Mar 31, 2023
To The Members of AUROBINDO PHARMA LIMITED Report on the Audit of the Standalone Financial Statements
OPINION
We have audited the accompanying standalone financial statements of AUROBINDO PHARMA LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2023, and 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 significant accounting policies and other explanatory information (hereinafter referred to as the âstandalone financial statementsâ).
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 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditorâs Responsibility 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 (ICAI) 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 made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit 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. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. |
Key Audit Matter |
Auditorâs Response |
2 |
Inventory Existence and Valuation â Refer to Note 11 of the |
Principal audit procedures performed: |
Standalone financial statements: |
⢠Evaluated the Companyâs inventory accounting policies and |
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Refer to Note 2.2(g) of the summary of significant accounting policies. |
assessing compliance with the relevant accounting standards. ⢠Evaluated the design and testing the implementation and |
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The carrying value of inventories as at March 31, 2023 is ''41,252.6 million. |
operating effectiveness of the Companyâs internal controls |
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over physical verification of inventory, inventory valuation |
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Inventories are located at multiple locations including factories, warehouses and third party locations. |
and accounting. ⢠Evaluated the design, implementation and operating effectiveness |
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Inventories are valued at lower of cost, determined on weighted average basis and net realisable value. Raw material costs |
of general IT controls and key application controls over the |
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include cost of purchase and other costs incurred in bringing the |
Companyâs IT systems including those relating to recording of |
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inventories to their present location and condition. Finished goods and work-in-progress costs include direct |
inventory quantities on occurrence of each transaction, including access controls, controls over program changes. |
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material, labour and a proportion of manufacturing overheads |
⢠For the selected locations, observed the physical verification |
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based on the normal operating capacity. |
conducted by management near to the year end and tested |
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Inventory valuation is carried out across the units in excel |
the roll forward procedures performed by management on a |
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spreadsheets based on the quantitative inputs extracted from |
sample basis. |
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the books of accounts. |
⢠Tested the costs as calculated by the management on a |
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Existence and Valuation of Inventory has been considered as a |
sample basis by verifying underlying records such as purchase |
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key audit matter due to: |
invoices, cost sheets, overhead allocations and capacity |
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a. Significance of the inventory balance to the total assets as |
utilization certificates. |
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per standalone financial statements. |
⢠Compared the cost of the Raw material, Finished goods and Work |
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b. Multiple locations that inventory is held at. |
In Progress with the estimated net realizable value and checked |
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c. Valuation of inventory in a non-automated environment, and |
if those inventories were recorded at net realizable value where |
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the resultant likelihood of material misstatement resulting from errors in computation. |
the cost was higher than the net realizable value. |
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3 |
Assessment of impairment of investments in and unsecured |
Principal audit procedures performed: |
loans given to subsidiaries and joint ventures â Refer to Note 4 of the standalone financial statements |
⢠Evaluated the design, tested the implementation and operating effectiveness of the internal controls over impairment assessment |
|
Refer to note 2.1(d)(v) of the summary of significant accounting |
process, including those over the forecasts made and the |
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policies. |
selection of the appropriate discount rate. |
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The carrying value of investments in and unsecured loans given to certain subsidiaries and joint ventures is ''50,462 million. The Company performs annual assessment of investments to |
⢠Evaluated the impairment indicator assessment performed by the Company considering quantitative and qualitative factors. |
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identify any indicators of impairment. Based on internal and |
⢠Evaluated the reasonableness of the Managementâs estimates |
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external factors considered, where such evidence exists, |
and judgements through discussion with management and by |
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impairment loss is determined and recognised in accordance |
comparing the forecasts to historical revenues, margins, growth |
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with note 2.1(d)(v) of accounting policies to the standalone |
rate etc. |
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financial statements. |
⢠With the assistance of our internal fair value specialists, evaluated |
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The Companyâs evaluation of impairment of its investments |
the reasonableness of the valuation methodology, discount rate |
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involves comparison of their recoverable value to their corresponding carrying values. The Company used the |
and other key business assumptions used in the assessment. |
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discounted cash flow model to estimate recoverable values, |
⢠Tested the mathematical accuracy of the model to conclude that |
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which requires management to make estimates and assumptions |
the model is accurately calculating the value in use. |
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related to forecasts of future Revenues, operating margins, and |
⢠Performed sensitivity analysis around these key estimates to |
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discount rates. Changes in these assumptions could have a |
ascertain the extent of change in those assumptions that either |
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significant impact on either the recoverable value, the amount of |
individually or collectively would be required for the investments |
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any impairment charge, or both. |
and loans tested were to be impaired. |
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We considered this as a Key Audit Matter due to the materiality of the investments, and because the Companyâs assessment of |
⢠Evaluated the adequacy of disclosures made in the standalone |
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the recoverable values involves judgements around the future results of the business and the discount rates applied to future cash flow forecasts. |
financial statements. |
Sr. No. |
Key Audit Matter |
Auditorâs Response |
1 |
Revenue recognition â Refer to note 20 of the Standalone financial statements: Refer to Note 2.2(c) of the summary of significant accounting policies. The Company recognises revenue from sale of API, Intermediates and Formulations based on the terms and conditions of transactions which varies with different customers which define the timing of the transfer of control to the customer. For revenue recognized during the period near to the Balance Sheet date, it is essential to ensure that the control of goods have transferred to the customers. Dispatch of goods to the customerâs location happens from multiple locations including factories, warehouses and third-party locations. Revenue recognition being subject to the manual exercise of tracking the evidence of delivery and ascertaining the revenue recognition date against each invoice, we identified the Cut-off of revenue as a key audit matter |
Principal audit procedures performed: ⢠Evaluated the Companyâs revenue recognition policy and assessed compliance with the Indian Accounting Standard (Ind AS). ⢠Obtained an understanding of the revenue recognition process and tested the companyâs controls around the timely and accurate recording of sales transactions including controls around the identification and reversal of cut-off sales. ⢠Tested the access and change management controls of the relevant information technology system in which shipments are recorded. ⢠Basis of the sales recorded during the year, performed a lead time analysis to arrive at the average lead time taken for transfer of control to the customers from the date of dispatch, against the various INCOTERMS ⢠We selected samples from invoices recorded during such lead sales time immediately before the balance sheet date and obtained evidence of delivery to support the revenue recognition / reversal of revenue as the case may be. |
Sr. No. |
Key Audit Matter |
Auditorâs Response |
4 |
Litigation, Claims and Contingent Liabilities - Refer to note 30 of the standalone financials statements. Refer to Note 2.2(m) of the summary of significant accounting policies. The Company is involved in various legal proceedings including, product liability, contracts, investigations, disputed taxes and other regulatory matters relating to conduct of its business. Most of the claims involve complex legal and regulatory issues. The Company, assisted by their external legal counsel assesses the need to make provision or disclose a contingency on a case-to-case basis considering the underlying facts of each litigation. The Companyâs conclusions may result in an incorrect Provision or disclosure in the Standalone financial statements considering the aforesaid assessment involves significant judgement to be exercised by the Company based on current developments. Further, unexpected adverse outcomes could also significantly impact the Companyâs reported results. Given the different views possible, basis the interpretations, complexity and the magnitude of the potential exposures, and the judgement necessary to determine required disclosures, this is a key audit matter. |
Principal audit procedures performed: ⢠Understood the process, evaluated the design and implementation of controls and tested the operating effectiveness of the Companyâs controls over the recording and assessment of uncertain legal positions, claims & contingent liabilities. ⢠Held discussions with management including the person responsible for legal & compliance to obtain an understanding of the factors considered by management in classification of the matter as probable, possible and remote. ⢠Examined the Companyâs legal expenses on sample basis and read the minutes of the board meetings in order to ensure completeness. ⢠Circulated, obtained and read legal confirmations from Companyâs external legal counsels in respect of material litigations and considered probability assessment of the outcomes. ⢠Examined documents in the Companyâs possession concerning litigation and claims, legal advice/opinion received by the company. Obtained corroborative evidence to confirm the status & existence of the litigation. ⢠Evaluated the adequacy of disclosures made in the standalone financial statements. |
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORâS REPORT THEREON
⢠The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion & Analysis, Boardâs Report, Business Responsibility and Sustainability Report and Report on Corporate Governance, including Annexures, but does not include the consolidated financial statements, standalone financial statements and our auditorâs 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 identified above and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our 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.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS
The Companyâs Board of Directors is 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 financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 financial statement 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, 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
the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Companyâs Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
AUDITORâS RESPONSIBILITY 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 auditorâs 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 financial 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 standalone 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.
