supriya pharmaceuticals ltd share price Auditors report

SUPRIYA PHARMACEUTICALS LIMITED ANNUAL REPORT 2002-2003 AUDITORS REPORT To the Shareholders) We have audited the attached Balance Sheet of M/s SUPRIYA PHARMACEUTICALS LTD as at 30th September, 2003 and also the Profit & Loss Account of the period ended on that date. 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. 1) We have conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan & perform the audit to obtain reasonable assurance about whether the financial statements are free from any material misstatement. An audit includes examining on a test basis, evidence supporting the amounts & 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. 2) As required by the manufacturing and other Companies (Auditors Report) order, 1988 issued by the Company Law board in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement of the matters specified in paragraph 4 & 5 of the said order. 3) Further to our comments it the annexure referred to above, we report that a) We have obtained all the information & explanations which to the best of our knowledge & belief were necessary for the purpose of our audit. b) In our opinion, proper books of accounts as required by law have been kept by the company so far as re-appears from our examination of such books of accounts. c) The attached balance sheet and Profit & Loss Account are in agreement with the books of accounts d) In our opinion, the Profit and Loss Account and Balance Sheet generally comply with Mandatory Accounting Standards. e) On the basis of written representations received from the directors of the company and taken on record by the board none of the directors as at 30 September 2003 are disqualified from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act 1956. The Company has recognised Deferred Tax Assets on 30.09.2003 amounting to Rs.157.97 lacs on carried forward Business Losses. Since the Deferred Tax Assets have been created based on futures projections. we are unable to express any opinion on such assets and their consequent impact, if any. Subject to above, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and the Profit & Loss Account read together with the notes thereon. give the information required by the Companies Act 1956, in the manner so required and gives a true and fair view: (i) In so far as it relates to Balance Sheet, of the state of affairs of the Company as at 30th September 2003 and, (ii) In so far it relates to the Profit and Loss Account, of the profit of the Company for the period ended on that date. For Doogar & Associates Chartered Accountants Sd/- Place: New Delhi (M. S. Agarwal) Date: 11.11.2003 Partner As required by the Manufacturing and other Companies (Auditors Report) Order, 1966, Issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we further report that: - 1. The Company has maintained proper records showing full particulars, including quantitative details and location of fixed assets. Most of the Fixed Assets have been physically verified by the management during the period, at reasonable intervals. As explained to us no discrepancies were noticed on such verification. 2. None of the Fixed Assets have been revalued during the year. 3. The Stocks of Finished goods, Work in progress, raw materials and other consumbles lying at its location have been physically verified by the Management at reasonable intervals. 4. In our opinion the procedure followed by management for physical verification of stocks are reasonable and adequate in relation to the size of the Company and the nature of its business. 5. The discrepancies noticed on physical verification of stocks as compared to the book records were not significant and have been properly dealt with in the books of accounts. 6. In our opinion, the valuation of stocks is fair and proper in accordance with the normally accepted accounting principals and is on the same basis as in the preceding year. 7. The Company has taken interest free unsecured loans from various corporates. The terms & conditions of such loans, prima facie, in our opinion are not prejudicial to the interest of the Company. 8. The Company has not granted any loans to Companies, Firms or other parties listed in the register maintained under section 301 of the Companies Act 1956. 9. The Parties / employees to whom loans or advances in the nature of loans has been given by the Company are repaying the principal amounts as stipulated and are also regular in the payment of interest where ever applicable, as stipulated. 10. 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 purchase of stores, raw Materials, (including Components), Plants and Machinery, Equipment and other assets and for the sale of goods. 11. In our opinion and according to the information and explanations given to us, the transactions for purchase of goods and materials / services and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and aggregating during the period to Rs. 50000/- or more in respect of each party, have been made at price which are reasonable having regards to prevailing market prices for such goods, materials or services, where such market prices are available with the Company or the prices at which transactions for similar goods or services have been made with other parties. 12. As explained to us, though the company has a regular procedure for the determination of unserviceable or damaged stores, raw materials and finished goods but identification o/ obsolete stocks forming part of total inventory has not been made & not provided for. 13. The company has not accepted any deposits from the public hence the provisions of Section 58A of the Companies Act, 1958 and the rules, made thereunder do not apply. 14. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of scrap generated out of finished products. There are no by-products. 15. In our opinion, the Company has an in house internal audit system commensurate with the size and nature of its business. 16. We are informed that maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956, in respect of the Companys products. 17. According to the records of the Company and explanations given to us. the dues of Provident Funds and Employees State insurance have been deposited with delays during the period with the appropriate authorities, and the outstanding amount of provident fund and Employees State Insurance amounting to Rs. 3,11,194/- & Rs. 2,15,226/- respectively as on 30.09.2003 have not been deposited with appropriate authorities. 18. There are no undisputed amount of Sales tax, Custom Duty and Excise Duty outstanding as at 30th September, 2003, for a period of more than six months from the date they became payable, except as mentioned in the schedule-24 to the notes to accounts. 19. In our opinion and according to information and explanations given to us and during the course of our examination of the books of accounts carried out in accordance with generally accepted auditing practices, we have not come across any personal expenses which have been charged to Profit and Loss Account other than those payable under contractual obligation or in accordance with generally accepted business practices. 20. The Company was a Sick Industrial Company within the meaning of clause (O) of Sub-section (1) of the Section 3 of the Sick Industrial Companies (Special Provisions) Acts. 1985 and as on 30.09.2003 the networth of the company has become positive. 21. In case of Service Activities (i) The Company has a reasonable system of recording receipts, issues an, consumptions of materials and stores commensurate with its size and nature of business in case of work done on job processing basis. Though allocation of materials consumed is not made to relative jobs, in our opinion, control has been exercised by the jobs. (ii) Allocation of man hours utilised is not made to relative jobs. However in our opinion, control has been exercised on total man-hours utilised on the jobs. (iii) The Company has reasonable system for authorization at proper level with necessary control on the issue of stores and as stated in (I) above, though allocation of stores and labour to jobs is not made, in our opinion. control has been exercised on the total materials and labour consumed on the jobs The Company has a system of internal control commensurate with its size and nature of business. For Doogar & Associates Chartered Accountants Sd/- Place: New Delhi (M. S. Agarwal) Date: 11.11.2003 Partner