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-44.55 (-10.34%) | Auditor's Report (Ranbaxy Laboratories) | Year End : Dec '12 |
a) We have audited the attached Balance Sheet of Ranbaxy Laboratories
Limited (''the Company'') as at 31 December 2012, the Statement of Proft
and Loss and the Cash Flow Statement (collectively referred to as
''fnancial statements'') of the Company for the year ended on that date,
annexed thereto. These fnancial statements are the responsibility of
the Company''s management. Our responsibility is to express an opinion
on these fnancial statements based on our audit.
b) 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
fnancial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the fnancial statements. An audit also includes
assessing the accounting principles used and signifcant estimates made
by management, as well as evaluating the overall fnancial statements
presentation. We believe that our audit provides a reasonable basis for
our opinion.
c) As required by the Companies (Auditor''s Report) Order, 2003 (''the
Order'') issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, (''the
Act''), we enclose in the Annexure, a statement on the matters specifed
in paragraphs 4 and 5 of the said Order.
d) 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, the Statement of Proft and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(iv) in our opinion, the Balance Sheet, the Statement of Proft and Loss
and the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Act, to the extent applicable;
(v) on the basis of written representations received from the directors
of the Company as at 31 December 2012, and taken on record by the Board
of Directors, we report that none of the directors is disqualifed as at
31 December 2012 from being appointed as a Director in terms of clause
(g) of sub-section (1) of Section 274 of the Act;
e) Without qualifying our opinion, we draw attention to note 37 of the
fnancial statements, wherein it has been stated that on the basis of a
legal advice, the Company is of the view that the appointment of and
payment of remuneration to Mr. Arun Sawhney, CEO and Managing Director
for the full year ended 31 December 2011 is in accordance with the
conditions stipulated under Notifcation no. GSR 534(E) dated 14 July
2011 read with the clarifcation dated 16 August 2012 issued by the
Ministry of Corporate Affairs.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said fnancial statements give the
information required by the Act, in the manner so required and gives a
true and fair view in conformity with the accounting principles
generally accepted in India:
i) in the case of the Balance Sheet, of the state of the affairs of the
Company as at 31 December 2012;
ii) in the case of the Statement of Proft and Loss, of the loss of the
Company for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash fows of the
Company for the year ended on that date.
Annexure to the Auditors'' Report
(Referred to in our report of even date)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fxed
assets.
(b) The Company has a regular programme of physical verifcation of its
fxed assets through which all fxed assets are verifed, in a phased
manner, over a period of three years. In our opinion, this periodicity
of physical verifcation is reasonable having regard to the size of the
Company and the nature of its assets. As informed to us, no material
discrepancies were noticed on such verifcation as carried out under the
above programme during the current year.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
(ii) (a) The inventories, except goods-in-transit, have been physically
verifed by the management during the year. In our opinion, the
frequency of such verifcation is reasonable.
(b) In our opinion, the procedures of physical verifcation of
inventories 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 inventories. As
informed to us, the discrepancies observed on verifcation between the
physical stocks and the book records were not material.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to or from companies, frms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956 (''the
Act'').
(iv) In our opinion, and according to the information and explanations
given to us, and having regard to the explanation that purchase of
certain items of inventories and fxed assets are for the Company''s
specialised requirements, and similarly, certain goods sold are for the
specialised requirements of the buyers and suitable alternative sources
are not available to obtain comparable quotations, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business with regard to purchase of inventories and
fxed assets, and for the sale of goods and services. In our opinion,
and according to the information and explanations given to us, we have
not observed any major weakness during the course of audit.
(v) In our opinion, and according to the information and explanations
given to us, there are no contracts and arrangements, the particulars
of which need to be entered into the register maintained under section
301 of the Act.
(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 prescribed by the Central Government for
maintenance of cost records under section 209(1)(d) of the Act, in
respect of its products and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained. However,
we have not carried out a detailed examination of the records with a
view to determine whether these are accurate or complete.
(ix) (a) According to the information and explanations given to us, and
on the basis of our examination of the records of the Company, amounts
deducted / accrued in the books of account in respect of 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 and other material
statutory dues have generally been regularly deposited during the year
by the Company with the appropriate authorities.
According to the information and explanations given to us and on the
basis of our examination of the records of the Company, no undisputed
amounts payable in respect of Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material
statutory dues were in arrears as at 31 December 2012 for a period of
more than six months from the date those became payable.
