Mar 31, 2022
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of Wockhardt Limited ("the Company"), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its loss and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Revenue recognition |
|
The Key Audit Matter |
How the matter was addressed in our audit |
The Company recognises revenue from sale of goods when control over the goods is transferred to the customer. The actual point in time when revenue is recognised varies depending on the specific terms and conditions of the sale contracts entered into with customers. Revenue is a key performance indicator of the Company and there is risk of overstatement of revenue due to fraud resulting from pressure to achieve targets, earning expectations or incentive schemes linked to performance. Given the risk of overstatement of revenue due to fraud, this is a key audit matter. Refer note 3(j) of accounting policy and note 39 in standalone financial statements. |
Our audit procedures included the following: ⢠We have assessed the Company''s accounting policies relating to revenue recognition by comparing with applicable accounting standards. ⢠We have evaluated the design, implementation and operating effectiveness of the Company''s key internal control over revenue recognition. ⢠We have examined the samples, selected using statistical sampling, of revenue recorded during the year with the underlying documentation. ⢠We have performed cut off procedures by selecting samples, using statistical sampling, of revenue recorded as at the period end. ⢠We have examined the manual journals posted to revenue during the year to identify unusual or irregular items. ⢠We have assessed the adequacy of the disclosures made in respect of revenue from sale of goods. |
Assessment of recoverability of carrying value of certain Property, Plant and Equipment and Capital Work in progress |
|
The Key Audit Matter |
How the matter was addressed in our audit |
Certain property, plant and equipment of the Company is affected by lower capacity utilization. Further, the Company has made investments in certain projects which has been deferred. These are lying in capital work in progress. The Company''s investment in these facilities was made considering market feasibility and potential of existing / future products. As at 31 March 2022, carrying value of such Property, Plant and Equipment and Capital Work in Progress amounts to '' 455 crores and '' 58 crore respectively Given the significance of carrying value and judgement involved in assessing the recoverability of such facilities this is considered to be a key audit matter. Refer note 3(d) and 3(q) of accounting policy and note 4, 40 and 48(a) in standalone financial statements |
Our audit procedures included the following: ⢠We have assessed the Company''s accounting policies relating to impairment by comparing with applicable accounting standards. ⢠We have inquired the progress made on remediation work for facilities impacted due to regulatory approvals with key managerial personnel. ⢠We have verified the reports of physical verification of property, plant and equipment and capital work in progress by the Company. ⢠We have assessed the capabilities and objectivity of the experts (internal and external) used by the Company in the process of verification of assets, assessing the usability of assets and determining recoverable amounts, where required. ⢠We have evaluated the basis applied by the Company in determining cash generating unit for impairment testing purpose. ⢠We have challenged the significant assumptions considered by the Company while making impairment assessment with respect to revenue forecast, margin and discount rate. ⢠We have involved our valuation specialists to assess the valuation methodologies applied by the Company to determine the recoverable amount for certain assets. |
Recoverability of carrying value of Intangible assets under development |
|
The Key Audit Matter |
How the matter was addressed in our audit |
The Company has intangible under development amounting '' 756 Crore as at 31 March 2022. These acquired intangible under development is in relation to the New Chemical Entities (NCE). Company has acquired NCE amounting to '' 336 Crore during the current year. The carrying value of such intangible under development is tested for recoverability, based on the estimates future cash flows, market conditions, etc. Changes in these assumptions could lead to an impairment to the carrying value of these intangible under development Given the significance of the amount involved and the estimates and judgement involved in assessment of their recoverability, this is considered to be a key audit matter. Refer note 3(b) of accounting policy and note 5 in standalone financial statements. |
Our audit procedures included the following: ⢠We have assessed the Company''s accounting policies relating to intangible under development by comparing with applicable accounting standards. ⢠We have inquired the progress made on NCE development with the key managerial personnel. ⢠We have inspected the correspondences with regulatory authorities, third parties, scientific documentation and the market release made by the Company. ⢠We have evaluated the Company''s assessment of estimated future cash flows relating to the NCE project and their recoverability plans. ⢠We have obtained and verified the purchase agreement for NCE acquired during the year. ⢠We have assessed the capabilities and objectivity of the external expert used by the Company in determining the fair value of the NCE purchased during the year. |
The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the financial statements and our auditors'' report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management''s and Board of Directors'' Responsibility for the Standalone Financial Statements
The Company''s Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠I dentify 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 and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2020 ("the Order") issued by the Central Government in terms of section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) As required by Section 143(3) 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 as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 45 to the standalone financial statements;
b) The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
d) (i) The management has represented that, to the best of its knowledge and belief, no funds have been
advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:
⢠directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or
⢠provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:
⢠directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or
⢠provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
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 mis-statement.
e) The Company has neither declared nor paid any dividend during the year.
