We have examined the Balance Sheet of Vishal Footwear Limited as at
 31st March, 2002 and Profit and Loss Account annexed thereto for the
 year ended on that date.  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
 audit to obtain reasonable assurance about whether the financial
 statements are free of material mis-statement.  An audit includes
 examining on a test basis, evidence supporting the amounts and
 disclosure in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by managements, as well as evaluating the overall financial statement
 presentation. We believe that our audit provided a : reasonable basis
 for our opinion.
 
 1. 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 various matters specified in the paragraph 4 and 5 of
 the said order to the extent applicable.
 
 2. Further to our comments in the Annexure referred to in paragraph (1)
 above, we also report that:
 
 a) 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.
 
 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 the
 books.
 
 c) The Balance Sheet and Profit & Loss Account dealt with by this
 report are in agreement with the books of account.
 
 d) In our opinion the, the Profit & Loss Account and Balance Sheet
 comply with the mandatory Accounting Standards specified by the
 Institute of Chartered Accountants of India and as referred to in
 Sub-section (3C) of Section 211 of the Companies Act, 1956.
 
 3. In our opinion and to the best of information and according to the
 explanations given to us, the said accounts, subject to Note B-10 of
 Schedule 9 regarding non-provision of interest amounting to Rs.
 1,36,49,372.87 in the accounts, read together with the Notes on
 Accounts as per Schedule 9, 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 :
 
 i.  In the case of Balance Sheet, of the state of affairs of the
 Company as at March 31, 2002.
 
 ii.  In the case of Profit & Loss Account, of the loss of the Company
 for the year ended on that date.
 
                                            for ADITYA & ASSOCIATES
                                             Chartered Accountants
 
 New Delhi,                                       (A.B.GUPTA)
 27th August, 2002                                  Partner
 
 ANNEXURE TO THE AUDITORS' REPORT
 
 Annexure referred to in paragraph 1 of our report of even date to the
 members of VISHAL FOOTWEAR LIMITED on the Accounts for the year ended
 March 31, 2002.
 
 1.  The Company is under the process of updating its Fixed Assets
 records. All the Fixed Assets of the Company, as informed to us, were
 physically verified by the management during the year.  As the Fixed
 Assets record is not yet updated, descrepancy between book records and
 physical verification, if any, is not yet ascertained. In our opinion,
 the frequency of the physical verification of Fixed Assets is
 reasonable having regard to the size of the Company and the nature of
 the Fixed Assets.
 
 2. The Fixes Assets of the Company have not been revalued during the
 year.
 
 3. The Company has taken interst free unsecured loans from directors of
 the Company. The other terms and conditions of such loans are not,
 prima fade, prejudicial to the interests of the Company.
 
 4. The Company has not given any loan, secured or unsecured, to the
 Companies, Firms or other parties listed in the register maintained
 under Secton 301 of the Companies Act, 1956. The provisions of Section
 370 (1-B) of the Act, are not applicable to a Company on or after 31st
 October, 1998.
 
 5. The Company has given interest free loans or advances in the nature
 of loans to certain parties.
 
 6.  In our opinion and according to the information and explanation
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business for the purchase of plant & machinery, equipments and other
 assets.
 
 7.  According to the information and explanations given to us there
 were no transactions of purchase and sale of goods, materials and
 services with the parties whose names are listed in the register
 mainatained under Section 301 of the Companies Act, 1956 aggregating
 during the year to Rs. 50,000 or more in respect of each party.
 
 8. The Company has not accepted any deposits from the public.
 
 9. The Company has no internal audit system.
 
 10. We were informed that the Company is not required to maintain cost
 records under Section 209(1)(d) of the Companies Act, 1956
 
 11. Provident Fund and Employees State Insurance Scheme are not
 applicable to the the Company.
 
 12. According to the information and explanations given to us and the
 records examined by us, there are no undisputed amounts payable in
 respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise
 Duty outstanding as at March 31,2002 for a period of more than six
 months from the date they became payable.
 
 13. According to the information and explanations given to us, no
 personal expenses of employees or directors have been charged to
 revenue accounts, other than those payable under contractual
 obligations or in accordance with the generally accepted business
 policies.
 
 14. The Company is not a Sick Industrial Company within the meaning of
 section 3(1)(o) of the Sick Industrial Companies (Special Provisions)
 Act, 1985.
 
                                             for ADITYA & ASSOCIATES
                                              Chartered Accountants
 
 New Delhi,                                       (A.B. GUPTA)
 27th August, 2002                                   Partner