Home  »  Company  »  Divi's Lab  »  Quotes  »  Auditor Report
Enter the first few characters of Company and click 'Go'

Auditor Report of Divi's Laboratories Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of DIVI'S LABORATORIES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note No. 30(II)(9)(c) regarding investments in wholly owned subsidiaries whose net worth are eroded and the consequent possibility of impairment of the equity investment of Rs. 281.61 lakhs made and non-recovery or partial recovery of loans of Rs. 4358.08 lakhs given to them by the company. For reasons explained in the said Note, including the subsidiaries future business plans and growth prospects, no provision is considered necessary in the accounts of the Company.

Our opinion is not modified in respect of this matter.

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, to 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 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, 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 written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us :

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 30.II.4.A to the financial statements;

ii. The Company did not have any long-term contracts with material foreseeable losses and did not have any long-term derivative contracts as at 31st March, 2015;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and protection Fund by the Company during the year ended 31st March, 2015.

Annexure to Independent Auditor's Report Referred to in Paragraph 1 under the heading of 'Report on Other Legal and Regulatory Requirements' of our report of even date

1. (a) The company has maintained proper records showing full parti -culars including quantitative details and situation of Fixed Assets.

(b) The fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotation basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such verification.

2. (a) The inventories of the company have been physically verified by the Management during the year at reasonable intervals except stocks lying with others which have been verified with reference to confirmations, certificates and other relevant documents where available.

(b) The procedures of physical verification of Inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The Company has maintained proper records of inventories and the discrepancies noticed on physical verification of stocks as compared to book records, which in our opinion were not material, have been properly dealt with in the books of account.

3. The Company has not granted any loans, secured or unsecured, to Companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 ("the Act"). Therefore, the provisions of Clause 3(iii), (iii) (a) and (iii) (b) of the said Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and nature of its business with regard to 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 continuing failure to correct major weaknesses in internal control system with regard to purchase of inventory and fixed assets and for the sale of goods and services.

5. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

6. We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under Sub-section (1) of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been maintained and are being made up. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the records of the Company and as per the information and explanations given to us, the company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable to it with appropriate authorities. In respect of these statutory dues, there are no outstanding dues as on 31.03.2015 which are outstanding for a period of more than six months from the date they became payable.

(b) According to the records of the Company and as per the information and explanations given to us, there are no dues of sales tax, wealth tax, value added tax or cess which has not been deposited on account of dispute as on 31.03.2015, except income tax, duty of customs, duty of excise and service tax the details of which are as given below :

Name of the Period to which the Nature of dues Amount Statute amount relates Rs. In Lakhs

Customs Act, 1962 August 2005 Penalty 0.30

Customs Act, 1962 January, 2007 Penalty 10.00

Customs Act, 1962 June, 2006 to Customs duty 18.00 December, 2008 and Penalty

Customs Act, 1962 March, 2012 Customs duty 36.70 and Penalty

Customs Act, 1962 November, 2012 Customs duty 63.15 and Penalty

Customs Act, 1962 June, 2009 to Penalty 1.25 March, 2010

Central Excise September, 2006 to Excise duty 244.09 Act, 1944 December, 2008 and Penalty

Central Excise July, 2009 to Excise duty 9.37 Act, 1944 March, 2010 and Penalty

Central Excise June, 2010 to Excise duty 39.04 Act, 1944 March, 2011 and Penalty

Central Excise May, 2011 to Excise duty 19.43 Act, 1944 December,2011 and Penalty

Central Excise April, 2010 to Excise duty 25.73 Act, 1944 November, 2013 and Penalty

Service Tax under April, 2006 to Penalty 22.69 the Finance December, 2006 Act, 1994

