Mar 31, 2022
Report on the Audit of the Standalone FinancialStatements
Opinion
We have audited the standalone financial statements of Alkem Laboratories Limited (the "Company"), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matter Revenue from operations |
|
The key audit matter |
How the matter was addressed in our audit |
⢠Revenue is recognized when the control of the products being sold has been transferred to the |
Our audit procedures included the following: ⢠Obtained an understanding of the systems, processes and |
customer. There is a risk of revenue being overstated |
controls implemented by the company for recording revenue |
as management, to achieve its performance targets, may recognize as revenue on sale of products though |
from sale of goods. |
control may not have transferred to the customer. |
⢠Evaluated Company''s revenue recognition policies by assessing |
This was an area of focus for us. |
compliance with applicable accounting standards. |
⢠Refer Note 2.9 of the standalone financial statements for |
⢠Assessed the IT environment in which the business |
details on accounting policy on revenue recognition. |
system operates and tested system controls involved in revenue recognition. ⢠Tested design, implementation and operating effectiveness of the company''s controls on generating sales order, recording of revenue, creation of new customers and performance of revenue cut off. ⢠On selected statistical samples of transactions, we tested the underlying documents, which include testing contractual terms of sale contracts/ invoices, shipping documents and lag time/ proof of delivery to test evidence for transfer of control. ⢠Performed procedures to identify and test exceptional transactions such as unusual sales trend, one off sales to customers, to identify any unusual transactions. ⢠Tested manual journal entry posted to revenue to identify unusual transactions. |
The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) As required by Section 143(3) of the Act, we report that:
a) We have sought and 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of
cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B"
(B) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditor''s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 3.26 to the standalone financial statements.
b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
d) (i) The management has represented that, to the
best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:
⢠directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or
⢠provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:
⢠directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or
⢠provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (d) (i) and (d) (ii) contain any material misstatement.
e) The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Act.
(C) With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firm''s Registration No.101248W/W-100022
Balajirao Pothana
Partner
Place: Mumbai Membership No. 122632
Date: 13 May 2022 UDIN: 22122632AIXALU6482
Mar 31, 2021
To the Members of
Opinion
We have audited the standalone financial statements of Alkem Laboratories Limited ("the Company"), which comprise the standalone balance sheet as at 31 March 2021, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2021, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Revenue from operations |
|
The key audit matter description |
How the matter was addressed in our audit |
⢠Revenue is recognized when the control of the |
In view of significance of the matter we applied following audit |
products being sold has been transferred to |
procedures in this area, among others to obtain sufficient and |
the customer. There is a risk of revenue being |
appropriate audit evidence: |
overstated at period end as management, to achieve its performance targets, may recognise certain transactions as revenue though control may not have |
⢠Evaluated the Company''s revenue recognition policies by assessing compliance with applicable accounting standards. |
transferred to the customer as of the period end. |
⢠Tested design, implementation and operating effectiveness of |
This was an area of focus for us. |
the Company''s general IT controls and key IT application/ manual |
⢠Refer Note 2.9 of the standalone financial statements for details on accounting policy on revenue recognition. |
controls over the Company''s systems which governs recording of revenue, creation of new customers and key controls over revenue cut-off in the general ledger accounting system. |
⢠Performed substantive testing (including period end cut off |
|
testing) by selecting samples of revenue transactions recorded during the year-end, by verifying the underlying documents, which include testing contractual terms of sale contracts / invoices, shipping documents and lag time to test evidence for transfer of control. |
|
⢠Performed analysis such as sales trend, one-off sales to customers |
|
during the year to identify any unusual fluctuations. |
|
⢠Tested significant manual journals posted to revenue to |
|
identify unusual items. |
The key audit matter description |
How the matter was addressed in our audit |
⢠As at 31 March 2021, the carrying amount of |
In view of significance of the matter we applied following audit |
investment in subsidiaries is '' 18,770 million. |
procedures in this area, among others to obtain sufficient and |
The carrying value of investment in subsidiaries |
appropriate audit evidence: |
will be recovered through future cash flows and accordingly there is inherent risk that these assets may be impaired if these cash flows do not meet the |
⢠Tested operating effectiveness of controls over Company''s review of impairment analysis. |
Company''s expectations. Refer Note 2.4, 3.2 and 3.45 |
⢠Compared the inputs with historical growth trends evaluating |
to the standalone financial statements for details of |
the forecast used in prior year models to its actual performance |
accounting policies on impairment of investment in |
of the business. |
subsidiaries and related disclosures. |
⢠Compared current forecasts to the business plan approved by |
⢠Annual impairment testing of investments is |
the Board of Directors. Using our knowledge of the Company and |
considered to be a key audit matter due to |
industry, challenged significant assumptions and judgements |
the significance of the carrying value of these |
used by the Company in its impairment assessment, specifically |
investments in the standalone financial statements, |
in relation to forecast revenue, margins, terminal growth rate, |
inherent complexity in auditing the forward-looking |
consideration of impact of economic slowdown caused by |
assumptions applied to determine recoverable |
Covid 19 pandemic and discount rates with the assistance of our |
value given the significant judgements involved. |
valuation specialists. |
The key assumptions in the cash flow models include the forecast revenue, margins, terminal growth, weighted average cost of capital (discount rate) and uncertainty in business across geographies arising from the impact of Covid-19 pandemic. |
⢠Performed sensitivity analysis of the key assumptions, including revenue growth rates, projected gross margins, and the discount rate applied in determining the recoverable value and considering the resulting impact on the impairment testing and whether there were any indicators of management bias in the selection of these |
key assumptions; |
|
⢠Evaluated adequacy of disclosures, including disclosures of key |
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assumptions, judgements and sensitivities and impairment adjustment recorded during the year under audit. |
The key audit matter description |
How the matter was addressed in our audit |
⢠The Company pays minimum alternate tax (MAT) under section 115JB of the Income Tax Act, 1961, and has recognised deferred tax asset (DTA) aggregating '' 10,174 million as at 31 March 2021, in relation to unutilized MAT credit. |
In view of significance of the matter we applied following audit procedures in this area, among others to obtain sufficient and appropriate audit evidence: ⢠Evaluated the Company''s accounting policy in respect of DTA by comparing compliance with applicable accounting standards ⢠Evaluated Company''s controls over the assumptions and judgments used in the projections of taxable future income. |
⢠The MAT paid is available as an offset over a period of 15 years. The MAT credit is recognized as a deferred tax asset to be available for offset when the Company pays taxes under the normal provision of Income Tax Act, 1961. Refer note 2.12 for accounting policies and note 3.7 for disclosures related to DTA on Mat credit asset in the standalone financial statements. |
|
⢠Assessed Company''s ability to estimate future taxable income by comparing the prior year forecasts to actual results. ⢠Performed a sensitivity analysis over the key assumptions to assess their impact on the reasonability in Company''s determination that MAT credit asset were realizable. ⢠In respect of DTA on account of MAT credit asset, we evaluated the |
|
Period-end assessment of recoverability of DTA in relation to MAT credit asset is considered to be a |
|
key audit matter due to the significance of carrying value of MAT credit asset in the standalone financial |
Company''s assessment and conclusion in relation to its utilization within the period allowed for carry forward and set off against |
statements. The assessment of recoverability of DTA on account of MAT credit asset requires significant |
forecasted taxable income streams. |
judgment regarding the Company''s estimation of |
⢠Evaluated adequacy of disclosures in relation to DTA on account |
future profitability and taxable income which will result in utilization of the MAT credit within the time limits available under the applicable Income tax laws. |
of MAT credit asset made in the standalone financial statements. |
The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the financial statements and our auditors'' report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Company''s Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
1. As required by the Companies (Auditors'' Report) Order, 2016 ("the Order") issued by the Central Government in terms of section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) As required by Section 143(3) ofthe Act, we report that:
a) We have sought and 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2021 taken
on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31 March 2021 on its financial position in its standalone financial statements - Refer Note 3.26 to the standalone financial statements;.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these financial statements since they do not pertain to the financial year ended 31 March 2021.
(C) With respect to the matter to be included in the Auditors'' Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firm''s Registration No.101248W/W-100022
Sadashiv Shetty
Partner
Mumbai Membership No. 048648
25 May 2021 UDIN: 21048648AAAABB4812
Mar 31, 2018
REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying standalone Ind AS financial statements of Alkem Laboratories Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and summary of the significant accounting policies and other explanatory information (herein after referred to as âStandalone Ind AS Financial Statementsâ).
MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We are also responsible to conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entityâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditorâs report. However, future events or conditions may cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31 March 2018, its profit including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and 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 Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows, dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 3.26 to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2018;
iv. The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 have not been made since the requirement does not pertain to financial year ended 31 March 2018.
Annexure â A to the Independent Auditorâs Report - 31 March 2018
(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 fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, a portion of the fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties, are held in the name of the Company
(ii) The inventory, except goods-in-transit and stocks lying with third parties, has been physically verified by the management during the year. In respect of inventory lying with third parties at the year-end, written confirmations have been obtained. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs 3 (iii) (a), (b) and (c) of the Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 of the Act during the year. The Company has complied with the provisions of Section 186 of the Act, with respect to the investments made, loans, guarantees given to subsidiaries and securities given in respect of loan taken by the subsidiaries.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public during the year in terms of the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.
(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under subsection 1 of section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.
(vii) (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, employeesâ state insurance, income-tax, sales-tax, service tax, Goods and Services tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, Goods and Services tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues were in arrears as at 31 March 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of income-tax, sales tax, service tax, Goods and Services Tax, duty of customs, duty of excise and value added tax as at 31 March 2018 which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in Enclosure I to this report.