⢠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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
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 auditorâs 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.
directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
c) Based on the audit procedures performed that have been 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 (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. a. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable.
b. The interim dividend declared and paid by the Company during the year and until the date of this report is in accordance with section 123 of the Companies Act 2013.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by Section 143(3) of the Act, based on our audit
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 Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) I n 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 March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 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 âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls with reference to standalone financial statements.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) 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, as amended 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 financial statements (Refer note 30(c) 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. a) The Management has represented that,
to the best of its knowledge and belief, other than as disclosed in the note 51 (v) to the standalone financial statements, 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 person(s) or entity(ies), including foreign entities (âIntermediariesâ), 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 by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
b) The Management has represented, that, to the best of its knowledge and belief, other than as disclosed in the note 51 (vi) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall,
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company w.e.f. April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.
2. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells
Chartered Accountants
(Firmâs Registration No. 008072S)
C Manish Muralidhar
(Partner)
(Membership No. 213649)
Place: Hyderabad
Date: May 27, 2023
UDIN: 23213649BGVBYS5552
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Aurobindo Pharma Limited (the âCompanyâ), which comprise the standalone balance sheet as at March 31,2022, 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 (âActâ) 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 March 31, 2022, and its 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 Auditorâs 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 judgement, 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. We have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matters |
How the matter was addressed in our audit |
Litigations, claims and contingencies |
Our audit procedures included the following: |
Refer note 2.2(m) of the summary of significant accounting policies |
⢠Evaluating the design and testing the operating effectiveness of |
and note 30(C) to the standalone financial statements. |
controls relating to identification and evaluation of litigation and |
The Company is involved in disputes, lawsuits, claims, governmental |
claims and measurement of provisions, contingent liabilities and |
and/or regulatory inquiries, investigations and proceedings, including |
disclosures thereof. |
patent infringement cases, tax and commercial disputes arising from |
⢠Obtained a list of ongoing litigations from the Company''s legal |
time to time in the ordinary course of business. |
head. We selected a sample of significant litigations and evaluated |
Most of the claims involve complex legal and regulatory issues. The |
the Company''s assessment thereof by: |
Company, assisted by their external legal counsel assesses the need |
i. making inquiries with the in-house legal counsel of the |
to make provision or disclose a contingency on a case-to-case basis |
Company; |
considering the underlying facts of each litigation. The Company''s |
ii. obtaining and inspecting board minutes, verifying |
conclusions may result in an incorrect disclosure or provision in the |
correspondence, orders and appeals in respect of open |
books of account considering the aforesaid assessment involves significant judgement to be exercised by the Company based on |
litigation; and |
current developments. Further, unexpected adverse outcomes could |
iii. obtained independent confirmations from external legal |
also significantly impact the Company''s reported results. |
counsels where relevant and/ or. evaluated legal opinions obtained by the Company. Also assessed the competence |
This area is significant to our audit, since the accounting and disclosure for litigations, claims and contingencies is complex and |
and independence of the external legal counsels. |
judgemental. |
iv evaluated uncertain tax positions with assistance of our tax |
specialists. |
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⢠Evaluating the adequacy of provision and disclosures to Standalone financial statements |
|
Revenue Recognition |
Our audit procedures included the following: |
Refer to Note 2.2(c) of the summary of significant accounting policies |
⢠Assessing the Company''s revenue recognition policies for |
to the standalone financial statements. |
compliance with the applicable Ind AS. |
Revenue from sale of goods is recognised when a promise in a |
⢠Evaluating the design and implementation and testing the |
customer contract (performance obligation) has been satisfied |
operating effectiveness of the relevant key internal controls |
by transferring control over the promised goods to the customer. |
over recognition of revenue in accordance with delivery and |
Control is usually transferred upon shipment, delivery to, upon |
acceptance terms of the underlying customer contracts. |
receipt of goods by the customer, in accordance with the delivery |
⢠Performing testing of selected statistical samples of revenue |
and acceptance terms agreed with the customers. The amount of |
transactions recorded during the year by verifying the underlying |
revenue to be recognised is based on the consideration expected |
documents such as sales invoices/ contracts and dispatch/ |
to be received in exchange for goods, excluding trade discounts, |
acknowledged delivery receipts/shipping documents. |
volume discounts, sales returns and taxes. |
⢠Testing revenue transactions recorded before and after the |
We identified the recognition of revenue from sale of products as a |
financial year end date, selected on a sample basis using random |
key audit matter because: |
sampling, to assess revenue is recognised in the period in which |
Revenue is one of the key performance indicators for the Company |
control is transferred. |
and there could be a risk of revenue being recognised before the |
⢠Assessing manual journals, sample selected based on specified |
control has been transferred to the customer. |
risk-based criteria posted to revenue to identify unusual items. |
Key audit matters |
How the matter was addressed in our audit |
|
Inventory Valuation |
Our audit procedures included the following: |
|
Refer to Note 2.2(g) of the summary of significant accounting policies and note 11 to the standalone financial statements. |
⢠Evaluating the Companyâs inventory valuation policies and assessing compliance with the relevant accounting standards. |
|
The carrying value of inventories comprising of raw materials, packing materials, work-in-progress, finished goods, stores, spares and consumables as at March 31,2022 is ''33,561.8 million. |
⢠Evaluating the design and testing the implementation operating effectiveness of the Companyâs internal controls valuation of inventories. |
and over |
Inventories are valued at lower of cost, determined on weighted average basis and net realisable value. Raw material costs include cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Finished goods and work-in-progress costs include direct material, labour and a proportion of manufacturing overheads based on the normal operating capacity. |
⢠Evaluating the data inputs by testing samples, selected using statistical sampling, by verifying the underlying records such as purchase invoices, cost sheets, batch records, overhead allocation workings, and capacity utilisation certificates. ⢠Testing the mathematical accuracy of the valuation models. ⢠Performing analytical procedures on gross margin analysis (including price and volume changes) to identify unusual |
|
We identified inventory valuation as a key audit matter because of: |
variances. |
|
⢠the significance of the amount of inventories to the Standalone Balance Sheet; and |
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⢠non-automated environment, likelihood of material misstatement in inventory valuation arising from incorrect alterations to the inventory valuation records, on account of high volume of transactions and stock keeping units. |
The Companyâs Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the standalone financial statements and our auditorâs report thereon. The Companyâs annual report is expected to be made available to us after the date of this auditorâs report.
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.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
MANAGEMENTâS AND BOARD OF DIRECTORSâ RESPONSIBILITIES FOR THE STANDALONE FINANCIAL STATEMENTS
The Companyâs 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 judgements 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 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 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 Companyâs financial reporting process.
AUDITORâS 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 auditorâs 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 judgement and maintain professional scepticism 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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 auditorâs 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 (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of Section 143 (11) 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. (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 March 31,2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act.
⢠directly or indirectly, lend or invest in other persons or entities identified
in any manner whatsoever (âUltimate Beneficiariesâ) 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 interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with Section 123 of the Companies Act, 2013.
As stated in note 14 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
(C) With respect to the matter to be included in the Auditorâs Report under Section 197(16) of the Act:
I n 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 & Associates LLP
Chartered Accountants ICAI Firm Registration No. 116231 W/W-100024
Amit Kumar Bajaj
Partner
Place: Hyderabad Membership No. 218685
Date: May 30, 2022 ICAI UDIN: 22218685AJWCDF6328
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.
(B) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditorâs) 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 March 31, 2022 on its financial position in its standalone financial statements - Refer Note 30 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, as disclosed in the note 52(v) to the accounts, 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 (âIntermediariesâ), 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 (âUltimate Beneficiariesâ) 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, as disclosed in the note 52(v) to the accounts, no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall:
Mar 31, 2021
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Opinion
We have audited the standalone financial statements of Aurobindo Pharma Limited (âthe Companyâ), which comprise the standalone balance sheet as at March 31, 2021, 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 (âActâ) 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 March 31, 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 Auditorâs 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. We have determined the matters described below to be the key audit matters to be communicated in our report.
