
 securities, debentures or other investments, and accordingly Clause
 (xiv) of Para 4 of the Order is not applicable.
 
 xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 xvi) Term loans obtained by the Company were applied for the purpose
 for which the loans were obtained.
 
 xvii) According to the information and explanation given to us and on
 an overall examination of the Balance Sheet of the Company, we report
 that no funds raised on short-term basis have been used for long-term
 investments.
 
 xviii) The Company has made preferential allotment of 3,80,000 Equity
 Shares of Rs 10/- each at a premium of Rs. 26 per share to a company
 covered in the Register maintained under Section 301 of the Companies
 Act, 1956.The Equity Shares have been issued based on the price
 determined as per SEBI Guidelines and are therefore not prejudicial to
 the interest of the Company..
 
 xix) The Company has not issued any debenture during the year.
 
 xx) The Company has disclosed the end use of money raised by issue of
 Equity Shares on Preferential basis and the same has been verified by
 us. (Refer Note No. 33)
 
 xxi) During the course of our examination of the books and records of
 the Company carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor we
 have been informed of any such case by the management.
 
                                          For A. C. Bhuteria & Co.
                                            Chartered Accountants
                                    Firm Registration No. 303105E
 
                                                2, India Exchange 
 
 Place Mohit Bhuteria
 
 Kolkata - 700 001                                     Partner
 
 Dated : 29th August, 2012                   Membership No. 56832