Auditors Report:

The financial statements of Square Pharmaceuticals Ltd. have been audited of set
out on pages ........ To ........, which comprise the [balance sheet with Horizontal and
Vertical Analysis] [statement of Financial Position] as at 31st December 2012 and
the [[income statement] [statement of comprehensive income], [statement of
changes in equity], [statement of income and retained earnings] and [Income
Statement Horizontal Analysis] [Income statement Vertical Analysis] for the year
then ended, and a summary of significant accounting policies and other explanatory
notes.
Management's Responsibility for the Financial Statements:
Management is responsible for the preparation and fair presentation of these
financial statements in accordance with Bangladesh Financial Reporting Standards
(BFRS), the Companies Act 1994 and other applicable laws and regulations. This
responsibility includes: designing, implementing, and maintaining internal control
relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error; selecting and
applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.
Auditors' Responsibility:
Auditors responsibility is to express an opinion on these financial statements based
on audit which was conducted in accordance with Bangladesh Standards on
Auditing (BSA). Those standards required by complying with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the
financial statements are free from material misstatement. An audit involves
performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the a) auditor's
judgment b) including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's
preparation but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. An audit also includes evaluating the overall
presentation of the financial statement. Audit evidence need to be sufficient and
appropriate to provide audit opinion.
Opinion:
In opinion section, the Financial Statements prepared in accordance with
Bangladesh Financial Reporting Standards, give a true and fair view of the state of
the company's affairs as at 31st December, 2012 and its cash flows for the year then
ended and comply with the companies Act 1994 and other applicable laws and
regulations.
Further to opinion in the above paragraph, it can be state that:

1. all the information have been obtained and explanations which to the best of
auditors knowledge and belief were necessary for the purpose of audit and
were made due verification thereof;
2. Proper books of account as required by law have been kept by Square
Formulations Limited so far as it appeared from our examination of those
books;
3. The company's Statement of Financial Position and its Cash Flow Statement
dealt with by the report are in agreement with the books of account and
returns;
Recommendations:
Following troubles needs to be sorted out from the overall analysis1. Omeprazole Injection has introduced already by Incepta & popular before
Square; so Square should concentrate on endoscopic ethanol injection which
is a better alternatives to the Omeprazole injection.
2. Management should try to boost up its quick and current rations & the
earnings per share by introducing endoscopic ethanol injection.
3. Strong linkages between industry and academia which are essential for
growth of the industry is lacking in SPL, management should emphasis to
reduce the difference between industry and academia thus it will results
liquidity of the company.
4. Due to inadequate and traditional marketing practices management is
lagging behind considering other pharmaceuticals, management can increase
their profit if they can cut the financial cost and use less debt capital.
5. To fight back in the market competition management should reduce its
dependency on debts because it is risky.