Hira Automobile Ltd

To

The Members,

Hira Automobiles Ltd.

1. We have audited the attached Balance Sheet of Hira Automobiles Limited as at31 st March 2009, the Profit & Loss Account and also the Cash Flow Statement of theCompany for the year ended on that date annexed there to. These Financial statements arethe responsibility of the management of the company. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes, examining on a test basis, evidence supporting the amount and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by the management, as well as evaluating the overallpresentation of the financial statements. We believe that our audit provides a reasonablebasis for our opinion .

3. As required by the Companies (Auditor's report) order 2003 issued by the centralgovernment of India in terms of sub section (4-A) of section 227 of the Companies Act 1956, we enclose in the Annexure, a statement on the matters specified in the paragraphs 4& 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we reportthat :-

i) We have obtained all the information and explanations which to the best of ourknowledge 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 thecompany, so far as appears from our examination of those books and proper returns adequatefor the purpose of our audit have been received from branches not visited by us.

iii) The Balance Sheet, Profit & Loss Account and cash flow statement dealt with bythis report are in agreement with the books of account of the company.

iv) In our opinion , the Balance Sheet and Profit & Loss Account and cash flowstatement dealt with by this report are in compliance with the Accounting Standardsreferred to in section 211 (3C) of the Companies Act, 1956.

v) On the basis of written representations received from directors of the company as on31st March, 2009 and taken on record by the board of directors. We report that none of thedirectors is disqualified as on 31st March 2009, from being appointment as a director interms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts read together with significant accounting policies andother notes of accounts thereon, give the information required by the Companies Act, 1956in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India.

a) In the case of the Balance Sheet, of the state of affairs of the company as at 31 stMarch, 2009; and

b) In the case of Profit & Loss account, of the profit of the company for the yearended on that date; and

c) In the case of cash flow statement, of the cash flow for the year ended on thatdate.

Annexure to the Auditors' Report

(Referred to in paragraph (3) of our report of even data

1. In respect of its fixed assets: -

a. The Company has maintained proper records to show full particulars, includingquantitative details and situation of its fixed assets.

b. As explained to us, the fixed assets have been physically verified by the managementduring the year in a phased periodical manner, which in our opinion is reasonable, havingregard to size of the company and nature to its assets. No material discrepancies werenoticed on such physical verification.

2. In respect of its inventories,

a. As explained to us, inventories have been physically verified by the management atregular intervals during the year.

b. In our opinion and according to the information and explanations given to us, theprocedures of physical verifications of inventories followed by the management arereasonable and adequate in relation to the size of the company and nature of its business.

c. The company has maintained proper records of inventories. As explained to us, therewere some discrepancies noticed on physical verification of inventory as compared to booksof record which have been rectified or adjusted accordingly in the books.

3. In respect of loans secured or unsecured, granted or taken by the company to / fromcompanies, firms or other parties covered in the register maintained under section 301 ofthe Companies Act, 1956:

a. The company has granted inter corporate deposit to two companies covered in theregister maintained under section 301 of the companies Act. 1956, Detail of amount oftransactions and balance outstanding as on 31.03.2009 is as under.

And Balance Outstanding as on 31/03/2009 is Rs. 9.54 lacs

And Balance Outstanding as on 31/03/2009 is Rs.247.86 lacs

In our opinion and information and explanations given to us , company has not takensecured or unsecured loans from companies, firms or other parties covered in the registermaintained under section 301 of the Act.

b. In our opinion and according to the information and explanations given to us, therate of interest and other terms & conditions of inter corporate deposits given to thecompanies mentioned above in 3(a) is not prima-facie prejudicial to the interest of thecompany.

c. As explained above company has not taken any loan from companies, firms or partiescovered in the register maintained under section 301 of the companies Act. 1956, and inrespect of loan granted to. the companies mentioned above in 3(a), the account is runningone.

d. In our opinion and according to information & explanations given to us, there isno overdue amount in respect of the loan given by the company.

4. In our opinion and according to the information and explanations given to us, thereare adequate internal control procedures commensurate with the size of the company and thenature of its business for the purchase of the inventory, fixed assets and also for thesale of goods. During the course of our audit we have not observed any major weaknesses ininternal controls.

5. In respect of the transactions covered under section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts or arrangements , that needed to be enteredinto the register maintained under section 301 of the Companies. Act 1956 have been soentered.

b. In our opinion and according to the information and explanations given to us, Thesetransactions have been made at price which are reasonable having regard to the prevailingmarket price at the relevant time.

6. The company has not accepted any deposits from the public except advances for saleof vehicles/ against sales promotion schemes run by the company to promote its sales.

7. In our opinion the internal audit system of the company is commensurate with itssize and nature of its business.

8. The maintenance of cost records under section 209(1)(d) of the Companies Act 1956has not been prescribed by the central government for the company since it is not amanufacturing concern.

9. In respect of statutory dues :

a. In our opinion and according to the information and explanations given to us, thecompany is regular in depositing all undisputed statutory dues including Provident Fund,Investor Education and Protection Fund, E.S.I, Income Tax, Sales Tax, Wealth Tax , CustomDuty. Excise Duty, Cess and any other statutory due with appropriate authority. Accordingto the information and explanations given to us , no undisputed amount was outstanding inrespect of statutory dues as at 31st March 2009 for a period of more than 6 months fromthe date of becoming payable.

b. There is no amount outstanding in case of sales tax/income tax / custom duty /wealth tax / excise duty /cess on account of any dispute.

10. The company has no accumulated losses at the end of the financial year and it hasnot incurred cash losses in financial year and in the financial year immediately precedingsuch financial year also.

11. In our opinion and according to the information and explanations given to us, thecompany has not defaulted in repayment of dues to financial institutions or banks.

12 Our opinion and according to the information and explanations given to us, no loansand advances have been granted by the company on the basis of security by way of pledge ofshares, debentures and other securities.

13 In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, clause 4(xiii) of the companies (Auditor's Report) order 2003 is notapplicable to the company.

14 In our opinion and according to the information and explanations given to us, thecompany is not dealing or trading in shares, securities, debentures and other investments.But the investment made in shares of other companies are held in its own name.

15 According to the information and explanations given to us, we are of the opinionthat the company has not given any guarantees for loans taken by others from banks andfinancial institutions.

16 According to the information and explanation given to us the company has not raisedany fresh term loans during this financial year..

17 According to the information and explanations given to us and on an overallexamination of the balance sheet of the company, we are of the opinion that the companyhas not utilized from short term sources for long-term investments.

18 During the year, the company has not made any preferential allotment of shares toparties and companies covered in the register maintained under section 301 of theCompanies Act, 1956. -

19 The company has not issued debentures, therefore the company has not created anysecurity for the debentures issued.

20 The company has not raised any money by way of public issue during the year.

21 In our opinion and according to the information and explanations given to us, nofraud on or by the company has been noticed or reported during the year, that causes thefinancial statements to be materially misstated.