(viii) 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. The Company does not have any loans or borrowings from financial institutions or Government, nor has it issued any debentures during the year.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit nor have we been informed of such case by the management.
(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with the provisions of Sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required under Indian Accounting Standard (AS) 24, Related Party Disclosures specified under Section 133 of the Act.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any noncash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.
Enclosure I to Annexure A to the Independent Auditorâs Report -31 March 2018
Name of the Statute |
Nature of dues |
Amount under dispute (Rs. in Millions) |
Amount paid under protest (Rs. in Millions) |
Financial year / year (s) Forum where dispute is pending |
Central Excise Act, 1944 |
Excise Duty and Penalty |
172.6 |
18.6 |
2003-2014 CESTAT |
Central Excise Act, 1944 |
Excise Duty and Penalty |
5.4 |
2.2 |
2012-2017 Commissioner of Central Excise (Appeals) |
Maharashtra VAT Act, 2002 |
Value Added Tax |
6.4 |
3.5 |
2003-2005 Appellate Tribunal |
Maharashtra VAT Act, 2002 |
Value Added Tax |
95.9 |
10.3 |
2006-2014 Joint Dy. Commissioner of Sales Tax (Appeals) |
West Bengal VAT Act, 2003 |
Value Added Tax |
13.4 |
2 |
2012-2015 Senior Joint Commissioner, Corporate Division (Appellate Authority) |
West Bengal VAT Act, 2003 |
Value Added Tax |
0.3 |
- |
2010-2011 Sr. Joint Commissioner of Commercial Tax |
Bihar VAT Act, 2005 |
Value Added Tax |
13.4 |
3.2 |
2010-2012 Joint commissioner Commercial Taxes (Appeals) |
Uttar Pradesh VAT Act, 2008 Value Added Tax |
3.6 |
1.8 |
2012-2013 Joint commissioner of Commercial taxes -Circle -I |
|
Odisha VAT Act, 2004 |
Value Added Tax |
1.5 |
0.1 |
2012-2016 Commissioner of Commercial Taxes |
Gujarat VAT Act, 2003 |
Value Added Tax |
0.1 |
- |
2006-2007 Commissioner of Commercial Taxes Gujarat |
Odisha Entry Tax Act, 1999 |
Entry Tax |
0.2 |
0.1 |
2012-2014 Commissioner of Commercial Taxes |
Central Sales Tax Act, 1956 |
Central Sales Tax |
32.0 |
4.8 |
2013-2015 Joint Commissioner, Corporate Division (Appellate Authority) |
Central Sales Tax Act, 1956 |
Central Sales Tax |
0.2 |
0.1 |
2010-2011 Joint Dy. Commissioner Of Sales Tax(Appeals) |
Central Sales Tax Act, 1956 |
Central Sales Tax |
0.2 |
0.1 |
2009-2011 Joint Commissioner of Sales Tax (Appeals) |
Central Sales Tax Act, 1956 |
Central Sales Tax |
0.6 |
0.1 |
2010-2011 & Commissioner of Commercial Taxes 2014-2017 |
Income Tax Act, 1961 |
Income Tax |
25.2 |
23.6 |
2001-2012 Commissioner of Income Tax (Appeal) |
For B S R & Co. LLP
Chartered Accountants
Firmâs Registration No: 101248W/W-100022
Sadashiv Shetty
Place: Mumbai Partner
Date: 30th May, 2018 Membership No: 048648
Mar 31, 2017
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Alkem Laboratories Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as âstandalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31 March 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and 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 Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015.
(e) On the basis of the written representations received from the directors as on 31 March 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2017;
iv. The Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 3.43 to the standalone Ind AS financial statements.
ANNEXURE- A
to the Independent Auditorsâ Report - 31 March 2017
(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 fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, a portion of the fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties, as disclosed in Note 3.1 to the standalone Ind AS financial statements, are held in the name of the Company
(ii) The inventory, except goods-in-transit and stocks lying with third parties, has been physically verified by the management during the year. In respect of inventory lying with third parties at the year-end, written confirmations have been obtained. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs 3 (iii) (a), (b) and (c) of the Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 of the Act during the year. The Company has complied with the provisions of Section 186 of the Act, with respect to the investments made, loans, guarantees given to subsidiaries and securities given in respect of loan taken by the subsidiaries.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public during the year in terms of the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.
(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under subsection 1 of section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.
(vii) (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, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues were in arrears as at 31 March 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of income-tax, sales tax, service tax, duty of customs, duty of excise and value added tax as at 31 March 2017 which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in Enclosure I to this report.
(viii) 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. The Company does not have any loans or borrowings from financial institutions or Government, nor has it issued any debentures during the year.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with the provisions of Sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any noncash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.
Enclosure I to Annexure A to the Independent Auditorsâ Report - 31 March 2017
Name of the Statute |
Nature of dues |
Amount under dispute (Rs. in millions) |
Amount paid under protest (Rs. in millions) |
Financial year / year (s) |
Forum where dispute is pending |
Central Excise Act, 1944 |
Excise Duty and Penalty |
173.2 |
14.3 |
2003-2014 |
CESTAT |
Central Excise Act, 1944 |
Excise Duty and Penalty |
3.5 |
2.2 |
2012-2017 |
Commissioner of Central Excise (Appeals) |
Maharashtra VAT Act, 2002 |
Value Added Tax |
6.4 |
3.5 |
2003-2005 |
Appeallate Tribunal |
Maharashtra VAT Act, 2002 |
Value Added Tax |
296.8 |
8.3 |
2008-2011 |
Joint Commissioner of Sales Tax (Appeals) |
West Bengal VAT Act, 2003 |
Value Added Tax |
9.0 |
1.3 |
2010-2013 |
Senior Joint Commissioner of Commercial Tax |
Bihar VAT Act, 2005 |
Value Added Tax |
13.4 |
3.2 |
2010-2012 |
Joint commissioner Commercial Taxes (Appeals) |
Bihar VAT Act, 2005 |
Value Added Tax |
66.5 |
13.3 |
2009-13 |
Deputy Commissioner, Special Circle |
Uttar Pradesh VAT Act, 2008 |
Value Added Tax |
3.6 |
1.8 |
2012-2013 |
Joint commissioner of Commercial taxes -Circle -I |
Odisha VAT Act, 2004 |
Value Added Tax |
0.5 |
0.0* |
2012-2014 |
Commissioner of Commercial Taxes |
Gujarat VAT Act, 2003 |
Value Added Tax |
0.1 |
- |
2006-2007 |
Commissioner of Commercial Taxes Gujarat |
Odisha Entry Tax Act, 1999 |
Entry Tax @ |
0.2 |
0.0** |
2012-2014 |
Commissioner of Commercial Taxes |
Central Sales Tax Act, 1956 |
Central Sales Tax |
349.7 |
0.1 |
2009-2011 |
Joint Commissioner of Sales Tax (Appeals) |
Central Sales Tax Act, 1956 |
Central Sales Tax # |
0.4 |
0.0*** |
2012-2014 |
Commissioner of Commercial Taxes |
Income Tax Act, 1961 |
Income Tax |
6.1 |
- |
2001-2012 |
Commissioner of Income Tax (Appeal) |
* Rs.34,961
** Rs.10,130
*** Rs.25,254
For B S R & Co. LLP
Chartered Accountants
Firmâs Registration No: 101248W/W-100022
Sadashiv Shetty
Mumbai Partner
26 May 2017 Membership No: 048648
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Alkem Laboratories Limited ("the Company"), which comprise the Balance
Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash
Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, 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 financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31 March, 2016, and its profit and cash flows for the year ended on
that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we give in the "Annexure A"
a statement on the matters specified in paragraphs 3 and 4 of the
Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and 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 Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31 March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March, 2016
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in "Annexure B".
(g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 2.27(a) (1)
to the standalone financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company during the year
ended 31 March 2016.
Annexure-A
To the Independent Auditors'' Report- 31 March 2016 (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 fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner over
a period of three years. In accordance with this programme, certain
fixed assets were verified during the year and no material
discrepancies were noticed on such verification. In our opinion, this
periodicity of physical verification is reasonable having regard to the
size of the Company and the nature of its assets.
(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, the title
deeds of immovable properties, as disclosed in Note 2.10 to the
financial statements, are held in the name of the Company, except for
the following:
Particulars Freehold Building
Land
Number of cases 2 5
Gross block 22.2 705.9
as at 31 March 2016
(Rs. In million)
Net block 22.2 604.7
as at 31 March 2016
(Rs. In million)
(ii) The inventory, except goods-in-transit, has been physically
verified by the management during the year. For inventory lying with
third parties at the year- end, written confirmations have been
obtained. In our opinion, the frequency of such verification is
reasonable. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
(iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to companies,
firms, limited liability partnerships or other parties covered in the
register maintained under Section 189 of the Act. Accordingly,
paragraphs 3 (iii) (a), (b) and (c) of the Order are not applicable to
the Company.
(iv) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans, or provided any
guarantees or security to the parties covered under Section 185 of the
Act during the year. The Company has complied with the provisions of
Section 186 of the Act, with respect to the investments made and
securities given in respect of loan taken by the subsidiaries.
(v) According to the information and explanations given to us, the
Company has not accepted any deposits from the public. Accordingly,
paragraph 3(v) of the Order is not applicable to the Company.
(vi) We have broadly reviewed the records maintained by the Company
pursuant to the rules prescribed by the Central Government for
maintenance of cost records under sub-section 1 of section 148 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. However, we have not made a
detailed examination of the records.
