We have audited the attached Balance Sheet of ANUSHA INTERNATIONAL
 LIMITED as at 31st March 2002 and the Profit & Loss Account of the
 company for the year ended on that date annexed thereto. These
 financial statements are the responsibility of the Companys
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 We 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 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 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 Central Government of India 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 referred to in paragraph 1
 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 purpose 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 and Profit and Loss account dealt with by this
 report are in agreement with the books of account.
 
 d) Subject to the matters stated in para (f) below, regarding deferred
 tax and provision of interest to Banks and Financial Institutions, the
 companys profit and loss account and Balance Sheet comply with
 accounting standards referred to in sub section (3C) of Section 211 of
 the Companies Act, 1956.
 
 e) On the basis of the written representation received from the
 directors of the Company as at 31st March, 2002 and taken on record by
 the board of directors, we report that none of the directors is
 disqualified 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 Balance Sheet and Profit and
 Loss Accounts give the information required by the Companies Act 1956,
 in the manner so required and subject to note 10 & 18 of Schedule 13
 regarding deferred tax and interst to Financial Institutions and Banks,
 give a true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 i. In so far as it relates to the Balance Sheet of the state of
 affairs of the company as at 31st March, 2002;
 
 ii. In so far as it relates to the Profit and Loss Account of the Loss
 of the company for the year ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH (1) OF THE AUDIT REPORT OF EVEN DATE
 TO THE SHAREHOLDERS OF ANUSHA INTERNATIONAL LIMITED ON THE ACCOUNTS FOR
 THE PERIOD ENDED 31 ST MARCH, 2002.
 
 i. The company has maintained proper records showing particulars
 including quantitative details and situation of fixed assets. However
 the records maintained requires updating. As explained to us, the
 management has physically verified its fixed assets during the period
 and no serious discrepancies were noticed on such verification. In our
 opinion, the frequency of physical verification of fixed asset is
 reasonable having regard to size of the company and nature of assets.
 
 ii. None of the fixed assets have been revalued during the period.
 
 iii. The stock of finished goods, stores, spare parts and raw material
 have been physically verified by the management at reasonable intervals
 during the period.
 
 iv. In our opinion, the procedures of physical verification of stocks
 followed by the management are reasonable and adequate in relation to
 the size of the company and the nature of its business.
 
 v. Material discrepancies were noticed on physical verification of
 stocks as compared to book records and the same have been properly
 dealt with in the books of accounts.
 
 vi. On the basis of our examination of stock records, we are of the
 opinion that the valuation of stocks is fair and proper and is in
 accordance with the normally accepted accounting principles and the
 basis of the valuation is same as in the preceding year.
 
 vii. The company has not obtained any loans secured or unsecured to
 companies, firms or other parties listed in the register maintained
 under section 301 of the Companies Act, 1956. According to the
 information given to us on loans have been taken from the companies
 under the same management.
 
 viii. The company has not granted any loans secured or unsecured to
 companies, firms or other parties listed in the register maintained
 under section 301 and/or to the companies under the same management as
 defined under sub-section (1 B) of the section 370 of the Companies
 Act, 1956.
 
 ix. The company has not granted any loans or advances in the nature of
 loans to any party.
 
 x. 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 the purchase of stores, raw materials, plants and
 machinery, equipment and the assets and for the sale of goods.
 
 xi. In our opinion and according to the information and explanations
 given to us, there were no transactions of purchase of goods, materials
 and sale of goods, materials and services made in pursuance of
 contracts or arrangements entered in the register maintained under
 section 301 of the Companies Act, 1956 and aggregating during the
 period to Rs. 50,000 or more in respect of each party.
 
 xii. According to the information given to us, the company has a
 regular procedure for determination of unserviceable or damaged stores,
 and materials.
 
 xiii. The company has not accepted deposits from the public during the
 year within the meaning of section 58-A of the Companies Act, 1956.
 And the rules made thereunder.
 
 xiv. In our opinion, the company has maintained reasonable records for
 the sale and disposal of scraps. According to information furnished
 to us, the company has no realisable by-products.
 
 xv. Even though the companys paid up capital exceeds Rs. 25,00,000/-
 the company has no internal audit system at present. However, the
 existing internal control is adequate considering the size of the
 company and the nature of its business.
 
 xvi. The Central Government has not prescribed maintenance of cost
 records under section 209(1) (d) of the Companies Act, 1956 for any of
 the products of the company.
 
 xvii. According to the records of the Company, the Provident Fund and
 ESI dues have not been regularly deposited with appropriate
 authorities. Arrears of PF and ESI amounting to Rs. 18,68,403/- was yet
 to be paid as on the date on the Balance Sheet.
 
 xviii. According to the information and explanations given to us the
 following undisputed amounts were outstanding at 31.03.2002 for a
 period of more than six months from the date they became payable.
 
 Professional Tax                                             Rs. 11,412
 
 Tax Deducted at Source                                     Rs. 2,82,668
 
 Income Tax liability                                       Rs. 3,98,153
 
 xix. No personal expenses of the Employees or Directors have been
 charged to revenue account, other than those payable under contractual
 obligations or in accordance with generally accepted business practice.
 
 xx. The company is 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. The company has been
 registered with BIFR as a sick company and has submitted a draft
 proposal for rehabilitation to IDBI, the operating agency appointed by
 BIFR.
 
                                                      For VENKATESH & CO
                                                   Chartered Accountants
 
 Chennai                                                     V. DASARATY
 2nd September 2002                                              Partner