Service Tax under April, 2011 to Penalty 37.79 the Finance March, 2012 Act, 1994

Service Tax under April, 2010 to Penalty 5.93 the Finance March, 2011 Act, 1994

Income Tax 2005-06 Interest 0.41 Act, 1961

Income Tax 2007-08 Income Tax 7.08 Act, 1961 and Interest

Income Tax 2009-10 Income Tax 104.91 Act, 1961 and Interest

Income Tax 2010-11 Income Tax 59.85 Act, 1961 and Interest



NAME OF THE STATUE Forum where dispute is pending

Customs Act, 1962 Customs, Excise & Service Tax Appellate Tribunal, south Zonal Bench, Bangalore

Customs Act, 1962 Customs, Excise & Service Tax Appellate Tribunal, south Zonal Bench, Chennai



Customs Act, 1962 Customs, Excise & Service Tax Appellate Tribunal, south Zonal Bench, Bangalore

Customs Act, 1962 Customs, Excise & Service Tax Appellate Tribunal, south Zonal Bench, Bangalore

Customs Act, 1962 Customs, Excise & Service Tax Appellate Tribunal, south Zonal Bench, Bangalore

Central Excise Act1944 Customs, Excise & Service Tax Appellate Tribunal, south Zonal Bench, Bangalore

Central Excise Act1944 Customs, Excise & Service Tax Appellate Tribunal, south Zonal Bench, Bangalore

Central Excise Act1944 Customs, Excise & Service Tax Appellate Tribunal, south Zonal Bench, Bangalore

Central Excise Act1944 Customs, Excise & Service Tax Appellate Tribunal, south Zonal Bench, Bangalore

Central Excise Act1944 Excise, Customs & Service Tax (Appeals), Visakhapatnam.

Central Excise Act1944 Customs, Central Excise & Service Tax (Appeals I and III), Hyderabad.

Service Tax under the Finance Act, 1994 Customs, Excise & Service Tax Appellate Tribunal, south Zonal Bench, Bangalore

Service Tax under the Finance Act, 1994 Customs, Central Excise & Service Tax (Appeals-III) Hyderabad.

Service Tax under the Finance Act, 1994 Customs, Central Excise & Service Tax (Appeals-III) Hyderabad.

Income Tax Act, 1961 Additional Commissioner of Income Tax, Range-1 Hyderabad.

Income Tax Act, 1961 Appeal yet to be filed with Commissioner of Income Tax, (Appeals)-X, Hyderabad.

Income Tax Act, 1961 Commissioner of Income Tax, (Appeals) - II, Hyderabad.

Income Tax Act, 1961 Commissioner of Income Tax, (Appeals) - X, Hyderabad.

(c) 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 thereunder has been transferred to such fund within time.

8. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

9. According to the records of the Company, during the year the Company has not defaulted in repayment of dues to financial institutions or bank. There was no amount raised by the Company through the issue of Debentures.

10. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, the provisions of Clause 3(x) of the Order are not applicable to the Company.

11. According to the records of the Company, as the Company has not raised any term loans during the year, the provisions of Clause 3(xi) of the Order are not applicable to the company for this year.

12. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and as per the representation given by the Company and relied on by us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such cases by the management.

For P.V.R.K. NAGESWARA RAO & CO., Chartered Accountants Firm's Registration Number : 002283S

N. ANKA RAO Hyderabad. Partner 23.05.2015 Membership Number : 23939


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of DIVI''S LABORATORIES 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 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.

Emphasis of Matter

We draw attention to Note No 31(II)(9)(c) regarding investments in wholly owned subsidiaries whose net worth are eroded and the consequent possibility of impairment of the equity investment of Rs. 281.61 lakhs made and non- recovery or partial recovery loans of Rs. 4486.31 lakhs given to them by the company. For reasons explained in the said Note, including the subsidiaries future business plans and growth prospects, such impairment if any is considered to be temporary in nature and no provision is considered necessary in the accounts of the company. Our opinion is not qualified in respect of this matter.

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 subsection (3C) of section 211 of the Companies Act, 1956;

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 Companies Act, 1956.

