1. We have audited the attached Balance Sheet of Aurobindo Pharma
Limited (the Company) as at March 31, 2011 and also the Profit and
Loss Account and the Cash Flow Statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and 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 financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Without qualifying our opinion, we draw attention to Note 6(d) of
Schedule 23 to the financial statements with regard to non-provision of
premium payable on 139,200 Zero Coupon Foreign Currency Convertible
Bonds of USD 1,000 each issued by the Company. Management is of the
view that the liability to pay premium on redemption is contingent and
the ultimate outcome of the matter cannot be presently determined.
Accordingly, no provision for the above liability that may result in
future has been made in the accompanying financial statements.
5. Further to our comments in the Annexure referred to above, we
report that:
i. we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv. in our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
v. on the basis of the written representations received from the
Directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub- section (1) of Section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
b. in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 3 of our report of even date
Re: Aurobindo Pharma Limited (the Company)
i. a. The Company has maintained proper records showing fuLL
particulars, including quantitative details and situation of fixed
assets.
b. All fixed assets have not been physically verified by the
management during the year but there is a regular program of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed on such verification.
c. There was no substantial disposal of fixed assets during the year.
ii. a. The management has conducted physical verification of inventory
at reasonable intervals during the year.
b. The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
iii. a. According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, the provisions of Clause
4(iii) (a) to (d) of the Order are not applicable to the Company and
hence not commented upon.
e. According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, the provisions of Clause
4(iii) (e) to (g) of the Order are not applicable to the Company and
hence not commented upon.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
v. a. According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Act that need to be
entered into the register maintained under Section 301 have been so
entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi. The Company has not accepted any deposits from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii. 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(l)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
ix. a. Undisputed statutory dues including provident fund, investor
education and protection fund, employees state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and
other material statutory dues have generally been regularly deposited
with the appropriate authorities though there has been a slight delay
in depositing of tax deducted at source in few cases.
Further, since the Central Government has till date not prescribed the
amount of cess payable under Section 441A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the Company in depositing the same.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
c. According to the records of the Company, there are no dues
outstanding of income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise duty and cess on account of any dispute, other than
service tax, customs duty and excise duty which are follows:
Name of the
statute Nature of dues Amount Period to
which the Forum where
dispute is
Rs. amount
relates
pending
Central
Excise and Excise Duty 52,136,641 2007-08, The Assistant
Commissioner
Customs Act,
1944 2008-09,
2009-10 Appeals,
Hyderabad
Excise Duty 18,604,080 2006-07,
2007-08, CESTAT,
Bangalore
2008-09
Customs Duty 42,621,459* 2002-03,
2003-04, CESTAT,
Chennai
and Penalty 2004-05,
2005-06
Interest 439,770 2007-08 Joint
Commissioner
of
Central
Excise
Interest 5,680,233 2004-05,
2005-06, Commissioner
of Central
2006-07,
2007-08 Excise
2008-09
Interest 131,555 2009-10 Assistant
Commissioner
of
Central Excise
Excise duty 2,526,389 2005-06,
2006-07, Additional
Commissioner
of
2007-08,
2008-09, Central
Excise,
Hyderabad
2009-10,
2010-11
Finance
Act, 1994 Service Tax 525,000 2005-06 CESTAT,
Bangalore
Service Tax 64,685 2006-07 CESTAT,
Bangalore
Service Tax 1,524,348 2006-07 CESTAT,
Chennai
*Stay granted
x. The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
xi. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
xii. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 (as amended) are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 (as amended) are not applicable to the Company.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
xvi. Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
xvii. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
xviii. The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under Section
301 of the Companies Act, 1956.
xix. The Company has unsecured debentures (Foreign Currency Convertible
Bonds) outstanding during the year on which no security or charge is
required to be created.
xx. The Company has not raised any money by way of public issue during
the year.
xxi. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S.R. BATLIBOI & ASSOCIATES
Firm Registration Number: 101049W
Chartered Accountants
per VIKAS KUMAR PANSARI
Partner
Membership No. 93649
Hyderabad, May 9, 2011.
|