Description of Key Audit Matters |
|
Key audit matters |
How the matter was addressed in our audit |
Litigations, claims and contingencies |
In view of the significance of the matter we applied the following |
Refer note 2.2(m) of the summary of significant accounting policies and note 30(C) to the standalone financial statements. |
audit procedures in this area, among others to obtain sufficient audit evidence: |
The Company is involved in disputes, lawsuits, claims, governmental and / or regulatory inquiries, investigations and proceedings, including patent infringement cases, tax and commercial disputes arising from time to time in the ordinary |
⢠Evaluating the design and testing the operating effectiveness of controls relating to identification and evaluation of litigation and claims and measurement of provisions, contingent liabilities and disclosures thereof. |
course of business. |
⢠Obtained a list of ongoing litigations from the Companyâs |
Most of the claims involve complex issues. The Company, assisted by their external legal counsel assesses the need to |
legal head. We selected a sample of significant litigations and evaluated the Companyâs assessment thereof by: |
make provision or disclose a contingency on a case-to-case |
i. making enquiries with the in-house legal counsel of the |
basis considering the underlying facts of each litigation. The |
Company; |
Companyâs conclusions may result in an incorrect disclosure or provision in the books of account considering the aforesaid assessment involves significant judgment to be exercised |
ii. verifying correspondence, orders and appeals in respect of open litigation; and |
by the Company based on current developments. Further, |
iii. obtained independent confirmations from external legal |
unexpected adverse outcomes could also significantly |
counsels where relevant and/ or evaluated legal opinions |
impact the Companyâs reported results. |
obtained by the Company. |
This area is significant to our audit, since the accounting and |
⢠Evaluating the adequacy of provision and disclosures given in |
disclosure for litigations, claims and contingencies is complex and judgmental. |
Note 30(C) to standalone financial statements |
Revenue Recognition |
Our audit procedures in respect of the recognition of revenue |
Refer to Note 2.2(C) of the summary of significant accounting policies to the standalone financial statements. |
included the following: ⢠Considering the Companyâs revenue recognition policies and assessed compliance with the applicable accounting standards. |
Revenue from sale of goods is recognised when a promise in a customer contract (performance obligation) has been satisfied by transferring control over the promised goods to the customer. Control is usually transferred upon shipment, delivery to, upon receipt of goods by the customer, in |
⢠Evaluating the design, tested the implementation and operating effectiveness of the Companyâs internal controls over recognition and measurement of revenue in accordance with underlying customer contracts. |
accordance with the delivery and acceptance terms agreed |
⢠Performing substantive testing (including cutoff testing |
with the customers. The amount of revenue to be recognised |
procedures) by selecting samples of revenue transactions |
is based on the consideration expected to be received in |
recorded during the year and for the selected samples, verifying |
exchange for goods, excluding trade discounts, volume |
the underlying documents such as sales invoices / contracts and |
discounts, sales returns and taxes. |
dispatch/shipping documents. |
Revenue is one of the key performance indicators of the |
⢠Assessing manual journals posted to revenue to identify unusual |
Company and there could be a risk of revenue is recognised |
items not already covered by our audit testing; |
in the incorrect period or before the control has been transferred to the customer. |
⢠Evaluating adequacy of disclosures given in the standalone |
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and our auditorsâ report thereon. The Companyâs annual report is expected to be made available to us after the date of this auditorâs report.
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.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Managementâs and Board of Directorsâ Responsibility for the Standalone Financial Statements
The Companyâs 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 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 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 Companyâs financial reporting process.
Auditorâs 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 auditorâs 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 scepticism 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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 auditorsâ 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.
The standalone financial statements of the company include the financial statements of 5 wholly owned subsidiaries whose standalone financial statements reflect total assets (before intercompany adjustments) of ?6,985.5 million as at March 31, 2021 (March 31, 2020: ?5,478.9 million) and the total revenue (before inter-company adjustments) of ?1,462.7 million (March 31, 2020: C1,109.1 million) for the year ended on that date. These subsidiaries have been merged with the Company vide The Honâble National Company Law Tribunal, Hyderabad order dated March 30, 2021. These subsidiaries have been audited by other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, is based solely on the report of such other auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143 (11) 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 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) I n 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 on various dates from March 31, 2021 till May 24, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 âAnnexure Bâ; and
g) With respect to the other matters to be included in the Auditorsâ 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 March 31, 2021 on its financial position in its standalone financial statements -Refer 30(C) 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; and
iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from November 8, 2016 to December 30, 2016 have not been made in these financial statements since they do not pertain to the financial year ended March 31, 2021.
3. With respect to the matter to be included in the Auditorsâ Report under Section 197(16):
I n 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.
Chartered Accountants ICAI Firm Registration No: 116231 W/W-100024
Partner
Place: Palakkad Membership No: 049642
Date: June 3, 2021 ICAI UDIN: 21049642AAAABV5245
Mar 31, 2019
INDEPENDENT AUDITORâS REPORT
To the Members of Aurobindo Pharma Limited
REPORT ON THE AUDIT OF THE STANDALONE
FINANCIAL STATEMENTS
Opinion
We have audited the standalone financial statements of Aurobindo Pharma Limited (âthe Companyâ), which comprise the standalone balance sheet as at 31 March 2019, 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 (âActâ) 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 2019, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Key audit matters How the matter was addressed in our audit Impairment of investment in subsidiaries Refer note 2.1(d)(vi) of the summary of significant accounting Our key audit procedures included the following: Policies and note 4 to the standalone financial statements. - Discussing with management whether there was any The Company has made investments in its subsidiaries and joint objective evidence of impairment of individual investment venture entities. The carrying value of these investments as at 31 and challenging managementâs assertions and conclusions March 2019 is Rs,23,390.2 million. with reference to the guidance in the prevailing accounting Determining whether there is objective evidence of standards and by (i) obtaining the latest available budgets impairment, which includes a significant shortfall in the investeeâs and comparing the actual performance of the investees actual business performance compared with budgets and with management expectations, (ii) °btaining and reviewing significant changes in the technological, market, economic or legal the latest financial statements of the respective investee environment that have an adverse effect on the fair value of the companies and fln) comparing the carrying amount of investment for investments which do not have a quoted prices in the investments with audited net worth of these investee an active market, involves the exercise of significant management companies which have been audited by the respective judgment. component auditor. - Assessing the appropriateness of the valuation methodology We identified assessing potential impairment of investments in used by management and tested the mathematical accuracy subsidiaries and joint ventures as a key audit matter because of of the impairment models. the significance of investments to the financial statements and Assessing the reasonableness of the valuation assumptions, because of the degree of judgment exercised by management in . ... . . such as discount rates, growth rate, projected/ forecasted determining whether there was objective evidence of impairment ofcash flow used by management. investments. - Performing a sensitivity analysis around the key assumptions, in particular discount rates and long term growth rates. - Assessed the appropriateness of the disclosure made in the standalone financial statements. |
Basis for Opinion
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 Auditorâs 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 there under, 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.
Key Audit Matters
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. We have determined the matters described below to be the key audit matters to be communicated in our report.
