Datt Mediproducts Ltd

TO THE MEMBERS OF DATT MEDIPRODUCTS LIMITED

1. We have audited the attached Balance Sheet of DATT MEDIPRODUCTS LIMITED, as at 31st March, 2004 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. 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.

2. 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 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 (Auditor's Report) Order, 2003 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 a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that

(i) 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;

(ii) 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;

(iii) The Balance Sheet, Profit and Loss Account and Cash Row Statement dealt with by this report are in agreement with the Books of Account;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards except Accounting Standard 22 regarding accounting for Taxes on Income (refer point no.5 of Notes on accounts In Schedule 15) referred to in Sub-Section (3C) of Section 211 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 accounts subject to note no. 5 of Notes on accounts In Schedule 15 regarding non provision of deferred tax liability, give the information required by the Companies Act 1956, in the manner so required and give a true and fair view in confirmity with the accounting principles generally accepted in India;

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2004;

(b) In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the Cash flows for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF DATT MEDIPRODUCTS LIMITED

1. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

2. The assets have been physically verified by the management during the year and there is a regular programme of verification, which in our opinion, is reasonable having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such verification.

3. During the year, the company has not disposed of a major part of the plant and machinery based on the information and explanation given by the management and on the basis of audit procedures performed by us.

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

5. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

6. On the basis of our examination of the records of the inventory, we are of the opinion that the company is maintaining proper records of inventory.

7. The Company has taken secured and/or unsecured loan from two companies covered in the Register maintained under Section 301 of the Companies Act, 1956. The year end balance of the loans taken from such companies was Rs. ('000) 86.400.00.

8. The company has not granted any secured and/or unsecured loans to companies, firms and other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

9. In our opinion the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the registers maintained under Section 301 are not prima facie, prejudicial to the interest of the company.

10. The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

11. There is no overdue amount of loans taken from or granted to companies, firms or other parties listed in the registers maintained under Section 301 of the Companies Act, 1956.

12. 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 regard to the purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

13. Based on the audit procedures applied by us and according to the information explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 have been so entered.

14. In our opinion and according to the information and explanations given to us, no transactions have been made in pursuance of contracts or arrangements with companies, firms or other parties covered in the registers maintained under Section 301 exceeding the value of five lakh rupees in respect of any party during the year.

15. In our opinion and according to the information and explanations given to us, the company has not accepted any deposit from public.

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

17. The Central Government has not prescribed maintenance of Cost Records under Section 209 (1)(d) of the Companies Act, 1956.

18. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees' state insurance, income-tax, sales tax, wealth tax, custom duty, excise duty, cess and other statutory dues applicable to it.

19. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding, as at 31st March, 2004 for a period of more than six months from the date they became payable.

20. According to the records of the company, there are no dues of sales tax, income-tax, customs duty/wealth tax, excise duty/cess which have not been deposited on account of any dispute.

21. The company does not have accumulated losses as at 31st March 2004 and has not incurred cash losses during the financial year ended on that date or in the immediately preceding financial year.

22. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to a financial institution or bank.

23. Based on our examination of documents and records, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

24. The company has not given any guarantee for loans taken by others from bank or financial institutions.

25. Based on our examination of documents and records, the company has not taken any term loan.

26. Based on our examination of the balance sheet of the company as at 31st March, 2004, we are of the opinion that the company has not used funds raised on short term basis for long term purposes and vice-versa.

27. 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.

28. The Company has not issued any debentures.

29. The Company has not raised any money by public issue during the year.

31. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.