We conducted our audit in accordance with audit 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 examination, 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.

1. As required by the Manufacturing and other Companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a Statement on the matters specified in paragraphs 4 & 5 of the said order.

2. Further to our comments in the Annexure to paragraph (1) above, we report that:

(i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

(ii) In our opinion, proper books of accounts as required by law have been kept by the company, so far as appears from our examination of the books.

(iii) The Balance Sheet and Profit and Loss Account dealt with by the report are in agreement with the books of accounts.

(iv) In our opinion the profit and loss account and Balance Sheet comply with the accounting standards referred to in sub section (3C) of Section 211 of the companies Act, 1956.

(v) On the basis of written confirmation received from the directors and taken on record by the Board of Directors on 31.03.2002, we report that none of the Directors are disqualified as on 31.03.2002 from being appointed as a director in terms of clause (g) of sub section (i) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the accounts give the information required by the companies Act 1956 in the manner so required and give a true and fair view:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2002 and

ii) In the case of Profit and Loss Account, of the Loss for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in Paragraph (1) of our report of even date)

1. The company has maintained proper records showing full particulars including quantative details and situation of Fixed Assets. The fixed assets have been physically verified by the management at reasonable intervals and no serious discrepancies have been noticed on verification.

2. None of the assets has been revalued during the year.

3. The stock of goods has been physically verified at reasonable intervals by the management and the frequency of verification is reasonable.

4. Procedures for physical verification on stocks followed by the company is reasonable and adequate, having regard to the size of the company in the nature of its business.

5. No discrepancies have been noticed on verfication, between the book stocks and physical stocks.

6. In our opinion the valuation of stock is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in preceding year.

7. The Company has not taken Secured/Unsecured Loans from the Companies firms or other parties listed in the register maintained u/s 301 of the Companies Act, 1956.

8. The Company has not granted any loans to companies, firms or other parties listed in the register maintained under Section 301 of fee Companies Act, 1956, and the companies under the same Management as defined under sub section (1B) of section 370 of the Companies Act, 1956.

9. In respect of loans and advances in. the nature of loans given by the Company, parties are repaying the Principal amounts as stipulated and have been regular in payment of interest, wherever applicable.

10. 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 with regard to purchase of stores, law materials including plant & machinery, equipments and other assets and for the sale of goods.

11. The transactions of purchases and sales of goods and material aggregating to Rs. 50,000 or more in pursuance of contracts or agreements entered in the register maintained u/s 301 of the Companies Act, 1956, have been done at the prevailing market, rates.

12. As explained to us the Company has a regular procedure for the determination of unserviceable or damaged stores and raw materials. Adequate provision has been made in the accounts for the loss arising on the items so determined.

13. The Company has not accepted any deposits from the public.

14. In our opinion the Company has maintained reasonable records for the sale of scraps, The nature of the business of the Company is such that no by-products arise.

15. The internal audit system needs to be strengthened considering the size said nature of the business of the Company.

16. On the basis of records, we are of the opinion that prima facie the cast records and accounts prescribed by fee Central Government of India under Section 209 (1) (d) of the Companies Act, 1956, have been maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

17. The Company is not regular in making payment of Provident Fund contribution.

18. In our opinion and according to the information and explanations given to us the Company does not have any undisputed amount payable in respect of Income-tax, Sales Tax and Excise duty which have remained outstanding as at 31st March 2001 for a period of more than six months from the date they became payable, except for a sum of Rs. 71955/= payable for Income Tax Assessment year 1998-1999.

19. In our opinion and according to the information and explanations given to us and as per the records examined by us no personal expenses have been charged to revenue accounts, other man those payable under contractual obligations or in accordance with the generally accepted business practices.

20. The company is not a sick industrial Company within the meaning of clause (O) of sub section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

                                             For DAGDULAL K. JAIN & CO.
                                                  Chartered Accountants

Place: MUMBAI                                                D. K. JAIN
Date: 30th August 2002                                       PROPRIETOR