1. We have audited the attached Balance Sheet of Kodak India Limited
 as at December 31, 2002 and the relative Profit and Loss Account for
 the year ended on that date annexed thereto and the Cash Flow Statement
 for the year ended on that date, which we have signed under reference
 to this report. These financial statements are the responsibility of
 the Management of the Company. Our responsibility is to express our
 opinion on these financial statements based on our audit.
 
 2. We have 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 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 Central Government of India in terms
 of Section 227(4A) of The Companies Act, 1956, of India (the Act), and
 on the basis of such checks as we considered appropriate and according
 to the information and explanation given to us, we set out in the
 Annexure a statement on the matters specified in paragraphs 4 and 5 of
 the said Order.
 
 4. Further to our comments in the Annexure referred to in Paragraph 3
 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 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 and Profit and Loss Account dealt with by this
 report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and the
 Cash Flow Statement dealt with by this report have been prepared in
 compliance with the applicable accounting standards referred to in
 Section 211 (3C) of the Act;
 
 (e) On the basis of written representations received from the Directors
 as on December 31, 2002, and taken on record by the Board of Directors
 of the Company, none of the Directors is disqualified as on December
 31, 2002 from being appointed as a Director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the Balance Sheet, Profit and Loss
 Account and the Cash Flow Statement together with the Notes thereon and
 annexed thereto, give in the prescribed manner, subject to Note 6 on
 Schedule S of the Accounts, regarding quantitative information not
 given, the information required by the Act and also 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 December 31, 2002;
 
 (ii) in the 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.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 (Referred to in paragraph 3 of our report of even date)
 
 (i) a) The Company has maintained proper records to show full
 particulars including quantitative details and situation of its fixed
 assets.
 
 b) The fixed assets of the Company are physically verified by the
 Management according to a phased programme designed to cover all items
 over a period of three years, which we consider reasonable. Pursuant to
 the programme, a physical verification has been carried out during the
 year and this revealed no material discrepancies.
 
 (ii) The fixed assets of the Company have not been revalued during the
 year.
 
 (iii) The stocks of processing materials, chemicals, camera components,
 films, work-in-progress and finished goods other than those lying with
 third parties (in respect of which confirmations have been obtained)
 have been physically verified by the Management at the year-end.
 
 (iv) In our opinion, the procedures of physical verification of stocks
 of processing materials, chemicals, camera components, films,
 work-in-progress and finished goods followed by the Management are
 reasonable and adequate in relation to the size of the Company and the
 nature of its business.
 
 (v) The discrepancies between the physical stocks and the book stocks,
 which have been properly dealt with, were not material.
 
 (vi) In our opinion, the valuation of stocks of processing materials,
 chemicals, camera components, films, work-in-progress and finished
 goods has been fair and proper in accordance with the normally accepted
 accounting principles followed in India and is on the same basis 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, of India (the Act). In
 terms of sub-section (6) of Section 370 of the Act, provisions of the
 Section are not applicable to a company after the commencement of The
 Companies (Amendment) Act, 1999, of India.
 
 (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 Act. In terms of sub-section (6) of Section
 370 of the Act, provisions of the Section are not applicable to a
 company on or after the commencement of The Companies (Amendment) Act,
 1999, of India.
 
 (ix) The parties (including employees) to whom loans or advances in the
 nature of loans have been given by the Company are repaying the
 principal amounts as stipulated and are also regular in payment of
 interest, where applicable.
 
 (x) In our opinion, and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are of a special nature, no alternative quotations are
 required. The internal control procedures of the Company with regard to
 purchase of stores, raw materials including components, plant and
 machinery, equipment and other assets and for the sale of goods are
 commensurate with the size of the Company and the nature of its
 business.
 
 (xi) The Company has not purchased goods and materials and sold goods,
 materials and services in pursuance of contracts or arrangements
 entered in the register maintained under Section 301 of the Act and
 aggregating during the year Rs. 50,000 or more in value in respect of
 each party.
 
 (xii) The Company has a system of determining unserviceable or damaged
 processing materials, chemicals, camera components, films and finished
 goods on the basis of technical evaluation and on such basis, in our
 opinion, adequate amounts have been written off such stocks in the
 accounts.
 
 (xiii) In the cases of public deposits received by the Company, the
 directives issued by the Reserve Bank of India and the provisions of
 Section 58A of the Act and the rules framed thereunder, where
 applicable, have been complied with.
 
 (xiv) In our opinion, reasonable records have been maintained by the
 Company for the sale and disposal of realisable scrap. The Company does
 not have any by-product.
 
 (xv) In our opinion, the Companys present internal audit system is
 commensurate with its size and the nature of its business.
 
 (xvi) The Central Government of India has not prescribed the
 maintenance of cost records by the Company under Section 209 (1) (d) of
 the Act for any of its products.
 
 (xvii) The Company has regularly deposited during the year, Provident
 Fund and Employees State Insurance dues with the appropriate
 authorities in India.
 
 (xviii) At the last day of the financial year, there were no amounts
 outstanding in respect of undisputed income tax, wealth tax, sales tax,
 customs duty and excise duty which were due for more than six months
 from the date they became payable.
 
 (xix) During the course of our examination of the books of account
 carried out in accordance with the generally accepted auditing
 practices in India, we have not come across any personal expenses which
 have been charged to the Profit and Loss Account, other than those
 payable under contractual obligations or accepted business practices as
 followed in India, nor have we been informed of such a case by the
 Management.
 
 (xx) 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, of India.
 
 (xxi) In respect of trading activities, damaged goods have been
 determined by the Company on the basis of technical evaluation and on
 such basis, in our opinion, adequate amounts have been written off such
 stocks in the accounts.
 
                                                          P. N. GHATALIA
                                                                 Partner
 
                                                    For and on behalf of
                                                        PRICE WATERHOUSE
                                                  Chartered Accountants.
 Mumbai, 19th March 2003.