(vii) (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, employees'' state insurance,
income-tax, sales-tax, service tax, duty of customs, duty of excise,
value added tax, cess and other material statutory dues have been
generally regularly deposited during the year by the Company with the
appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees''
state insurance, income- tax, sales-tax, service tax, duty of customs,
duty of excise, value added tax, cess and other material statutory dues
were in arrears as at 31 March 2016 for a period of more than six
months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of income-tax, sales tax, service tax, duty of customs,
duty of excise and value added tax as at 31 March 2016 which have not
been deposited with the appropriate authorities on account of any
dispute other than those mentioned in Enclosure I to this report.
(viii) 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. The Company does not have any loans or borrowings from
financial institutions or Government, nor has it issued any debentures
during the year.
(ix) The Company has completed the Initial Public Offering (IPO)
through an offer for sale of equity share by the existing shareholders
during the year. Accordingly the Company has not raised any money by
way of initial public offer or further public offer (including debt
instruments) and term loans during the year. And therefore paragraph
3(ix) of the Order is not applicable to the Company.
(x) According to the information and explanations given to us, no
material fraud by the Company or on the Company by its officers or
employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
paid/provided for managerial remuneration in accordance with the
requisite approvals mandated by the provisions of Section 197 read with
Schedule V to the Act.
(xii) In our opinion and according to the information and explanations
given to us, the Company is not a Nidhi company. Accordingly, paragraph
3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and
based on our examination of the records of the Company, transactions
with the related parties are in compliance with the provisions of
Sections 177 and 188 of the Act where applicable. The details of such
related party transactions have been disclosed in the financial
statements as required under Accounting Standard (AS) 18, Related Party
Disclosures specified under Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014.
(xiv) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not made any preferential allotment or private placement of shares or
fully or partly convertible debentures during the year. Accordingly,
paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not entered into any non- cash transactions with directors or persons
connected with them. Accordingly, paragraph 3(xv) of the Order is not
applicable to the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the Company is not required to be registered under Section
45-IAof the Reserve Bank of India Act, 1934. Accordingly, paragraph
3(xvi) of the Order is not applicable to the Company.
Enclosure I to Annexure A to the Independent Auditors'' Report - 31
March 2016
Name of the Statute Nature of dues Amount Amount
under paid under
dispute
(Rs. protest
(Rs. in
in
millions) millions)
Central Excise
Act, 1944 Excise Duty 60.2 14.5
and Penalty
Central Excise Act, 1944 Excise Duty 2.2 0.2
and Penalty
Maharashtra VAT Act,
2002 Value Added 6.4 3.5
Tax
Maharashtra VAT Act,
2002 Value Added 283.2 4.1
Tax
West Bengal VAT Act,
2003 Value Added 9.0 1.3
Tax
Bihar VAT Act, 2005 Value Added 71.0 14.8
Tax
Uttar Pradesh VAT Act,
2008 Value Added 1.7 0.4
Tax
Odisha VAT Act, 2004 Value Added 0.5 0.0*
Tax
Gujarat VAT Act, 2003 Value Added 0.1 -
Tax
Odisha Entry Tax
Act, 1999 Entry Tax 0.2 0.0**
Central Sales Tax
Act, 1956 Central Sales 349.7 0.1
Tax
Central Sales Tax
Act, 1956 Central Sales 372.5 55.9
Tax
Central Sales Tax
Act, 1956 Central Sales 0.4 0.0***
Tax
Income Tax Act, 1961 Income Tax 6.1 -
Name of the Statute Financial
year Forum where dispute is
/year(s) pending
Central Excise Act, 1944 2003-2014 CESTAT
Central Excise Act, 1944 2010-2016 Commissioner of Central
Excise (Appeals)
Maharashtra VAT Act, 2002 2003-2005 Appellate Tribunal
Maharashtra VAT Act, 2002 2005-2011 Joint Commissioner of Sales
Tax (Appeals)
West Bengal VAT Act, 2003 2010-2013 Senior Joint Commissioner of
Commercial Tax
Bihar VAT Act, 2005 2010-2012 Joint commissioner Commercial
Taxes (Appeals)
Uttar Pradesh VAT
Act, 2008 2012-2013 Commercial Tax Tribunal,
Lucknow
Odisha VAT Act, 2004 2012-2014 Commissioner of Commercial
Taxes
Gujarat VAT Act, 2003 2006-2007 Deputy Commissioner of
Commercial Tax (Appeal)
Odisha Entry Tax
Act, 1999 2012-2014 Commissioner of Commercial
Taxes
Central Sales Tax
Act, 1956 2009-2011 Joint Commissioner of Sales
Tax (Appeals)
Central Sales Tax
Act, 1956 2012-2013 Senior Joint Commissioner of
Commercial Tax
Central Sales Tax
Act, 1956 2012-2014 Commissioner of Commercial
Taxes
Income Tax Act, 1961 2001-2012 Commissioner of Income
Tax (Appeal)
*Rs. 34,961
**Rs. 10,130
*** Rs. 25,254
For BSR & Co.LLP
Chartered Accountants
Firm''s Registration No: 101248WAA/-100022
Sadashiv Shetty
Mumbai Partner
27 May 2016 Membership No: 048648
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Alkem Laboratories Limited ("the Company"), which comprise of the
Balance Sheet as at 31 March 2015, the Statement of Profit and Loss and
the Cash Flow Statement for the year then ended and a summary of the
significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
Independent Auditors'' Report (Continued)
Alkem Laboratories Limited
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, 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 financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31 March, 2015, and its profits and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Companies Act, 2015, we give in
the Annexure a statement on the matters specified in paragraphs 3 and 4
of the Order, to the extent applicable.
As required by Section 143 (3) of the Act, we report that:
(a) We have sought and 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 Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31 March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements  Refer Note 2.27(a) to
the financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts outstanding as on balance sheet date which
were required to be transferred to the Investor Education and
Protection Fund by the Company.
Annexure to the Independent Auditors'' Report - 31 March 2015
(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 fixed
assets.
(b) The Company has a regular program of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of three years. In accordance with the program, certain
fixed assets were verified during this year and no material
discrepancies were noticed on such verification. In our opinion, this
periodicity of physical verification is reasonable having regard to the
size of the Company and the nature of its assets.
(ii) (a) The inventory, except goods-in-transit, has been physically
verified by the management during the year. In our opinion, the
frequency of such verification is reasonable. For stocks lying with
third parties at the year-end, written confirmations have been
obtained.
(b) The procedures for the physical verification 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 inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of 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 item of inventories are for the Company''s specialized
requirements, and similarly certain goods sold and services rendered
are for specialized 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 fixed assets and with regard to sale of goods and
services. We have not observed any major weakness in the internal
control system during the course of the audit.
(v) The Company has not accepted any deposits during the year from the
public in accordance with the provisions of sections 73 to 76 of the
Act and the rules framed there under.
(vi) We have broadly reviewed the records maintained by the Company
pursuant to the rules prescribed by the Central Government for
maintenance of cost records under sub-section 1 of Section 148 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. However we have not made a
detailed examination of the records.
(vii) (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, employees'' state insurance,
income tax, sales-tax, wealth tax, service tax, duty of customs, duty
of excise, value added tax and any other material statutory dues have
been generally regularly deposited during the year by the Company with
the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees''
state insurance, income tax, sales- tax, wealth tax, service tax, duty
of customs, duty of excise, value added tax and any other material
statutory dues were in arrears as at 31 March 2015 for a period of more
than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of income tax, sales tax, duty of customs, duty of excise
and value added tax which have not been deposited with the appropriate
authorities on account of any dispute other than those mentioned in
Annexure II to this report.
(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, there are
no amounts which are required to be transferred to Investor Education
and Protection Fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made thereunder.
(viii) The Company does not have any accumulated losses at the end of
the year and has not incurred cash losses during the current financial
year and in the immediately preceding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
banks. The Company did not have any outstanding dues to any financial
institution or debenture holders during the year.
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not taken any term loan during the year.
(xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit
For B S R & Co. LLP
Chartered Accountants
Firm''s Registration No: 101248W/W - 100022
Sadashiv Shetty
Mumbai Partner
29 June 2015 Membership No: 048648
Mar 31, 2014
We have audited the accompanying financial statements of Alkem
Laboratories Limited (''the Company'') which comprise the Balance Sheet
as at 31st March, 2014, the Statement of Profit and Loss and the Cash
Flow Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the financial statements:
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India including
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 (''the Act'') read with General Circular 15/2013
dated 13th September,2013 of the ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility:
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
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 auditor''s judgment, 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 Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
Internal Control . An audit also includes evaluating the
appropriateness of accounting principles used and the reasonableness of
the accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a base for our audit opinion.
Opinion:
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act 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, 2014;
(ii) In the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
(iii) In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditors'' Report) Order, 2003 (''the
Order''), as amended, issued by the Central Government of India in terms
of sub-section (4A) of Section 227 of the Act, we give in the Annexure
hereto a statement on the matters specified in paragraphs 4 and 5 of
the order.
2. As required by Section 227 (3) of the Act, we report that:
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 appears from our examination of those
books;
c. The Balance Sheet, the Statement of Profit and Loss 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 Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of Section 211 of the Act read with
General Circular 15/2013 dated 13th September,2013 of the ministry of
Corporate Affairs in respect of Section 133 of the Companies Act,2013;
e. On the basis of the written representations received from the
directors as on 31st March, 2014, and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,
2014, from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act.
Re: Alkem Laboratories Limited (Referred to in Paragraph 1 under the
heading of "Report on Other Legal and Regulatory Requirements" of our
Report of even date)
1. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of its fixed assets on the
basis of available information.
