1. We have audited the attached Balance Sheet of Origin Agrostar
 Limited as at 31st March, 2004 and also the Profit and Loss Account for
 the period 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.
 
 2. We conducted our 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 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 Companies (Auditors Report) Order, 2003 issued
 by the Central Government of India in terms of sub-section (4A) of
 section 227 of the Companies Act, 1956, we close in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4. Further to our comments in 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 purpose 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 and Loss Account dealt with by this
 report are in agreement with the books of accounts;
 
 (iv) In our opinion, 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 2004, and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31st March 2004 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 read together with and
 subject to;
 
 (a) Note 1 (L) of Schedule 1 8, on existence of going concern status of
 the Company,
 
 (b) Note 10 of Schedule 18, on realisability of certain advances given
 to various companies and the impact of shortfall if any on recovery of
 these advances
 
 (c) Note 7 (b) of Schedule 18, regarding recovery proceedings initiated
 by the Income Tax Department
 
 (d) Note 3(b) of Schedule 18, regarding default in payment of term
 loans to the financial Institutions
 
 (e) Note 4(b) of Schedule 18 regarding default in repayment of working
 capital loans to the banks, and other notes in Schedule 18 of
 Significant 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;
 
 (f) In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2004; and
 
 (g) In the case of the Profit and Loss Account, of the Loss of the
 company for the period ended on that date;
 
                                                  For N. K. THARAD & CO.
                                                   Chartered Accountants
 Place: Chennai                                               N.K.THARAD
 Date: 24th May, 2004                                            Partner
                                                             M. No.51867
 
 ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 3 OF OUR
 REPORT OF EVEN DATE
 
 1. The Company has maintained proper records showing full particulars
 including quantitative details and situation of Fixed Assets.
 
 2. The management during the period has physically verified all the
 fixed assets. No material discrepancies were noticed on such
 verification.
 
 3. During the period, the company has not disposed off any substantial
 part of fixed assets.
 
 4. The inventory has been physically verified during the period by the
 management. In our opinion, the frequency of such verification is
 reasonable.
 
 5. 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.
 
 6. On the basis of our examination of the records of inventory, we are
 of the opinion that the company is maintaining proper records of the
 inventory. The discrepancies noticed on verification between the
 physical stocks and the book records were not material.
 
 7. According to the information and explanation given to us, the
 company has not granted/taken any loans, secured and unsecured to/from
 companies, firms or other parties covered in the Register maintained
 under Section 301 of the Companies Act, 1956.
 
 8. 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 inventory, fixed assets and for the
 sale of goods. During the course of our audit, no major weaknesses have
 been noticed in the internal controls.
 
 9. Based on the audit procedures applied by us and according to the
 information and explanations provided by the management, we are of the
 opinion that the transactions that need to be entered into the register
 maintained under section 301 have been so entered.
 
 10. On the basis of our examination of the books of account, the
 Company has not entered into any transactions exceeding Rupees Five
 lakhs in respect of any party during the financial year that need to be
 entered in the register pursuant to the Section 301 of the Act.
 
 11. In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits under the
 provisions of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 12. In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 13. 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.
 
 14. According to the records of the company, the company is generally
 regular in depositing undisputed statutory dues including provident
 fund, employees state insurance, wealth-tax, custom duty, excise-duty,
 cess and other statutory dues with appropriate authorities. However the
 Company is irregular in the payment of following dues, which are
 outstanding for a period of more than six months from the date they
 became payable:
 
 A. Income Tax (Asst. Yr. 2000-01) Rs, 1,73,72,678
 
 B. Sales Tax Deferral dues. Rs, 37,43,028
 
 C. Investor Protection Fund (Unpaid dividend for the year ended
 31.07.1995) Rs, 1,02,993
 
 15. According to the records of the company, there are no dues of sale
 tax, income-tax, customs tax/wealth-tax, excise duty/cess which have
 not been deposited on account of any dispute except as stated herein
 below:
 
 Nature of Dues               Amount Rs.  Forum where dispute is pending
 
 Income Tax (Asst. Yr. 1996-97)   16,35,000                CIT (Appeals)
 
 16. The accumulated losses of the Company as at 31st March 2004, are
 less than fifty percent of its net worth and the Company has also
 incurred cash losses during the financial period ending on 31st March,
 2004 and in the immediately preceding financial period ending on 31st
 December, 2002.
 
 17. Based on our audit procedures and on the information and
 explanations given by the management, we are of the opinion that the
 company has defaulted in repayment of dues to financial institutions &
 banks as followings:
 
 Nature of Dues                        Period          Amount of default
 (As per companys books of accounts)
 
 IDBI - Term Loan                   2000-2001               21,89,26,476
 
 Onwards
 
 State Bank of India - Working      2001-2002               13,01,80,997
 Capital Loan Onwards
 
 Above lenders have already initiated recovery proceedings under various
 acts & regulations and the matters are sub-judice.
 
 18. Based on our examination of documents and records, we are of the
 opinion that the company has not granted any loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities.
 
 19. Based on our examination of the records and evaluation of the
 related internal controls, we are of the opinion that proper records
 have been maintained of the transaction and contracts in respect of
 shares and securities, and timely entries have been made in those
 records. We also report that the company has held the shares,
 securities, debentures and other securities in its own name.
 
 20. In our opinion, considering the nature of activities carried on by
 the Company during the year, the provisions of any special statute
 applicable to chit fund/nidhi/mutual benefit fund/societies are not
 applicable to it.
 
 21. The Company has not given any guarantee for the loans taken by
 others from banks or financial institutions during the year.
 
 22. The Company has not taken any term loans during the year.
 
 23. The funds raised on short-term basis during the year have not been
 used for long-term investment and funds raised on long-term basis have
 not been used for short term investment.
 
 24. The Company has not made any preferential allotment of shares
 during the year.
 
 25. The company has not issued any debentures during the year and
 therefore the question of creating security in respect thereof does not
 arise.
 
 26. The company has not made any Public issue of any Securities during
 the year and therefore the question of disclosing the end use of money
 does not arise.
 
 27. Based upon the audit procedures performed and information and
 explanations given by the management, we report that no fraud on or by
 the company has been noticed or reported during the year.
 
                                                   For N. K. THARAD & CO
                                                   Chartered Accountants
 Place: Chennai                                               N.K.THARAD
 Date: 24th May, 2004                                            Partner
                                                            M. No. 51867