ebers pharmaceuticals ltd Auditors report

EBERS PHARMACEUTICALS LIMITED ANNUAL REPORT 2000-2001 AUDITORS REPORT To the Members of EBERS PHARMACEUTICALS LIMITED We have audited the attached Balance Sheet of Ebers Pharmaceuticals Limited as at 31st March, 2001 and the annexed Profit & Loss Account for the year ended on that date and report that :- 1. 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. 2 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 such books. 3. The Balance Sheet and Profit & Loss Account referred to in this report are in agreement with the books of account. 4. In our opinion, the Profit and Loss Account and Balance Sheet comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. 5. On the basis of the written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2001 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Company Act. 1956. 6. In our opinion and to the best of our information and according to explanations given to us, the said Balance Sheet and Profit & Loss Account subject to (i) note No. 2 in Schedule 18 regarding non provision of the doubtful debts and advances to the extent of Rs. 60.60 lacs. ii) Guarantees given by the company referred in note no.3 are in excess of the limits specified in Section 372A of the Companies Act 1956 to the extent of Rs.10.00 crores iii) the Cash on hand of Rs. 4,13,590/- as on 31.3.2001 as shown in Schedule - 9 to the Balance Sheet was not verified by us: and 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 a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2001 and b) in the case of the Profit & Loss Account, of the loss for the year ended on that date. 7. As required by the Manufacturing & Other Companies (Auditors Report) Order 1988. issued by the Central Government and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we report as under :- i) The Company has maintained records showing full particulars including quantitative details and situation of fixed assets except for the Plant & Machineries and Furniture and Fixtures installed at Companys Plant situated at Rabale, Thane Belapur Road, Thane. We were informed that the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies have been noticed on such verification. However Plant & Machineries and Furniture & Fixtures have been kept in dismantled condition, the same could not be verified by us. ii) None of the fixed assets of the company have been revalued during the year. iii) Physical verification has been conducted by the management at periodical intervals in respect of finished goods and raw materials. iv) The procedures followed by the Management for such physical verification are, in our opinion, needs to be strengthened as to its frequencies so as to be commensurate with its size and nature of its business. v) The material discrepancies noticed on such verification between the physical stock and the book records have been properly dealt with ire the books of account. vi) In our opinion, the valuation of stock is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceeding year. vii) The Company has taken unsecured loans from companies, firms or other patties listed in the register maintained under Section 301 of the Companies Act, 1956. The terms and conditions of such loans are not prima facie prejudicial to the interest of the Company. As explained to us there are no companies under the same management as defined under Sub-section (IB) of Section 370 of the companies Act, 1956. viii) The Company has not granted any loans secured or unsecured to Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. As explained to us, there are no Companies under the same management as defined under Sub-section (IB) of Section 370 of the Companies Act, 1956. ix) In respect of loans or advances in the nature of loans given by the Company, to the employees as interest free advance the employees are generally repaying the principal amounts as stipulated. As regards advances given to others to the extent of Rs. 3.77 lacs no amount is repaid during the year and is considered doubtful of recovery. x) There are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of raw material, equipment and other assets and sale of goods. xi) According to the information and explanations given to us, there have been no transactions entered into during the year with different parties for purchase and sale of goods in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act. 1956 and aggregating during the year to Rs.50,000 or more in respect of each party. xii) The Company has neither determined nor made any provision tot the loss on account of any unserviceable or damaged raw material or finished goods. xiii) The Company has not accepted deposits during the year. xiv) The Companys operations do not generate any realisable by products. In our opinion reasonable records have been maintained by the company for the sale and disposal of scrap. xv) The internal audit system of the Company needs to be strengthened as to its scope and frequency so as to be commensurate with size and nature of its business. xvi) The Company has not maintained cost records as prescribed by the Central Government under Section 209(1)(d) of the Companies Act. 1956. xvii) According to the information made available to us there have been delays in depositing Provident fund and Employees State Insurance dues with concerned authorities. xviii)According to the information and explanations given to us and the books and records examined by us, there are no undisputed amounts payable in respect of income tax, sales-tax, customs and excise duty outstanding as at the Balance Sheet date for a period exceeding six months from the date they become payable, xix) According to the information and explanations given to us, no personal expenses of employees or Directors have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business practice. xx) We were informed that the Company being in the SSI sector, the provisions of the Sick Industrial Companies (Special Provisions) Act. 1985 are not applicable as provided in Section 3(1)(f) of the said Act. xxi) In respect of Companys trading activity, according to the explanations given to us, no damaged goods have been determined. for J. D. PADWAL & CO. Chartered Accountants J. D. PADWAL Proprietor Mumbai: 30.08.2001