(C) With respect to the matter to be included in the Auditors'' 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
Firm''s Registration No. 101248W/W-100022
Partner
Membership No.: 112399
ICAI UDIN: 22112399AJWETT7833
Place : Mumbai Date : 30 May 2022
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Wockhardt Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including 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, (hereinafter referred to as âInd 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) financial position, profit (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant rules issued thereunder. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorsâ 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2018, its profit (financial performance including other comprehensive income), its cash flows and changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in âAnnexure 1â, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(2) As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet, the Statement of Profit and Loss, Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant rules issued thereunder;
e. On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 over financial reporting of the Company and the operating effectiveness of such controls, we give our separate Report in âAnnexure 2â;
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 45 on Contingent Liabilities to the standalone Ind AS financial statements;
(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 18 & 25 to the standalone Ind AS financial statements;
(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
[Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorâs Report of even date to the members of Wockhardt Limited on the standalone Ind AS financial statements for the year ended March 31, 2018]
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.
(b) During the year, Property, Plant and Equipment have been physically verified by the management as per the 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) According to the information & explanation given to us, the title deeds of immovable properties other than selfconstructed properties recorded as Property, Plant and Equipment in the books of account of the Company as on March 31, 2018 are held in the name of the Company, except for the details given below:
In respect of Freehold land with gross block and net block of Rs.0.31 Crore and Building comprising of certain flats with gross block of Rs.0.94 Crore and net block of Rs.0.58 Crore, relevant transfer in the name of the Company is pending.
(ii) The inventory (excluding stock lying with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. As informed, no material discrepancies were noticed on physical verification carried out during the year.
(iii) As informed, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraph 3 (iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.
(iv) Based on information and explanation given to us in respect of loans, investments, guarantees and securities, the Company has complied with the provisions of Section 185 and 186 of the Act.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed there under and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.
(vii) (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, income tax, sales tax, service tax, value added tax, goods and services tax, customs duty, excise duty, cess and any other material statutory dues applicable to it.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, service tax, value added tax, goods and services tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us, the dues outstanding with respect to, income tax, sales tax, service tax, value added tax, goods and services tax, customs duty, excise duty on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs. in crore) |
Period to which the amount relates |
Forum where the dispute is pending |
Central Excise Act, 1944 |
Demand and Penalty for Classification |
1.10 |
February 2001 to February 2003 |
CESTAT, Mumbai |
Demand and Penalty for Classification |
4.44 |
April 2005 to March 2009 |
CESTAT, Mumbai |
|
