1. We have audited the attached Balance Sheet of Limited as at 31st
 March, 2003 and also the Profit and Loss Account of the company for the
 period ended on that date annexed thereto. These financial statements
 are the responsibility of the companys management. Our responsibility
 is to express and opinion on these financial statements based on our
 audit.
 
 2. 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 misstatements. 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 statements
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3. As required by the manufacturing and other companies (Auditors
 Report) order, 1998, issued by the central Government in terms of
 section 227 (4A) of the companies Act 1956, we give in the Annexure, a
 Statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4. Further to our comments in the annexure referred to in paragraph 1
 above, we report that:
 
 a) We have obtained all 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 company, so far as appears from examination of these books.
 
 c) The Balance Sheet and the Profit and Loss account dealt with in this
 report are in agreement with the above books of account.
 
 d) In our opinion, the Balance Sheet and Profit and Loss Account comply
 with the accounting standards, to the extent applicable, referred to in
 sub-section (3C) of section 211 of the companies Act, 1956.
 
 e) On the basis of the written representations received from and the
 directors of the company, other than nominee directors, and taken on
 records by the board of Directors, we report that none of those
 directors is disqualified as at 31 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 explanation given to us, the said accounts, read together with the
 notes.
 
 Note No. 4 regarding recalling of Loan and filing case with Debt
 recovering Tribunal by IFCI.
 
 Note No. 5 regarding reconciliation of Interests with Bank in NRA
 Accounts.
 
 Note No. 6 regarding Company being declared sick and BIFR orders
 thereon.
 
 Note No. 9 regarding Balance Confirmation with Sundry Debtors, Advances
 and creditors.
 
 Note No.5&9 of the Annexure to the Audit report regarding Sales,
 purchases and internal control systems of the Company.
 
 Thereon, give the information required by 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 at 31st March, 2003 and
 
 ii) In the case of the profit and Loss Account, of the toss for nine
 months period ended on that date.
 
                                    For Anoop Kumar Sharma & Associates
                                                  Chartered Accountants
 Date : 27thAugust, 2003
 Place: Chandigarh                                                 Sd/-
                                                   (Anoop Kumar Sharma)
                                                                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 except for
 Building & Plant & Machinery. As per the information and explanation
 none of the assets have been physically verified by the management
 during the year.
 
 2. The fixed assets have not been revalued during the year.
 
 3. Physical verification of stores, spares parts has been conducted by
 the management at the end of financial year, No material discrepancy
 was noticed on stocks and spares on such verification and the dosing
 stocks are taken as physically verified and certified by the management
 as at the end of the financial year.
 
 4. The Company has not taken/granted any loans from/to companies,
 firms or other parties listed in the register maintained under Section
 301 of the companies Act, 1956 and from/to companies under the same
 management within the meaning of section 370 (1B) of the companies Act,
 1956.
 
 5. In our opinion internal control procedures commensurate with the
 size of the company and there is no proper system of recording sales
 and purchases of raw material and other assets.
 
 6. According to the information and explanation given to us, there are
 no transactions for purchase of goods and material and sale of good,
 material and services made in pursuance of contracts or arrangement
 entered in the register maintained under section 301 of the companies
 Act, 1956 and aggregating during the year to Rs. 50,000/- or more in
 respect of each party.
 
 7. The company has not accepted any deposits from the public.
 
 8. The Company does not generate any Disposable by product or scrap.
 
 9. In our opinion the internal audit system of the company is not
 commensurate with the size and nature of its business.
 
 10. The maintenance of cost records has not been prescribed by the
 central Government under section 209 (1) (d) of the Companies Act, 1956
 for the business carried on by the company.
 
 11. The company has regularly deposited provident Fund dues with the
 appropriate authorities.
 
 12. According to the information and explanations given to us, there
 are no undisputed amounts payable in respect of income tax, wealth tax,
 custom duty and excise duty outstanding for a period of more than six
 months as at 31st March, 2003 from the date they became payable.
 
 13. According to the information and explanation 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.
 
 14. The company has been declared sick industrial company within the
 meaning of clause (o) of section (1) of section 3 of the sick
 Industrial companies (Special provisions) Act, 1985. The BIFR has
 recommended takeover/change of management/winding up of the Company.
 
 15. In relation of trading activities of the company, it has adequate
 system to determine the damaged stocks. There were no significant
 damaged observed during the year.
 
                                     For Anoop Kumar Sharma & Associates
                                                   Chartered Accountants
                                                                    Sd/-
 Date : 27th August, 2003                           (Anoop Kumar Sharma)
 Place: Chandigarh                                               Partner