ANNEXURE TO INDEPENDENT AUDITOR''S REPORT

Referred to in Paragraph 1 under the heading of ''Report on Other Legal and Regulatory Requirements'' of our report of even date

1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to us, the fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotation basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such verification.

(c) The Company has not disposed off substantial part of fixed assets during the year, which affect the going concern assumption.

2. (a) The inventories of the Company have been physically verified by the Management during the year at reasonable intervals except stocks lying with others which have been verified with reference to confirmations, certificates and other relevant documents where available.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories and the discrepancies noticed on physical verification of stocks as compared to book records, which in our opinion were not material, have been properly dealt with in the books of account.

3. The Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act. Consequently, the provisions of Clause 4(iiib), 4(iiic), 4(iiid), 4(iiif) and 4(iiig) of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls with regard to purchase of inventory, fixed assets and for the sale of goods and services.

5. (a) According to the information and explanations given to us and as confirmed by the Company Secretary and Management of the Company, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of each party have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public covered by the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under. Consequently, the provisions of Clause 4(vi) of the Order are not applicable to the Company.

7. In our opinion and according to the explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the records maintained by the Company pursuant to the order made by the Central Government of India, 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 records have been maintained and are being made up. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the records of the Company and as per the information and explanations given to us, the Company is generally regular in depositing the 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 with the appropriate authorities. In respect of these statutory dues, there are no outstanding dues as on 31.03.2013 which are outstanding for a period of more than six months from the date they became payable.

(b) According to the records of the Company and as per the information and explanations given to us, there are no dues of Sales Tax, Wealth Tax and Cess which have not been deposited on account of any dispute as on 31.3.2013 except Excise Duty, Customs Duty, Service Tax and Income Tax, the details of which are as given under:

Name of the Period to which the Nature of dues A Statute amount relates

Customs August 2005 Penalty and fine for non- Act, 1962 fulfillment of export obligation against goods imported under DEEC Scheme

Customs January, 2007 Penalty for non-fulfillment Act, 1962 of export obligation against goods imported under DEEC Scheme

Customs June, 2006 to Customs duty foregone on Act, 1962 July, 2008 materials used for manufacture of non-excisable goods, Penalty for non- payment of customs duty and Penalty for improper utilisation of Cenvat Credit

Customs August, 2008 to Penalty for non-payment of Act, 1962 December, 2008 Customs duty and for improper utilisation of Cenvat Credit

Name of the Statute Amount Forum where Rs. in lakhs dispute is pending

Customs Act 1962 0.30 Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Bangalore

Customs Act 1962 10.00 Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Chennai

Customs Act 1962 16.00 Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Bangalore

Customs Act 1962 2.00 Commissioner of Central Excise (Appeals), Visakhapatnam

10. As per the information and explanations given to us and on an overall examination of the financial statements of the company for the current and immediately preceding financial year, we report that the Company does not have any accumulated losses at the end of the current financial year nor incurred cash losses in the current and immediately preceding financial year.

11. According to records of the Company, during the year the Company has not defaulted in repayment of dues to financial institutions or banks or debenture holders.

12. As per the information and explanations given to us, as the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities to any body during the year.

13. In our opinion, as the Company is not a chit fund or a nidhi or mutual benefit fund or society, the provisions of Clause 4 (xiii) of the Order are not applicable to the Company for this year.

14. In our opinion, the Company is not dealing in or trading in Shares, Securities, debentures and other investments.

15. As per the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

16. According to records of the Company, the Company has not raised any term loans during the year and in respect of term loans raised in earlier years, the same have been applied for the purposes for which they were raised in the corresponding years.

17. According to records and on an overall examination of the balance sheet of the company, we report that the funds raised on short term basis have not been used for long term investments.

18. As per the information and explanations given to us, the Company has not made any preferential allotment of shares to parties covered in the Register maintained under section 301 of the Act during the year.

19. As the Company has not issued any debentures during the year, which requires the creation of security or charge, the provisions of Clause 4(xix) are not applicable to the Company.

