We have audited the attached Balance Sheet of Gujarat Optical
 Communication Limited as on 30th June, 2002 and also the Profit & 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 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.
 
 We report as follows :
 
 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 give In the Annexure a
 statement of the matters specified In the paragraphs 4 & 5 In 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 accounts as required by the Law have
 been kept by the Company so far as it appears from our examination of
 those books;
 
 c) The Balance Sheet and the Profit & Loss Account dealt with by this
 report are in agreement with the books of accounts;
 
 d) In our opinion, the attached Balance Sheet and Profit & Loss
 Account, comply with the mandatory accounting standards referred to in
 Section 211 (3C) of the Companies Act, 1956 to the extent applicable
 except non provision of gratuity and Leave encashment as mentioned in
 Note No.5 of Schedule 72 which is contrary to the practice recommended
 in Accounting Standard 15 Accounting for retirement benefits in the
 financial statement of Employers, the amount of which is not
 ascertained and therefore the effect of this on loss for the year and
 liabilities could not be quantified and Note No.:17 in schedule 12
 regarding non disclosure of dues to SSI Units and ancillary
 undertakings.
 
 e) On the basis of the written representations received from the
 Directors and taken on record by Board of Directors-and legal opinion
 obtained by the company, we report that none of the Directors is
 disqualified as on 30th June, 2002 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 and said accounts read with accounting
 policies and other 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 the case of Balance Sheet, of the state of affairs of the
 Company as on 30th June, 2002 ; and
 
 (ii) In the case of Profit & 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 on the
 accounts of Gujarat Optical Communication Ltd. for the year ended
 30th June, 2002 ]
 
 (i) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets. However
 the same is required to be updated to include particulars about
 additions made during the year 2000-01 & 2001-02. The fixed assets have
 been physically verified by the management at reasonable intervals
 during the year. No material discrepancies were noticed on such
 verification.
 
 (ii) The fixed assets of the Company have not been revalued during the
 year.
 
 (iii) The stock of finished goods, stores, spare parts and raw
 materials have been physically verified by the management at reasonable
 Intervals.
 
 (iv) In our opinion, the procedures of physical verification of the
 stocks followed by the management were found reasonable and adequate
 in relation to the size of the Company and nature of its business.
 
 (v) According to the information given to us, no material discrepancies
 were noticed on physical verification of stocks as compared to book
 records.
 
 (vi) In our opinion and on the basis of our examination, the
 valuation of stocks is fair and proper in accordance with the normally
 accepted accounting principles. The basis of valuation of stocks is
 same as in the preceding year.
 
 (vii) The Company has not taken any loans, secured or unsecured, from
 companies, firms or other parties listed in the register maintained
 under Section 301 of the Companies Act, 1956. As explained to us there
 is no Company under the same management as defined under Section 370
 (1B) of the Companies Act, 1956.
 
 (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 of the Companies Act, 1956. As explained to us, there
 is no Company under the same management as defined under section 370
 (1B) of the Companies Act. 1956.
 
 (ix) In the respect of the loans, and advances In the nature of loans
 given by the company to the parties there are no stipulations regarding
 re payment of the principal amount. In the case of interest free loans
 given to staff, which is outstanding since long time, we have been
 informed that the management has taken steps for recovery / adjustment
 of the same.
 
 (x) In our opinion there are adequate internal control procedures
 commensurate with size of the Company and the nature of its business
 with regard to purchase of stores, raw materials including
 components, plant and machinery, equipment and other assets and for the
 sale of goods.
 
 (xi) The transactions of purchase and sales of goods and materials made
 in pursuance of contracts or arrangements entered in the register
 maintained under section 301 of the Companies Act, 1956 as
 aggregating during the year to Rs. 50,000/- (Rupees Fifty thousand
 only) or more in the respect of each party have been made at price
 which are reasonable, having regard to the prevailing market prices
 for such goods or materials.
 
 (xii) As explained to us, the Company has a regular procedure for the
 determination of unserviceable or damaged stores and raw materials.
 We are informed that there are no unserviceable or damaged stores,
 raw materials and finished goods as at the end of the year.
 
 (xiii) The Company has not accepted any deposits from the Public.
 
 (xiv) In our opinion, reasonable records have been maintained by the
 Company for the sale and disposal of realisable scrap. The Company has
 no by-products.
 
 (xv) The company did not have any formal internal audit system during
 the year under review.  However the company has explained that the
 internal control procedure involve reasonable internal checking of its
 financial records, which Is considered adequate under the
 circumstances.
 
 (xvi) We have broadly reviewed the books of accounts maintained by the
 Company pursuant to the rules made by the Central Govt. for the
 maintenance of cost records Under section 209 (1)(d) of the Companies
 Act, 1956 in respect of cables and are of the opinion that prima facie,
 the prescribed accounts and records have been maintained. We have,
 however, not made a detailed examination of these records.
 
 (xvii) According to the records of the Company has regularly deposited
 the provident fund dues with the appropriate authorities and there were
 no arrears of such dues as on the date of this report. According to the
 information and explanations given to us, provisions of Employees
 State Insurance Act, 1948 are not applicable to the Company.
 
 (xviii) According to the Information and explanations given to us and
 on the basis of records examined by us, no personal expenses of the
 employees or directors, other than those payable under contractual
 obligations or In accordance with generally accepted business practice
 have been charged to revenue account.
 
 (xix) According to the information and explanations given to us, no
 undisputed amount payable in respect of Income-Tax, Wealth Tax, Sales
 Tax, Custom Duty and Excise Duty were outstanding as on 30th
 June, 2002 for a period of more than six months from the date they
 become payable.
 
 (xx) As per the legal opinion obtained by the Company, the provisions
 of Sick Industrial Companies (Special Provisions) Act, 1985, do not
 apply to the Company.
 
 (xxi) In respect of trading activities of the Company, we are
 informed that there were no damaged goods during the year.
 
 For Manubhai & Co.
 Chartered Accountants
 
 Kshitij M Patel
 Partner
 
 Place : Ahmedabad
 Date : 28th September, 2002