核数师报告书

Report of the Auditors2023 991981 90To the membersHong Kong Pharmaceutical Holdings Limited(Incorporated in Bermuda with limited liability)We have audited the financial statements on pages 23 to 99 whichhave been prepared in accordance with accounting principlesgenerally accepted in Hong Kong, other than as set out below.RESPECTIVE RESPONSIBILITIES OFDIRECTORS AND AUDITORSThe Company’s directors are responsible for the preparation offinancial statements which give a true and fair view. In preparingfinancial statements which give a true and fair view it isfundamental that appropriate accounting policies are selected andapplied c onsistently. It is our responsibility to form anindependent opinion, based on our audit, on those financialstatements and to report our opinion solely to you, as a body, inaccordance with Section 90 of the Bermuda Companies Act 1981,and for no other purpose. We do not assume responsibility towardsor accept liability to any other person for the contents of thisreport.BASIS OF OPINIONWe conducted our audit in accordance with Statements ofAuditing Standards issued by the Hong Kong Soc iety ofAccountants. An audit includes an examination, on a test basis,of evidence relevant to the amounts and disclosures in thefinancial statements. It also includes an assessment of thesignificant estimates and judgements made by the directors inthe preparation of the financial statements, and of whether theaccounting policies are appropriate to the Company’s and theGroup’s circumstances, consistently applied and adequatelydisclosed.We planned and performed our audit so as to obtain all theinformation and explanations which we considered necessary inorder to provide us with sufficient evidence to give reasonableassurance as to whether the financial statements are free frommaterial misstatement. In forming our opinion we also evaluatedthe overall adequacy of the presentation of information in thefinancial statements. We believe that our audit provides areasonable basis for our opinion.Hong Kong Pharmaceutical Holdings Limited • Annual Report 2002/20032002/2003 •Report of the Auditors 212222Tin Ming ManagementLimited Hong Tau Investment Ltd.13,378,000864,000700,00012,678,000FUNDAMENTAL UNCERTAINTY RELATING TO GOING CONCERN BASIS In forming our opinion, we have considered the adequacy of the disclosures made in note 2 to the financial statements concerning the adoption of the going concern basis on which the financial statements have been prepared. As explained in note 2 to the financial statements, the Group is currently undertaking a number of measures to relieve its current liquidity problems. The financial statements have been prepared on a going concern basis, the validity of which depends upon the successful outcome of the proposed debt restructuring plan of the Group, the ongoing support of the Group’s principal banks and other lenders, the availability of additional external funding and the attainment of profitable and positive cash flow operations. The financial statements do not include any adjustment that may be necessary should the implementation of such measures be unsuccessful.We consider that appropriate disclosures have been made, but the fundamental uncertainty relating to whether the going concern basis is appropriate is so extreme that we have disclaimed our opinion.DISAGREEMENT ABOUT ACCOUNTING TREATMENT – INSUFFICIENT PROVISIONS AGAINST AMOUNTS DUE FROM INTERMEDIATE HOLDING COMP ANIES As more fully explained in note 22 to the financial statements,the Group’s receivables from intermediate holding companies included in current assets in the balance sheet comprise an aggregate amount of approximately HK$13,378,000, inclusive of interest of approximately HK$864,000, due from Tin Ming Management Limited and Hong Tau Investment Ltd. The repayment dates of these receivables have been revised on a number of occasions, and have been further extended to 31 March 2004. Only HK$700,000 has been settled subsequent to the balance sheet date. Notwithstanding the revised repayment terms,we consider that, in the absence of any security for these debts or other reliable financial information about these intermediate holding companies and their ability to settle these overdue amounts, we believe that the Group is unlikely to recover the remaining balance of approximately HK$12,678,000 in full and a provision should have been made against these receivables.However, due to the absence of sufficient information, it is also impracticable to quantify the amount of the provision to be made.If such provision had been made, the Company’s and the Group’s net loss from ordinary activities attributable to shareholders for the year ended 31 March 2003 would have been increased andthe Company’s and the Group’s net assets as at 31 March 2003would have been reduced by the amounts thereof.Report of the Auditors22DISCLAIMER OF OPINIONBecause of the significance of the fundamental uncertaintyrelating to the going concern basis, we are unable to form anopinion as to whether the financial statements give a true andfair view of the state of affairs of the Company and of the Groupas at 31 March 2003 and of the loss and cash flows of the Groupfor the year then ended and have been properly prepared inaccordance with the disclosure requirements of the Hong KongCompanies Ordinance.Had we not disclaimed our opinion, we would have qualified ourreport with respect to the disagreement about the accountingtreatment relating to insufficient provisions against amounts duefrom intermediate holding companies as set out in the basis ofopinion section of this report.Ernst & Y oungCertified Public AccountantsHong Kong12 December 2003Hong Kong Pharmaceutical Holdings Limited • Annual Report 2002/2003。