Demand, Interest and Penalty towards exemption availed in EOU unit |
21.22 |
May 2004 to March 2007 |
CESTAT, Mumbai |
|
EPO Formulation matter |
6.25 |
February 2001 to February 2003 |
CESTAT, Mumbai |
|
Demand, Interest and Penalty for exempted goods cleared |
18.96 |
November 2006 to April 2013 |
CESTAT, Mumbai |
UP VAT/CST Act |
Demand under Section 28 & Section 9(2) |
0.25 |
April 2009 to March 2010 |
Addl. Commissioner Grade 2 (Appeals), U.P |
Sales Tax Due to under Invoicing and late deposit of tax |
0.08 |
2003-04 to 2005-06 |
Joint Commissioner (Appeals), U.P. |
|
Demand under Section 28 & Section 9(2) |
0.29 |
April 2008 to March 2009 |
Addl. Commissioner Grade 2 (Appeals) first, Ghaziabad |
|
Demand under Section 28(2) |
5.15 |
April 2014 to March 2015 |
Addl. Commissioner Grade 2 (Appeals) first, Ghaziabad |
|
WB VAT/CST Act |
Demand under various Sections |
2.44 |
2005-06 to 2015-16 |
Addl. Commissioner (Appeals) and Appellate & Revision Board, W.B. |
Kerala VAT Act |
Demand under Section 21 |
0.07 |
April 2011 to March 2012 |
Commissioner (Appeals), Kerala |
Central Sales Tax/ VAT Act |
Demand under Section 9(2) |
0.30 |
April 2005 to March 2006 |
Deputy Commissioner of Sales Tax (Appeals III), Maharashtra |
Demand under CST and Goa VAT Act |
1.25 |
2006-2007 |
Addl. Commissioner of Commercial Tax, Goa |
|
Demand under MVAT Act |
3.04 |
April 2009 to March 2010 |
Appeal to be filed with The Maharashtra Sales Tax Tribunal |
|
Demand under CST Act |
0.41 |
April 2009 to March 2010 |
Appeal to be filed with The Maharashtra Sales Tax Tribunal |
|
Demand and Penalty under MVAT Act |
0.71 |
April 2009 to March 2010 |
Appeal to be filed with The Maharashtra Sales Tax Tribunal |
|
Demand and Penalty under MVAT Act |
22.06 |
April 2010 to March 2011 |
The Maharashtra Sales Tax Tribunal |
|
Demand and Penalty under CST Act |
2.59 |
April 2010 to March 2011 |
The Maharashtra Sales Tax Tribunal |
|
Demand under CST Act |
6.28 |
April 2011 to March 2012 |
Appeal to be filed with The Maharashtra Sales Tax Tribunal |
|
Demand under MVAT Act |
7.85 |
April 2011 to March 2012 |
Appeal to be filed with The Maharashtra Sales Tax Tribunal |
|
Demand and Penalty under MVAT Act |
10.64 |
April 2012 to March 2013 |
Joint Commissioner (Appeals), Maharashtra |
|
Demand under MVAT Act |
1.66 |
April 2012 to March 2013 |
Joint Commissioner (Appeal), Maharashtra |
|
Demand under MVAT Act |
5.45 |
April 2013 to March 2014 |
Appeal to be filed with Joint Commissioner (Appeals) |
|
Demand under CST Act |
0.99 |
April 2013 to March 2014 |
Appeal to be filed with Joint Commissioner (Appeals) |
|
The Finance Act, 1994 (Service Tax) |
Interest and penalty on nonpayment of Service Tax on Import of certain services |
0.98 |
April 2005 to March 2010 |
Appeal to be filed with Commissioner (Appeals) |
Interest on non-payment of Service Tax on Import of certain services |
0.07 |
April 2011 to March 2012 |
Appeal to be filed with Commissioner (Appeals) |
|
Income Tax Act, 1961 |
Demand under Section 143(3) |
4.04 |
FY 2003-04 |
High Court |
Demand under Section 143(3) |
12.8 |
FY 2006-07 |
Income Tax Appellate Tribunal |
|
Demand under Section 143(3) |
0.46 |
FY 2007-08 |
Income Tax Appellate Tribunal |
TDS Assessment order u/s 201/201(A) |
0.14 |
January 2007 to March 2009 |
Commissioner of Income Tax (Appeals) / TDS Officers |
|
TDS (TRACES) |
0.31 |
April 2011 to March 2017 |
TDS Officers |
|
Demand under Section 143(3) read with Section 148 |
75.05 |
FY 2009-10 |
Commissioner of Income Tax (Appeals) |
|
TDS Assessment order u/s 201/201(A) |
54.25 |
FY 2009-10 |
Commissioner of Income Tax (Appeals) - TDS |
|
Demand under Section 143(3) |
0.62 |
FY 2011-12 |
Commissioner of Income Tax (Appeals) |
|
Demand under Section 143(3) |
67.30 |
FY 2012-13 |
Commissioner of Income Tax (Appeals) |
|
TDS Assessment order u/s 201/201(A) |
36.66 |
FY 2010-11 |
Commissioner of Income Tax (Appeals) - TDS |
|
Demand under Section 143(3) |
21.00 |
FY 2013-14 |
Commissioner of Income Tax (Appeals) |
Note: Out of the above, amount paid under protest by the Company for Excise, VAT and Income-tax is Rs. 0.47 Crore, Rs. 4.48 Crore and Rs. 23.38 Crore respectively.