Other Information
Key audit matters |
How the matter was addressed in our audit |
|
Contingencies and litigations |
||
Refer note 2.2(m) of the summary of significant accounting policies |
Evaluating the design and testing the operating effectiveness |
|
and note 30(C) to the standalone financial statements. |
of controls in respect of the recognition and measurement of |
|
The Company operates in multiple jurisdictions in the |
provisions towards litigation and claims; |
|
pharmaceutical industry which is heavily regulated, resulting in |
Corroborating managementâs assessment by: |
|
increased exposure to litigation risk. The Company is involved in a |
making enquiries with the in-house legal counsel of the Company; |
|
number of litigations/ legal actions. |
- |
|
These provisions are based on judgments and accounting |
||
estimates made by management reflect in determining the |
- |
verifying correspondence, orders and appeals in respect of |
likelihood and magnitude of an unfavorable outcome on the claims. |
open litigation; |
|
Accordingly, unexpected adverse outcomes could significantly |
- |
Obtaining confirmations from internal legal counsel where |
impact the Companyâs reported profit and balance sheet position. |
relevant and/ or evaluating legal opinions obtained by the |
|
management; |
||
Evaluating significant adjustments to legal provisions recorded during the year to determine if they were indicative of management bias; and |
||
- |
Evaluating adequacy of disclosures given in Note 30(C) to standalone financial statements |
|
Revenue Recognition |
In view of the significance of the matter, we applied the following |
|
Refer to Note 2.2(c) of the summary of significant accounting |
audit procedures in this area, among others to obtain sufficient |
|
policies to the standalone financial statements. |
appropriate audit evidence: |
|
Revenue from sale of goods is recognized when a promise in a |
- |
Assessed the appropriateness of the Companyâs revenue |
customer contract (performance obligation) has been satisfied |
recognition accounting policies including those relating to |
|
by transferring control over the promised goods to the customer. |
discounts and sales return and assessed compliance with |
|
Control is usually transferred upon shipment, delivery to, upon |
the policies in terms of applicable accounting standards. |
|
receipt of goods by the customer, in accordance with the delivery |
- |
Tested the effectiveness of the Companyâs controls over |
and acceptance terms agreed with the customers. The amount of |
measurement and recognition of revenue in accordance with |
|
revenue to be recognized is based on the consideration expected |
customer contracts which includes control over transaction |
|
to be received in exchange for goods, excluding trade discounts, |
pricing including discounts and correct timing of revenue |
|
volume discounts, sales returns and any taxes or duties collected |
recognition. |
|
on behalf of the government which are levied on sales such as |
- |
Assessed sales transactions taking place at either side of |
sales tax, value added tax, goods and services tax etc., where |
the balance sheet date as well as credit notes issued after |
|
applicable. |
the yearend date to assess whether that revenue was |
|
Revenue is one of the key performance indicators of the Company |
recognized in the correct period. |
|
and there could be a risk that revenue is recognized in the incorrect |
- |
Other audit procedures specifically designed to address risk |
period or before the control has been transferred to the customer. |
of Management override of controls included journal entry |
|
testing. |
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and our auditorsâ report thereon. The Companyâs annual report is expected to be made available to us after the date of this auditorâs report
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 financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs 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, management and Board of Directors are 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.
Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs 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 auditorâs 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 management.
- 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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 auditorsâ 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 (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143 (11) 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 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 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 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; and
g) With respect to the other matters to be included in the Auditorsâ 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 2019 on its financial position in its standalone financial statements - Refer Note 30(C) 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; and
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 standalone financial statements since they do not pertain to the financial year ended 31 March 2019.
3. With respect to the matter to be included in the Auditorsâ 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.
With reference to the âAnnexure Aâ referred to in Report on Other Legal and Regulatory Requirements of the Independent Auditorâs Report to the Members of the Company on the audit of standalone financial statements for the year ended 31 March 2019, we report that:
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.
(b) The property, plant and equipment are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the Programme, a portion of the property, plant and equipment has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) In our opinion and 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, included in the property, plant and equipment except for the following are held in the name of the Company. As explained to us, registration of title deeds is in progress in respect of these immovable properties:
No. of |
Freehold / |
Gross Block |
Net Block as at |
|
Category |
instances |
Leasehold |
as at |
31 March 2019 |
31 March 2019 (Rs, in million) |
(Rs, in million) |
|||
Land |
5 |
Freehold land |
131.2 |
131.2 |
Building |
1 |
Freehold building |
35.3 |
14.0 |
Total |
166.5 |
145.2 |
ii. The inventories, except goods-in-transit and stock lying with third parties, has been physically verified by the Management during the year. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stock and the book records were not material. Inventories lying with third parties as at 31 March 2019 have been confirmed by them and no material discrepancies were noticed in respect of such confirmations.
iii. According to 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 Companies Act, 2013 (âthe Actâ). Accordingly, the Provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
iv. In our opinion and according to the information and explanations given to us, the Company has not advanced loans to directors / to a Company in which the director is interested to which, the provisions of Section 185 of the Act apply and hence not commented upon. However, in respect of loans given, investments made and guarantees given, the Company is in compliance with the provisions of Section 186 of the Act.
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Rules framed there under. Accordingly, the provisions of clause 3(v) of the Order are not applicable.
vi. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Act related to the manufacture of Active Pharmaceutical Ingredients and Formulations and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
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, Duty of Customs, Goods and Services tax, Cess and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income-tax, Duty of Customs, Goods and Services tax, Cess and any other material statutory dues were in arrears as at 31 March 2019, for a period of more than six months from the date they became payable.
-Customs, Excise and Service Tax Appellate Tribunals
(b) According to the information and explanations given to us and based on our examination of the records of the Company, there are no dues of Goods and Services tax and Cess. According to the information and explanations given to us, the following dues of Income-tax, Service tax, Duty of Customs, Duty of Excise have not been deposited by the Company on account of disputes:
Nature of the Statute |
Nature of dues |
Disputed amount (Rs, in millions) |
Paid under protest (Rs, in millions) |
Period to which the amount relates |
Forum where dispute is pending |
Central Excise Act, |
Central Excise |
6.3 |
6.1 |
F.Y 2004-2016 |
CESTAT- |
1944 and Customs |
Central Excise |
2.6 |
2.3 |
F.Y 2007-2014 |
Revisionary Authority |
Act, 1962 |
Central Excise |
7.4 |
- |
F.Y 2013-2015 |
Commissioner (Appeals) |
Central Excise-Interest |
0.5 |
0.2 |
F.Y 2006-2010 |
CESTAT- |
|
Central Excise-Interest |
13.5 |
1.0 |
F.Y 2011-2012 |
Appellate Authority up to Commissionerâs level |
|
Customs |
9.8 |
1.4 |
F.Y 2002-2015 |
CESTAT- |
|
Customs |
4.7 |
3.7 |
F.Y 2011-2012 |
Commissioner (Appeals) |
|
Finance Act, 1994 |
Service tax |
1.8 |
0.2 |
F.Y 2014-2015 |
Commissioner (Appeals) |
Service tax |
508.9 |
34.5 |
F.Y 2005-2016 |
CESTAT- |
|
Service tax |
0.3 |
- |
F.Y 2004-2005 |
Honorable AP High court |
|
Income-tax Act, 1961 |
Income-tax |
3.5 |
- |
A.Y 2013-2015 |
Commissioner (Appeals) |
viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to bank. The Company did not have any dues to any financial institution, government or debenture holder during the year.
ix. The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). According to the information and explanation given to us, the monies raised by way of term loans have been applied, on an overall basis, for the purpose for which they are obtained.
x. Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the Management, we report that no fraud by the Company or no fraud on the Company by its officers and employees of the Company has been noticed or reported during the year.
xi. According to the information and explanations given to us and based on 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. According to the information and explanations given to us, in our opinion, the Company is not a Nidhi Company as prescribed under Section 406 of the Act. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with related parties are in compliance with Sections 177 and 188 of the Act, where applicable, and the details of such transactions have been disclosed in the standalone financial statements as required by the applicable Indian Accounting Standards.
xiv. Based on our examination of the records of the Company and according to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, provisions of clause 3(xiv) of the Order are not applicable.
xv. Based on our examination of the records of the Company and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with him, as referred to in Section 192 of the Act.
xvi. According to the information and explanations given to us and in our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
(Referred to in clause (f) of paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date) Opinion
Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
We have audited the internal financial controls with reference to financial statements of Aurobindo Pharma Limited (âthe Companyâ) as of 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the âGuidance Noteâ).
Managementâs Responsibility for Internal Financial Controls
The Companyâs management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as âthe Actâ).
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and whether such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls with reference to financial statements.
Meaning of Internal Financial controls with Reference to Financial Statements
A Company''s internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial controls with reference to financial statements include those policies and procedures that:
1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial controls with Reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility
of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
For B S R & Associates LLP
Chartered Accountants
Firmâs Registration Number: 116231W/W-100024
Sriram Mahalingam
Partner
Membership Number: 049642
Place: Hyderabad
Date: 28 May 2019
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 Aurobindo Pharma 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 a summary of 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 (including 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 standalone Ind AS 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.
