WE HAVE AUDITED THE ATTACHED BALANCE SHEET OF M/S. SHREEJI PHOSPHATE
 LIMITED AS AT 31ST MARCH, 2003 AND ALSO THE ATTACHED PROFIT AND LOSS
 ACCOUNT OF THE COMPANY FOR THE YEAR ENDED ON THAT DATE ANNEXED THERETO
 AND CASH FLOW STATEMENTS FOR THE PERIOD ENDED ON THAT DATE. THESE
 FINANCIAL STATEMENTS ARE THE RESPONSIBILITY OF THE COMPANY'S
 MANAGEMENT. OUR RESPONSIBILITY IS TO EXPRESS AN OPINION ON THESE
 FINANCIAL STATEMENTS BASED ON OUR AUDIT.:
 
 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 misstatements. An audit
 includes examining, on test basis, evidence supporting the amounts and
 disclosures in financial statements. An audit also includes assessing
 the accounting principles as well as evaluating the overall financial
 statement presentation. We believe that our audit provides reasonable
 basis for our opinion.
 
 In our opinion, proper books of Accounts as required by law have not
 been kept by the Company so tar as appears from our examination of the
 books. Subject to the above, we unable to form an opinion as to:
 
 (i) Whether proper books of account as required by the Company and
 
 (ii) Whether the accounts give true and fair view in the case of the
 Balance Sheet of the State of Company's affairs as at the end of its
 financial year ended 31st March, 2003 and in the case of the profit &
 loss account of the profit/loss for its financial period on that day.
 
 In our opinion the Balance Sheet and Profit and Loss Account complies
 with the requirements of the Mandatory accounting standards referred to
 in Section 211(3C) of the Companies Act, 1956 Based on the
 representations made by the Directors of the Company and the information
 and explanations as made available to us by the Company, none of the
 Directors of the Company has prima facie any disqualification as
 referred to in clause (g) of sub-section (1) of Section 274 of the Act.
 
 In our opinion and to the best of our information and according to the
 explanation given to us, the said financial statements read together
 with the Significant Accounting Policies and subject to all the notes
 thereon give the information required in the Companies Act, 1956 in the
 manner so required and present a true and fair view in conformity with
 the accounting principles generally accepted in India:
 
 (a) In the case of Balance Sheet of the State of the Affairs of the
 Company as at 31st March 2003 and:
 
 (b) In the case of Profit and Loss Account of the profit for the year
 ended on that date.
 
 (c) In so far as it relates to the Cash flow Statement, of the cash
 flows of the company for the year ended on that date.
 
 As required by the Manufacturing and other Companies (Auditor Report)
 order, 1988 issued by the central government of India in term of
 subsection (4A) of section 227 of the Companies Act, 1956 and on the
 basis of such checks we considered appropriate, we further report that:
 
 1. The Company has maintained proper records showing full particulars
 including quantitative details and situation of fixed Assets, the fixed
 assets have been physically verified by the Management. In our opinion
 the frequency if verification is reasonable.  No material discrepancies
 have been noticed on such verification.
 
 2. None of the fixed assets have been revalued during the year.
 
 3. The stocks and finished goods, stores, spare parts and raw materials
 have been physically verified during the year by the management in our
 opinion, tie frequency of verification is reasonable.
 
 4. In our opinion, the procedure of physical verification of stocks
 followed by the management are reasonable and adequate relation to the
 size of the company and denature of its business.
 
 5. The discrepancies noticed on physical verification of stocks as
 compared to book records were not material and the same have been
 properly dealt with in books of accounts.
 
 6. In our opinion, the valuation of stocks is fair and proper in
 accordance with the normally accepted accounting principles and is on
 the basis as in the preceding year.
 
 7. The Company has not taken any Loans Secured or Unsecured from
 Companies, firm or other parties listed in the register maintain under
 Section 301 and/or from the Companies under the same Management as
 defined under Section 370 (1B) of the Companies Act, 1956.
 
 8. The Company has not granted, any loans secured or unsecured to the
 Companies. Firm on other parties listed in the register maintain under
 Section 301 and/or from the Companies under the same Management as
 defined under Section 370 (1B) of the Companies Act. 1956.
 
 9. In respect of Loans and Advances in the nature of loans given by the
 Company parties have repaid the principal amount as stipulated and also
 have been regular in payment of the Merest wherever applicable.
 
 10. In our opinion and according to the information and explanations
 given to us there are not 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
 sate of goods.
 
 11. In our opinion and according to the information and explanations
 given to us the prices paid for purchase of goods and materials & sale
 of goods material and services, made in purchase of contracts or
 arrangements 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 are reasonable having regard to the
 prevailing market prices as transaction for similar goods or services
 have been made with other parties.
 
 12. As explained to us. the company has 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. The Company does not accept any deposits, to which the provision of
 Section 58-A of the Companies Act, 1956 and the rules framed there
 under are applicable.
 
 14. In our opinion, reasonable records have not been maintained by the
 Company for the sale and disposal of scrap. The Company has no
 by-products.
 
 15. 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 business
 with regard to purchase of Stores, Raw Materials including Components,
 Plant and Machinery, Equipment and other assets.
 
 16. We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209(1)(d) of the Companies
 Act, 1956 to respect of the Company's products to which the said rules
 applicable and are of the opinion that prima facie the prescribed
 records have been made and maintained. We have however, not made a
 detailed examination of the said records with a view to determine
 whether they are accounts are complete.
 
 17. According to the records of the Company Employees State Insurance
 dues have been regularly deposited during the year with the appropriate
 authorities. And the Company has compiled with the formalities under
 the Provident Fund Act.
 
 18. According to the information and explanation given to us and the
 records examined by us no personal expenses have been charged to
 revenue account, other that those payable under contractual obligation
 or in accordance with generally accepted business practice.
 
 19. According to the records of the Company, there were no undisputed
 amounts payable in respect of Income-Tax. Wealth Tax, Sates Tax,
 Customs duty and Excise Duty outstanding as at 31st March, 2003 for a
 period of more that Six months from the date they become payable.
 
 20. The Networth of the Company as on 31.03.2003 of Rs.1139.04 lacs
 been fully eroded by accumulated losses of Rs. 1142.24.  However the
 Company will complete it's 20 years on 31.03.2003 and hence it will
 require to file its reference application to Board for Industrial and
 Financial Reconstruction in terms of provisions of Section 15(1) of the
 Sick Industrial Companies (Special Provisions) Act, 1985.
 
 21. In respect of Trading activities according to information and
 explanation given to us there were no damaged goods of significant
 value.
 
                                         For Bharat Parikh & Associates
                                                  Chartered Accountants
 
                                                          Bharat Parikh
                                                                Partner
 
 Place: Vadodara
 Date : 9th August. 2003