SUPRIYA PHARMACEUTICALS LIMITED
ANNUAL REPORT 2002-2003
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 Company's 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 (Auditor's 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
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
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
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 Company's 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,
consumption's 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
(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
Place: New Delhi (M. S. Agarwal)
Date: 11.11.2003 Partner