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CHARTERED ACCOUNTANTS
________________________________________________________________________________
269, CCCCC
________________________________________________________________________________

A U D I T O R'S R E P O R T
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TO THE MEMBERS OF
XXXXX

We have audited the attached Balance Sheet of EMA LUBES (PVT) LTD. as at
31st March 2004 and the Profit and Loss Account for the year
ended on that date annexed thereto. These financial statements are the
responsibilty 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 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.

1) As required by the Companies (Auditor's Report) Order, 2003, issued

by The Central Government of India in terms of Section 227(4A) of
the Companies Act,1956, we give, in the Annexure, a statement on the
matters specified in paragraphs 4 and 5 of the said Order.

2) Further to our comments in the Annexure referred to in Paragraph 1

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
purposes of our audit;

b) In our opinion, proper Books of Account as required by law have

been kept by the Company so far as it appears from our
examination of the books;

c) The Balance Sheet and Profit & Loss Account referred to in this
Report, are in agreement with the Books of Account;

d) In our opinion,the Balance Sheet and the Profit and Loss Account
comply with the Accounting Standards referred to in Section
211(3c) of the Companies Act, 1956, save for Note 8 of Schedule
'H' regarding non compliance with AS-2 issued by ICAI, the
effect of which is not calculated, but is not expected to be
 material.

e) In our opinion and based on written representation made by all

directors of the company and taken by the board on record and
the information and explanation as made available to us by the
company none of the directors of the company prima facie have
any disqualification as referred to in clause (g) of subsection
(1) of section 274 of the Companies Act 1956.

f) In our opinion and to the best of our information and according

to the explanations given to us,the said accounts, read together
with the Notes thereon 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 31st March, 2004 and

(ii) In the case of Profit and Loss Account, of the loss of the
Company for the year ended on that date.

FOR XXX
CHARTERED ACCOUNTANTS

DATE : 25/08/2004 ( CCCCC)

PLACE : PUNE PARTNER
M.NO. :
XXXXX

CHARTERED ACCOUNTANTS
________________________________________________________________________________

269, CCCCC
________________________________________________________________________________

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE ON THE

ACCOUNTS OF XXXXX. FOR THE YEAR ENDED 31ST MARCH, 2004

(i) (a) The Company has maintained partial records showing some
particulars including quantitative details and situations of
some of the Fixed Assets.

(b) The management has physically verified these assets during the
year and no material discrepancies were noticed on such
verification.

(c) There were no fixed assets which were disposed off during the
year and hence going concern assumption not affected.

(ii) (a) The inventory has been physically verified during the year by
the Management at reasonable intervals.

(b) According to the information and explanations given to us, in

our opinion, the procedures of physical verification of stock
followed by the Management are reasonable and adequate in
relation to the size of Company and the nature of its business.

(c) The company is maintaining proper records of inventory and the

discrepancies noticed on physical verification of inventory,
as compared to the records, were, in our opinion, not material.

(iii) The company has not granted or taken any loans secured or unsecured
to / from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Sub clause
(b),(c) and (d) of para 4 (iii) of Companies (Auditor's Report) Order
2003 are not applicable.

(iv) 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 regards to purchase of inventory, fixed assets and for
sale of goods. No weaknesses noticed during the course of audit.

(v) On the basis of our examination of the books of account, the company
has not entered into any transaction exceeding Rs.5.00 Lakhs in
respect of any party during the financial year that need to be
entered in the register pursuant to Section 301 of the Act.
 Accordingly clause 4(v)(b) of the Order is not applicable.

(vi) According to the information and explanations given to us, the

Company has not accepted any deposits from the Public to which the
provisions of Section 58A and 58AA of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975 are applicable.

(vii) In our opinion and having regard to the Company's size, the volume
of transactions and nature of operation, a formal internal audit
system is not necessary/applicable.

(viii) The Central Goverment has not prescribed maintenance of cost records
under Section 209(1)(d) of the Companies Act, 1956 for any of the
products of the company.

(ix) According to the information and explanations given to us, and

according to the books and record as produced and examined by us, in
our opinion the undisputed statutory dues in respect of Provident
Fund, Investor Education and Protection Fund , Employees State
Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise
Duty, Cess and other material statutory dues as applicable have been
regularly deposited by the company during the year with appropriate
authority and there are no dues which have remained outstanding as
at 31st March, 2004 for a period of more than six months from the
date they became payable except :

Particulars Amount
----------- ------
Sales Tax Rs.24,366 ( Y.E. 31/03/2000)

(x) The accumulated losses of the company at the end of the financial
year are more than 50% of its net worth. The company has
incurred cash losses during the period. However, in the financial
year immediately preceeding the period covered by the report, no
cash losses were incurred.

(xi) The company has availed of cash credit facility from a bank. There
is no default in operation of the said account.

(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 company has not given any guarantee for loans taken by others
from bank or financial institution, the terms and conditions whereof
are prejudicial to the interest of the company.

(xiv) The company has not obtained any term loans. Accordingly para 4
(xvi) of the Order is not applicable.

(xv) On the basis of review of utilization of funds on overall basis,

related information as made available to us by the management, there
are no funds raised on a short-term basis which have been used for
 long-term investment and vice-versa.

(xvi) The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956 during the year.

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

(xviii)The provisions contained in para 4 (xiii), (xiv), (xix) and (xx) of

the Companies (Auditor's Report) Order, 2003, issued by the Central
Government of India, were not applicable to the company.

CHARTERED ACCOUNTANTS

DATE : 25/08/2004 ( )
PLACE : PUNE PARTNER
M.NO :