OTHER MATTER
Corresponding figures for the year ended 31 March 2017 have been audited by another auditor who expressed an unmodified opinion dated 29 May 2017 on the standalone Ind AS financial statements of the Company for the year ended 31 March 2017.
Our opinion on the standalone Ind AS financial statements is not modified in respect of the above matter.
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 including the Statement of Other Comprehensive Income, 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 30(C) 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
iv. The disclosures in the standalone Ind AS 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 since they do not pertain to the financial year ended 31 March 2018. However, amounts as appearing in the audited Standalone Ind AS financial statements for the period ended 31 March 2017 have been disclosed.
ANNEXURE A TO THE INDEPENDENT AUDITORâS REPORT ON THE AUDIT OF STANDALONE IND AS FINANCIAL STATEMENTS
With reference to the âAnnexure Aâ referred to in Report on Other Legal and Regulatory Requirements of the Independent Auditorâs Report to the Members of the Company on the audit of standalone Ind AS financial statements for the year ended 31 March 2018, we report that:
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.
(b) All property, plant and equipment have not been physically verified by the Management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification.
(c) In our opinion and 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, included in the property, plant and equipment except for the following are held in the name of the Company. As explained to us, registration of title deeds is in progress in respect of these immovable properties:
Category |
No. of instances |
Freehold / Leasehold |
Gross Block as at 31 March 2018 |
Net Block as at 31 March 2018 |
Land |
5 |
Freehold land |
131,177,536 |
131,177,536 |
Building |
1 |
Freehold building |
35,341,469 |
15,199,937 |
Total |
166,519,005 |
146,377,473 |
ii. The inventory, except goods-in-transit and stock lying with third parties, has been physically verified by the Management during the year. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stock and the book records were not material. Inventories lying with third parties as at 31 March 2018 have been confirmed by them and no material discrepancies were noticed in respect of such confirmations.
iii. According to 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 Companies Act, 2013 (âthe Actâ). Accordingly, the Provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
iv. In our opinion and according to the information and explanations given to us, the Company has not advanced loans to directors / to a Company in which the director is interested to which, the provisions of Section 185 of the Act apply and hence not commented upon. However, the Company has made investments and given guarantees / provided security which is in compliance with the provisions of Section 186 of the Act.
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
vi. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Act related to the manufacture of Active Pharmaceutical Ingredients and Formulations and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
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, Goods and Services tax, Cess and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, 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, Goods and Services tax, Cess and any 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 and based on our examination of the records of the Company, there are no dues of Sales tax, Goods and Services tax, Value added tax and Cess. According to the information and explanations given to us, the following dues of Income-tax, Service Tax, Duty of Customs, Duty of Excise have not been deposited by the company on account of disputes:
Nature of the Statue |
Nature of Dues |
Disputed Amount (Rs.) |
Paid under Protest (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
Central Excise |
Central Excise |
33,988,653 |
13,591,862 |
F.Y 2004-2016 |
CESTAT* |
Act ,1944 |
Central Excise |
277,750 |
277,750 |
F.Y 1996-2000 |
Commissioner (Appeals) |
and Customs |
Central Excise |
7,963,132 |
7,634,604 |
F.Y 2007-2014 |
Revisionary Authority |
Act,1962 |
Central Excise |
4,760,055 |
- |
F.Y 2006-2008 |
Honorable AP High court |
Central Excise-Interest |
463,652 |
181,308 |
F.Y 2006-2010 |
CESTAT* |
|
Central Excise-Interest |
13,549,864 |
1,000,000 |
F.Y 2004-2010 |
Appellate Authority up to Commissionerâs level |
|
Customs |
13,942,994 |
738,855 |
F.Y 2002-2015 |
CESTAT* |
|
Customs |
4,689,566 |
3,739,566 |
F.Y 2011-2012 |
Commissioner (Appeals) |
|
Finance Act, |
Service tax |
1,759,819 |
132,000 |
F.Y 2014-2015 |
Commissioner (Appeals) |
1994 |
Service tax |
508,575,636 |
25,483,138 |
F.Y 2005-2016 |
CESTAT* |
Service tax |
260,105 |
- |
F.Y 2004-2005 |
Honorable AP High court |
|
Income-tax |
Income-tax |
221,655,739 |
- |
A.Y 2009-2012 |
ITAT** |
Act, 1961 |
Income-tax |
3,543,130 |
- |
A.Y 2013-2015 |
Commissioner (Appeals) |
*Customs, Excise and Service Tax Appellate Tribunal
**Income Tax Appellate Tribunal
viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to bank. The Company did not have any dues to any financial institution, government or debenture holder during the year.
ix. The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). According to the information and explanation given to us, the monies raised by way of term loans have been applied, on an overall basis, for the purpose for which they are obtained.
x. Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the Management, we report that no fraud by the Company or no fraud on the Company by its officers and employees of the Company has been noticed or reported during the year.
xi. According to the information and explanations given to us and based on 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. According to the information and explanations given to us, in our opinion, the Company is not a nidhi company as prescribed under Section 406 of the Act. Accordingly, provisions of Clause 3(xii) of the Order are not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with related parties are in compliance with Sections 177 and 188 of the Act, where applicable, and the details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.
xiv. Based on our examination of the records of the Company and according to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, provisions of Clause 3(xiv) of the Order are not applicable.
xv. Based on our examination of the records of the Company and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with him, as referred to in Section 192 of the Act.
xvi. According to the information and explanations given to us and in our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For B S R & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 116231W/ W-100024
Amit Kumar Agarwal
Partner
Membership No.214198
Place: Hyderabad
Date: 28 May 2018
Mar 31, 2017
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Aurobindo Pharma Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the 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 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act., read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS 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 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 there under. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 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 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 Company''s 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 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 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 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 March 31, 2017, its profit 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 (Auditor''s report) Order, 2016 (''the Order'') issued by the Central Government of India in terms of subsection (11) of Section 143 of the Act, we give in the Annexure 1 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 purpose 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, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and 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 Companies (Indian Accounting Standards) Rules, 2015, as amended;
e. On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 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 ''Annexure 2'' to this report;
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 standalone Ind AS financial statements - Refer Note 31(C) 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. The Company has provided requisite disclosures in Note 12(D) to these standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the management.
Annexure 1 referred to in paragraph 1 of our report of even date
Re: Aurobindo Pharma Limited (''the Company'')
i. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b. All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
c. According to information and explanations given by the management, the title deeds of immovable properties, included in property, plant and equipment except for the following, are held in the name of the Company. As explained to us, registration of title deeds is in progress in respect of these immovable properties:
Category |
No. of instances |
Freehold/leasehold |
Gross block as at March 31, 2017 (Rs.) |
Net block as at March 31, 2017 (Rs.) |
Land |
5 |
Freehold land |
131,777,536 |
131,777,536 |
Building |
1 |
Freehold building |
35,341,469 |
16,374,923 |
TOTAL |
167,119,005 |
148,152,459 |
ii. The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
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 Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
iv. In our opinion and according to the information and explanations given to us, the Company has not advanced loans to directors/to a Company in which the director is interested to which, the provisions of Section 185 of the Companies Act, 2013 apply and hence not commented upon. In our opinion and according to the information and explanations given to us, the Company has made investments and given guarantees/provided security which is in compliance with the provisions of Section 186 of the Companies Act, 2013.
