We have audited the attached Balance Sheet of M/s. ARYAN PESTICIDES
 LIMITED as at 31st March, 2003 and also the Profit and Loss Account for
 the year ended on that date annexed thereto and the cash flow statement
 for the year ended on that date. 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.
 
 As required by the Manufacturing and Other Companies (Auditors Report)
 Order, 1988, issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
 in the annexure, a statement on the matters specified 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 and Profit and Loss Account dealt with by this
 report are in agreement with the books of account;
 
 (d) in our opinion, the Balance Sheet and Profit and Loss Account dealt
 with in this report comply with the Accounting Standards referred to in
 sub-section [3c] of section 211 of the Companies Act, 1956 to the
 extent applicable;
 
 (e) on the basis of written representations received from the Directors
 as on 31st March, 2003 and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st March,
 2003 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 information and explanations given to us, the said accounts read
 together 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 case of the Balance Sheet, of the state of the Companys affairs
 as at 31st March, 2003;
 
 (ii) in the case of the Profit and Loss Account, of the Loss of the
 Company for the year ended on that date and
 
 (iii) in the case of Cash Flow statement, of the Cash Flows for the
 year ended on that date.
 
                                                 For A. L. KAPANI & CO.,
                                                   Chartered Accountants
 Place: Mumbai                                              A. L. KAPANI
 Dated: 27th May, 2003                                           Partner
 
 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 quantitative details and situation of fixed assets. The fixed
 assets of the Company have been physically verified by the management
 during the year.
 
 2. None of the fixed assets have been revalued during the year.
 
 3. The stocks of finished goods, stores, spare parts and raw materials
 (other than stocks held by third parties) have been physically verified
 by the management during the year. In our opinion the frequency of
 verification is reasonable.
 
 4. In our opinion, the procedure for 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.
 
 5. The discrepancies noticed on verification of physical stock and
 book records were not material in relation to the operations of Company
 and the same have been dealt with in the books of accounts.
 
 6. On the basis of our examination of stocks and other relevant
 records, we are of the opinion that the valuation of stocks are fair
 and proper, in accordance with the normally accepted accounting
 principles and is on the same basis as in the preceding year.
 
 7. The Company has not taken any loans, secured or unsecured from the
 Companies listed in the register maintained under section 301 of the
 Companies Act, 1956 and/or from the Companies under the same management
 as defined under Section 370 (1 B) of the Companies Act, 1956 on terms
 and conditions which are prima facie prejudicial to the interest of the
 Company.
 
 8. The Company has not granted any-loans, secured or unsecured to the
 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 Section 370 (1 B) of the Companies Act, 1956, where the
 rate of interest and other terms and conditions of such loan are prima
 facie prejudicial to the interest of the Company.
 
 9. The parties to whom loans and advances in the nature of loans have
 been given by the Company are repaying the principal amounts as
 stipulated and generally regular in the payment of interest wherever
 applicable.
 
 10. In our opinion and according to the information and explanations
 given to us, there is an adequate internal control procedure
 commensurate with the size of the Company and the nature of its
 business with regard to the purchase of stores, raw materials including
 component, plant and machinery, equipment and other assets and with
 regard to the sale of goods.
 
 11. In our opinion and according to the information and explanations
 given to us, the transactions of purchases of goods and materials and
 sale of goods, materials and services made in pursuance of contracts or
 arrangements entered in the register maintained u/s 301 and aggregating
 during the year to Rs. 50,000/- or more in respect of each party have
 been made at prices which are reasonable having regard to prevailing
 market prices and volumes of sale of such goods, materials or services
 or the price at which transactions for similar goods, materials or
 services have been made with other parties.
 
 12. As explained to us, the Company has a regular procedure for
 determination of unserviceable or damaged stores, raw materials and
 finished goods. Adequate provisions have been made in accounts for the
 loss arising on the items so determined.
 
 13. The Company has not accepted any deposits from Public.
 
 14. In our opinion, reasonable records have been maintained by the
 Company for the sale and disposal of scrap and by-products.
 
 15. In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 16. We are informed that 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.
 
 17. Provident Fund/Employees state Insurance dues have generally been
 deposited with the appropriate authorities though there has been a
 slight delay in few cases.
 
 18. According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, customs duty and excise duty were outstanding as at 31st March2003
 for a period of six months from the date they become payable.
 
 19. According to the information and explanations given to us, no
 personal expenses of employees or directors have been charged to
 revenue account, other than those payable under contractual obligations
 or in accordance with generally accepted business practice.
 
 20. The Company is not a Sick Industrial Company within the meaning of
 Clause (0) of sub-section (1) of section 3 of the Sick Industrial
 Companies (Special Provisions) Act, 1985.
 
 21. The Company has reasonable system of recording receipts, issues and
 consumption of materials and stores and allocating materials consumed
 to the relative job commensurate with size and nature of its business.
 
 22. As explained to us there are no damaged stores, raw materials or
 finished goods in case of trading goods.
 
                                                 For A. L. KAPANI & CO.,
                                                   Chartered Accountants
 Place: Mumbai                                              A. L. KAPANI
 Dated: 27th May, 2003                                           Partner