(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institutions, banks, or dues to debenture holders.
(ix) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. According to the information and explanations given to us, the Company has obtained term loan of Rs.3.80 Crore during the year, which as explained, pending utilization has been kept in cash credit account.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such instance by the management.
(xi) According to the information and explanations given to us, managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Therefore, paragraph 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanation given to us and based on our examination of the records of the Company, transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of Act, where applicable.
The details of related party transactions have been disclosed in the Financial Statements as required under Indian Accounting Standards (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act, read with relevant rules issued thereunder.
(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Therefore, paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him during the year.
(xvi) According to the information and explanation given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
[Referred to in paragraph 2(f) under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorâs Report of even date to the members of Wockhardt Limited on the standalone Ind AS financial statements for the year ended March 31, 2018.]
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Wockhardt Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 (âICAIâ). 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing specified under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. 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 over financial reporting were established and maintained and if 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 system over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 judgement, including the assessment of the risks of material misstatement of the standalone Ind AS 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 system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial control over financial reporting includes 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 standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting 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 ICAI.
For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W /W100048
Bhavik L. Shah
Partner
Membership No. 122071
Place : Mumbai
Date : May 04, 2018
Mar 31, 2017
To the Members of Wockhardt Limited Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Wockhardt Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including 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, (hereinafter referred to as "Ind AS Financial Statements")
Management''s Responsibility for the Standalone Ind AS 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 state of affairs (financial position), profit (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) 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 design, implementation and maintenance of adequate internal financial controls and ensuring their operating effectiveness and 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.
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 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 disclosures in the standalone Ind AS 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 aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2017, its profit (financial performance including other comprehensive income), its cash flows and changes in equity for the year ended on that date.
Other Matter
The comparative financial information of the Company for the year ended March 31 2016 and the transition date opening balance sheet as at April 01, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by us whose report for the year ended March 31, 2016 and March 31, 2015 dated May 06, 2016 and May 28, 2015 respectively expressed an unmodified opinion on those financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditors'' Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in "Annexure 1", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(2) As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. The Balance Sheet, the Statement of Profit and Loss, Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian 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 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, we give our separate Report in "Annexure 2"
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 50 on Contingent Liabilities to the standalone Ind AS financial statements;
(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 47 & 48 to the standalone Ind AS financial statements;
(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 its Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 08, 2016 to December 30, 2016 and these are in accordance with the books of account maintained by the Company - Refer Note 12(b) to the standalone Ind AS financial statements.
[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditor''s Report of even date to the members of Wockhardt Limited on the standalone IND AS financial statements for the year ended March 31, 2017]
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant
and Equipment.
(b) During the year, Property, Plant and Equipment have been physically verified by the management as per the 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) According to the information & explanation given to us, the title deeds of immovable properties other than self-constructed properties recorded as Property, Plant and Equipment in the books of account of the Company as on March 31, 2017 are held in the name of the company, except for the details given below:
In respect of Freehold land with gross block and net block of Rs, 0.28 Crore and Building comprising of certain flats with gross block of Rs, 0.91 Crore and net block of Rs, 0.60 Crore, relevant transfer in the name of the Company is pending.
(ii) The inventory (excluding stocks lying with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. As informed, no material discrepancies were noticed on physical verification carried out during the year.
(iii) As informed, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraph 3 (iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.
(iv) Based on information and explanation given to us in respect of loans, investments, guarantees and securities, the Company has complied with the provisions of Section 185 and 186 of the Act.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed there under and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.
