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 are free from material misstatements. An audit is 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.

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms o1 Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and5 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 wear necessary for the purpose of our audit.

b) In accordance with the consistent practice followed by the company, no provision has been made in respect of diminution in the value of investments Rs.52,09,675/- Determined on the basis of actuarial valuation which in our opinion is of permanent diminution required to be provided in the account however no provision has been considered necessary by the management s its hopeful of recovering the same at the value stated which is not in accordance with the "Accounting Standard 13 of the "Accounting of Investment" issued by the ICAI.

c) Subject to what is stated in paragraph (b) above, in our opinion, the Company as required by law, has kept proper books of account so far as appears from our examination of those books.

d) The Balance Sheet, the Profit and Loss Account, and cash flow statements dealt with by this report are in agreement with the books of accounts.

e) Subject to what is stated in paragraph (b) above, In our opinion, the Balance Sheet, the 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.

f) Subject to what is stated in paragraph (b) above, In our opinion and to the best of our information and according to the explanation given to us the said accounts read with the 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 on March 31,2007 (ii) In the case of the Profit and Loss Account, Profit of the year ended on March 31, 2007 (iii) In the case of the cash flow statement, of the cash flows for the year ended on that date.

(g) On the basis of the 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 is disqualified as on March 31, 2007, from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph 3 of our report of even date on the accounts of HARVIC MANAGEMENT SERVICES (INDIA) LIMITED for the year ended March 31, 2007.

1. Fixed Assets

a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The Fixed assets of the company have been physically verified by the management at the end of the year and we are informed that no discrepancies between book records and the physical Inventory has been noticed, except for plant & machinery Gross value Rs.8,09,377, (net block Rs. 7,86,561/-) which are under custody of third parties for a long time, in view of this, we are unable to comment as to when the said machineries would be released to the company and on the ultimate reliability of the carrying value thereof

c) In our opinion, and according to the information and explanation given to us, the company has not made any substantial disposals during the year Concern assumption.

2. Inventories

a) As explained to us the inventories were physically verified by the management at reasonable, intervals during the year and inventories with directors and relatives, brokers has been verified with reference to confirmation obtained from such directors, relatives and brokers

b) In our opinion and to the best of our information and according to explanations given to us the procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business

c) In our opinion and to the best of our information and according to explanation given to us, the company has maintained proper records of it inventories and the discrepancies noticed on such physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account

3. Loans and Advances

a) The Company has taken and given interest free loans, secured or unsecured from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956

b) The terms and condition on which loan given or taken , are not prima facie prejudicial to the company.

c) The loan given does not have stipulation of repayment

d) The are no overdue amount more then Rupees One Lacs.

4. Internal Control

In our opinion and 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 purchase and sale of fixed assets and for, the sale and purchase of shares etc . During the course of our audit no major weakness have been observed in the internal controls.

5. 301 Register Transaction

a) Based on the audit procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that all transaction that need to be entered in to the register in purchase of Section 301 of the Act have been so entered.

b) Based on the information and explanations given to us, it is our opinion that these transactions have made at reasonable prices at the relevant time.

6. Deposits

The Company has not accepted any deposits from the public.

7. Internal Audit

The company has an internal audit system, which in our opinion, .is commensurate with the size and nature of its business information to us,-

8. The Central Government has not prescribed for the maintenance of Cost records u/s 209(1 )(d) of the Companies Act, 1956, in respect of the activities carried on by the company.

9. Statutory Dues

a) According to the records, information and explanation provided to us, there are no undisputed amount payable in respect of Income tax Wealth tax, Excise duty, cess and other statutory dues applicable to it were outstanding as on March 31, 2006 for a period of more than six moths from the date they became payable.

b) According to the records of the company and information and explanation,given to us the following are the particulars of disputed amount payable in respect of, income tax

Nature of statue                  Nature of dues          Amount

The Income tax Act, 1961          Income Tax            2,68,274
The Income Tax Act, 1961          Income Tax            4,21,537

Period for which             Forum where
relates                      dispute is pending
1999-2001                    CIT (Appeals)
Mumbai
1998-1999                    Tribunal

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that company is not defaulted in repayment of loan taken from the financial institution or bank.

12. Based on our examination and according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities;

13. The company is not a chit / nidhi / mutual benefit fund/society and clause xiii of the order is not applicable.

14. The Company has maintain proper records of transactions and contracts in respect of trading in shares, debentures and other securities and that timely entries have been made therein. The shares and debentures have been held by the Company in its own name except some of the shares and those shares and debentures which are. in the process of transfers and to the extent exemption granted under Section 49 of the Companies Act, 1956.

15. According to the information and explanation given to us and the record examined by us, the company has not given any guarantees for loans taken by others from banks or financial institutions,

16. Based on our examination and according to the information and explanations given to us, the company has not taken any term loan;

17. On the basis of our examination of the books of accounts and the information and explanation given to us, in our opinion the company has not raised any fund on the short term basis have been used for long term investment and vice versa.

18. During the year, 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.

19. The company did not have any outstanding debenture during the year;

20. The company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed and the information and explanation given to us 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 SHAH JAIN & ASSOCIATES
                                                Chartered Accountants

                                                       Sd/- 
Place : Mumbai,                                    (YATIN C SHAH)
Date  : 30th June, 2007                                Partner
                                                 Membership No. 49549