NAGARJUNA DRUGS LIMITED
ANNUAL REPORT 1999-2000
The Members of
M/s. NAGARJUNA DRUGS LIMITED
We have audited the attached Balance Sheet of M/s. NAGARJUNA DRUGS LIMITED,
BONTHAPALLY as on 31st March, 2000 and the annexed Profit & Loss Account
for the year ended on that date and report that:-
1. As required by 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 enclose in the Annexure a statement on the
matters specified in Paragraphs 4 and 5 of the said Order.
2. Our comments on the accounts are as under:-
i) Reference is invited to note No. 19 under Schedule - Q regarding
confirmation of Balances.
ii) Reference is invited to Note No. 5 under Schedule-Q regarding Sales
iii) No provision for interest is made on the amount outstanding under cash
credit with State Bank of India at the year end. The amount of non-
provision of interest could not quantified as necessary details are not
provided and hence its impact on the loss for the year of the Company could
not reflected in the Accounts.
3. Subject to our observations in the Annexure referred to in Paragraph (1)
and our comments in Paragraph (2) above. 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 our audit.
b) In our opinion, the Company has kept proper books of account as required
by Law so far as it appears from our examination of such books.
c) In our opinion the Balance Sheet and Profit & Loss Account are in
compliance with the accounting standards referred in Section 211 (3) (C) of
the Companies Act, 1956.
d) The Balance Sheet and Profit & Loss Account referred to in this report
are in agreement with the books of account.
e) In our opinion and to the best of our information and according to the
explanations given to us the said Balance Sheet and Profit & Loss Account
read together with the significant accounting policies and notes thereon,
give the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view.
i) In so far as it relates to the Balance Sheet of the state of affairs of
the Company as on 31st March, 2000 and
ii) In so far as it relates to the Profit & Loss Account of the loss of the
Company for the year ended on that date.
for KUMAR & GIRI
Place : Hyderabad, J. BHADRA KUMAR
Date : 27-07-2000. PARTNER.
ANNEXURE REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE
1. Fixed Assets records showing full particulars including quantitative
details and situation of fixed assets are yet to be compiled by the
Company. No physical verification of fixed assets were carried out during
2. The fixed assets have been revalued during the year.
3. The stocks of work-in-process, finished goods, stores,spare parts, raw-
materials and packing materials have been verified by the Management at the
year end and the certificate given by the Management is being relied upon.
4. The procedures of physical verification of stocks followed by the
Management need to be strengthened and streamlined by drawing up a
periodical programme of verification and reporting so as to be reasonable
and adequate in relation to the size of the Company and the nature of its
5. The Company has maintained stock records for the year and we are
explained that there are no material discrepancies between physical
verification of stocks and books records, excepting stocks of work-in-
progress in respect of which the certificate given to that extent by the
Management has been relied upon.
6. According to the information and explanations given to us and subject to
our comment given in clause (5) above, we are of the opinion that the
valuation of stocks is fair and proper and is in accordance with normally
accepted accounting principles. There is no change in the basis of
valuation as compared to previous year.
7. The Company has not taken any loans from the Companies, firms or parties
listed in the register maintained under Section 370(1B) of the Companies
Act, 1956, excepting loans from Directors for which not terms and
conditions are prescribed.
8. The Company has advanced monies to Companies, firms and other parties as
listed in the register maintained under Section 301 of the Companies Act,
1956. The terms and conditions for those advances have not been specified.
9. The Company has not given any loans or advances in the nature of loans.
10. In our opinion and according to the information and explanations given
to us, the internal control procedures for the purchase of stores. raw-
materials and packing materials, plant and machinery, equipment and other
assets and for the sale of goods needs to be strengthened and streamlined
so as to be commensurate with the size of the Company and the nature of its
11. The transactions of Purchase of goods and Materials 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 aggregate during the year to Rs.50,000/- or more in respect of
each party are considered reasonable by comparison with the prevailing
12. As explained to us, the Company has a procedure for the determination
of unserviceable or damaged stores, Raw-materials, Work-in-process and
finished goods. Adequate provision has been made in the accounts for the
loss arising on the items so determined.
13. The Company, has taken accepted any deposits from the public excepting
Unsecured Loans from directors and others and hence there is no compliance
to that extent within the meaning of section 58A of the Companies Act, 1956
and the rules framed thereunder.
14. In our opinion, reasonable records have been maintained by the Company
for the sale and disposal of realisable by product and scrap, wherever
applicable and significant.
15. The Company does not have any internal audit system.-
16. The Central Government has not prescribed maintenance of cost records
under section 209(1) (d) of the Companies Act, 1956 for the products of the
17. The Company is not regular in depositing the Employees State Insurance
and Provident Fund dues with the appropriate authorities. As at 31-03-2000
an amount of Rs. 85.943/- is outstanding on payable towards PF and Rs.
32,959/- towards ESI.
18. According to the information and explanations given to us there are no
undisputed amounts payable in respect of Income Tax, Customs Duty and
Excise Duty outstanding as at 31st March, 2000 for a period exceeding six
months from the date they became payable. However, sales tax amounting to
Rs.4.95 lacs is due on 31-03-2000 which includes its. 4.59 lacs due for
more than six months.
19. 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 the generally accepted business practice.
20. The Company is a Sick Industrial Company within the meaning of Section
3 (1)(0) of the Sick Industrial Companies (Special Provisions) Act, 1985.
for KUMAR & GIRL
Place : Hyderabad, J. BHADRA KUMAR
Date : 27-07-2000. PARTNER.