(vii) (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, income tax, sales tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us, the dues outstanding with respect to, income tax, sales tax, service tax, value added tax, customs duty, excise duty on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs, in crore) |
Period to which the amount relates |
Forum where dispute is pending |
Central Excise Act, 1944 |
Demand and Penalty for Classification |
0.73 |
February 2001 to February 2003 |
CESTAT |
Demand and Penalty for Classification. |
2.20 |
September 1991 to July 1993 |
CESTAT |
|
Demand and Penalty for Classification. |
4.44 |
April 2005 to March 2009 |
CESTAT |
|
Demand and Penalty for Classification. |
21.22 |
May 2004 to March 2007 |
CESTAT |
|
EPO Formulation matter |
6.25 |
February 2001 to February 2003 |
CESTAT |
|
UP VAT/CST Act |
Demand under Section 28 & Section 9(2) |
0.25 |
April 2009 to March 2010 |
Addl. Commissioner Grade 2 (Appeals), U.P |
Name of the statute |
Nature of dues |
Amount (Rs, in crore) |
Period to which the amount relates |
Forum where dispute is pending |
Sales Tax Due to under Invoicing and late deposit of tax |
0.08 |
2003-04 to 2005-06 |
Joint Commissioner (Appeals), U.P |
|
Demand under Section 28 & Section 9(2) |
0.29 |
April 2008 to March 2009 |
Addl. Commissioner Grade 2 (Appeals) first, Ghaziabad |
|
WB VAT/CST Act |
Demand under various Sections |
2.44 |
2005-06 to 2015-16 |
Addl. Commissioner (Appeals) and Appellate & Revision Board, W.B |
Kerala VAT Act |
Demand under Section 21 |
0.07 |
April 2011 to March 2012 |
Commissioner (Appeals), Kerala |
Patna VAT Act |
VAT on free goods supplied as bonus offer and deposited |
0.54 |
2009-10 to 2012-2013 |
Joint Commissioner Commercial Taxes (Appeals), Bihar |
Central Sales Tax/ VAT Act |
Demand under Section 9(2) |
0.30 |
April 2005 to March 2006 |
Deputy Commissioner of Sales Tax (Appeals III), Maharashtra |
Demand under CST and Goa VAT act. |
1.25 |
2006-2007 |
Addl. Commissioner of Commercial Tax, Goa |
|
Demand under MVAT act. |
3.04 |
April 2009 to March 2010 |
Joint Commissioner (Appeal V), Maharashtra |
|
Demand under CST Act |
0.41 |
April 2009 to March 2010 |
Joint Commissioner (Appeal V) |
|
Demand and Penalty under MVAT act. |
0.71 |
April 2009 to March 2010 |
Joint Commissioner (Appeal V) |
|
Demand and Penalty under MVAT act. |
22.06 |
April 2010 to March 2011 |
Joint Commissioner (Appeal V) |
|
Demand and Penalty under CST Act |
2.59 |
April 2010 to March 2011 |
Joint Commissioner (Appeal V) |
|
Demand under CST Act |
6.28 |
April 2011 to March 2012 |
Joint Commissioner (Appeal V) |
|
Demand under MVAT Act |
7.85 |
April 2011 to March 2012 |
Joint Commissioner (Appeal V) |
|
Demand and Penalty under MVAT Act |
10.64 |
April 2012 to March 2013 |
Deputy Commissioner, Sales Tax |
|
Demand under MVAT Act |
1.66 |
April 2012 to March 2013 |
Deputy Commissioner, Sales Tax |
|
Income Tax Act, 1961 |
Demand under Section 143(3) |
4.04 |
FY 2003-04 |
High Court |
Demand under Section 143(3) |
12.8 |
FY 2006-07 |
Income Tax Appellate Tribunal |
|
Demand under Section 143(3) |
0.46 |
FY 2007-08 |
Income Tax Appellate Tribunal |
|
TDS Assessment order u/s 201/201(A) |
0.14 |
January 2007 to March 2009 |
Commissioner of Income Tax (Appeals) / TDS Officers |
|
TDS (TRACES) |
0.31 |
April 2011 to March 2017 |
TDS Officers |
|
Demand under section 143(3) |
1.23 |
FY 2009-10 |
Commissioner of Income Tax (Appeals) |
|
TDS Assessment order u/s 201/201(A) |
54.25 |
FY 2009-10 |
Commissioner of Income Tax (Appeals) / TDS Officers |
|
Demand under Section 143(3) |
0.62 |
FY 2011-12 |
Commissioner of Income Tax (Appeals) |
|
Demand under Section 143(3) |
67.30 |
FY 2012-13 |
Commissioner of Income Tax (Appeals) |
Note: Out of the above, amount paid under protest by the Company for VAT and Income-tax is Rs, 2.81 Crore and Rs, 16.13 Crore respectively.
