TEEM LABORATORIES LIMITED ANNUAL REPORT 2002-2003 AUDITORS' REPORT TO THE MEMBERS OF TEEM LABORATORIES LIMITED We have audited the attached Balance Sheet of Teem Laboratories Lined as on 31st March 2003 and annexed Profit and Loss Account of the Company for the year ended on that date. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on these financial statements based on our audit We conducted our audit n 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 mis-statement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes the accounting principles used and significant estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that our audit subject to notes thereon provides a reasonable basis for our opinion. We report as follows 1. As required by the Manufacturing and Other Companies (Auditor's Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 of India 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 during the course of audit, we give in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order. 2. Further to our comments in the Annexure referred to in paragraph 1 and subject to notes to the accounts 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 the 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 books c) the Balance Sheet and Profit and Loss Account dealt with-by this report are in agreement with the books of account d) in our opinion, the Profit and Loss Account and Balance Sheet of the Company, read with the notes and significant Accounting Policies vide schedule 11, and subject to notes to accounts comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956 e) As per the information explanations and certificate given to us by the management of the company, and relied upon by us, none of the directors of the company are prima facie as of 31st March 2003, disqualified from being appointed as Directors of the company under clause (g) of sub-section (1) Section 27 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 accounts, read with the notes and significant accounting policies thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view i) in the case of the Balance Sheet, of the state of affairs of the company at 31st March 2003; and ii) in the case of the Profit and Loss Account, of the Loss of the company for the year ended on that date. For Jitendra Chandulal Mahta & Co. Chartered Accountants Jitendra Mehta, Proprietor Annexure to the Auditor's Report We reference to the Annexure referred to in paragraph 1 of the report, of the Auditors to the Members of Teem Laboratories Limited on the accounts for the year ended 31st March 2003, we report that :- 1. The company is maintaining proper records to show full particulars including quantitative details and situations of fixed assets. As per explanations given to us, the fixed assets have been physically verified by the management and no serious discrepancies were noticed. 2. None of the fixed assets have been revalued during the year. 3. As explained to us, the physical verification has been conducted by the management at the and of the year in respect of the finished goods, Work in progress, stores, spare parts, raw materials and blocks and cylinders. 4. In, our opinion and according to the information and explanations given to us the procedure physical verification of stocks followed by the Management is reasonable and adequate relation to the size of the company and nature of its business. 5. The discrepancies noted on the physical verification of stocks as compared to book records have been adjusted in the books of accounts. 6. In our opinion and on the basis of our examination of inventory of stocks, the valuation Is fair and proper. 7. The company has taken unsecured loans from parties listed in the register maintained under Section 301 of the Companies Act, 1956. There are no specific terms and conditions on which such loans are taken, as such we are unable to comment whether such loan is prejudicial to the company or not. 8. The company has granted loan to firms listed in the register maintained under Section 301 of the Companies Act, 1956. There is no company under the same management as entered in the register maintained under Section 370 (1 B) of the Companies Act, 1956. There are no specific terms and conditions on which loans are granted and as such we are not in a position to comment whether it is prejudicial to the company or not. 9. The company has not given any loans and advances to its employees during the year. 10. In our opinion and according to information and explanation given to us, there is an adequate Internal control procedures commensurate with the size of the company and nature of its business for the purchase of store, raw materials, components, plant and machinery, equipments and other assets and for the sale of goods. However, during the year under review, there are no purchase or sale transactions. 11. As per Information and explanations given to us, there were no transactions of purchase of goods and materials and sale of goods and materials and services aggregating during the year of Rs. 50,000/- or more in respect of each party. 12. As explained to us, the company has a regular procedure for determination of unserviceable or damaged/deteriorated stores and raw maters. 13. During the year, the company has not accepted any new fixed deposits from the public. Also, we are informed that as there are no public deposits, the company has not filed returns of fixed Deposits with the Registrar of Companies. 14. In our opinion and according to information and explanations given to us, as there was no trading activity during the year the company has not kept an adequate internal audit system commensurate with its size and nature of its business. 15. As Certified by the management, no scrap was generated during the year and therefore, no record for the sale and disposal of scrap has been maintained. 16. We are informed that the maintenance of cost records has not been prescribed by the Central Government under Section 209 (1)(d) of the Companies Act, 1956 for the year under consideration. 17. We report that management states that as there were no employees, the P.F. ACT and E.S.I.C. Act are not applicable for the year under review for audit. 18. According to information and explanations given to us there are more than six months disputed amount of income Tax, as on 31st March 2003. There are no disputed liabilities for sales tax, wealth tax, as on custom duties and excise duties. 19. As per information and explanations given to us, there are no personal expenses which have been charged to revenue account except incurred in the ordinary course for the purpose of business of the company. 20. The Company, subject to notes on depreciation, is not sick industrial company within meaning of Section 3(1)(o) of the Sick Industrial Companies, (Special Provisions) Act, 19$5. For Jitendra Chandutal Mehta & Co. Chartered Accountants Jitendra Mehta Proprietor