We have audited the attached Balance sheet of HIMGIRI FINCAP LIMITED as
 at 31st March 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 mis statement An audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the financial statements. An audit also induces
 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:
 
 (i) 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;
 
 (ii) 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;
 
 (iii) The Balance Sheet and Profit & Loss Account dealt with by this
 report are in agreement with the books of account;
 
 (iv) In our opinion, the Balance Sheet and Profit and Loss Account
 dealt with by this report comply with the accounting standards referred
 to in sub-section (3C) of section 211 of the Companies Act, 1956;
 
 (v) On the basis of written representations received from the
 directors, as on 31st March, 2002. and taken on record by the Board of
 Directors, we report that none of the directors, is disqualified as on
 31st March. 2002 from being appointed as a director in terms of clause
 (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts subject to the
 following:
 
 The Company has not made a provision for debts amounting to
 Rs.44,51,692.56, the recovery of which is doubtful in nature. This has
 resulted In understatement of loss end also the overstatement of sundry
 debtors In current ends 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:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2002;and
 
 (b) in the case of the Profit & Loss Account, of the toss for the year
 ended on that date.
 
                                   for VIPAN KUMAR AGGARWAL & ASSOCIATES
                                                    Chartered Accountant
                                                            V.K.AGGARWAL
                                                              Proprietor
 Place: New Delhi
 Dated: 2nd September, 2002
 
 ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our
 report of even date)
 
 1. The company has maintained proper records to show full particulars
 including quantitative details and situation of the fixed assets. In
 our opinion, the frequency of verification of fixed assets by the
 management is reasonable, having regard to the size of the Company and
 the nature of its assets. No material discrepancies were noticed on
 such physical verification.
 
 2. None of the fixed assets have been re-valued during the year.
 
 3. The stocks of finished goods which is in the shape of Equity Shares
 have been physically verified by the management during the year at
 reasonable intervals. In our opinion, We frequency of verification is
 reasonable.
 
 4. In our opinion and according to the information and explanations
 given to us, 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.
 
 5. No discrepancies were noticed on verification between the physical
 stocks and book records.
 
 6. In our opinion and on the basis of our examination, the valuation
 of stocks is fair and proper in accordance with normally accepted
 accounting principles and is on the same basis as in the previous year.
 
 7. The company has not taken any loans from companies, firms or other
 parties listed in the register maintained under section 301 of the
 Companies Act, 1956. In terms of sub-section (6) of Section 370 of the
 Companies Act, 1956, provision of the Section are not applicable to a
 company on or after 31st October. 1998.
 
 8. According to the information and explanations given to us the
 company has granted Loans to Company listed in the register maintained
 under Section 301 of the companies Act, 1956. The rate of interest and
 terms & conditions of such loan are prima facie not prejudicial to the
 interests of the company. In terms of sub-section (6) of Section 370 of
 the Companies Act. 1956, provision of the Section are not applicable to
 a company on or after 31st October, 1998.
 
 9. In respect of the parties to whom loans or advances in the nature
 of loans have been given by the Company, they are repaying the
 principal amounts and are also regular in payment of interest wherever
 stipulated.
 
 10. 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 with regard to purchase of shares including other assets and
 with regard to the sale of shares.
 
 11 According to the information and explanations given to us,
 transactions of purchase and sale of shares aggregating during the year
 to Rs.50,000/- or more inrespect of each party, made in pursuance of
 contracts or arrangements entered in the register maintained under
 Section 301 of the companies Act, 1956, the prices paid/received for
 such shares are reasonable as compared to the prices of similar shares
 for which transactions wherever made with other parties.
 
 12. The nature of the business of the company is such in which the
 company has no unserviceable or damaged stores and raw materials, so
 the question of determining the value of the same does not arise.
 
 13. The company has not accepted any deposits from the public within
 the meaning of Section 58-A of the Companies Act. 1956 and the rules
 framed thereunder.
 
 14. The nature of the business of the Company is such that does not
 generate any by products or scrap. Hence the question of maintenance
 of records for sale and disposal of such by products or scrap does not
 arise.
 
 15. In our opinion, there is an adequate internal audit system
 commensurate with the size of the company and the nature of its
 business.
 
 16. The Provisions of Section 209 (1) (d) of the Companies Act, 1956
 regarding maintenance of cost records are not applicable to the
 company.
 
 17. The Provisions of Provident fund Act and Employee State Insurance
 Act are not applicable to the Company.
 
 18. As per information and explanations given to us, there were no
 undisputed amounts payable in respect of Income Tax, Wealth Tax and
 Excise Duty which have remained outstanding as at 31st March, 2002 for
 a period of more than six months from the date they become payable.
 Sales Tax and Custom Duty is not applicable to the business of company.
 
 19. According to the information and explanation given to us and the
 records examined by us. no personal expenses have been charged to
 Revenue Account
 
 20. The company is not a Sick Industrial Company within the meaning of
 clause (o) of section 3(1) of the Sick Industrial Companies (Special
 Provisions) Act, 1985 as amended upto date.
 
 21. According to the informations and explanations given to us, the
 company is dealing in snares and securities and other instruments for
 which the company has maintained proper records of the transactions and
 contracts and timely entries have been made.
 
 22. Other matters in para 4 (D) of the said order are not applicable to
 the company.
 
                                   for VIPAN KUMAR AGGARWAL & ASSOCIATES
                                                    Chartered Accountant
                                                            V.K.AGGARWAL
                                                              Proprietor
 Place: New Delhi
 Dated: 2nd September, 2002