We have audited the attached Balance Sheet of SARDA INFORMATION
 TECHNOLOGY LIMITED, as at 31st March, 2002 and also the Profit and
 Loss Account of the Company 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 management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a
 reasonable basis for our opinion.
 
 1) 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 statement on the matters specified in paras
 4 and 5 of the said Order.
 
 2) Further to our Comments in Annexure referred to in paragraph 1
 above:
 
 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 accounts, as required by law have
 been kept by the Company, so far as It appears from our examination of
 these books;
 
 iii) The Balance Sheet and Profit & Loss Account referred to in this
 report are in agreement with the books of account
 
 iv) In our opinion, SUBJECT TO NOTE No. 5, 10 AND 12 OF SCHEDULE -19,
 the Balance sheet and the Profit & 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
 of the company, and taken on the record by the Board Of Directors we
 report that none of the director is disqualified as at 31st MARCH,
 2002 from being appointed as a director in terms of clause (g) of sub
 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 Balance Sheet and Profit and
 Loss Account read together with the Significant Accounting Policies
 and other notes thereon, SUBJECT TO NOTE No. I (b) OF SCHEDULE -19
 give the information required by the Companies Act, 1956 in the manner
 so required and give a true and fair view :
 
 (a) In so far as it relates to Balance Sheet, of the state of affairs
 of the Company as at 31st March, 2002 and
 
 (b) In so far as it relates to the Profit and Loss Account, of the
 Loss of the Company for the year ended on that date.
 
 ANNEXTURE TO THE AUDITORS REPORT
 
 Referred to in paragraph 1 of our report of even date
 
 1) The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed assets.
 According to the information and explanations given to us the fixed
 assets have been physically verified by the management during the year
 in a phased periodical manner, which in our opinion is reasonable,
 having regard to the size of the Company and nature of the assets. No
 material discrepancies were noticed on such verification.
 
 2) None of the fixed assets have been revalued during the year.
 
 3) As explained to us, the stock of finished goods, raw materials,
 consumables, stores and spares and trading of cloth have been
 physically verified by the Management at reasonable intervals during
 the year. In our opinion, the frequency of such Verification is
 reasonable having regard to the size of the Company and the nature of
 its business. Production and consumption are taken as certified by
 the Management.
 
 4) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of stock followed
 by the management are reasonable and adequate in relation to the size
 of the Company and the nature of its business.
 
 5) As explained to us, there were no material discrepancies noticed on
 physical verification to the stocks of raw materials, stores and
 spares and finished goods and trading of cloth having regard to the
 size of the operations of the Company.
 
 6) The valuation of stock is fair and proper and is in accordance with
 the normally accepted accounting principles and is on same basis as in
 the preceding year.
 
 7) The Company has not taken any loans, secured or unsecured from
 companies, firms or other parties listed in the register maintained
 under Sec. 301 of the Companies Act, 1956 or from the Companies under
 the same management within the meaning of Section 370 (1B) of the
 Companies Act, 1956, where the rate of interest and other terms and
 conditions of such loans are prima facie prejudicial to the interest
 of the company.
 
 8) 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 Companies Act, 1956, or to Companies under
 same management within the meaning of section 370 (1B) of the
 companies Act 1956, where the rate of interest and other terms and
 condition of such loans are prima facie prejudicial to the interest of
 the company.
 
 9) In respect of loans and advances given by the company, the parties
 have repaid the principal amounts and interest as stipulated, wherever
 stipulations have been made or as rescheduled.
 
 10) In our opinion and according to 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 stores, raw materials, including consumable
 parts, plant and sale of goods.
 
 11) In our opinion and according to the information and explanations
 given to us, the transaction of purchase of goods, material and
 service, made in pursuance of contracts or arrangements entered in the
 register maintained u/s 301 of the Companies Act, 1956 and aggregating
 during the year to RS. 50,000/- or more in respect of each party have
 been made to prices which are reasonable having regard to prevailing
 market prices as available with the Company for such goods, materials
 or services or transactions made with other parties.
 
 12) According to the information and explanations given to us, the
 Company has a regular procedure for the determination of unserviceable
 or damaged stores, raw materials and finished goods, adequate
 provision has been made in the accounts for the loss arising on the
 items so determined.
 
 13) According to the information and explanations given to us, the
 Company has not accepted any deposits during the year from the public
 within the meaning of the provisions of Section 58A of the Companies
 Act, 1956 and rules made thereunder are not applicable.
 
 14) In our opinion, reasonable records have been maintained by the
 company for the sale and disposal of realisable scrap. The Company has
 no by-products.
 
 15) In our opinion, the internal audit system of the Company is
 commensurate with its size and nature of its business.
 
 16) As informed to us, the Central Govt. has not prescribed
 maintenance of cost records under Section 209(1) (d) of the Companies
 Act, 1956 in respect of Companys products.
 
 17) According to the records of the Company the provident fund and
 employees state insurance scheme dues were generally been regularly
 deposited during the year with appropriate authorities.
 
 18) According to the information and explanations given to us, there
 are no undisputed amounts payable in the respect of Income Tax, Sales
 Tax, Customs Duty and Excise Duty, except custom duty Rs. 1133345/- &
 excise cess Rs. 217562/- were outstanding as on 31 March, 2002 for a
 period of more than six months from the date they become payable.
 
 19) According to the information and explanations given to us, and
 records examined by us, no personal expenses have been charged to
 Revenue Accounts other than those payable under contractual
 obligations or in accordance with generally accepted business
 practice.
 
 20) The Company has become a sick industrial unit within the meaning
 of clause (O) of Sub Section (I) of Section 3 of the Sick Industrial
 Companies (Special Provisions) Act, 1985.
 
 21) In respect of trading activities, we are informed that there were
 no damaged goods during the year.
 
 						  For N. B. MUNDADA&CO.
 						 Chartered Accountants
 
 N. B. MUNDADA 					     Place : Ahmednagar
 Proprietor 					      Date : 06/5/2002.