1. We have audited the attached Balance Sheet of TORRENT
PHARMACEUTICALS LIMITED (the Company) as at 31st March, 2011, the
profit and Loss Account and the Cash Flow Statement of the Company for
the year ended on that date, both 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 the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the fi
nancial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the signifi cant
estimates made by the Management, as well as evaluating the overall fi
nancial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specifi ed in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(a) 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;
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
(c) the Balance Sheet, the profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, the profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) 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:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
(ii) in the case of the profit and Loss Account, of the profit of the
Company for the year ended on that date and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on 31st March, 2011 taken on record by the Board of
Directors, none of the Directors is disqualifi ed as on 31st March,
2011 from being appointed as a director in terms of Section 274(1)(g)
of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of our report of even date)
(i) Having regard to the nature of the Companys business/activities,
clauses (x), (xiii) and (xiv) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verifi ed over a period of three
years by the Management in accordance with a regular programme of
verifi cation which, in our opinion, provides for physical verifi
cation of all the fixed assets at reasonable intervals. According to
the information and explanations given to us, discrepancies noticed on
such verifi cation have been properly dealt with in the books of
account.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) In respect of its inventory:
(a) As explained to us, the inventories were physically verifi ed
during the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verifi cation of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verifi cation.
(iv) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, fi rms or other parties listed in the
Register maintained under Section 301 of the Companies Act, 1956.
(v) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining 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 purchases of
inventory and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weaknesses in
such internal control system.
(vi) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Transactions during the year exceeding the value of Rupees Five
lacs in respect of any party have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vii) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA and other relevant provisions of the Companies Act, 1956
and the Companies (Acceptance of Deposits) Rules, 1975 with regard to
the deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or the National Company Law Tribunal or the Reserve Bank of India
or any Court or any other Tribunal.
(viii) In our opinion, the internal audit functions carried out during
the year by fi rm of Chartered Accountants appointed by the management
have been commensurate with the size of the Company and the nature of
its business.
(ix) 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(1) (d) of the Companies
Act, 1956 for the Companys products to which the said rules are made
applicable and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the records with a view to
determining whether they are accurate or complete.
(x) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has been generally regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Income-tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
dues in arrears as at 31st March, 2011 for a period of more than six
months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax/VAT, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and Employees State Insurance
which have not been deposited as on 31st March, 2011 on account of
disputes are given below:
Period to
which Amount
Nature of Forum where Dispute is
Statute the
amount involved
Dues pending
relates (Rs. in
lacs)
The West Bengal Demand of Tax Taxation Tribunal,
West Bengal 2004-05 9.98
Sales Tax
Act,1994
West Bengal Value
Added Tax Additional
Commissioner of
Demand of Tax 2005-06 5.21
Act, 2003 Sales Tax,
West Bengal
Additional
Commissioner of
Central Sales
Tax Act,1956 Demand of Tax 2005-06 0.72
Sales Tax, West Bengal
Uttar Pradesh
Trade Tax Act, Joint Commissioner
Demand of Tax 2005-06 2.03
1948 Commercial Tax,
Uttar Pradesh
Joint Commissioner of
Gujarat Value
Added Tax, Demand of Tax Commercial Tax
(Appeal), 2006-07 43.91
2003 Ahmedabad
Input Service CESTAT 2006-07 0.69
Credit
Commissioner
(Appeals- 2005-06
and
Demand of Duty 0.70
Ankleshwar) 2006-07
Commissioner of
Central
Cenvat Credit 2006-07 11.47
excise, Ahmedabad-III
Demand of Duty CESTAT 2005-06 2.71
and penalty
Central Excise
Act,1944 Demand of Dy. Commissioner of
Central 2001-02
and 3.02
Interest Excise-Kalol 2002-03
Demand of 2005-06
and
CESTAT 0.50
penalty 2006-07
Assistant
Commissioner of 2008-09
and
Demand of Duty 8.28
Central Excise-Kalol 2009-10
Demand of Duty CESTAT 2009-10 12.92
and penalty
Service Tax Commissioner (Appeals) 2001-02 6.09
Demand of Duty 2004-05
and
Commissioner (Appeals) 6.21
Finance Act, 1994 and penalty 2005-06
Demand of Joint Commissioner of
Central 2008-09 18.01
Penalty Excise
E.S.I 1993-94
to
E.S.I Act, 1948 Gujarat High Court 390.98
Contribution 2010-11
Demand of Tax Assessment Offlcer-TDS 2007-08 15.92
and interest Range, Ahmedabad
Commissioner of
Income Tax
Income Tax Act,
1961 Demand of Tax 2004-05 0.15
(Appeals)
Demand of Commissioner of
Income Tax 2005-06 39.59
Penalty (Appeals)
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions. The Company has not issued any
debentures.
(xii) In our opinion, 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 and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by others from banks and financial
institutions are not prima facie prejudicial to the interests of the
Company.
(xiv) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained, other than temporary deployment pending
application.
(xv) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xvi) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Companies Act, 1956.
(xvii) The Company has not issued any debenture during the year.
(xviii) The Company has not raised money by public issue during the
year.
(xix) To the best of our knowledge and according to the information and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 117365W)
Gaurav J. Shah
Ahmedabad Partner
28th May, 2011 Membership No. 35701
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