(b) According to the information and explanations given to us, there
are no dues of Income Tax, Wealth Tax and Customs Duty which have not
been deposited with the appropriate authorities on account of any
dispute. According to the information and explanations given to us, the
following dues of Excise Duty, Value Added Tax, Service Tax and Sales
Tax have not been deposited by the Company on account of disputes:
Name of the
Statute Nature of Amount Periods to Forum where the
dispute is
dues (Rs. in which the pending
millions) amount
relates to
Central
Excise
Act, 1944 Excise Duty 18.97 2001-02, Customs, Excise and
Service Tax
Appellate
2004 and
2005, Tribunal (CESTAT),
Delhi
2007 and
2008, 2006
to 2011
Central
Excise
Act, 1944 Excise Duty 1.95 2004 to 2007 CESTAT, Mumbai
Central
Excise
Act, 1944 Excise Duty 6.77 2005 to 2008 Commissioner
(Appeals),Chandigarh
Bihar Value
Added Tax Value Added Tax 10.47 2005-06 Commercial Tax
Authority, Patna
Act, 2005
Madhya
Pradesh Value Value Added Tax 0.14 2008-09 Additional
Commissioner of
Commercial
Added Tax,
2010 Tax, Indore
Uttar Pradesh
Sales Tax Sales Tax 1.21 2008-09 Member Tribunal,
Commercial Tax,
Act, 1948 Lucknow
The Odisha
Entry Tax
Act, Sales Tax 0.34 April
2005 to Odisha Sales Tax
Tribunal
1999 January
2007
Andhra
Pradesh
General Sales Tax 1.16 2004-05 Sales tax Appellate
Tribunal
Sales Tax
Act, 1957
The Rajasthan
Value Value Added Tax 0.45 2008-09 Deputy Commissioner
Appeals Commercial
Added Tax
Act, 2003 Taxes, Jaipur
Delhi Value
Added Tax Value Added Tax 0.10 2007-08 Joint Commissioner
Trade and Tax
Act, 2004 Department, Delhi
Madhya
Pradesh Value Entry Tax 5.42 2009-10 Additional
Commissioner,Indore
Added Tax
Act, 2002
Madhya
Pradesh Value Value Added Tax 0.31 2011 The Appellate
Authority
Added Tax
Act, 2002 Madhya Pradesh
Commercial Tax,
Ujjain
(x) The accumulated losses of the Company at the end of the year are
not less than ffty percent of its net worth (without adjusting
accumulated losses). As explained to us, these are primarily due to
provision created for settlement with the Department of Justice (DOJ)
of the United States of America for resolution of potential civil and
criminal a legations by the DOJ (refer to note 8 of the fnancial
statements). The Company has not incurred cash losses in the current
fnancial year though it had incurred cash losses in the immediately
preceding fnancial year.
(xi) In our opinion, and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers, debenture holders and fnancial institutions.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi/ mutual beneft
fund / society.
(xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has issued
letters of comfort and given guarantees for loans taken from banks by
subsidiaries and an associate company respectively, are not prejudicial
to the interests of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, except for term loans lying unutilised as at year end, the
term loans taken by the Company have been applied for the purpose for
which these were raised.
(xvii) According to the information and explanations given to us, the
provision created for settlement with the DOJ amounting to Rs. 26,480
milion (refer to note 8 of the fnancial statements) by the Company in
the previous accounting year have resulted in long-term funds being
lower by Rs. 5,558.22 mi lion compared to long-term assets as at 31
December 2012. Accordingly, on an overa l examination of the Balance
Sheet of the Company as at 31 December 2012, it appears that short term
funds of Rs. 5,558.22 mi lion have been used for long-term purposes. As
represented to us by the management, the shortfa l is temporary in
nature and action is being taken to have long term funds within a short
period of the amount being actua ly paid.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties and companies/ frms/ parties covered in the
register maintained under section 301 of the Act.
(xix) According to the information and explanations given to us, the
Company has created a security or charge in respect of debentures
issued during the year.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) According to the information and explanations given to us, no
signifcant fraud on or by the Company has been noticed or reported
during the course of our audit.
For B S R & Co.
Chartered Accountants
Registration No. 101248W
Vikram Aggarwal
Place : Gurgaon Partner
Dated : 26 February 2013 Membership No. 089826 |
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