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013, related to the manufacture of Active Pharmaceutical Ingredients and Formulations and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
vii. a. The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues applicable to it.
b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income tax, service tax, sales tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
c. According to the records of the Company, the dues outstanding of income tax, sales tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:
Nature of the statute |
Nature of the dues |
Disputed Amount (Rs.) |
Paid under protest (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
Central Excise and Customs Act, 1944 |
Excise duty and penalty |
9,224,104 |
5,559,640 |
2007-08, 2008-09, 2009-10, 2010-11 |
CESTAT |
Customs duty and penalty |
8,709,455 |
346,340 |
2002-03, 2003-04, 2004-05, 2005-06 |
CESTAT |
|
Excise duty |
14,606,598 |
14,471,641 |
2005-06 |
Commissioner of Central Excise |
|
Interest and penalty |
14,013,0666 |
1,181,753 |
2006-07, 2007-08, 2008-09, 2009-10 |
CESTAT |
|
Excise duty and penalty |
2,035,680 |
1,017,840 |
2009-10, 2010-11 |
CESTAT |
|
Excise duty and penalty |
5,980,852 |
2006-07, 2007-08, 2008-09, 2009-10, 2010-11 |
CESTAT |
Nature of the statute |
Nature of the dues |
Disputed Amount (Rs.) |
Paid under protest (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
Customs duty and penalty |
4,689,566 |
3,739,566 |
2011-12, 2012-13 |
Commissioner of Customs - Appeals |
|
Excise duty and penalty |
6,278,701 |
1,809,138 |
2000-01, 2001-02, 2002-03 |
CESTAT |
|
Excise duty |
3,962,773 |
3,962,773 |
2012-13 |
Revision Authority |
|
Interest |
2,297,939 |
2,297,939 |
2007-08, 2008-09, 2009-10, 2010-11 |
Revision Authority |
|
Excise duty |
4,760,055 |
- |
2006-07, 2007-08 |
High Court |
|
Excise duty |
4,490,484 |
2006-07, 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 |
CESTAT |
||
Excise duty and penalty |
636,956 |
318,478 |
2008-09 |
CESTAT |
|
Excise duty and penalty |
1,226,000 |
1,176,000 |
2012-13 |
CESTAT |
|
Excise duty |
100,943 |
- |
2012-13, 2013-14, 2014-15 |
Commissioner of Central Excise (Appeals) |
|
Excise duty and penalty |
83,242 |
83,242 |
2008-09, 2009-10 |
CESTAT |
|
Excise duty and penalty |
1,989,820 |
1,889,820 |
2014-15, 2015-16 |
Commissioner of Central Excise (Appeals) |
|
Excise duty and penalty |
84,215 |
- |
2014-15 |
Commissioner of Central Excise (Appeals) |
|
Excise duty |
5,665,193 |
5,336,665 |
2012-13, 2013-14 |
Revision Authority |
|
Service tax |
3,369,212 |
428,697 |
2012-13 |
CESTAT |
|
Service tax |
11,295,379 |
2,066,239 |
2011-12 |
CESTAT |
|
Service tax |
12,308,490 |
9,376,541 |
2006-07, 2007-08, 2008-09, 2009-10, 2010-11 |
CESTAT |
|
Service tax |
97,222,192 |
'' |
2005-06, 2007-08, 2008-09, 2009-10, 2010-11 |
CESTAT |
|
Service tax |
69,299,037 |
5,197,428 |
2011-12 |
CESTAT |
|
Service tax |
429,697 |
429,697 |
2012-13 |
CESTAT |
|
Service tax |
32,871,546 |
2,465,366 |
2013-14 |
CESTAT |
|
Service tax |
120,542,613 |
- |
2014-15 |
CESTAT |
|
Service tax |
49,083,119 |
- |
2014-15, 2015-16 |
Commissioner (Appeals) |
|
Income Tax Act, |
Income tax |
190,070,479 |
- |
2008-09 |
ITAT |
1961 |
Income tax |
31,585,269 |
- |
2010-11 |
ITAT |
Income tax |
991,130 |
- |
2013-14 |
Commissioner of Income Tax (Appeals) |
viii. In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowings to a bank or government. There are no dues which are payable to financial institutions or debenture holders.
ix. In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of term loans for the purposes for which they were raised. The Company has not raised any money way of initial public offer/further public offer/debt instruments and hence, not commented upon.
x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
xi. According to the information and explanations given by the management, the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
xii. In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
xiii. According to the information and explanations given by the management, transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
xv. According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of Companies Act, 2013.
xvi. According to the information and explanations given to us, the provisions of Section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm''s Registration Number: 101049W/E300004
per VIKAS KUMAR PANSARI
Partner
Membership No. 093649
Hyderabad, May 29, 2017
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Aurobindo Pharma Limited ('the Company1), which comprise the Balance
Sheet as at March 31, 2015, the Statement of Profit and Loss and 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
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 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 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 the design,
implementation and maintenance of adequate internal financial control
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 there under. We conducted our
audit in accordance with the Standards on Auditing, issued by the
Institute of Chartered Accountants of India, as 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 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 effectiveness of such
controls. An audit also includes evaluating the appropriateness of
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 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 March 31, 2015, its profit and its 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, 2015 ('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
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, 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 March 31, 2015 and taken on record by the Board of
Directors, none of the Directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164(2) of the
Act; and
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 29 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 has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure referred to in paragraph 1 of our report of even date Re:
Aurobindo Pharma Limited ('the Company')
i. a. The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. All fixed assets have not been physically verified by the management
during the year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. No material discrepancies were noticed on
such verification.
ii. a. The management has conducted physical verification of inventory
at reasonable intervals during the year.
b. The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
c. The Company is maintaining proper records of inventory and no
material discrepancies were noted on physical verification.
iii. According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
189 of the Companies Act, 2013. Accordingly, the provisions of clause
3(iii)(a) and (b) of the Order are not applicable to the Company and
hence not commented upon.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
v. The Company has not accepted any deposits from the public.
vi. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 148(1) of the Companies Act,
2013, related to the manufacture of Active Pharmaceutical Ingredients
and Formulations and are of the opinion that prima facie, the specified
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the same.
vii a. Undisputed statutory dues including provident fund, employees'
state insurance, income tax, sales tax, wealth tax, service tax,
customs duty, excise duty, value added tax, cess and other material
statutory dues have generally been regularly deposited with the
appropriate authorities.
b. 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,
customs duty, excise duty, value added tax, cess and other material
statutory dues were outstanding, at the year end, for a period of more
than six months from the date they became payable.
c. According to the records of the Company, the dues outstanding of
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, value added tax and cess on account of any dispute, are as
follows:
Name of the statute Nature of Disputed Paid under
dues Amount Rs. protest Rs.
Central Excise and Excise duty and 9,224,104 4,000,000
Customs Act, 1944 penalty
Customs duty and 8,709,455 -
penalty
Excise duty 14,606,598 14,471,641
Interest 13,013,066 1,181,753
Excise duty 1,303,500 -
Excise duty and 2,035,680 1,017,840
penalty
Excise duty and 13,029,452 2,569,008
penalty
Excise duty 13,062,768 -
Excise duty and 5,480,404 3,490,202
penalty
Name of the statute Period to which the Forum where dispute is
amount relates is pending
Central Excise and
Customs Act, 1944 2007- 08, 2008-09, CESTAT
2009-10, 2010-11
2002-03, 2003-04, Commissioner
2004- 05, 2005-06 of Customs
2005- 06 Commissioner of
Central Excise
2006- 07, 2007-08, CESTAT
2008- 09, 2009-10
2007- 08 CESTAT
2009- 10, 2010-11 CESTAT
2005-06, 2006-07, CESTAT
2007- 08, 2008-09,
2009-10, 2010-11,
2011-12, 2012-13
2011-12, 2012-13 CESTAT
2008- 09 CESTAT
Name of the statute Nature of Disputed Paid under
dues Amount Rs. protest Rs.
