Shivam Autotech Ltd.

We have audited the attached Balance Sheet of Shivam Autotech Limited as at 31st March, 2009 and also the Profi t & Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These fi nancial statements are the responsibility of the Company�s management. Our responsibility is to express an opinion on these fi nancial statements based on our audit. We have 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 fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by the management, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors� Report) Order, 2003 as amended by the Companies (Auditors� Report) (Amendment) Order, 2004 (Collectively the Order) issued by the Central Government of India in terms of Section 227 (4A) 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, we enclose in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the said Order. 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 Company so far as appears from our examination of those books; c) The Balance Sheet, Profi t & 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, Profi t & 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, 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualifi ed as on 31st March, 2009 from being appointed as a 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 with the Accounting policies and 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2009; ii) In the case of Profi t and Loss Account, of the Profi t for the year ended on that date; and iii) In the case of Cash Flow Statement, of the cash fl ows for the year ended on that date. ANNEXURE TO AUDITORS� REPORT (Annexure referred to in our report of even date) 1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fi xed assets. (b) The Company has a phased programme of physical verifi cation of its fi xed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Management has physically verifi ed certain fi xed assets during the year. Discrepancies noticed on such verifi cation as compared to book records were not material and have been properly adjusted in the books of accounts. (c) Fixed assets disposed off during the year were not substantial. 2. (a) As explained to us, physical verifi cation has been conducted by the management at reasonable intervals in respect of inventory. Further stocks in the possession and custody of third parties as at 31st March 2009 have been verifi ed by the management with reference to confi rmations or statement of account or correspondence of the third parties. In our opinion, the frequency of such verifi cation is reasonable. (b) The procedures for the physical verifi cation of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business. (c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verifi cation of inventory as compared to book records were not material and have been properly dealt with in the books of account. 3. (a) The Company has not granted any loan, secured or unsecured, to Companies, fi rms and other parties covered in the register maintained under section 301 of the Companies Act, 1956. (b) The company has taken unsecured loan in the nature of advance against supplies, from a Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs 1400.00 lacs and year end balance of such loan was Rs NIL. Apart from this, the company has not taken any other loans, secured or unsecured, to companies, fi rms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. (c) In our opinion, other terms and conditions of such loan are, prima facie, not prejudicial to the interest of the Company. (d) In respect of the aforesaid loan, the company was regular in repayment of principal amount and interest due thereon as per the terms of the acceptance. 4. In our opinion, and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the Company and the nature of its business with regard to purchase of inventory and fi xed assets and for the sale of goods and services. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems. 5. (a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Act have been so entered. (b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating during the year to Rupees fi ve lakhs or more in respect of each party have been made at prices which are reasonable having regard to market prices for such transactions, prevailing at the relevant time, where such market prices are available. 6. The Company has not accepted any deposits from the public within the meaning of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposits) Rules, 1975. 7. In our opinion, the Company has an internal audit system commensurate with the size & nature of its business. 8. We have broadly reviewed the Cost Accounting records, maintained by the Company pursuant to the Rules prescribed by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of such books and records. 9. (a) 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, Custom Duty, Excise Duty, Cess and other material statutory dues have been generally regularly deposited with the appropriate authorities during the year and there are no such undisputed statutory dues outstanding as on the date of Balance Sheet for a period exceeding six months from the date they became payable. (b) According to the information & explanations given to us and as per the books and records examined by us, there are no dues in respect of Excise Duty, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Income Tax and Cess which have not been deposited on account of any dispute. 10. The company is in existence for less than 5 years. However, there are no accumulated losses of the Company at the end of the fi nancial year. There are no cash losses during the fi nancial year and in the immediately preceding fi nancial year. 11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any fi nancial institution or bank. 12. According to the information and explanations 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. 13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefi t fund / Society and hence the related reporting requirements are not applicable. 14. The Company is not dealing in or trading in shares, securities, debentures, and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the company. 15. The company has not given any guarantees for loans taken by others from bank or fi nancial institution. 16. In our opinion, and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where such end-use has been stipulated by the lender. 17. According to the information and explanations given to us and as per the books and records examined by us, as on the date of balance sheet, the funds raised by the Company on short-term basis have not been applied for long term investments. 18. The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956. 19. The Company has not issued any debentures during the year nor has any outstanding debentures. 20. The Company has not raised any money by way of public issues during the year. 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, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management. For S.S. KOTHARI MEHTA & CO. Chartered Accountants (ARUN K. TULSIAN) Partner M. No. 89907 Place: New Delhi Dated: 29-06-2009