1.  We have audited the attached balance sheet of Eicher Limited (the
 Company) as at 31st March, 2007, the profit and loss account and also
 the cash flow statement for the year ended on that date annexed
 thereto. These financial statements are the responsibility of the
 Companys 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 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 (the
 Order) 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.
 
 4.  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 purpose 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 the
 books;
 
 (iii) The balance sheet, the profit and loss account and the cash flow
 statement dealt with by this
 
 report are in agreement with the books of account;
 
 (iv) In our opinion, the balance sheet, the profit and loss account and
 the cash flow statement dealt with by this report comply with the
 accounting standards referred to in sub- section (3C) section 21 I of
 the Companies Act, 1956;
 
 (v) On the basis of written representations received from the Directors
 of the Company, as on 31!t March, 2007 and taken on record by the Board
 of Directors, we report that none of the directors is disqualified as
 on 3 Ist March, 2007 from being appointed as a director in terms of
 clause (g) of sub-section (I) of section 274 of the Companies Act,
 1956; and
 
 (vi) In our opinion and to the best of our information and according to
 the explanation given to us, the said accounts 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 31 March 2007;
 
 (b) In the case of the profit and loss account, of the profit for the
 year ended on the date; and
 
 (c) In the case of the cash flow statement, of the cash flows for the
 year ended on the date.
 
 ANNEXURE TO AUDITORS REPORT
 
 REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
 
 1.  The Company is maintaining proper records showing full particulars
 including quantitative details and situation of fixed assets. These
 assets have been physically verified by the management during the year
 which in our opinion is reasonable having regard to the size of the
 Company and the nature of its business. No discrepancies between the
 book records and the physical inventory were noticed on such
 verification. As there was no sale of fixed assets during the financial
 year ended March 31, 2007 substantial or otherwise, paragraph (4)(i)(c)
 of the Order is not applicable.
 
 2.  Physical verification of the stocks i.e. shares held as
 stock-in-trade, has been conducted by the management at reasonable
 intervals.The procedures of physical verification of stocks followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.The Company has maintained
 proper records of such stock-in-trade. No discrepancies have been
 noticed on physical verification of stocks as compared to book records.
 
 3.  The Company has not taken any loans in the nature of loans to
 parties covered in the register maintained under section 301 of the
 Companies Act, 1956.The Company has given unsecured loans to its
 holding company covered in the register maintained under section 301 of
 the Companies Act, 1956. The maximum amount involved during the year
 was Rs. 610 lacs and the year end balance was Rs. Nil. In our opinion
 the rate of interest and other terms and conditions on which loan has
 been granted to the company listed, in the register maintained under
 section 301 are not, prima facie, prejudicial to the interest of the
 Company. The concerned company has repaid the principal amount as
 stipulated and has been regular in the payment of interest as
 stipulated. Further, there are no dues outstanding as at the year end.
 
 4.  Having regard to the nature of the Companys business and based on
 our scrutiny of the
 
 Companys records and the information and explanations received by us,
 we report that the Companys activities do not include purchases of
 inventory and sale of goods and services. In our opinion and according
 to the information and explanation received by us, there are adequate
 internal control procedures commensurate with the size of the Company
 and the nature of its business with regards to purchases of fixed
 assets.  During the course of our audit, we have neither come across
 nor have been informed of any instance of major weaknesses in the
 aforesaid internal controls system.
 
 5.  Based on the audit procedures applied by us and the information and
 explanations provided by the management, we are of the opinion that
 there were no transactions made in pursuance of contracts or
 arrangements referred to in section 301 of the Act during the year that
 need to be entered in the register maintained under that
 section.Accordingly, paragraph (4)(v) of the Order is not applicable.
 
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Sections 58A, 58AA or any other relevant the Act and the
 rules framed there under or to which the directives issued by the
 Reserve Bank of India apply. As per the information and explanations
 given to us, no order under the aforesaid sections 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 on the Company.
 Accordingly, paragraph (4)(vi) of the Order is not applicable.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size of the Company and the nature of its
 business.
 
 8.  We are informed that the maintenance of,cost records has not been
 prescribed by the Central Government under section 209(l)(d) of the
 Companies Act, 1956. Accordingly, paragraph (4)(viii) of the Order is
 not applicable.
 
 9.  According to the records of the Company, undisputed statutory dues
 including provident Fund, Investor Education and protection fund,
 Employees State Insurance, Income-Tax, Sales tax, Wealth Tax, Service
 tax, Customs Duty, Excise Duty, Cess and other statutory dues
 applicable to it have been regularly deposited with the appropriate
 authorities. According to the information and explanations given to us,
 no undisputed amounts payable in respect of the Income tax/ Sales tax/
 Wealth tax/ Service tax/ Custom duty/Excise duty/ Cess were outstanding
 as at 31 March, 2007, for a period of more than six months from the
 date of becoming payable. According to the information and explanations
 given to us and the records of the company examined by us, the
 particulars of dues of income-tax as at March 31, 2007 which have not
 been deposited on account of a dispute have been stated in Note 7 on
 Schedule I to the balance sheet.
 
 10.  The Company does not have accumulated losses at the end of the
 financial year as at March 31, 2007.  The Company has not incurred any
 cash losses during the financial year covered by our audit and in the
 immediately preceding financial year.
 
 11.  As the Company has not borrowed from any financial institutions or
 banks nor has issued any debentures till 31 March, 2007, paragraph
 (4)(xi) of the Order is not applicable.
 
 12.  As the Company has not granted any loans and advances on the basis
 of security by way of pledge of shares, debentures or other securities,
 paragraph (4)(xii) of the Order is not applicable.
 
 13.  The Company does not attract any special statute applicable to
 chit fund and nidhi/mutual benefit fund/ societies. Accordingly,
 paragraph (4)(xiii) of the Order is not applicable.
 
 14.  On the basis of our examination of the Companys records we are of
 the opinion that the Company is maintaining adequate records regarding
 transactions and contracts regarding Its trading activities in shares,
 and timely entries have been made in these records. The shares,
 securities and other investments have been held by the Company in its
 own name.
 
 15.  As the Company has not given any guarantee for loans taken by
 others from bank or financial institutions, paragraph (4)(xv) of the
 Order is not applicable.
 
 16.  As the Company has not obtained any term loans and there are no
 term loans outstanding as at the beginning of the year, paragraph
 (4)(xvi) of the Order is not applicable.
 
 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 no funds raised on short term basis have been used for long term
 investment.
 
 18.  As the Company has not made any preferential allotment of shares
 to parties and companies covered in the register maintained under
 section 301 of the Act during the year, paragraph (4)(xviii) of the
 Order is not applicable.
 
 19.  As the Company did not have any outstanding debentures during the
 year, paragraph (4)(xix) of the Order is not applicable.
 
 20.  As the Company has not raised any money by way of public issue
 during the year, paragraph (4)(xx) of the Order is not applicable.
 
 21.  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
 have we been informed of such case by the management.
 
                                              For VKGN& Associates
                                              Chartered Accountants
 
 Place : New Delhi                                Vijay Gupta
 Date : August 21,2007                        Membership No. 081986