We have audited the attached Balance Sheet of PHARMED LIMITED Bombay,
 as at 31st March 2004, and also the Profit & Loss account for the year
 ended on that date annexed thereto. 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 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 (Auditors Report) Order, 2003, issued
 by the Company Law Board in terms of Section 227 (4 A) 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:
 
 1. We have obtained all the information and explanation, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit.
 
 2.  In our opinion, the Company has kept proper books of accounts as
 required by law so far as it appears from the examination of the books.
 
 3.  The Balance Sheet and the Profit & Loss account dealt with by this
 report are in agreement with the books of account.
 
 4.  In our opinion the Balance Sheet and the Profit and Loss Account
 dealt with by this report comply with the Accounting Standards referred
 to in sub-section (3c) of Section 211 of the Companies Act, 1956, to
 the extent applicable.
 
 5.  On the basis of written representations received from the directors
 as on 31.03.2004 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on 31.03.2004 from
 being appointed as a director in terms of clause (g) of sub-section (1)
 of section 274 of the Companies Act, 1956.
 
 6.  In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, read with other 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:
 
 a) In the case of the Balance Sheet, of the State of affairs of the
 Company as at 31st March 2004; and
 
 b) In the case of Profit & Loss account, of the Profit of the Company
 for the year ended as on that date.
 
 ANNEXURE TO AUDITORS REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT
 OF EVEN DATE.
 
 1.  In respect of its fixed assets
 
 a.  The Company has maintained proper records showing full particulars
 including quantitative details and situation of Fixed Assets.
 
 b.  The fixed assets have been physically verified by the management.
 In our opinion the frequency of verification is reasonable. According
 to the information and explanation given to us no material
 discrepancies were noticed on such verification.
 
 c.  The company has not disposed off its substantial part of fixed
 assets during the year.
 
 2.  In respect of inventories
 
 a.  As explained to us inventories were physically verified by the
 management at reasonable intervals.
 
 b.  In our opinion, and according to the information and explanation
 given to us, the procedures of physical verification of inventories
 followed by the management were reasonable and adequate in relation to
 the size of the company and the nature of the business.
 
 c.  In our opinion, and according to the information and explanation
 given to us, the company has maintained proper books of its inventories
 and no material discrepancies were noticed on physical verification.
 
 3.  In respect of loans, secured or unsecured, granted or taken by the
 Company to or from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956,
 according to the information and explanation given to us the company
 has not taken any loans from companies in which directors are
 interested; The Company has not granted any loans to companies, firms
 or other parties covered in the register maintained under section 301
 of the Companies Act.
 
 4.  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 for the purchase of inventory and fixed assets and for the
 sale of goods.  According to the explanation given to us, there are no
 failures to correct the major weaknesses observed in the internal
 control;
 
 5.  In respect of transactions entered in the Register maintained in
 pursuance of Section 301 of the Companies Act, 1956
 
 a.  To the best of our knowledge and belief and according to the
 information and explanations given to us, transactions that needed to
 be entered into the register have been so entered.
 
 b.  The company has not entered in to any transactions exceeding the
 value of five lakh rupees in respect of each party and hence we are not
 required to comment on such transactions.
 
 6.  As per the records and according to the information given to us,
 the company has not accepted any deposits from the public. The Company
 Law Board has not passed any order on the company.
 
 7.  The company did not have internal audit system for the period under
 the audit.
 
 8.  The provisions of section 209 (1) (d) of the Companies Act, 1956,
 regarding maintenance of cost records is not applicable to the Company.
 
 9.  According to the information and explanations given to us, in
 respect of statutory dues and other dues
 
 a.  The Company has been generally regular in depositing undisputed
 statutory dues, with appropriate authorities during the period.
 
 b.  Disputed Sales Tax duty of Rs.3.22 lacs is pending before the
 Commissioner Appeals. The company has deposited an advance of Rs 0.58
 lakhs against the same.
 
 10.  There are no accumulated losses at the end of the year and hence
 clause (x) of the Order is not applicable for the company;
 
 11.  Based on our audit procedures and according to the information and
 explanation given by the management,
 
 the Company has not defaulted in repayment of dues to a financial
 institution or bank or debenture holders.
 
 12.  According to the information furnished to us and verified by us,
 the company has not granted loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities and hence
 clause (xi) of the Order is not applicable to the company;
 
 13.  In our opinion, the company is not a Chit fund or a Nidhi/Mutual
 Benefit Fund/Society. Therefore, the provisions of clause (xiii) of the
 Order are not applicable to the company;
 
 14.  Based on our audit procedures and according to the information and
 explanation given by the management, all investments made by the
 company are held in the companys own name.
 
 15.  According to the information and explanation given by the
 management, the Company has not given any guarantee for loans taken by
 others from bank or financial institutions.
 
 16.  The company has not availed any term loans for the period under
 the audit.
 
 17.  Since the company has not availed any loans other than loans for
 purchase of Motor Vehicles during the period of audit , clause xvii is
 not applicable to the company.
 
 18.  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.
 
 19.  The company has not issued any debentures during the year and
 hence clause (xix) of the Order is not applicable to the company.
 
 20.  The company has not raised any money by way of public issue during
 the year under report and hence clause (xx) of the Order is not
 applicable.
 
 21.  According to the information given by the Management, in the year
 under audit there was a case of misappropriation of funds to the extent
 of Rupees thirty thousands.
 
                                               For GNANOBA & BHAT
                                             CHARTERED ACCOUNTANTS
 
 PLACE: BANGALORE                              (NAVIN NAYAK K.)
 DATE : 31-08-2004                                PARTNER