20. As the Company has not raised any money by public issues during the year, the provisions of Clause 4(xx) are not applicable to the Company.

21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and as per the representation given by the Company and relied on by us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such cases by the management.

For P.V.R.K. NAGESWARA RAO & CO.,

Chartered Accountants

Firm''s Registration Number: 002283S

P.V.R.K. NAGESWARA RAO

Hyderabad Partner

20.05.2013 Membership Number: 18840


Mar 31, 2012

1. We have audited the attached Balance Sheet of DIVI'S LABORATORIES LIMITED ('the Company') as at 31st March 2012, the Statement of Profit and Loss and also 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 (Auditors' Report) Order, 2003 ('the Order') issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 ('the Act'), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. 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 purpose 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 these 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 Section 211 (3C) of the Act, 1956 to the extent applicable.

v) On the basis of the written representations received from the directors, as on 31.03.2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as 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 read in conjunction with the notes and accounting policies thereon 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

b) in the case of Statement of Profit and Loss, of the profit for the year ended on that date; and

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDIT REPORT OF EVEN DATE ON THE ACCOUNTS OF DIVI'S LABORATORIES LIMITED ('THE COMPANY') FOR THE YEAR ENDED 31ST MARCH 2012

1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to us, the fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotation basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such verification. As regards capital works in-progress, the same will be verified by the management on completion of assets.

(c) The fixed assets disposed off during the year did not represent substantial part of fixed assets of the Company, which will affect the going concern status of the Company.

2. (a) The inventories of the Company have been physically verified by the Management during the year at reasonable intervals except stocks lying with others which have been verified with reference to confirmations, certificates and other relevant documents where available.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories and the discrepancies noticed on physical verification of stocks as compared to book records, which in our opinion were not material, have been properly dealt with in the books of account.

3. The Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act. Consequently, the provisions of Clause 4(iiib), 4(iiic), 4(iiid), 4(iiif) and 4(iiig) of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls with regard to purchase of inventory, fixed assets and for the sale of goods and services.

5. (a) According to the information and explanations given to us and as confirmed by the Company Secretary and Management of the Company, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs.5,00,000/- in respect of each party during the year.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public covered by the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under. Consequently, the provisions of Clause 4(vi) of the Order are not applicable to the Company.

7. In our opinion and according to the explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the records maintained by the Company pursuant to the order made by the Central Government of India, 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 records have been maintained and are being made up. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the records of the Company and as per the information and explanations given to us, the Company is generally regular in depositing the 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 with the appropriate authorities. In respect of these statutory dues, there are no outstanding dues as on 31.03.2012 which are outstanding for a period of more than six months from the date they became payable.

(b) According to the records of the Company and as per the information and explanations given to us, there are no dues of Sales Tax, Wealth Tax and Cess which have not been deposited on account of any dispute as on 31.3.2012 except Excise Duty, Customs Duty, Service Tax and Income Tax, the details of which are as given under :

Name of the Period to which the Nature of dues Amount Forum where Statute amount relates Rs. in lakhs dispute is pending

Customs August 2005 Penalty and fine for non- 0.30 Customs, Excise & Service Tax Act, 1962 fulfillment of export Appellate Tribunal, South obligation against goods Zonal Bench, Bangalore imported under DEEC Scheme

Customs Act, January, 2007 Penalty for non-fulfillment 10.00 Customs, Excise & Service 1962 of export obligation against Tax Appellate Tribunal, goods imported under DEEC South Zonal Bench, Chennai Scheme

Customs Act, June, 2006 to Customs duty foregone on 16.00 Customs, Excise & Service 1962 July, 2008 materials used for manufacture Tax Appellate Tribunal, South of non-excisable goods, Zonal Bench, Bangalore Penalty for non- payment of customs duty and Penalty for improper utilisation of Cenvat Credit

