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 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 of India (the Act) and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we further report that:

0) a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) The fixed assets of the company have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year.

(ii) a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and the same has been properly dealt with in the books of account.

(iii) a) The company has taken unsecured loans from two companies covered in the register maintained under Section 301 of the Companies Act, 1956. As per arrangement with those companies the amount has been drawn as per requirement.The maximum amount drawn during the year was Rs. 69.15 Lacs and the year end balance was Rs. 3.76 Lacs. The company has granted loans to two companies covered in the register maintained under Section 301 of the Companies Act, 1956.The maximum amount outstanding during the year was Rs. 1.89 Lacs and year end Balance was Nil.

b) In our opinion and according to information and explanations given to us the rate of interest and other terms and conditions on which said loans have been taken or granted are prima facie not prejudicial to the interest of the company.

c) The Company has repaid the principal amount as stipulated and has been regular in the payment of interest for the loan taken by it. In case of loan granted by the company neither principal amount or interest is due as per terms of the loan.

d) There are no overdue amounts of principal and interest in respect of the said loans,

(iv) In our opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across not have been informed of any major weaknesses in the aforesaid internal control procedures.

(v) a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register in pursuance to Section 301 of the Act, have been so entered.

b) In our opinion and according to the information and explanations given to us, there are no transactions made pursuance of contracts or arrangements entered into the register in pursuance of Section 301 of the Act exceeding the value of Rupees Five Lacs in respect of any party during the year.

(vi) The company has not accepted any deposits from the public within the meaning of Sections 58A and 54AA of the Act and the rules framed thereunder,

(vii) In our opinion, the company has an internal audit system commensurate with its size and nature of its business.

(viii) The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the company.

(ix) a) According to the information and explanations given to us and the records of the company examination by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales tax, wealth tax, customs duty, cess and other material statutory dues, as applicable, with the appropriate authorities and no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31 st March, 2005 for a period of more than six month.

b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of Sales Tax, Ihcome Tax, Customs Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute (without considering cases wherein the disputed dues have been paid under protest and net of demands raised which have been adjusted by the appropriate authorities against the fund of some other year(s) due to the company).

(x) The company has no accumulated losses as at March 31,2005 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institutions as at the balance sheet date, (xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statutes applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the company.

(xiv) In our opinion the Company is not a dealer in shares, securities, debentures and other instruments.

(xv) In our opinion, and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xvi) The company has not taken any term loans during the year.

(xvii) On the basis of an overall examination of the Balance Sheet of the company, in our opinion and according to the information and explanation given to us, there are no funds raised on a short term basis which have been used for long term and vice-versa,

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

(xix) The company has not raised any money by public issue during the year.

(xx) During the course of our examination of the books and records of the company, carried out in accordance with the generally accept auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, notice or reported during the year, nor have we been informed of such case by the management.

4. Further to our comments 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 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 those books;

c) The Balance Sheet and Profit and Loss Account and Cash Row Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and Profit and Loss and Cash Row Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

e) On the basis of written representations received from the directors, as on March 31,2005 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2005 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 said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and 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 March 31, 2005;

(ii) in the case of Profit and Loss Account, of the profit for the year ended on that date. (iii) in the case of the Cash Row Statement of the Cash Flows for the year ended on that date.

                                            For A. PANDEY & ASSOCIATES
                                                 Chartered Accountants

                                                                  Sd/-
Date : 25.07.2005                            ICAI Membership No. 52873