(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institutions, banks, or dues to debenture holders.
(ix) The Company has neither raised money by way of public issue offer nor has obtained any term loans during the year. Therefore, paragraph 3(ix) of the Order is not applicable to the Company.
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such instance by the management.
(xi) According to the information and explanations given to us, managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Therefore, paragraph 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanation given to us and based on our examination of the records of the company, transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of Act, where applicable. The details of such related party transaction have been disclosed in the Financial Statements as required under Indian Accounting Standards (Ind AS) 24, Related Party Disclosures specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Therefore, paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him during the year.
(xvi) According to the information and explanation given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
[Referred to in paragraph 2(f) under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditor''s Report of even date to the members of Wockhardt Limited on the standalone Ind AS financial statements for the year ended March 31, 2017]
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Wockhardt Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 ("ICAI"). 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 company''s 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. 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 over financial reporting was established and maintained and if 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 system over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes 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 standalone Ind AS 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 standalone Ind AS financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting 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 ICAI.
For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W /W100048
Bhavik L. Shah
Partner
Membership No. 122071
Place : Mumbai
Date : May 04, 2017
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Wockhardt Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2015, the Statement of Profit and Loss, 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 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
and ensuring their operating effectiveness and 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.
Auditors'' 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 standalone financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the standalone financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the standalone
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 financial
statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on whether the Company has in place an
adequate internal financial controls system over financial reporting
and the operating effectiveness of such controls. An audit also
includes evaluating the appropriateness of 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 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 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 (Auditors'' 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 the extent applicable.
(2) As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
c. The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
d. In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act read with Rule 7 of the Companies (Accounts) Rules, 2014;
e. On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 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 Auditors''
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its
financial position in its standalone financial statements - Refer Note
47 on Contingent Liabilities;
(ii) The Company did not have any long-term contracts including
derivative contracts. Hence, the question of any material foreseeable
losses does not arise;
(iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' in the Independent Auditors'' Report of even date to the
members of Wockhardt Limited on the standalone financial statements for
the year ended March 31, 2015]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) During the year, fixed assets have been physically verified by the
management as per the 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.
(ii) (a) The inventory (excluding stocks lying with third parties) has
been physically verified by the management during the year. In respect
of inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(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. As
informed, no material discrepancies were noticed on physical
verification carried out during the year.
(iii) 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 189 of the Act. Accordingly, the provisions
stated in paragraph 3 (iii)(a) and 3 (iii)(b) of the Order are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists 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 continuing failure to correct any major weaknesses in the
aforesaid internal control system of the Company.
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the provisions of Sections 73 to 76 of the Act and the rules
framed there under.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of products where the maintenance of cost records has
been specified by the Central Government under sub-section (1) of
Section 148 of the Act and the rules framed there under and we are of
the opinion that prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detail
examination of the records with a view to determine whether they are
accurate or complete.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, employees'' state insurance, income-tax, sales-tax, wealth-tax,
service tax, value added tax, customs duty, excise duty, cess and other
material statutory dues applicable to it. 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, value added tax, customs duty, excise duty,
cess and any other material statutory dues applicable to it, were
outstanding, at the year end, for a period of more than six months from
the date they became payable.
(b) According to the information and explanation given to us, the dues
outstanding with respect to income tax, sales tax, wealth tax, service
tax, value added tax, customs duty, excise duty or cess as applicable
to it, on account of any dispute, are as follows:
Name of the Nature of dues Amount
statute (Rs. in crore)
Central Excise Penalty for Classification 0.37
Act, 1944
Differential Duty 2.19
Education Cess 0.02
Demand and Penalty for 2.20
Classification.
Demand and Penalty for 4.44
Classification.
Denial of concessional rate 21.23
of duty on sale to DTA
UP VAT Act Demand under Section 28 0.27
& Section 9(2)
UP VAT Act Sales Tax due to under 0.08
invoicing and late deposit
of Tax
Patna VAT Act VAT on free goods 0.54
supplied as bonus offer
and deposited
Maharashtra Demand under Section 23 10.16
VAT Act, 2002 of MVAT, 2002 and under
and Central Section 9(2) of Central
Sales Tax Act Sales Tax Act
Central Demand under 0.30
Sales Tax Section 9(2)
Central Demand under CST and 1.25
Sales Tax VAT Act.
