DRIVIN G ROWTH - Dr. Reddy's

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annexure to the auditors’ report
(Referred to in paragraph (1) of our report of even date)
1. The Company is in the process of compiling proper records showing full particulars including quantitative details and location of
fixed assets. All the fixed assets have been physically verified by the Management during the year and to the best of our knowledge
no serious discrepancies have been noticed on such verification.
2. None of the fixed assets have been revalued during the year.
3. The stocks of finished goods, stores, spare parts and raw materials have been physically verified during the year by the
Management. In our opinion, the frequency of verification is reasonable.
4. The procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
5. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been
properly dealt with in the books of account.
6. On the basis of our examination of stock records, we are of the opinion that the valuation of stocks is fair and proper in accordance
with the normally accepted accounting principles
7. The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the Register required
to be maintained under section 301 and 370(1C) of the Companies Act, 1956, the rate of interest and other terms and conditions
of such loans are prima facie prejudicial to the interest of the Company.
8. The Company has not granted any loans to companies, firms or other parties listed in the registers maintained under section 301
and 370(1C) of the Companies Act, 1956.
9. The Company has not given loans and advances in the nature of loans to any parties excepting staff of the Company who are
repaying the principal 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, plant and machinery, equipments, other assets and with regard to the sale of goods.
11. In our opinion and according to the information and explanations given to us, the Company has not purchased any stores, raw
materials and components exceeding Rs. 50,000/- in value of each type thereof from firms, companies or parties in which the
Directors are interested during the year.
12. As explained to us, the Company has a regular procedure for the determination of unservicable or damaged stores, raw materials
and components and necessary adjustments for the loss has been made in the accounts.
13. The Company has not accepted any deposits from public during the year.
14. In our opinion, reasonable records have been maintained by the Company for sale and disposal of realisable scrap wherever
significant. There is no by product, arising out of the manufacturing process of the Company.
15. In our opinion, the internal audit system of the Company needs to be further strengthend to commensurate with the size and
nature of its business.
16. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that
prima facie the prescribed accounts and records have been maintained. We have not however made a detailed examination of the
records with a view to determining whether they are accurate or complete.
17. According to the records of the Company, Provident Fund and Employees’ State Insurance dues have been regularly deposited
during the year with the appropriate authorities.
18. According to information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales-Tax,
Customs Duty and Excise Duty were outstanding as at March 31, 2002 for a period of more than six months from the date they
became payable.
19. According to the information and explanations given to us, no personal expenses of employees or Directors have been charged to
the revenue account, other than those payable under contractual obligations or in accordance with generally accepted business
practices.
20. The Company is not a sick industrial company within the meaning of clause (o) of sub-section (1) of section 3 of the Sick Industrial
Companies (Special Provisions) Amendment Act, 1993.
For A RAMACHANDRA RAO & CO.
Chartered Accountants
Hyderabad A RAMACHANDRA RAO
June 4, 2002 Partner
COMPACT ELECTRIC LTD. | FINANCIALS | ANNUAL REPORT 2001-2002