1. We have audited the attached Balance Sheet of JOHN FOWLER (INDIA)
 LIMITED as at 31st March, 2003 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
 management. Our responsibility is to express opinion on the financial
 statements based on our audit.
 
 2. We conducted the audit in accordance with the 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 from material misstatement. An audit
 includes examining, on a test check 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.
 
 3. 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 enclose in the annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 order, to the extent applicable to this Company.
 
 4. Further to our comments in the annexure referred to in paragraph 3
 above.
 
 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. Attention is invited to accounting policy no. C (ii) and D (ii).
 As explained therein we have relied upon the certificate issued by a
 firm of Chartered Accountants in respect of income and expenses and
 stock of agricultural activities of the company.
 
 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 and Loss account and Cash Flow statement
 dealt with by this report are in agreement with the books of account
 maintained by the Company.
 
 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 31st March, 2003 and taken on record by the board of directors at
 their meeting, we report that none of the directors is disqualified as
 on 31.3.2003 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
 explanations given to us, the said accounts read together with the
 notes thereon and the significant accounting policies 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 policies generally accepted in India -
 
 i) in case of the Balance Sheet, of the State of Affairs of the Company
 as at 31st March, 2003;
 
 ii) in case of the Profit and Loss account, of the Profit for the year
 ended on that date; and 
 
 iii) in the case of the Cash Flow statement, of the Cash Flows for the
 year ended on that date.
 
                                                  For HARIBHAKTI & CO.,
                                                  Chartered Accountants
 Place : Mumbai                                          (CHETAN DESAI)
 Date : 9th June, 2003                                          Partner
                                                   Membership No. 17000
 
 ANNEXURE TO AUDITORS REPORT
 
 (referred to in Paragraph 3 of our Report of even date on the Accounts
 of JOHN FOWLER (INDIA) LIMITED for the year ended 31st March, 2003)
 
 1. The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets. We are
 informed that certain items of plant and machinery and buildings have
 been physically verified by the management during the year and that no
 material discrepancies were noticed on such verification.
 
 2. None of the fixed assets has been revalued during the year.
 
 3. The stocks of finished goods, stores, spare parts and raw materials
 including components have been physically verified by • the management
 during the year. In our opinion, the frequency of verification is
 reasonable. In the case of stocks lying with the third parties,
 certificates for such stocks have been obtained from many of the
 parties.
 
 4. The procedures of physical verification of stocks followed by the
 management are reasonable and adequate in relation to the size of the
 Company and nature of its business.
 
 5. The discrepancies noticed on physical verification of stocks as
 compared to the book records are being adjusted in the books of
 accounts.
 
 6. In our opinion, 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 had borrowed funds from a company in which one of the
 Directors of the Company is interested and the terms and conditions of
 which were prima-facie not prejudicial to the interests of the Company.
 
 8. The Company had granted unsecured loans to companies, listed in the
 register maintained under Section 301. The terms and conditions of such
 loans were prima-facie not prejudicial to the interests of the Company.
 In respect of loans and advances in the nature of loans given by the
 Company, the principal and interest amounts have been recovered as
 stipulated.
 
 9. In our opinion and according to the information and explanations
 given to us, and having regard to the explanation that some of the
 items purchased/sold are of a special nature for which comparable
 alternative prices are not available, there are adequate internal
 control procedures commensurate with the 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.
 
 10. In our opinion and according to the information and explanations
 given to us, and having regard to our comments in item 9 above, the
 transactions of purchase of goods and materials and sale of goods,
 materials and services, made in pursuance of contracts or arrangements
 entered/to be entered in the register maintained under section 301 of
 the Companies Act, 1956, aggregating during the year to Rs.50,000 or
 more in respect of each party have been made at the prices which are
 reasonable, having regard to prevailing market prices as available with
 the Company for such goods, materials, or services or the prices at
 which transactions for similar goods or services have been made with
 other parties.
 
 11. As explained to us, the Company has a regular procedure for the
 determination of unserviceable or damaged stores, raw materials
 including components and finished goods. Adequate provision has been
 made in the accounts for the loss arising on the items so determined.
 
 12. The Company does not have any deposits as defined under Section 58A
 of the Companies Act, 1956, and the Companies (Acceptance of Deposits)
 Rules, 1975.
 
 13. Reasonable records have been maintained by the Company for the sale
 and disposal of realizable scrap, except for the value of scrap
 consumed internally. We are informed that the Companys manufacturing
 processes do not generate any realizable by-products.
 
 14. The Company has an adequate internal audit system commensurate with
 the size and nature of its business.
 
 15. We are informed that the Central Government has prescribed
 maintenance of cost records under Section 209 (1) (d) of the Companies
 Act, 1956, for automotive parts and accessories manufactured by the
 Company and that the Company has maintained such records as are
 prescribed.
 
 16. According to the records of the Company, provident fund and
 Employees State Insurance dues have been deposited regularly during
 the year with the appropriate authorities. There are no overdue amounts
 outstanding as at the end of the year.
 
 17. According to the information and explanations given to us, there
 are no material undisputed amounts payable in respect of Income Tax,
 Wealth Tax, Sales Tax, Customs duty and Excise duty which are
 outstanding as on 31st March, 2003 for a period of more than six months
 from the date they became payable.
 
 18. On the basis of examination of books of account carried out by us
 in accordance with the generally accepted auditing practices and
 according to the information and explanations given to us, no personal
 expenses of employees or directors have been charged to the profit and
 loss account, other than those payable under contractual obligations or
 in accordance with the generally accepted business practice.
 
 19. The Company is not as sick industrial company within the meaning
 of clause (o) of sub section (1) of Section 3 of the Sick Industrial
 Companies (Special Provisions) Act, 1985.
 
                                                   For HARIBHAKTI & CO.,
                                                   Chartered Accountants
 Place: Mumbai                                            (CHETAN DESAI)
 Date: 9th June, 2003                                            Partner
                                                    Membership No. 17000