Excise duty and 5,980,852 -
penalty
Customs duty 4,689,566 3,739,566
and penalty
Excise duty and 6,278,701 -
penalty
Excise duty 3,962,773 3,962,773
Interest 2,297,939 2,297,939
Finance Act, Service Tax 64,685 -
1994 Service Tax 458,500 458,500
Service Tax 1,524,348 -
Service Tax 3,369,212 428,697
Service Tax 11,295,379 2,066,239
Service Tax 12,308,490 9,376,541
Service Tax 97,222,192 -
Service Tax 69,299,037 5,197,428
Income Tax Income Tax 283,446,583 -
Act, 1961 Income Tax 405,333,009 -
Income Tax 330,121,258 -
Name of the statute Period to which the Forum where dispute is
amount relates is pending
2006- 07, 2007-08, CESTAT
2008- 09, 2009-10,
2010-11
2011- 12, 2012-13 Commissioner of
Customs-Appeals
2000-01, 2001-02, CESTAT
2002-03
2012- 13 Revision Authority
2007- 08, 2008-09, Revision Authority
2009- 10, 2010-11
Finance Act,
1994 2006- 07 CESTAT
2007- 08 CESTAT
2006-07 CESTAT
2012-13 CESTAT
2011-12 CESTAT
2006-07, 2007-08, CESTAT
2008- 09, 2009-10,
2010- 11
2005-06, 2007-08, CESTAT
2008-09, 2009-10,
2010-11
2011-12 CESTAT
Income Tax 2008- 09 ITAT
Act, 1961
2009- 10 ITAT
2010- 11 ITAT
d. According to the information and explanations given to us, the
amount 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 there under has been transferred to
such fund within time.
viii. The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
ix. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
x. According to the information and explanations given to us, the
Company has given guarantee for loans taken by wholly owned
subsidiaries from banks and financial institutions, the terms and
conditions whereof, in our opinion, are not prima-facie prejudicial to
the interest of the Company.
xi. Based on the information and explanations given to us by the
Management, term loans were applied for the purpose for which the loans
were obtained.
xii. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm's Registration Number: 101049W
per VIKAS KUMAR PANSARI
Partner
Membership No. 093649
Hyderabad, May 28, 2015
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Aurobindo
Pharma Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, and the Statement of Profit and Loss and 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
accounting principles generally accepted in India, including the
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 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
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The
procedures selected depend on the 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 policies 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
basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b. in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure 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 purpose 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the Act; and
e. On the basis of written representations received from the Directors
as on March 31, 2013 and taken on record by the Board of Directors,
none of the Directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
Annexure referred to in paragraph 1 of our report of even date
Re: Aurobindo Pharma Limited
i. a. The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
c. There was no disposal of a substantial part of fixed assets during
the year.
ii. a. The management has conducted physical verification of inventory
at reasonable intervals during the year.
b. The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
iii. a. According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Act. Accordingly, the provisions of clause 4(iii) (a) to
(d) of the Order are not applicable to the Company and hence not
commented upon
b. According to information and explanations given to us, the Company
has not taken any loans, secured or unsecured, from companies, firms or
other parties covered in the register maintained under Section 301 of
the Act. Accordingly, the provisions of clause 4(iii)(e) to (g) of the
Order are not applicable to the Company and hence not commented upon.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the company in respect of these areas.
v. a. According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under Section 301 have
been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lakhs have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi. The Company has not accepted any deposits from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) 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 not,
however, made a detailed examination of the same.
ix. a. The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income tax, sales tax, wealth tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income tax,
wealth tax, service tax, sales tax, customs duty, excise duty, cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
c. According to the records of the Company, there are no dues
outstanding of income tax, sales tax, wealth tax, service tax, customs
duty, excise duty and cess on account of any dispute, other than
service tax, custom duty, excise duty which are as follows:
Name of the statute Nature of dues Amount
demanded Rs.
Central Excise and Customs duty 42,621,459
Customs Act, 1944 and penalty
Excise duty 18,604,080
Excise duty 14,606,598
Excise duty 9,224,104
and penalty
Name of the Statute Period to which the Forum where dispute is
amount relates pending
Central Excise and
Customs Act 1944 2002-03, 2003-04, CESTAT@
2004-05, 2005-06
2006-07, 2007-08, CESTAT
2008-09
2005-06 Commissioner of
Central Excise
2007-08, 2008-09, Commissioner of
2009-10, 2010-11 Central Excise
x. The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
xi. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
xii. According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
xv. According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks, the
terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, the Company has not given any
guarantee for loans taken by others from financial institutions.
xvi. Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
xviii. The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
xix. The Company did not have any outstanding debentures during the
year.
xx. The Company has not raised any money by way of public issue during
the year.
xxi. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm''s Registration Number: 101049W
per VIKAS KUMAR PANSARI
Partner
Membership No. 93649
Hyderabad, May 30, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of Aurobindo Pharma
Limited ('the Company') as at March 31, 2012 and also the Statement of
Profit and Loss and the Cash Flow Statement for the year ended on that
date annexed thereto. 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Without qualifying our opinion, we draw attention to Note 43 of
financial statements, regarding excess managerial remuneration
amounting to Rs25,086,424 paid to four Directors in excess of limits
prescribed under Schedule XIII of the Companies Act, 1956. As
represented to us by the management, the Company is in the process of
applying to the Central Government for the approval of such excess
remuneration. The ultimate outcome of the above matters cannot
presently be determined, accordingly no adjustments has been made in
the financial statements.
5. Further to our comments in the Annexure referred to above, we
report that:
i. we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
iv. in our opinion, the Balance Sheet, Statement of Profit and Loss
and Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
v. on the basis of the written representations received from the
Directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub- section (1) of Section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, they said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
b. in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 3 of our report of even date
Re: Aurobindo Pharma Limited
i. a. The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. All fixed assets have not been physically verified by the
management during the year but there is a regular program of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed on such verification.
c. There was no substantial disposal of fixed assets during the year.
ii. a. The management has conducted physical verification of inventory
at reasonable intervals during the year.
b. The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
iii. a. As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly,
the provisions of clauses 4 (iii)(a) to (d) of the Companies
(Auditor's Report) Order, 2003 (as amended) are not applicable to the
Company.
e. As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, the provisions of clauses 4 (iii)(e) to (g) of the
Companies (Auditors' Report) Order, 2003 (as amended) are not
applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
v. a. According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Act that need to be
entered into the register maintained under Section 301 have been so
entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi. The Company has not accepted any deposits from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
ix. a. Undisputed statutory dues including provident fund, investor
education and protection fund, employees state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues have generally been
regularly deposited with the appropriate authorities though there has
been a slight delay in a few cases.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance,
income-tax, wealth-tax, service tax, sales-tax, customs duty, excise
duty, cess and other material statutory dues were outstanding, at the
year end, for a period of more than six months from the date they
became payable.
c. According to the records of the Company, there are no dues
outstanding of income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise duty and cess on account of any dispute, other than
service tax, customs duty and excise duty which are follows:
Name of the
statute Nature of dues Amount Period to
which the Forum where
dispute is
Rs. amount
relates pending
Central
Excise and Customs duty 42,621,459* 2002-03,
2003-04, CESTAT
Customs
Act, 1944 and penalty 2004-05,
2005-06
Excise duty 18,604,080 2006-07,
2007-08, CESTAT
2008-09
Excise duty 14,606,598** 2005-06 Commis
sioner of
Central
Excise
Excise duty 9,224,104 2007-08,
2008-09, Commis
sioner of
and penalty 2009-10,
2010-11 Central
Excise
Interest 8,825,256 2006-07,
2007-08, Commis
sioner of
2008-09,
2009-10
Central
Excise
Excise duty 6,401,211 2005-06,
2006-07, Additional
Commissioner
2007-08,
2008-09, of Central
Excise
2009-10,
2010-11
Excise duty 1,303,500 2007-08 Assistant
Commissioner
Appeals
Interest 439,770 2007-08 Joint Commis
sioner of
Central
Excise
Excise duty 197,065 2006-07,
2007-08, Assistant
Commissioner
2008-09,
2009-10 of Central
Excise
Interest 131,555 2009-10 Additional
Commissioner
of Central
Excise
Finance
Act, 1994 Service Tax 3,242,003 2004-05 Assistant
Commissioner
of Central
Excise
Service Tax 64,685 2006-07 CESTAT
Service Tax 1,524,348 2006-07 CESTAT
* Stay granted
** Amount paid under protest Rs14,187,883
x. The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
xi. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
xii. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
xv. According to the information and explanations given to us, the
Company has given any guarantee for loans taken by others from banks,
the terms and conditions whereof, in our opinion, are not prima-facie
prejudicial to the interest of the Company. According to the
information and explanations given to us, the Company has not given any
guarantee for loans taken by others from financial institutions.
xvi. Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
xvii. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
xviii. The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
xix. The Company did not have any outstanding debentures during the
year.
xx. The Company has not raised any money by way of public issue during
the year.
xxi. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S.R. BATLIBOI & ASSOCIATES
Firm Registration Number: 101049W
Chartered .Accountants
per VIKAS KUMAR PANSARI
Partner
Membership No. 93649
Hyderabad, May 29, 2012.
