We have audited the attached Balance Sheet of BENZO PETRO CHEMICALS
 LTD. as on 31st March 2002, and also the Profit and Loss Account 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 misslatemenl. An audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the financial statement. 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 company Law Board in terms of
 Section 227 (4A) of the Companies Act, 1956 and in terms of information
 and explanations given to us and on the basis of such checks as we
 considered appropriate, we enclose in the annexure a statement on the
 matters specified in paragraph 4 and 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 such
 books.
 
 c) The Balance Sheet and Profit and Loss Account dealt with by this
 Report arc in agreement with the Books of account.
 
 d) In our opinion, the Profit and Loss Account and Balance sheet dealt
 with by this report comply with the accounting standards (Except AS-2
 Regarding Valuation of inventories) referred to in Sub Section (3C)
 of Section 211 if the Companies Act. 1956 so far as it is applicable to
 the Company.
 
 e) On the basis of written representation received from the directors
 and taken on records by the Board of directors, we report that none of
 Directors is disqualified as on 30-03-2002 from being appointed as
 Director in term of clause (g) of sub section (I) of Section 274 of
 Companies Act, 1956.
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the said accounts subject to following,
 
 The Company has been unable to re-negotiate its revival scheme for
 financial Institution and bank borrowings at BIFR, and AAIFR who
 confirmed the order of BIFR for winding up of the company. (Refer Note
 No. X of Schedule L - Note on Accounts).
 
 In our opinion, without financial support there is substantial doubt
 that the Company will be able to continue as going concern, despite the
 accounts are prepared on going concern basis. (Refer Note - 1 (A) in
 Schedule K). Consequently, adjustment may be required to the recorded
 amount and classification of assets and liabilities. The financial
 statements (and notes thereto) docs not disclose this fact, and read
 with the notes thereon, give the information required by the Companies
 Act, 1956, in the manner so required but does not give true and fair
 view in conformity with the accounting principle of going concern.
 
 I. In the case of Balance Sheet, of the State of Affairs of (he Company
 at 31st March, 2002.
 
 II. In the case of Profit and Loss Account, of the Loss for the year
 ended on that date.
 
                                            For    J. HARKISONDAS & CO.,
                                                   CHARTERED ACCOUNTANTS
 
 Place : BARODA                                         (RASHMI ACHARYA)
 Date : 3-7-2002                                                 PARTNER
 
 ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH - I OF OUR
 REPORT OF EVEN DATE ON ACCOUNTS FOR HIE YEAR ENDED 31ST MARCH 2002 OF
 BENZO PETROCHEMICALS LIMITED.
 
 In our opinion and on the basis of such checks as we considered
 appropriate and according to information and explanation given to us,
 we start that:
 
 01. We have been informed that the Company has maintained proper
 records showing full particulars, including quantitative details and
 situations of Fixed Assets. We are also informed that at the Assets
 have not been physically varified by the management during the years.
 
 02. None of the Fixed Assets have been revalued during the year.
 
 03. As informed to us, the Stock of Finished goods,. Stores, Spares
 and Raw Materials have not been physically verified during the year by
 the Management.
 
 04. As the Stock of Finished goods, stores, spares and Raw materials
 have not been physically verified during the year by Management, we arc
 unable to give our opinion for item Number (IV), (V) and (VI) of clause
 (A) of the aforesaid order.
 
 05. As informed to us, the company has not taken secured or unsecured
 loans from the companies, firm or other parlies listed in the register
 maintained under section 301 of the Companies act. 1956. In view of
 provisions of section 370 of Companies Act, 1956 not being applicable.
 Loan from Companies under same mangaement, if any, have not been
 commented upon.
 
 06. As informed to us, the Company has not granted interest from
 unsecured loans to Companies, or other parties listed in the registers
 maintained under section 301 of the Companies Act, 1956. In view of
 provision of Section 370 of Companies under same management, if any,
 have not been commented upon,
 
 07. We are informed that the parties (including employees) to whom
 loans or advances, in the nature of loans, have been given by the
 company arc not repaying the principle amount as stipulated.
 
 08. As the Company has stopped its business activities, we are unable
 to comment on the adequacy of internal control System.
 
 09. According to the information and explanation given to us, there
 were no transactions for the purchase of the goods and the materials
 and the sales of goods, material and services made in pursuance of
 contracts or arrangments with the parties and attracting provisions of
 the section 301 of the companies Act, 1956 and aggregating during the
 year Rs.50,000/- or more in respect of each party.
 
 10. As explained to us, the company has no procedure for the
 determination of unserviceable or damaged stores, raw materials and
 finished goods, and no provisions has been made in the accounts for the
 loses, if any, arising due to its deterioration as the stock of
 Chemicals etc are too old and out dated.
 
 11. As informed to us, the company has not accepted any deposits from
 the public, hence the provisions of section 58A of companies act 1956
 and the companies (Acceptance of Deposits) rules, 1975, do not apply.
 
 12. As the Company has stopped its business activities. the Company
 has not generated any by products and scrap during the year.
 
 13. Company do not have an internal audit system commensurate with
 size and nature of its business.
 
 14. We have been informed that the Central Government has not
 prescribed the maintenance of the cost records under section 209 (i)
 (d) of the Companies Act, 1956 for the products of the Companies.
 
 15. As there is no employee on payroll, provisions of provident fund
 and ESIC acts arc not applicable to the Company.
 
 16. According to the information and explanations given to us no
 undisputed amount payable in respect of Income Tax, Sales Tax, Custom
 Duty and Excise Duty were outstanding as on 31st March, 2002 for a
 period of more than six months from the date they became payable.
 
 17. According to the information and explanations given to us, no
 personal expenses of Employes or Directors have been charged to revenue
 accounts, other than those payable under contractual obligation or in
 accordance with generally accepted business practice.
 
 18. The Company is 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. We have been informed that
 the Board has made an application on 24-07-1998 to the Board for
 Industrial and Financial reconstruction for the same and the company is
 declared sick by the BIFR vide their order dated 23-12-1998. (Ref No.
 208/98).
 
                                                For J. HARKISONDAS & CO.
                                                   CHARTERED ACCOUNTANTS
 
 Place : Baroda                                         (RASHMI ACHARYA)
 Date : 3-7-2002                                                PARTNER