Customs Act, August, 2008 to Penalty for non-payment of 2.00 Commissioner of Central 1962 December, 2008 Customs duty and for Excise (Appeals), Visakhapatnam improper utilisation of Cenvat Credit

Central September, 2006 to Excise duty and penalty on 244.09 Customs, Excise & Service Excise Act, December, 2008 exempted goods Tax Appellate Tribunal, South 1944 Zonal Bench, Bangalore

Customs Act, June, 2009 to Penalty for non-payment of 1.25 Preferring to file appeal before 1962 March, 2010 Customs duty and for Customs, Excise & Service improper utilisation of Tax Appellate Tribunal, South Cenvat Credit. Zonal Bench, Bangalore

Central Excise July, 2009 to Excise duty and penalty on 9.37 Preferring to file appeal before Act, 1944 March, 2010 exempted goods Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Bangalore.

Central Excise March, 2007 to Penalty on irregular 22.37 Commissioner of Central Excise Act, 1944 July, 2007 availment of Cenvat Credit. (Appeals), Visakhapatnam

Customs Act, March, 2007 to Penalty on imported Raw 1.00 Commissioner of Central Excise 1962 September, 2007 Material (Appeals), Visakhapatnam

Central Excise June, 2010 to Difference in duty and 39.04 Preferring to file appeal before Act, 1944 March, 2011 penalty for Domestic clearances Commissioner of Central Excise (Appeals), Visakhapatnam

Central Excise June, 2006 to Penalty and interest for 0.59 Commissioner of Central Excise Act, 1944 December, 2007 Domestic clearances (Appeals), Visakhapatnam

Service Tax April, 2006 to Penalty on Service Tax 22.69 Customs, Excise & Service Tax under the Finance December, 2006 Appellate Tribunal, South Zonal Act, 1994 Bench, Bangalore

Income Tax Act, 2005-06 Interest for delay in 0.41 Additional Commissioner of 1961 payment of advance fringe Income Tax, Range-1, benefit tax demanded on Hyderabad. completion of assessment

Income Tax Act, 2007-08 Income Tax and Interest 63.09 Commissioner of Income Tax, 1961 demanded on completion (Appeals) - II, Hyderabad. of assessment

10. As per the information and explanations given to us and on an overall examination of the financial statements of the company for the current and immediately preceding financial year, we report that the Company does not have any accumulated losses at the end of the current financial year nor incurred cash losses in the current and immediately preceding financial year.

11. According to records of the Company, during the year the Company has not defaulted in repayment of dues to financial institutions or banks or debenture holders.

12. As per the information and explanations given to us, as the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities to any body during the year.

13. In our opinion, as the Company is not a chit fund or a nidhi or mutual benefit fund or society, the provisions of Clause 4 (xiii) of the Order are not applicable to the Company for this year.

14. In our opinion, as the Company is not dealing in or trading in Shares, Securities, debentures and other investments.

15. As per the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

16. According to records of the Company, the Company has not raised any term loans during the year and in respect of term loans raised in earlier years, the same have been applied for the purposes for which they were raised in the corresponding years.

17. According to records and on an overall examination of the balance sheet of the company, we report that the funds raised on short term basis have not been used for long term investments.

18. As per the information and explanations given to us, the Company has not made any preferential allotment of shares to parties covered in the Register maintained under section 301 of the Act during the year.

19. As the Company has not issued any debentures during the year, which requires the creation of security or charge, the provisions of Clause 4(xix) are not applicable to the Company.

20. As the Company has not raised any money by public issues during the year, the provisions of Clause 4(xx) are not applicable to the Company.

21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and as per the representation given by the Company and relied on by us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such cases by the management.

For P.V.R.K. NAGESWARA RAO & CO.,

Chartered Accountants

Firm's Registration Number : 002283S

P.V.R.K. NAGESWARA RAO

Visakhapatnam Partner

12-05-2012 Membership No. 18840

 
Subscribe now to get personal finance updates in your inbox!