1.  We have audited the attached Balance Sheet of ESSKAY TELECOM
 LIMITED as at 31st March, 2007 and also the Profit & Loss Account and
 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 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 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 statements
 pres- entation. We believe that our audit provides a reasonable basis
 for our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2005
 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:
 
 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 Com- pany, so far as appears from our examination of those
 books;
 
 c) The Balance Sheet and Profit and Loss account 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 comply with the accounting
 standards 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 March 31, 2007, and taken on record by the Board of Directors, we
 report that none of the directors of the Company is disqualified as on
 March 31, 2007 from being appointed as director in terms of clause (g)
 of sub-section (1) of section 274 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 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 :
 
 i) In the case of the balance sheet, of the state of affairs of the
 Company as at March 31,2007;
 
 ii) In the case of the profit and loss account, of the profit of the
 Company for the year ended on that date ; and
 
 iii) In case of the 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 the Auditors Report to the
 Members of Esskay Telecom Ltd. on the accounts for the year ended March
 31, 2007.
 
 (i) . (a) The company has maintained proper records to show full
 particulars, including quantitative details and situation of its fixed
 assets;
 
 (b) We have been informed that the fixed assets of the company are
 physically verified by the management at reasonable intervals and the
 procedure of such verification, in our opinion, is reasonable having
 regard to the size of the company and the nature of its assets.
 Discrepancies noticed on such verification, which were not material,
 have been properly dealt with in the books of account;
 
 (c) No Substantial part of Fixed Assets has been disposed off by the
 company during the year under review.
 
 (ii) (a) Physical verification of inventory (Shares & Securities) has
 been conducted at reasonable intervals by the management during the
 year;
 
 (b) 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 the nature of its business.
 
 (c) The company has maintained proper records of inventory and
 discrepancies noticed on physical verification, which were not
 material, have been properly dealt with in the books of account;
 
 (iii) (a) The company has not granted unsecured/secured loans to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act and accordingly paragraphs iii (b), (c)
 and (d) are not applicable
 
 (b) The company has not taken any secured/unsecured loan from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act and accordingly paragraphs iii (f) and (g)
 of the Order are not applicable.
 
 (iv) According to the information and explanations given to us, there
 are adequate internal control procedures commensurate with,the size of
 the company and the nature of its business, for the purchase of
 inventory and fixed assets and for the sale of goods and services.
 During the course of our audit, no major weakness has been noticed in
 the underlying internal controls.
 
 (v) (a) According to the information and explanations given to us, the
 particulars of contracts or arrangements that need to be entered into a
 register in pursuance of section 301 of the Act have been duly entered;
 
 (b) Aforesaid transactions have been made at prices which are
 reasonable having regard to the prevailing market prices at the
 relevant time;
 
 (vi) The company has not accepted any deposits under the provisions of
 section 58A and 58AA or any other relevant provisions of the Act and
 the rules framed there under.
 
 (vii) The company has an internal audit system commensurate with its
 size and nature of its business;
 
 (viii) Maintenance of cost records has not been prescribed by the
 Central Government under clause (d) of sub-section (1) of section 209
 of the Act.
 
 (ix) (a) According to the books and records as produced and examined by
 us in accordance with generally accepted auditing practices in India
 and also based on Management representations, undisputed statutory dues
 in respect of Provident Fund, Employees State Insurance dues, Investor
 Education and Protection Fund, Income Tax, Wealth Tax, Service Tax,
 Sales Tax, Custom Duty, Excise duty, Cess and other material statutory
 dues have generally been regularly deposited by the company during the
 year with appropriate authorities. There are no undisputed statutory
 dues as referred to above as at 31 st March, 2007 outstanding for a
 period of more than six months from the date they became payable.
 
 (b) According to the records of the company and information and
 explanations given to us, there are no dues of Sales Tax, Income Tax,
 Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, which have
 not been deposited on account of any dispute.
 
 (x) The company has no accumulated losses as at 31 st March, 2007, and
 it has not incurred any cash loss during the financial year ended on
 that date or in the immediately preceding financial year.
 
 (xi) According to the records of the company, it has not defaulted in
 repayment of its dues to any financial institution or bank or to
 debenture holders as at the balance sheet date.
 
 (xii) According to the information and explanations given to us, the
 company has not granted any loans or advances on the basis of security
 by way of pledge of shares, debentures and other investments.
 
 (xiii) In our opinion, considering the nature of activities carried on
 by the company during the year, the provisions of any special statute
 applicable to chit fund/nidhi/mutual benefit fund/societies are not
 applicable to it.
 
 (xiv) The Company is maintaining proper records for purchases of
 shares, securities, debentures and other investments and timely entries
 have been made therein. The Shares, securities, debentures and other
 investments have been held by the company in its own name except to the
 extent, exemption has been granted under section 49 of the Companies
 Act, 1956.
 
 (xv) 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.
 
 (xvi) We have been informed by the management that no term loans have
 been raised during the year.
 
 (xvii) According to information and explanations given to us by the
 management the funds raised on short-term basis have not 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.
 
 (xx) The company has not raised any money through a public issue during
 the year.
 
 (xxi) Based upon the audit procedure performed and information and
 explanations given by the management, we report that no fraud on or by
 the company has been noticed or reported during the course of our audit
 for the year ended 31 st March, 2007.
 
 
                                                     For A. K. BASU&CO.
                                                 Chartered Accountants
 
                                                          (A. K. BASU)
 Place : Kolkata                                           Proprietor
 Dated : 30th June, 2007                          Membership No. 5887