(b) As explained to us, certain items of fixed assets have been
physically verified by the management during the year, and there is a
regular program of verification in a phased periodical manner, which in
our opinion is reasonable, having regard to the size of the Company and
the nature of its fixed assets. According to the information and
explanations given to us, no material discrepancies have been noticed
on such verification.
(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.
2. In respect of its inventories:
(a) As explained to us, the inventories (excluding goods-in-transit)
have been physically verified by the management at reasonable regular
intervals during the year. In respect of inventories which are not
physically verified being goods in transit, they are not material. In
our opinion, the frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate considering the
size of the Company and the nature of its business.
(c) The Company has maintained proper records of inventories. As
explained to us, there was no material discrepancy noticed on physical
verification of inventories as compared to the book records.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
(a) The Company has granted loans to its eight subsidiaries covered in
the register maintained under Section 301 of the Act. The maximum
amount outstanding at any time during the year was Rs. 12444.72 lakhs
and the year end balances of such loan amounted to Rs. 8580.26 lakhs.
Other than above, the Company has not granted any loan, secured or
unsecured, to Companies, Firms or parties covered in the register
maintained under Section 301 of Act.
(b) In our opinion, the rate of interest and other terms and conditions
on which these loans have been granted to the subsidiaries covered in
the register maintained under Section 301 of the Act are not, prima
facie, prejudicial to the interest of the Company.
(c) The Company is regular in receipt of interest and principal amount
of unsecured loans wherever applicable and there is no default.
(d) There are no overdue amounts of more than Rupees One Lakh in
respect of the loans granted to the subsidiaries listed in the register
maintained under Section 301 of the Act.
(e) The Company has taken unsecured loans from 31 parties covered in
the register maintained under Section 301 of the Companies Act, 1956
being directors, their relatives and subsidiary company. The aggregate
of the year end balances of such loans is Rs. 7042.48 Lakhs and the
maximum amount involved during the year was Rs. 7414.07 Lakhs from
these parties.
(f) The rate of interest, wherever applicable and other terms and
conditions of such loans are, in our opinion, prima facie not
prejudicial to the interest of the Company.
(g) The Company is regular in repayment of interest and principal
amount of unsecured loans wherever applicable and there is no default.
4. In our opinion, and according to the information and explanations
given to us and having regard to the explanation that purchases of
certain items of inventories are for the Company''s specialized
requirements and similarly certain goods sold are for the specialized
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 inventory and
fixed assets and also for sale of goods and services. Further, on the
basis of our examination of the books and records of the Company, we
have not observed any continuing failure to correct major weaknesses in
the aforesaid internal control procedures.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
(a) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered into a register in pursuance of
Section 301 of the Companies Act, 1956, have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements referred to in point (a) above and exceeding the value of
Rs. 5 lakhs with any party during the year, have been made at prices
which are prima facie reasonable having regard to the prevailing market
prices at the relevant time, except that reasonableness could not be
ascertained where comparable quotations are not available having
regards to the specialized nature of some of the transactions of the
Company as mentioned in paragraph 4 hereinabove. However, on the basis
of the information and explanation provided the same appears to be
reasonable.
6. The Company has not invited any deposit from public as such but has
accepted unsecured loans from its directors, shareholders and their
relatives and also trade deposits from stockiest and agents which are
in the nature of deposits defined under the provisions of section 58A
and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975. In our opinion, and according to the information
and explanations given to us, the Company has complied with the
directives issued by the Reserve Bank of India, the provisions of
Section 58A and Section 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits so accepted, to the extent applicable. We are informed by the
management that no order has been passed by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal, relevant to sections 58A, 58AA or other relevant
provisions of the Act upon the Company.
7. In our opinion, the Company has an internal audit system being
carried out by the firms of Chartered Accountants and also by its own
internal audit department during the year, which in our opinion is
commensurate with its size and the nature of its business.
8. We have broadly reviewed, the books of accounts and records
maintained by the Company in respect of the products where, pursuant to
the Rules made by the Central Government of India, the maintenance of
cost records has been prescribed under clause (d) of sub-section (1) of
Section 209 of the Companies Act, 1956, 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 determine whether they are accurate or complete.
9. In respect of statutory dues:
(a) According to the information and explanations given to us and the
records of the Company examined by us, in our opinion, the Company is
regular in depositing undisputed statutory dues including provident
fund, employees'' state insurance, income-tax, sales-tax, service-tax,
wealth tax, custom duty, excise duty, cess and other material statutory
dues during the year as applicable with the appropriate authorities in
India. According to the information and explanations given to us and
the records of the Company examined by us, no undisputed amount is
payable in respect of provident fund, employees'' state insurance,
income-tax, sales-tax, service-tax, wealth tax, custom duty, excise
duty, cess which were outstanding as on 31st March, 2014 for a period
of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues on account of
customs duty, wealth-tax, service-tax and cess which have not been
deposited on account of any dispute. The particulars of dues of sales
tax, excise duty and income tax as at 31st March, 2014 which have not
been deposited on account of dispute, are as under:
Name of the Nature of Amount Period to Forum where dispute
Statute Dues Rupees which the is pending
(In Lakhs) amount
relates
Central Excise Duty 37.24 2002 to 2005 Additional
Commissioner of
Excise
Act, 1944 Central Excise
Excise Duty 44.73 2007 to 2012 Additional
Commissioner of
Central Excise
Excise Duty 63.10 2006 to 2011 Commissioner of
Central
Penalty 2.13 2010 to 2011 Excise (Appeals)
Excise Duty 149.25 Central Excise
& Service Tax
Penalty 234.45 2003 to 2011 Appellate Tribunal
Excise Duty 12.12 2005 to 2012 Deputy
Commissioner of
Central Excise
Mahara
shtra Value Added 50.78 2003-04 Deputy Commis-
sioner of Sales
VAT Act, Tax Tax (Appeals)
2002
Mahara
shtra Value Added 56.54 2004-05 Joint Commis
sioner of Sales
VAT Act, Tax Tax (Appeals)
2002
West
Bengal Value Added 8.75 2006-2007 Additional
Commissioner of
VAT Act, Tax 3.37 2007-2008 Commercial Taxes
2003 (Appeal)
Uttar Value Added 31.38 2012-2013 Additional
Commissioner of
Pradesh
VAT Tax Commercial Taxes
Act 2008 (Appeal)
Bihar VAT Value Added 38.49 2010-2011 Joint Commis-
sioner of
Act, 2005 Tax 62.99 2011-2012 Commercial Taxes
(Appeals)
Income
Tax Income Tax 8.89 2008-09 Commissioner of
Income Tax
Act, 1961 45.01 2009-10 (Appeal)
10. In our opinion and according to the information and explanations
given to us, the Company does not have any accumulated losses as at the
end of the financial year and has not incurred any cash loss in the
financial year ended on that date or in the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of any dues to
any bank or any debenture holder during the year. The Company has not
taken any financial assistance from any financial institution and does
not have any debenture outstanding as on the balance sheet date.
12. In our opinion and according to the explanations given to us and
based on the information available, the Company has not granted any
loan or advance on the basis of security by way of pledge of shares,
debentures and other securities.
13. The provisions of any special statute applicable to a chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
Company and therefore the requirements of clause (xiii) of paragraph 4
of the Companies (Auditor''s Report) Order, 2003 are not applicable to
the Company for the current year.
14. In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in shares,
securities, debentures and other investments as such. However, the
Company has made certain investments in shares, securities, debentures,
bonds and/or mutual funds for which proper records are maintained in
respect of transactions and contracts and timely entries have been made
therein. All investments are held by the Company in its own name.
15. The Company has given guarantee for loan taken by one of its
subsidiary company from the banks. According to the information and
explanations given to us, we are of the opinion that the terms and
conditions thereof are not prima facie prejudicial to the interest of
the Company.
16. In our opinion and according to the information and explanations
given to us, the external commercial borrowing (ECB) loan taken be the
Company, which is in the nature of term loan, has been applied for the
purpose for which it was raised.
17. According to the cash-flow statement and other records examined by
us and the information and explanations given to us on an overall
basis, we are of the opinion that there is no direct utilization of the
funds raised on a short term basis during the year for long term
investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956 during the year and therefore the
requirements of clause (xviii) of paragraph 4 of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the Company for
the current year.
19. The Company has not issued any secured debentures and therefore the
requirements of clause (xix) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the Company for the current
year.
20. The Company has not raised any money by public issues during the
year and therefore the requirements of clause (xx) of paragraph 4 of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company for the current year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have been informed of such case by the management.
For R.S.SANGHAI & ASSOCIATES
Chartered Accountants
Registration No. 109094W
SD/-
R.S.SANGHAI
Partner
Membership No.: 036931
Mumbai: 7th July, 2014
Mar 31, 2013
We have audited the accompanying financial statements of ALKEM
LABORATORIES LIMITED (''the Company'') which comprise the Balance Sheet
as at 31st March, 2013, the Statement of Profit and Loss Account and
the Cash Flow ''Statement for the year then ended and a summary of
significant accounting policies and other explanatory information,
Management''s Responsibility for the financial statements :
Managements is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India including
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 (''the Act''). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statement that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility:
Our responsibility is to express an opinion on these financial
statements based on our audit We conducted our audit in accordance with
the Standards on Auditing issued by the Institute of Chartered
Accountants of India Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
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 auditor''s judgment, 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 Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting principles used
and the reasonableness of the accounting estimates made by management,
as well as evaluating the overall presentation of the financial
statements
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a base for our audit opinion.
