We have audited the attached Balance Sheet of Jaipur Polyspin Limited
 as at 31st March 2005 and also the Profit & Loss Account and the Cash
 Flow Statement 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 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 the management, as well as
 evaluating the overall financial statement presentation. We believe
 that our audit provides a reasonable basis for our opinion.
 
 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, profit & loss account and cash flow statement
 dealt with by this report are in agreement with the books of account.
 
 (d) In our opinion, the balance sheet, profit & loss account and cash
 flow statement dealt with by this report comply with the Accounting
 Standards referred to in sub-section (3C) of Section 211 of the
 Companies Act, 1956.
 
 (e) On the basis of written representations received from the
 directors, as on 31.03.2005 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31st March, 2005 from being appointed as a director in term 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, the said accounts read together with
 notes thereon, and appearing in Schedule of Accounting Policies and
 Notes on Accounts, 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 the balance sheet, of the state of affairs of the
 company as at 31st March, 2005.
 
 (ii) in the case of the profit & loss account, of the loss 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.
 
 As required by the Companies (Auditors Report) (Amendment) Order, 2004
 (The Order) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Companies Act, 1956 (The Act)
 and in terms of the information and explanations given to us and also
 on the basis of such checks as we considered appropriate, we further
 state that: -
 
 1. (a) The Company has maintained proper records showing full
 particulars including quantitative details and situations of fixed
 assets.
 
 (b) Fixed Assets have been physically verified by the Management
 according to the regular programme of periodical verification in phased
 manner which in our opinion is reasonable having regard to the size of
 the Company and the nature of its Fixed Assets. The discrepancies
 noticed on such physical verification were not material.
 
 (c) No Substantial, part of its fixed assets has been disposed off
 during the year, which has bearing on the going concern concept.
 
 2. (a) The inventory has been physically verified during the year by
 the management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) The procedures of physical verification of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. No material
 discrepancies have been noticed on physical verification of stocks as
 compared to book records.
 
 3. The Company has neither granted nor taken any loans, secured or
 unsecured to/from companies, firms or other parties as covered in the
 register maintained under section 301 of The Act. 1956. Accordingly,
 the clause 4 (iii) (b) to (g) of The Order are not applicable.
 
 4. In our opinion and according to the information and explanations
 given to us, there are adequate internal control system commensurate
 with the size of the company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. During the course of our audit, we have not observed any
 continuing failure to correct major weaknesses in internal control
 system.
 
 5. a.) According to information and explanation given to us, and on
 the basis of records made available to us, we are of the opinion that
 the transactions that need to be entered in the register maintained
 under the Section 301 of the Act have been so entered.
 
 b.) According to information and explanation given to us, the
 transactions made in pursuance of contracts or arrangements entered
 into the register maintained under the Section 301 of the Act have been
 made at a prices which are generally reasonable having regard to
 prevailing market prices at the relevant time.
 
 6. In our opinion and according to the information and explanations
 given to us company has not accepted any deposits from the public in
 terms of Sections 58A, 58AA or any other relevant provision of the Act
 and th& rules framed there under.
 
 7. In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8. We have broadly reviewed the books of account maintained by the
 Company pursuant to the order issued by the Central Government for
 maintenance of cost records under Section 209 (l)(d) of The Act in
 respect of Textiles and are of the opinion that, prima facie, the
 prescribed accounts and records have been made and maintained. We have
 not, however, made a detailed examination of the records with a view to
 determine whether they are accurate and complete.
 
 9. (a) According to the records of the company, undisputed statutory
 dues including provident fund, investor education protection fund,
 Income tax, Sales tax. Wealth tax, Service Tax, Customs duty. Excise
 duty. Cess and other material statutory dues have generally been
 regularly deposited during the year with the appropriate authorities
 and there are no undisputed amounts payable in respect of above
 statutory dues outstanding as at 31st March, 2005 for a period
 exceeding six months from the date they became payable.
 
 (b) As per the records of the Company and information and explanation
 given to us in cases of dues of Income Tax, Sales Tax, Service Tax,
 Custom Duty, Wealth Tax, Excise Duty, Cess that have not been deposited
 on account of any dispute are mentioned below:-
 
 Nature of Statute       Nature of
                         the dues    Amount (Rs)  Forum where dispute
                                                  is pending
 
 1 Central Excise duty   Excise Duty       24815  Central Excise Gold
                                                  Control appellate
 
 - do -                                   184947  Tribunal Commissioner
                                                  (Appeals)
                                                  Customs & Central
                                                  Excise
 
 2. Textile Act. Cess    Cess            4949052  Textile Committee
                                                 Cess Appellate Tribunal
 
 10. The company has no accumulated losses and has not incurred cash
 losses in the current financial year, and in the immediately preceding
 financial year.
 
 11. In our opinion, on the basis of audit procedures and on the
 information and explanations given to us, the company has not defaulted
 in repayment of any dues to financial institutions or banks. The
 Company has not issued debentures.
 
 12. Based on examination of documents and records made available to us
 and on the basis of information and explanations given to us, the
 company has not granted any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 13. In our opinion, the company is not a chit fund or a nidhi/mutual
 benefit fund/society. Therefore, the provisions of clause 4(xiii) of
 The Order are not applicable to the company.
 
 14. In our opinion, the company is not dealing in or trading in
 shares, securities, debentures and other investments. Accordingly, the
 provisions of clause 4(xiv) of The Order are not applicable to the
 company.
 
 15. Based on examination and on the basis of information and
 explanations given to us, the company has not given any guarantee for
 loans taken by others from banks or financial institutions.
 
 16. On the basis of information and explanations given to us, in our
 opinion, term loan(s) were applied for the purposes for which the
 loan(s) were obtained.
 
 17. According to the information and explanation given to us and on an
 overall examination of the Balance Sheet of the Company, we report that
 no funds raised on short-term basis have been used for long-term
 investment.
 
 18. During the year, the company has not made any preferential
 allotment of shares to any parties or companies covered in the register
 maintained under section 301 of The Act.
 
 19. The company has neither issued nor had any outstanding debentures
 during the year.
 
 20. The company has not raised any money through a public issue during
 the year.
 
 21. Based upon the audit procedures performed and on the basis of
 information and explanations given to us, we report that no fraud on or
 by the company has been noticed or reported during the course of our
 audit.
 
                                                        For LODHA & CO.,
                                                   Chartered Accountants
                                                           (V.K.SHRIMAL)
 Place : NOIDA                                                   Partner
 Dated : 25 April, 2005                              Membership No 71622