Auditor's report on financial statement of Chimfarm JSC (Kazakhstan) for 2001-2002

/KASE, September 2, 03/ - Chimfarm JSC (Shymkent), whose shares are circulating in Kazakhstan stock exchange's (KASE) official "B" listing category, has presented KASE auditor's report, which was made by Ernst & Young (Almaty), which was made in accordance with the company's financial statement for 2001-2002 prepared in compliance with international accounting standards. According to auditor's report the result of the company's financial and economic activity as of December 31 of 2001 and 2002 is as follows (in th. KZT, unless otherwise indicated): --------------------------------------------------------------- as of as of Показатель Jan. 1, 02 Jan. 1, 03 --------------------------------------- ---------- ---------- Authorized capital (paid) 1,557,675 1,557,675 Shareholders' equity 1,621,392 1,845,810 Total assets 3,429,231 3,763,931 Net working capital 488,688 -646,743 Accounts receivable (net) 306,003 370,434 Total liabilities 1,807,839 1,918,121 Attracted credits 1,414,304 1,356,804 Accounts payable 393,535 561,317 Sales volume 1,126,979 1,442,209 Cost of goods sold 830,938 973,988 Net income for the period 32,799 35,165 --------------------------------------- ---------- ---------- It's been calculated by auditor's data: --------------------------------------- ---------- ---------- Return on sales (ROS), % 26.27 32.47 Return on equity (ROE), % 2.02 1.91 Return on assets (ROA), % 0.96 0.93 Book value of one share, tenge 317.13 361.02 Earning per share (EPS), tenge 6.38 6.88 --------------------------------------------------------------- Audit of the financial statement of Chimfarm JSC, which was prepared in compliance with international accounting standards, was conducted by Ernst & Young in compliance with international auditing standards. As the company keeps books and compiles the financial statement in accordance with Kazakhstan accounting standards, its financial statement was correspondingly corrected by the auditor in order to bring it in conformity with international accounting standards. Ernst & Young notes in its' report: Auditors didn't observe conducting of stock-taking of the company's inventory as of December 31 of 2002 and 2001 in the amount of KZT842,271 th. and KZT667,104 th. correspondingly, as these dates forwent to the date of their appointment by auditors, and also didn't have opportunity to make sure regarding their quantity by means of other auditing procedures. On the reason the mentioned residues are taken into account during determination of the results of financial and economic activity, auditors could not determine if there was the necessity to correct results of the company's financial and economic activity for the accounting years. Also auditors didn't have opportunity to make sure in the presence and estimation of some fixed assets, which were purchased by the company before 1997, residual value KZT185,919 th. and KZT354,682 th. as of December 31 of 2002 and 2001 accordingly, as the result of absence of documents confirming the purchasing price, and absence of independent estimation of fixed assets data by the mentioned dates. Therefore the auditors couldn't determine correctness of the reflection of fixed assets by the mentioned dates, and also correctness of calculation of expenses for depreciation, revaluation fund, deferred income tax expenses. Auditors couldn't receive confirmation regarding loan indebtedness to the Ministry of finance of Kazakhstan in the amount of KZT104,534 th. as of December 31 of 2002 and 2001. Besides, the auditor's report notes that the company in contravention of some (standards) of international accounting standards: didn't acknowledge fines regarding overdue of loan indebtedness in the amount of KZT184,365 th. for the year, which ended on December 31 of 2001; didn't acknowledge liabilities concerning the tax at the source, which are concerned with interests, and fines for untimely payment of loan indebtedness in the amount of KZT40,521 th. and KZT147,452 th. as of December 31 of 2002 and 2001 accordingly. didn't acknowledge liabilities concerning deferred income tax in the amount of KZT315,555 th. and KZT190,917 th. as of December 31 of 2002 and 2001 accordingly. didn't acknowledge the interests expenses regarding loan indebtedness in the amount of KZT101,933 th. for year, which ended on December 31 of 2002; re-imposed fines regarding the overdue loan indebtedness in the amount of KZT85,685 th. and didn't acknowledge interests expenses regarding loan indebtedness in the amount of KZT101,933 th. for year, which ended on December 31 of 2002. Taking into account the above-mentioned, the auditors don't express their opinion regarding the financial statement of Chimfarm JSC for years, which ended on December 31 of 2002 and 2001. Company's primary activities - production of drugs; quality control and conducting of certification tests of drugs, ethyl alcohol and distillery production by the laboratory, which has passed accreditation; sale of chemical-pharmaceutical preparations, medical, sanitary-hygienic means and medical makings; preparation, purchasing of medical raw stuff; production and sale of other goods. [2003-09-02]