Opinion:
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act 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 31s1 March, 2013;
(ii) In the case of the Statement of Profit and Loss 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.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditors'' Report) Order, 2003 {''the
Order''), as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure
hereto a statement on the matters specified in paragraphs 4 and 5 of
the order.
2. As required by Section 227 (3) of the Act, we report that.
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 appears from our examination of
those books;
c. The Balance Sheet, the Statement of Profit and Loss 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 Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of Section 211 Act.
e. On the basis of written representations received from the
directors, as on 31sl March, 2013, and taken on record by the Board of
Directors, none of the directors is disqualified as on 31s1 March, 2013
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act.
Re: Alkem Laboratories Limited (Referred to in Paragraph 1 under the
heading of "Report on other Legal and Regulatory Requirements" of
Dur Report of even date)
1 In respect of its fixed assets;
(a) The company has maintained proper records showing full particulars,
including quantitative details and situation of its fixed assets on the
basis at available information.
(b) As explained to us, certain items of fixed assets have been
physically verified by the management during the year, and there is a
regular program of verification, in a phased periodical manner, which
in our opinion is reasonable, having regard to the size of the Company
and the nature of its fixed assets According to the information and
explanations given to us, no material discrepancies have been noticed
on such verification
(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
2 In respect of its inventories:
(a) As explained to us, the inventories (excluding goods-in-transit)
have been physically verified by the management at reasonable regular
intervals during the year In respect of inventories which are not
physically verified being goods in transit, they are not material In
our opinion, the frequency of verification is reasonable,
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate considering the
size of the Company and the nature of its business
(c) The Company has maintained proper records of inventories As
explained to us, there was no material discrepancy noticed on physical
verification of inventories as compared to the book records.
3 In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
(a) The Company has granted loans to its eight subsidiaries covered in
the register maintained under Section 301 of the Act, The maximum
amount outstanding at any time during the year was Rs 7500 00 lakhs and
the yearend year end balances of such loan amounted to Rs 4775.24
lakhs Other than above, the Company has not granted any loan, secured
or unsecured, to Companies, Firms or parties covered in the register
maintained under Section 301 of Act
(b) In our opinion, the rate of interest and other terms and conditions
on which these loans have been granted to the subsidiaries covered in
the register maintained under Section 301 of the Act are not, prima
fancies, prejudicial to the interest of the Company.
(c) The Company is regular in receipt of interest and principal amount
of unsecured loans wherever applicable and there is no default..
(d) There are no overdue amounts of more than Rupees One Lakh in
respect of the loans granted to the subsidiaries listed in the register
maintained under Section 301 of the Act.
(e) The Company has taken unsecured loans from 33 parties covered in
the register maintained under Section 301 of the Companies Act, 1956
being directors and their relatives, The aggregate of the year end
balances of such loans is Rs 4610.99 Lakhs and the maximum amount
involved during the year was Rs 4855 04 Lakhs from these parties.
(f) The rate of interest, wherever applicable and other terms and
conditions of such loan are, in our opinion, prima facie not
prejudicial to the interest of the Company.
(g) The company is regular in repayment of interest and principal
amount of unsecured loans and there is no default.
4. In our opinion, and according to the information and explanations
given to us and having regard to the explanation that purchases of
certain item of inventories are for the Company''s specialized
requirements and similarly certain goods sold are for the specialized
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 inventory and
fixed assets and also for sale of goods and services Further, on the
basis of our examination of the books and records of the Company, we
have not observed any continuing failure to correct major weaknesses in
the aforesaid internal control procedures.
5 In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
(a) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered into a register in pursuance of
Section 301 of the Companies Act, 1956, have been so entered
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements referred to in point (a) above and exceeding the value of
Rs 5 lakhs with any party during the year, have been made at prices
which are prima facie reasonable having regard to the prevailing market
prices at the relevant time, except that reasonableness could not be
ascertained where comparable quotations are not available having
regards to the specialized nature of some of the transactions of the
Company as mentioned in paragraph 4 hereinabove However, on the basis
of the information and explanation provided the same appears to be
reasonable
6. The company has not invited any deposit from public as such but has
accepted unsecured loans From its directors, shareholders and their
relatives and also trade deposits from stockiest and agents which are
in the nature of deposits defined under the provisions of section 58A
and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975. In our opinion, and according to the information
and explanations given to us, the company has complied with the
directives issued by the Reserve Bank of India, the provisions of
section 5BAand 58AAof the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits so
accepted, to the extent applicable We are informed by the management
that no order has been passed by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal, relevant to sections 58A, 58AA or other relevant provisions
of the Act upon the Company.
7. In our opinion, the company has an internal audit system being
carried out by firms of Chartered Accountants and also by its own
internal audit department during the year, which in our opinion is
commensurate with its size and the nature of its business.
B. We have broadly reviewed, the books of accounts and records
maintained by the company in respect of the products where, pursuant to
the Rules made by the Central Government of India, the maintenance of
cost records has been prescribed under clause (d) of sub- section (1)
of Section 209 of the Companies Act, 1956, 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 determine whether they are accurate or complete.
9. In respect of statutory dues:
(a) According to the information and explanations given to us and the
records of the company examined by us. in our opinion, the Company is
regular in depositing the undisputed statutory dues including provident
fund, employees'' state insurance, income-tax. sales-tax, service-tax,
wealth tax, custom duty, excise duty, cess and other material statutory
dues during the year as applicable with the appropriate authorities in
India. According to the information and explanations given to us and
the records of the Company examined by us, no undisputed amount is
payable in respect of provident fund, employees'' state insurance,
income-tax, sales-tax. service-tax, wealth tax. custom duty, excise
duty, cess which were outstanding as on 31st March, 2013 for a period of
more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the company examined by us, there are no dues on account of
customs duty, wealth-tax, service-tax and cess which have not been
deposited on account of any dispute The particulars of dues of
sales-tax, excise duty and income-tax, as at 31s1 March, 2013 which
have not been deposited on account of dispute, are as under:
Name of the Nature of Dues Amount Rupees Period to which the
where the
Statute (In Lakhs) amount relates
Central Excise Duty 37.24 2002 to 2005
Excise
Act 1944 Excise Duty 44.73 2007 to 2012
Excise Duty 63.10 2006 to 2011
Penalty 2.13 2010 to 2011
Excise Duty 149.25 2003 to 2011
Penalty 234.45
Excise Duty 12.12 2005 to 2012
Maharastra Sales Tax 50.78 2003 - 2004
VAT Act, 2002
Maharastra Sales Tax 56.54 2004 - 2005
Act,2002
West Bengal Value Added 8.75 2006 - 2007
VAT Act, 2003 Tax 3.37 2007 - 2008
Uttar Pradesh Value-added 31.38 2012-2013
VAT Act, 2008 Tax
Bihar VAT Value-added 38.49 2010 - 2011
Act, 2005 Tax 62.99 2011-2012
Income Tax Income Tax 8.89 FY 2008-2009
Act, 1961 AY 2009-2010
Name of the Forum where the
Statute dispute is pending
Central Additional Commissioner of
Excise Act Central Excise
1944
Additional Commissioner of
Central Excise
Commissioner of Central
Excise (Appeals)
Central Excise & Service Tax
Appellate Tribunal
Deputy Commissioner of
Maharastra Deputy Commissioner of Sales
VAT Act, 2002 Tax (Appeals)
Maharastra Joint Commissioner of Sales
Act,2002 Tax (Appeals)
West Bengal Additional Commissioner of
VAT Act, 2003 Commercial Taxes (Appeals)
Uttar Pradesh Additional Commissioner of
VAT Act, 2008 Commercial Taxes (Appeals)
BiharVAT Joint Commissioned
Act, 2005 Commercial Taxes (Appeals)
Income Tax Commercial of Income Tax
Act, 1961 (Appeals
10 In our opinion and according to the information and explanations
given to us, the Company does not have any accumulated losses as at the
end of the financial year and has not incurred any cash loss in the
financial year ended on that date or in the immediately preceding
financial year
11 In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of any dues to
any bank or any debenture holder during the year. The Company has not
taken any financial assistance from any financial institution and does
not have any debenture outstanding as on the balance sheet data*
12 In our opinion and according to the explanations given to us and
based on the information available, the Company has not granted any
loan or advance on the basis of security by way of pledge of shares,
debentures and other securities.
13. The provisions of any special statute applicable to a chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
Company and therefore the requirements of clause (xiii) of paragraph 4
of the Companies (Auditor''s Report) Order, 2003 are not applicable to
the Company for the current year.
14. In our opinion and according to the information and explanations
given to us, the company is not a dealer or trader in shares,
securities, debentures and other investments as such However, the
Company has made certain investments in shares, securities, debentures,
bonds and / or mutual funds for which proper records are maintained in
respect of transactions and contracts and timely entries have been made
therein All investments are held by the Company in its own name.
15 The Company has given guarantee for loan taken by its subsidiary
Company from the banks. According to the information and explanations
given to us, we are of the opinion that the terms and conditions
thereof are not prima facie prejudicial to the interest of the Company.
16. In our opinion and according to the information and explanations
given to us, the external commercial borrowing (ECB) loan taken by the
Company, which is in the nature of term loan, has been applied for the
purpose for which it was raised.
17 According to the cash-flow statement and other records examined by
us and the information and explanations given to us on an overall
basis, we are of the opinion that there is no direct utilization of the
funds raised on a short term basis during the year for long term
investments.
18.. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956 during the year and therefore the
requirements of clause (xviii) of paragraph 4 of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the company for
the current year.
