1.  We have audited the attached Balance Sheet of SHYAM TELECOM LIMITED
 as at 31st March, 2011, and also the Profit & Loss Account and the cash
 flow statement of the Company 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 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 the 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, 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 in paragraph 3
 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, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Profit & 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 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 (I) of section 274 of the Companies Act, 1956;
 
 (f) In our opinion, and to the best of our information and according to
 explanations 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:
 
 i.  in the case of the Balance Sheet, of the state of affairs of the
 company as at 31st, March, 2011;
 
 ii.  in the case of the Profit and Loss Account, of the Profit for the
 year ended on that date; and
 
 iii.  in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE
 
 (Referred to in paragraph 3 of our report of even date)
 
 i) The Company has maintained records showing full particulars,
 including quantitative details and situation of fixed assets. The fixed
 assets covering significant value 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. On
 the basis of the information and explanations given by the management,
 no material discrepancies have been noticed on such verification.
 Substantial Part of fixed assets have been disposed off on account of
 technical obsolescence during the year. However this has not affected
 going concern status of the company.
 
 ii) In our opinion, the Management at reasonable intervals has
 physically verified the inventories of the Company in its possession.
 Stocks in the possession and custody of the third parties have been
 verified by the Management with regard to confirmation or statement of
 account or correspondence of the third parties or subsequent receipt of
 goods. The procedures of physical verification of inventory of the
 Company 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
 
 iii) The Company has not granted any loans, secured or unsecured to
 Companies, firms or other parties as covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 The Company has not taken any secured loans from Companies, firms and
 other parties covered in the register maintained under section 301 of
 the Companies Act, 1956. In respect of unsecured loan taken from a
 Company covered in the register maintained under section 301 of the
 Companies Act, 1956, the rate of interest and other terms and
 conditions of loan are prima facie are not prejudicial to the interest
 of the Company. The maximum amount outstanding at any time during the is
 Rs.33.98 crores and year end balance Rs. 33.98 crores. The principal and
 interest amount is repayable on demand.
 
 iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the company and the nature of its business for the
 purchase of inventory, fixed assets and for the sale of goods and
 services. During the course of Audit, no major weakness has been
 noticed in the internal control systems.
 
 v) 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 Act have been entered into the register
 maintained under Section 301 of the Companies Act, 1956.
 
 According to the information and explanations given to us the
 transaction made in pursuance of such contracts or arrangements
 exceeding value of Rs. Five Lacs have been entered into during the
 financial year at prices which are reasonable having regard to the
 prevailing market prices at the relevant time.
 
 vi) To the best of our knowledge and according to the information and
 explanations given to us, the Company has not accepted any deposits
 covered under Section 58 A and 58 AA or any other relevant provisions
 of the Companies Act, 1956.
 
 vii) To the best of our knowledge and as per the information and
 explanations given to us, the Company has a reasonable internal audit
 system, being carried by a firm of Chartered Accountants, commensurate
 with its size and nature of its business.
 
 viii) On the basis of records produced, we are of the opinion that
 prima facie, the cost records and accounts prescribed by the Central
 Government under section 209(l)(d) of the Companies Act, 1956, have
 been maintained in respect of a division to which it is applicable.
 However, we have not nor we are required, carried out any detailed
 examination of such accounts and records.
 
 ix) To the best of our knowledge and according to the information and
 explanations given to us, the Company is generally regular in
 depositing undisputed statutory dues including Investor Education and
 Protection fund, Employee State Insurance, Provident Fund, Wealth Tax,
 Custom Duty, Excise Duty, Service Tax, Cess and any other statutory
 dues, where applicable with the appropriate authorities However some
 delays have been noticed in depositing Income Tax, ESI & Provident
 fund.
 
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
 Tax, Custom Duty and Excise Duty were outstanding as at 31 -03-20II for
 a period of more than six months from the date they became payable.
 
 Further according to the information and explanations given by the
 management, there were no disputed dues of sales tax, income tax,
 custom duty, wealth tax, excise duty, service tax and cess.
 
 x) The Company has no brought forward losses and has not incurred any
 cash losses during the financial year. However there was cash loss of
 Rs. 2.76 crores in the immediate preceding financial year.
 
 xi) On an examination of the records of the company & information &
 explanation given to us, the company has not defaulted in the repayment
 of dues to any financial institutions or bank or debenture holder as at
 the balance date.
 
 xii) On the basis of verification of accounts and records maintained by
 the Company and to the best of our knowledge & belief, 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 to the best of our information and according
 to the explanation by the management, we are of the opinion that the
 company is neither a chit fund nor a nidhi/mutual benefit society.
 
 xiv) To the best of our knowledge and according to information given to
 us, the Company is not dealing or trading in shares, debentures and
 other securities, except certain shares and units of mutual fund were
 traded during the year.
 
 xv) To the best of our knowledge and according to the information and
 explanation given to us, the Company has not given guarantee for loans
 taken by others from Banks/ Financial Institutions.
 
 xvi) To the best of our knowledge and according to the information and
 explanations given to us, no term loans were taken by the company
 during the year.
 
 xvii) According to the Cash Flow Statement and other records examined
 by us and information and explanations given to us, on an overall
 basis, funds raised on short-term basis have, prima facie, not been
 used during the year for long-term investment.
 
 xviii) According to the information & explanations given to us, the
 Company has not made any preferential allotment of shares during the
 year to parties and companies covered in the Register maintained under
 section 301 of the Companies Act, 1956.
 
 xix) According to the information & explanations given to us the
 Company has not issued any debentures during the year.
 
 xx) According to the information & explanations given to us, the
 Company has not raised any money by Public Issue during the year.
 
 xxi) Based upon the audit procedure performed and information and
 explanation given by the management we report that no fraud on or by
 the Company has been noticed or reported during the year.
 
 
 
                                                   For MEHRA GOEL & CO.
 
                                                  CHARTERED ACCOUNTANTS
 
                                                              R.K.MEHRA
 
 PLACE: NEW DELHI                                               PARTNER
 
 DATED: 1 st August 2011                                     M.No. 6102