Mar 31, 2011
1. We have audited the attached Balance Sheet of Aurobindo Pharma
Limited (the Company) as at March 31, 2011 and also the Profit and
Loss Account and the Cash Flow Statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Without qualifying our opinion, we draw attention to Note 6(d) of
Schedule 23 to the financial statements with regard to non-provision of
premium payable on 139,200 Zero Coupon Foreign Currency Convertible
Bonds of USD 1,000 each issued by the Company. Management is of the
view that the liability to pay premium on redemption is contingent and
the ultimate outcome of the matter cannot be presently determined.
Accordingly, no provision for the above liability that may result in
future has been made in the accompanying financial statements.
5. Further to our comments in the Annexure referred to above, we
report that:
i. we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv. in our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
v. on the basis of the written representations received from the
Directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub- section (1) of Section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
b. in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 3 of our report of even date
Re: Aurobindo Pharma Limited (the Company)
i. a. The Company has maintained proper records showing fuLL
particulars, including quantitative details and situation of fixed
assets.
b. All fixed assets have not been physically verified by the
management during the year but there is a regular program of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed on such verification.
c. There was no substantial disposal of fixed assets during the year.
ii. a. The management has conducted physical verification of inventory
at reasonable intervals during the year.
b. The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
iii. a. According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, the provisions of Clause
4(iii) (a) to (d) of the Order are not applicable to the Company and
hence not commented upon.
e. According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, the provisions of Clause
4(iii) (e) to (g) of the Order are not applicable to the Company and
hence not commented upon.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
v. a. According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Act that need to be
entered into the register maintained under Section 301 have been so
entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi. The Company has not accepted any deposits from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(l)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
ix. a. Undisputed statutory dues including provident fund, investor
education and protection fund, employees state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and
other material statutory dues have generally been regularly deposited
with the appropriate authorities though there has been a slight delay
in depositing of tax deducted at source in few cases.
Further, since the Central Government has till date not prescribed the
amount of cess payable under Section 441A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the Company in depositing the same.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
c. According to the records of the Company, there are no dues
outstanding of income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise duty and cess on account of any dispute, other than
service tax, customs duty and excise duty which are follows:
Name of the
statute Nature of dues Amount Period to
which the Forum where
dispute is
Rs. amount
relates
pending
Central
Excise and Excise Duty 52,136,641 2007-08, The Assistant
Commissioner
Customs Act,
1944 2008-09,
2009-10 Appeals,
Hyderabad
Excise Duty 18,604,080 2006-07,
2007-08, CESTAT,
Bangalore
2008-09
Customs Duty 42,621,459* 2002-03,
2003-04, CESTAT,
Chennai
and Penalty 2004-05,
2005-06
Interest 439,770 2007-08 Joint
Commissioner
of
Central
Excise
Interest 5,680,233 2004-05,
2005-06, Commissioner
of Central
2006-07,
2007-08 Excise
2008-09
Interest 131,555 2009-10 Assistant
Commissioner
of
Central Excise
Excise duty 2,526,389 2005-06,
2006-07, Additional
Commissioner
of
2007-08,
2008-09, Central
Excise,
Hyderabad
2009-10,
2010-11
Finance
Act, 1994 Service Tax 525,000 2005-06 CESTAT,
Bangalore
Service Tax 64,685 2006-07 CESTAT,
Bangalore
Service Tax 1,524,348 2006-07 CESTAT,
Chennai
*Stay granted
x. The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
xi. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
xii. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 (as amended) are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 (as amended) are not applicable to the Company.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
xvi. Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
xvii. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
xviii. The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under Section
301 of the Companies Act, 1956.
xix. The Company has unsecured debentures (Foreign Currency Convertible
Bonds) outstanding during the year on which no security or charge is
required to be created.
xx. The Company has not raised any money by way of public issue during
the year.
xxi. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S.R. BATLIBOI & ASSOCIATES
Firm Registration Number: 101049W
Chartered Accountants
per VIKAS KUMAR PANSARI
Partner
Membership No. 93649
Hyderabad, May 9, 2011.
Mar 31, 2010
1. We have audited the attached Balance Sheet of Aurobindo Pharma
Limited (the Company) as at March 31, 2010 and also the Profit and
Loss Account and the Cash Flow Statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Without qualifying our opinion, we draw attention to Note 6(d) of
Schedule 23 to the financial statements with regard to non-provision of
premium payable on 162,268 Zero Coupon Foreign Currency Convertible
Bonds of USD 1,000 each issued by the Company. Management is of the
view that the liability to pay premium on redemption is contingent and
the ultimate outcome of the matter cannot be presently deterrmined.
Accordingly, no provision for the above liability that may result in
furture has been made in the accompanying financial statements.
5. Further to our comments in the Annexure referred to above, we
report that:
i. we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv. in our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
v. on the basis of the written representations received from the
Directors, as on March 31, 2010, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
March 31, 2010 from being appointed as a director in terms of clause
(g) of sub- section (1) of Section 274 of the Companies Act, 1956;
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
b. in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure referred to in paragraph 3 of our report of even date
Re: Aurobindo Pharma Limited (the Company)
i. a. The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed on such verification.
c. There was no substantial disposal of fixed assets during the year.
ii. a. The management has conducted physical verification of inventory
at reasonable intervals during the year.
b. The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
iii. a. As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Accordingly,
the provisions of clauses 4 (iii) (b), 4(iii) (c), 4 (iii) (d) of the
Companies (Auditors Report) Order 2003 (as amended) are not applicable
to the Company.
b. As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the
Companies (Auditors Report) Order 2003 (as amended) are not applicable
to the Company.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal control system in respect of these areas.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system of the
Company.
v. a. According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Act that need to be
entered into the register maintained under Section 301 have been so
entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi. The Company has not accepted any deposits from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
ix. a. Undisputed statutory dues including provident fund, investor
education and protection fund, employees state insurance, income-tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess
have generally been regularly deposited with the appropriate
authorities though there has been a slight delay in depositing of tax
deducted at source in few cases. Furuther, since the Central Government
has till date not prescribed the amount of cess payable under Section
441A of the Companies Act, 1956, we are not in a position to comment
upon the regularity or otherwise of the Company in depositing the same.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
c. According to the records of the Company, there are no dues
outstanding of income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise duty and cess on account of any dispute, other than
service tax, customs duty and excise duty which are follows:
Name of
the statute Nature of
dues Amount Period to which the Forum
where dispute is
Rs. amount relates pending
Central
Excise and Excise
Duty 52,136,641 2007-08, The Assistant
Commissioner
Customs
Act, 1944 2008-09, 2009-10 Appeals,
Hyderabad
Excise
Duty 18,604,080 2006-07, 2007-08, CESTAT, Bangalore
2008-09
Customs
Duty 42,621,459* 2002-03, 2003-04, CESTAT, Chennai
and
Penalty 2004-05, 2005-06
Interest 439,770 2007-08 Joint Commissio-
ner of
Central Excise
Interest 5,680,233 2004-05, 2005-06, Commissioner of
Central
2006-07, 2007-08 Excise
2008-09
Finance
Act, 1994 Service
Tax 525,000 2005-06 CESTAT,
Bangalore
Service
Tax 64,685 2006-07 CESTAT,
Bangalore
Service
Tax 1,524,348 2006-07 CESTAT, Chennai
Stay
granted
x. The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
xi. Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
xii. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) Order, 2003 (as amended) are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 (as amended) are not applicable to the Company.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
xvi. Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
xvii. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
xviii. The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under Section
301 of the Companies Act, 1956.
xix. The Company has unsecured debentures (Foreign Currency Convertible
Bonds) outstanding during the year on which no security or charge is
required to be created.
xx. The Company has not raised any money by way of public issue during
the year.
xxi. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S.R. BATLIBOI & ASSOCIATES
Firm Registration Number: 101049W
Chartered Accountants
per VIKAS KUMAR PANSARI
Partner
Membership No. 93649
Hyderabad, May 29, 2010.