19 The company has not issued any secured debentures and therefore the
requirements of clause (xix) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the Company for the current
year
20 The Company has not raised any money by public issues during the
year and therefore the requirements of clause (xx) of paragraph 4 of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
company for the current year.
21 During the course of our examination of the books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instance of material fraud
on or by the company, noticed or reported during the year, nor have
been informed of such case by the management.
For R.S.SANGHAI & ASSOCIATES
Chartered Accountants
Registration No. 109094W
R.S.SANGHAI
Partner
Membership No : 36931
Mumbai, 12th June, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of ALKEM LABORATORIES
LIMITED (''the Company'') as at 31st March, 2012, the Statement of Profit
and Loss Account and the Cash Flow Statement (together known as
''financial statements'') of the Company for the year ended or that date
all annexed thereto, which we have signed under reference to this
report. These financial statements are the responsibility of the
Company''s 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 the management, as well as evaluating the overall presentation of
the financial statement. We believe that our audit provides a
reasonable basis for our opinion.
3 As required by the Companies (Auditors'' Report) Order, 2003 (''the
CARO Order1) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956 (''the Act'')
and on the basis of such checks of the books and records of the Company
as we considered appropriate and according to the information and
explanations given to us during the course of our audit, we enclose in
the Annexure hereto a statement on the matters specified in paragraphs
4 and 5 of the said order to the extent applicable
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
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 appears from our examination of
those books;
c. The Balance Sheet, the Statement of Profit and Loss 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 Statement of Profit 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 Companies Act, 1956 read with Companies (Accounting Standard)
Rules, 2006, to the extent applicable;
e. On the basis of written representations received from the
directors, as on 31st March. 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956; and
f. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Significant Accounting Policies, and Notes there on 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, 2012;
(ii) in the case of the Statement of Profit and Loss 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
Re: Alkem Laboratories Limited (Referred to in Paragraph 3 of our
Report of even date on the financial statements of the Company for the
year ended 31st March, 2012)
1 In respect of its fixed assets:
(a) The company has maintained proper records showing full particulars,
including quantitative details and situation of its fixed assets
(b) As examined to us certain items of fixed assets has been physically
verified by the management during the year, and there is
a regular program of verification, in a phased periodical manner,
which in our opinion is responsible, having regard to the size of the
Company and the nature of its fixed assets. According to the on and
explanations given to us. no material discrepant have been noticed on
such verification.
(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.
2 In respect of its inventories:
(a) As explained to us, the inventories (excluding goods-in-transit)
have been physically verified by the management at reasonable regular
intervals during the year. In respect of inventories which are not
physically verified being goods in transit, they are not material. In
our opinion, the frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of inventory
followed by the management were reasonable and adequate considering the
size of the company and the nature of its business.
(c) On the basis of examination of the inventory record, in our opinion
and according to the information and explanation given to us, the
company is maintaining proper records of inventory. discrepancies
noticed on physical verification of inventory as compared to book
records which have been properly dealt with in the books of account
were not material .
3 In respect of the loans, secured or unsecured, granted or taken by
the Company to I from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
(a) The company has not granted any loan, secured or unsecured to
companies. firm or other parties listed in the register maintained
under section 301 of the companies Ac, 1956 and accordingly, the
requirements of sub- clauses (a) to (d) of clause (iii) of perhaps 4 of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company for the current year.
(b) The company has take unsecured loans from 23 parties covered in the
register maintained under section 301 of the companies Act, 1956 being
directors and their relatives. The aggregate of the year end balances
of such loans is Rs. 3471,89 Lakhs and the maximum amount involved
during the year was Rs 3827 8 Lakhs from these parties.
(c) The rate of interest, wherever applicable and other terms and
conditions of such loans are, in our opinion, prima face not
prejudicial to the interest of the Company.
(d) The company is regular in repayment of interest and principal
amount of unsecured loans and there is no default.
4. In our opinion, and according to the information and explanation
given to us, and having regard to the explanation that purchases of
certain items of inventories are for the company'' specialized
requirements and generally certain goods sold are for the specialized
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 inventory and fixed assets
and also for sales of goods and services Future, on the basis of our
examination of the book and records of the company. We have not observed
any continuing future to correct major weakness in the aforesaid
internal control procedures.
5 In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
(a) In our opinion, and according to the information and explanations
given " arrangements, that needed to be entered into a register in
pursuance of Section 301 of the Company
(b) In our opinion and according to the information and explanations
given to us, that transaction made in pursuance of the contracts
arrangements referred to in point (a) above and exceeding the value of
Rs. 5 Lakhs with any party during the year have been made at prices
which are puma tape reasonable having regard to the prevailing market
prices at the relevant time. Except that reasonableness could not be
ascertained where comparable quotations are not available having regards
to the specialised nature of some of the transactions of the Company as
mentioned in paragraph 4 here in above. However on the basis of the
information and explanation provided the same appears to be reasonable.
6 The company has not invited any deposit from public as such but has
accepted unsecured loans from its directors, shareholders and their
relatives and also trade deposits from stockiest and agents which are
in the nature of deposits defined under the provisions of section 58A
and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975 In out on'' 3rd according to the information and
explanations given to us, the company has complied with the director
issued by the Resent Bank of India the provisions of section 58A and
58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules 1975 with regard to the deposits accepted, to the
extent applicable We are informed by the management that no order has
bee passed by the Company Law Board or National Company Law Tribunal or
Resent Bank of India or any Court or any other Tribunal, relevant to
sections 58A, 58AA or other relevant provisions of the Act upon the
Company
7. In our opinion, the company has an internal audit system being
carried out by firms of Chartered Accountants and also by its own
internal audit department during the year, which in our opinion is
commensurate with its size and the nature of its business.
8. We have broadly reviewed, the books of accounts and records
maintained by true company to the Rules made by the Central Government
of India. the maintenance of cost records has Been company by under clause
section (1) of Section 209 of the Companies Act. 1956. and are of the opinion
that puma facie, the prescribed accounts and records have been made and
maintained. We have, however, not trade a detailed examination of the records
with a view to determine whether they are accurate or complete.
9. In respect of statutory dues
(a) According to ''he information and explanations given to us
and the records of the company examined by . in out opinion. the ESS
up to in depositing the statutory dues Mud* prudent fund, employees''
state insurance. income tax sales-tax. service tax. wealth tax custom
duty, excise duty cess and other material statutory dues during the year
with the appropriate authorised India. According to the information and
explanations given to us and the records of the Company examined by us
no undisputed amount a payable in respect of provident land. employees
state insurance tax sale tax, service tax, wealth tax custom duty, excise
duty, cess which were outstanding as on 31- March. 2012 for a period of
more than six months thorn the date they became payable Since the
Central Government has till date net prescribed the 31 cost payable
under Section of the Companies Act 1956 we are not in a position to
comment upon the require or otherwise of the Company m depositing the
same.
(b) According to the information and explanations given to us and the
records of the company examined dues on account of customs duty,
income-tax. wealth-tax, service-tax and cess which have not been
deposited on account of any dispute. The particulars of dues sales-tax
and excise duty as at 31- March. 2012 which have not been deposited on
account of are as under
Name of the Nature of Dues Amount Rupees
Statute (In Lakhs)
Central Excise Duty 17.93
Excise Act
1944 Excise Duty 57.99
Penalty 45.60
Excise Duty 19.30
Penalty on 19.88
Excise Duty
Excise Duty 89.07
Penalty 23.90
Excise Duty 61.47
Excise Duty 94.62
Penalty 142.51
Maharashtra Sales Tax 50.78
VAT Act, 2002
Punjab VAT Sales Tax 21.98
Act, 2005 Penalty 7.80
Bihar VAT Sales Tax 9.03
Act 2005 10.87
Name of the Period to which the Forum where the
Statute amount relates dispute is pending
Central Excise 2004 to 2005 Additional Commissioner of
Act, 1944 Central Excise
2003 to 2005 Central Excise & Service tax
Appellate Tribunal
2002 to 2004 Additional Commissioner of
Central Excise
2009 Central Excise & Service Tax
Appellate Tribunal
2005 to 2012 Deputy Commissioner of
Central Excise
2008 to 2010 Commissioner of Central
Excise (Appeals)
2006 to 2010 Commissioner of Central
Excise (Appeals)
2007 to 2012 Central Excise & Service
Tax Appellate Tribunal
Maharashtra VAT 2003-2004 Deputy Commissioner of Sales
Act, 2002 2004-2005 Tax (Appeals)
Panjab VAT 2010-2011 Joint Director (Enforcement)
Act,2005
Bihar VAT 2002-2003 Commercial Taxes Tribunal
2003-2004
10 In our opinion and according to the information and explanations
given to us, the Company does not have any accumulated fosses as at the
end of the financial year and has not incurred any cash loss in the
financial year ended on that date or in the immediately preceding
financial year
11 In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of any dues to
any bank or any debenture holder during the year. The Company has not
taken any financial assistance from any financial institution and does
not have any debenture outstanding as on the balance sheet date
12 In our opinion and according to the explanations given to us and
based on the information available, the Company has not granted any
loan or advance on the basis of security by way of pledge of shares,
debentures and other securities.
13 The provisions of any special statute applicable to a chit fund /
nidhi / mutual benefit fund /societies are not applicable to the
Company and therefore the requirements of clause (xiii) of paragraph 4
of the Companies (Auditor''s Report) Order, 2003 are not applicable to
the Company for the current year.
14 In our opinion and according to the information and explanations
given to us, the company is not a dealer or trader in shares,
securities, debentures and other investments as such However, the
Company has carried on transactions on account of investment and trading
in shares, securities, debentures, bonds and mutual funds for which
proper records are maintained in respect of transactions and contracts
and timely entries have been made therein All the investments are held
by the Company in its own name
15 The Company has given guarantee for loan taken by it''s subsidiary
Company from the bank. According to the information and explanations
given to us, we are of the opinion that the terms and conditions
thereof are not prima fade prejudicial to interest of the Company.
16 In our opinion and according to the information and explanations
given to us, the external commercial borrowing (ECB) loan taken by the
Company, which is in the nature of term loan, has been applied for the
purpose for which it was raised.
17 According to the cash-flow statement and other records examined by
us and the information and explanations given to us on an overall
basis, we are of the opinion that there is no direct utilization of the
funds raised on a short term basis during the year for long term
investments
18 The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956 during the year and therefore the
requirements of clause (xviii) of paragraph 4 of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the company for
the current year.
19 The company has not issued any secured debentures and therefore the
requirements of clause (xix) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the Company for the current
year.
20 The Company has not raised any money by public issues during the
year and therefore the requirements of clause (xx) of paragraph 4 of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
company for the current year.
21 During the course of our examination of the books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instance of material fraud
on or by the company, noticed or reported during the year, nor have
been informed of such case by the management.
For R.S.SANGHAI & ASSOCIATES
Chartered Accountants
Registration No. 109094W
R.S.SANGHAI
Proprietor
Membership No.: 36931
Mumbai, 25th May. 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of ALKEM LABORATORIES
LIMITED ("the Company'') as at 32st March 2011,and the related Profit
and Loss Account and the Cash Flow Statement (together knows as
"financial statements'') of the company for the year ended on that date
annexed thereto, which we have signed under reference to this
report. 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 puritanical statement. We believe that our audit
provides a reasonable basis for our opinion.
3.As required by the Companies(Auditors'' Report)Order,2003("the CARO
Order'')Issued by the Central Movement of India in terms of
sub-section(4A)of Section 227 of the Companies Act,1956("the Act'')and
on the basis of such checks of the books and record of the company as
we considered and according to the information and explanations given
to us during the course of our audit, we enclose in the annexure hereto
a statement on the matters specified in paragraphs 4nad 5 of the said
order to the extent applicable.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
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 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 comply with the mandatory
Accounting Standards referred to in sub-Section(3C)of Section 211 of
the Companies Act1956 read with Companies (Accounting Standard) Rules,
2006, to the extent applicable,
e. On the basis of written representations received from the directors
as on 30st March,2011 and taken on record by the Board of Directors, we
report that none of the Directors is disqualified as on 31st
March,2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Compan.es Act, 1956, and
f. In our opinion and to the best of our information and according to
the explanations given to us the said accounts read together with the
significant Accounting Policies, Other Notes and Schedules annexed
thereto, view in conformity with the accounting principles generally
accepted in Indian:
(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 for the
year ended on that date
Re: Alkem Laboratories Limited (Referred to in Paragraph 3of even date
on the financial statement of the Company of the Company for the year
ended 31st March,2011
1 (a) The Company has maintained proper records Showing full
Particulars. including quantitative details and situation of its assets.
(b) As explained to us, certain items of fixed assets have been
physically verified by the management during the year, and 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 fixed assets. According to the ,information and explanations given
to us, no material discrepancies have been noticed on such verification
(c) No Substantial part of the fixed assets has been disposed of by
the company during the year and therefore in our opinion and according
to the information and explanations given to us the going concern
concept is not affected.
2 (a) As Explained to us, the inventories(excluding goods-in
transit)have been physically verified by the management at reasonable
regular intervals during the year. In respect on inventories which are
not physically verified being goods in transit, they are not material in
our opinion, the frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management were reasonable and adequate considering the
size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records. in our
opinion and according to the information and explanations given to us,
the company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records which have been properly dealt with in the books of
account and were not material.
3 (a) The company has not granted any loan in the nature of loan as such
(other than advances in the normal course of its business),secured or
unsecured, to companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act,1956.Therefore,the
requirements of clauses(iii-a), (iii-c) and (iii-d) of paragraph 4 of
the companies(Auditor''s Report) Order,2003 are not applicable to the
company for the current year.
(b) The Company has not granted any loan in the nature of loan from 24
parties covered in the register maintained under Section 301 of the
Companies Act,1956 being director and their relatives. The aggregate of
the year end balances of such loans is Rs.2925.26 Lakhs and the maximum
amount involved during the year was Rs.4211.12Lakhs from these parties.
(c) The rate of interest ,wherever applicable and other terms and
conditions are ,in our opinion, prima facie not prejudicial to the
interest of the company.
(d) The company is regular in repayment of interest and principal
amount of unsecured loans and there is no default.
4, In our opinion, and according to the information and explanations
given to us and having regard to the explanation that purchases of
certain items of inventories are for the company''s Specialized
requirements and similarly certain goods sold are for the Specialized
requirements of the buyers and suitable alternative sources are not
available to obtain comparable quotations, there is an adequate internal
control procedures commensurate with the size of the Company and the
nature of its business for purchase of inventory and fixed assets and
also for sale of goods and services. further, on the basis of our
examinations of the books and records of the company, and according to
the information and explanations given to us, we have not observed any
continuing failure to correct major weaknesses in the aforesaid
internal control procedures.
5 (a) In Our opinion, and according to the information and explanations
to us, the transactions made in pursuance contracts or
arrangements, that needed to be entered in to a register in pursuance of
Sectarian 301 of the Companies Act,1956,have been so entered,
(b) In our opinion and according to the information and explanations
given to us, these contracts or arrangements have been made at prices
which are prima facie reasonable having regard to the prevailing
market prices at the relevant time, except that reasonable could not
be ascertained where comparable quotations are not available having
regards to the specialized nature of some of the transactions of the
company as mentioned in Para 4 hereinabove. However, On the basis of the
information and explanation provided the same appears to be reasonable.
6. The company has not invited any deposit from public as such but has
accepted unsecured loans from its directors, shareholders and their
relatives and also trade deposits from stockiest and agents which are
in the nature of deposits defined under the provisions of section
58Aand 58AAof the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975. In our opinion, and according to the information
and explanations given to us, the company has complied with the
directives issued by the Reserve Bank of India, the provisions of
section 58Aand 58AA of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted, to the extent applicable. We are informed by the management
that no order has been passed by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal, relevant to sections 58A, 58AA or other relevant provisions
of the Act upon the Company.
7. In our opinion, the company has an internal audit system being
carried out by firms of Chartered Accountants and also by its own
internal audit department during the year, which in our opinion is
commensurate with its size and the nature of its business.
8. We have broadly reviewed, the books of accounts and records
maintained by the company in respect of the products where, pursuant to
the Rules made by the Central Government of India, the maintenance of
cost records has been prescribed under clause (d) of sub- section (1)
of Section 209 of the Companies Act, 1956, 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 determine whether they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the company
is regular in depositing the undisputed statutory dues including
provident fund, employees'' state insurance, income-tax, sales-tax,
service-tax, wealth tax, custom duty, excise duty, cess and other
material statutory dues during the year as applicable with the
appropriate authorities in India. According to the information and
explanations given to us and the records of the company examined by us,
no undisputed amount is payable in respect of provident fund,
employees'' state insurance, income-tax, sales-tax, service-tax, wealth
tax, custom duty, excise duty, cess which were outstanding as on 31s1
March, 2011 for a period of more than six months from the date they
became payable. 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 and the
records of the company examined by us, there are no dues of customs
duty, income-tax, wealth-tax, service-tax and cess which have not been
deposited on account of any dispute. The particulars of dues of
sales-tax and excise duty as at 31st March, 2011 which have not been
deposited on account of dispute, are as follows-
Name of the Nature of Dues Amount Period to which the
Statute Rs. (In Lakhs) amount relates
Central Excise Excise Duty 17.93 2004 to 2005
Act and 309.88 2003''to 2009
Penalty
thereon 16.12 2007 to 2009
Various States Sales-Tax & 50.78 2003 - 2004
Sales Tax/VAT Penalty 56.54 2004 - 2005
Acts thereon 21.21 2008 - 2009
3.83 2009 - 2010
29.78 2010 - 2011
19.90 2002 - 2004
Name of the Forum where the
Statute dispute is pending
Central Supreme Court of India
Act Central Excise & Service tax
Appellate Tribunal
Commissioner of Central Excise
(Appeals)
Various States Joint Sales Commissioner/Deputy
Commissioner / Commissioner of
Sales Tax (Appeals) of the
respective states
Sales Tax Appellate Tribunal
10 In our opinion and according to the information and explanations
given to us, the company does not have any accumulated losses as at the
end of the financial year and has not incurred any cash loss in the
financial year ended on that date or in the immediately preceding
financial year.
11 In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of any dues to
any bank or any debenture holder during the year. The company has not
taken any financial assistance from any financial institution and does
not have any debenture outstanding as on the balance sheet date.
12. In our opinion and according to the explanations given to us and
based on the information available, the company has not granted any
loan or advance on the basis of security by way of pledge of shares,
debentures and other securities.
13 The provisions of any special statute applicable to a chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
company and therefore the requirements of clause (xiii) of paragraph 4
of the Companies (Auditor''s Report) Order, 2003 are not applicable to
the company for the current year.
14 In our opinion and according to the information and explanations
given to us, the company is not a dealer or trader in shares,
securities, debentures and other investments as such. However, the
company has carried on transactions on account of investment and
trading in shares, securities, debentures, bonds and mutual funds for
which proper records are maintained in respect of transactions and
contracts and timely entries have been made therein. All the
investments are held by the company in its own name.
15. The Company has given guarantee for loan taken by others from the
bank. According to the information and explanations given to us, we are
of the opinion that the terms and conditions thereof are not prima
facie prejudicial to interest of the Company.
16. The company has not taken any term loan and therefore the
requirements of clause (xvi) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the company for the current
year.
17 According to the cash-flow statement and other records examined by
us and the information and explanations given to us on an overall
basis, we are of the opinion that there is no direct utilization of the
funds raised on a short term basis during the year for long term
investments.
18 The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956 during the year and therefore the
requirements of clause (xviii) of paragraph 4 of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the company for
the current year.
19. The company has not issued any secured debentures and therefore
the requirements of clause (xix) of paragraph 4 of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the company for
the current year.
20. The company has not raised any money by public issues during the
year and therefore the requirements of clause (xx) of paragraph 4 of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
company for the current year.
21 During the course of our examination of the books and records of the
company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instance of material fraud
on or by the company, noticed or reported during the year, nor have
been informed of such case by the management.
For R.S.SANGHAI & ASSOCIATES
Chartered Accountants
Registration No.109094W
SD/-
R.S.SANGHAI
Proprietor
Membership No.: 36931
Mumbai, 14th June, 2011
Mar 31, 2009
1. We have audited the attached Balance Sheet of ALKEM LABORATORIES
LIMITED (''the Company'') as at 31st March, 2009, and the related
Profit and Loss Account and the Cash Flow Statement of the company for
the year ended on that date annexed thereto, which we have signed under
reference to this report. These financial statements are the
responsibility of the Company''s 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 the management, as well as evaluating the overall presentation of
the financial statement. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditors'' Report) Order, 2003
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956 and on the basis of such
checks of the books and records of the company as we considered
appropriate and according to the information and explanations given to
us during the course of our audit, we enclose in the Annexure hereto a
statement on the matters specified in paragraphs 4 and 5 of the said
order to the extent applicable.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
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 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 comply with the
mandatory Accounting Standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956 read with Companies (Accounting
Standard) Rules, 2006, to the extent applicable;
e. On the basis of the written representations received from the
directors, as on 31st March, 2009, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2009 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956; and
f. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Significant Accounting Policies, Other Notes and Schedules annexed
thereto, 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, 2009;
(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 for the
year ended on that date.
Annexure to the Auditors'' Report
Re: Alkem Laboratories Limited (Referred to in Paragraph 3 of our
Report of even date on the financial statements of the company for the
year ended 31st March, 2009)
1. (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) As explained to us, certain items of fixed assets have been
physically verified by the management during the year, and 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 fixed
assets. According to the information and explanations given to us, no
material discrepancies have been noticed on such verification.
(c) No substantial part of the fixed assets has been disposed off by
the company during the year and therefore in our opinion and according
to the information and explanations given to us the going concern
concept is not affected.
2. (a) As explained to us, the inventories (excluding stocks with some
of the third parties) have been physically verified by the management
at reasonable regular intervals during the year. In respect of
inventories which are not physically verified and are lying with third
parties are not substantial. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management were reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion and according to the information and explanations given to us,
the company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records which have been properly dealt with in the books of
account were not material.
3. (a) The Company has not granted any loan in the nature of loan as
such (other than advances in the normal course of its business),
secured or unsecured, to companies, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
Therefore, the requirements of clauses (iii-a), (iii-
b), (iii-c) and (iii-d) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the company for the current
year.
(b) The Company has taken unsecured loans from 35 parties covered in
the register maintained under Section 301 of the Companies Act, 1956
being directors and their relatives. The aggregate of the year end
balances of such loans is Rs. 1769.15 Lakhs and the maximum amount
involved during the year was Rs. 1897.20 Lakhs from these parties. .
(c) The rate of interest, wherever applicable and other terms and
conditions of such loans are, in our opinion, prima facie not
prejudicial to the interest of the company.
(d) The company is regular in repayment of interest and principal
amount of unsecured loans and there is no default.
4. In our opinion, and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased are of special nature for which suitable alternative sources
do not exist for obtaining comparative quotations, there are adequate
internal control procedures commensurate with the size of the company
and the nature of its business for purchase of inventory and fixed
assets and also for sale of goods and services. Further, on the basis
of our examination of the books and records of the Company, and
according to the information and explanations given to us, we have not
observed any continuing failure to correct major weaknesses in the
aforesaid internal control procedures.
5. (a) In our opinion, and according to the information and
explanations given to us, the transactions made in pursuance of
contracts or arrangements, that needed to be entered into a register in
pursuance of Section 301 of the Companies Act, 1956, have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, these contracts or arrangements have been made at prices
which are prima facie reasonable having regard to the prevailing market
prices at the relevant time, except that reasonableness could not be
ascertained where comparable quotations are not available having
regards to the specialized nature of some of the transactions of the
company.
6. The company has not invited any deposit from public as such but has
accepted unsecured loans and deposits from its directors, shareholders
and their relatives and also trade deposits from stockiest and agents
which are in the nature of deposits specified under the provisions of
section 58A and 58AA of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975. In our opinion, and according to
the information and explanations given to us, the company has complied
with the directives issued by the Reserve Bank of India, the provisions
of section 58A and 58AA of the Companies Act, 1956 and the Companies
(Acceptance of Deposits) Rules, 1975 with regard to the deposits
accepted, to the extent applicable. We are informed by the management
that no order has been passed by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal, relevant to sections 58A, 58AA or other relevant provisions
of the Act upon the Company.
7. In our opinion, the company has an internal audit system being
carried out by a firm of Chartered Accountants and also by its own
internal audit department during the year which in our opinion is
commensurate with its size and the nature of its business.
8. We have broadly reviewed, the books of accounts and records
maintained by the company in respect of the products where, pursuant to
the Rules made by the Central Government of India, the maintenance of
cost records has been prescribed under clause (d) of sub-section (1) of
Section 209 of the Companies Act, 1956, 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 determine whether they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the company
is regular in depositing the undisputed statutory dues including
provident fund, employees'' state insurance, income-tax, sales-tax,
service-tax, wealth tax, custom duty, excise duty, cess and other
material statutory dues during the year as applicable with the
appropriate authorities in India. According to the information and
explanations given to us and the records of the company examined by us,
no undisputed amount is payable in respect of provident fund,
employees'' state insurance, income-tax, sales-tax, service-tax,
wealth tax, custom duty, excise duty, cess which were outstanding at
the year end for a period of more than six months for the date they
became payable.
(b) According to the information and explanations given to us and the
records of the company examined by us, there are no dues of customs
duty, income-tax, wealth- tax, service-tax and cess which have not been
deposited on account of any dispute. The particulars of dues of
sales-tax and excise duty as at 31st March, 2009 which have not been
deposited on account of dispute, are as follows-
Nameofthe Nature of Amount Period to Forum where the
Statute Dues Rupees which the dispute is
(In Lakhs) amount Pending
relates
Central Excise Duty 174 1997- Central Excise Tribunal
Excise Act &Penalty 2008 Commissioner of .
Thereo 192 Central Excise (Appeal)
119 Dy./Jt./Addl.
Commissioner of
Central Excise_
Local Sales Sales-Tax& 2 2002-03 Sales Tax Tribunal
Tax AAT Acts Penalty 109 2003-07 Commissioner of Sales
thereon Tax (Appeal)
10. In our opinion and according to the information and explanations
given to us, the company does not have any accumulated losses as at the
end of the financial year and has not incurred any cash loss in the
financial year ended on that date or in the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of any dues to
any bank as on the balance sheet date. The company has not taken any
financial assistance from any financial institution and has not issued
any debenture as at the balance sheet date.
12. In our opinion and according to the explanations given to us and
based on the information available, the company has not granted any
loan or advance on the basis of security by way of pledge of shares,
debentures and other securities.
13. The provisions of any special statute applicable to a chit fund /
nidhi / mutual benefit fund / societies are not applicable to the
Company and therefore the requirements of clause (xiii) of paragraph 4
of the Companies (Auditor''s Report) Order, 2003 are not applicable to
the company for the current year.
14. In our opinion and according to the information and explanations
given to us, the company is not a dealer or trader in shares,
securities, debentures and other investments as such. However, the
company has carried on transactions on account of investment and
trading in shares, securities, debentures, bonds and mutual funds for
which proper records are maintained in respect of transactions and
contracts and timely entries have been made therein. Ail the
investments are held by the company in its own name.
15. In our opinion and according to the information and explanations
given to us, and the representations made by the management, the
company has not given any guarantee for loans taken by others from any
bank or financial institution.
16. The company has not taken any term loan and therefore the
requirements of clause (xvi) of paragraph 4 of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the company for
the current year.
17. According to the cash-flow statement and other records examined by
us and the information and explanations given to us on an overall
basis, we are of the opinion that there is no direct utilization of the
funds raised on a short term basis during the year for long term
investments.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956 during the year and therefore the
requirements of clause (xviii) of paragraph 4 of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the company for
the current year.
19. The company has not issued any secured debentures and therefore
the requirements of clause (xix) of paragraph 4 of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the company for
the current year.
20. The company has not raised any money by public issues during the
year and therefore the requirements of clause (xx) of paragraph 4 of
the Companies (Auditor''s Report) Order, 2003 are not applicable to
the company for the current year.
21. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the company, noticed or reported during the
year, . nor have been informed of such case by the management.
For R.S.SANGHAL & ASSOCIATES
Chartered Accountants
R.S.SANGHA!
Proprietor
Membership No.: 36931
Mumbai: 27th July, 2009