Income Tax Demand under 4.05
Act, 1961 Section 143(3)
Demand under 12.80
Section 143(3)
Demand under 0.46
Section 143(3)
Demand under 1.11
Section 143(3)
TDS Assessment order 0.13
u/s 201/201(A)
Name of the Period to which the amount Forum where the
statute relates dispute is pending
Central Excise February 2001 to February 2003 CESTAT
Act, 1944
November 1996 to April 1998 Commissioner,
Aurangabad.
July 2004 to August 2004 Joint Commissioner,
Ankleshwar.
September 1991 to July 1993 CESTAT
April 2005 to March 2009 CESTAT
May 2004 to March 2007 CESTAT
Addl. Commissioner
UP VAT Act April 2008 to March 2011 Grade 2 ( Appeals)
First
UP VAT Act 2003 - 04 Joint Comm.
2005 - 06 Commercial Taxes
(Appeals)
Patna VAT Act 2009-10 to 2012-2013 Joint Comm.
Commercial Taxes
(Appeals)
Maharashtra April 2008 to March 2009 Joint Commissioner,
VAT Act, 2002 Appeal V
and Central
Sales Tax Act
Deputy Commissioner
Central April 2005 to March 2006 of Sales Tax Appeals
Sales Tax - 3,Mumbai
Central 2006-2007 Addl. Commissioner
Sales Tax of Commercial tax,
Panaji
Income Tax FY 2003-04 High Court
Act, 1961
FY 2006-07 Income Tax Appellate
Tribunal
FY 2007-08 Income Tax Appellate
Tribunal
FY 2009-10 Commissioner of
Income Tax (Appeals)
January 2007 to March 2011 Commissioner of
Income Tax (Appeals)
/TDS Officers
Note: Out of the above, amount paid under protest by the Company in
respect of Delhi and Patna VAT and Income-tax is Rs. 0.29 crore and Rs.
16.13 crore respectively.
(c) According to the information and explanations given to us, there
has been no delay in transferring amounts, required to be transferred,
to the Investor Education and Protection Fund by the Company.
(viii) The Company does not have accumulated losses at the end of the
financial year nor has incurred cash losses in the current and
immediately preceding financial year.
(ix) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to financial
institutions, banks or debenture holders.
(x) In our opinion and as explained in Note 47 to the financial
statements, the terms and conditions of the guarantees given by the
Company, for loans taken by its subsidiaries from banks or financial
institutions are not prejudicial to the interest of the Company.
(xi) According to the information and explanations given to us, the
term loans have been applied for the purpose for which they were
obtained.
(xii) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of any such instance by the management.
For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No. 103523W
Shailesh Haribhakti
Partner
Membership No. 030823
Place : Mumbai
Date : May 28, 2015
Mar 31, 2014
1. We have audited the accompanying financial statements of Wockhardt
Limited ("the Company"), which comprise the Balance Sheet as at March
31, 2014, the Statement of Profit and Loss and the Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
ManagementÂs Responsibility for the Financial Statements
2. 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.
Auditors Responsibility
3. 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 auditors 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 CompanyÂs preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the efectiveness of the CompanyÂs
internal control. 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 sufcient and
appropriate to provide a basis for our audit opinion.
Opinion
4. 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 afairs of the
Company as at March 31, 2014;
(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
5. We draw attention to Note 47 to the financial statements with
regard to regulatory alert received by the Company on certain
manufacturing units from the USFDA and UKMHRA due to which there has
been a decline in sales and Profitability for the year and inventory
write off amounting to Rs. 69.33 crore has been charged to Wockhardt Bio
AG. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
6. As required by the Companies (Auditors'' 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.
7. 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;
e. on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
ANNEXURE TO INDEPENDENT AUDITORSÂ REPORT [Referred to in paragraph &
under''Report on Other Legal and Regulatory Requirements''in the
Independent Auditors''Report of even date to the members of Wockhardt
Limited on the financial statements for the year ended March 31, 2014]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) The Company has a program for phased physical verification of all
its fixed assets over a period of three years, which, in our opinion,
is reasonable having regard to the size of the Company and nature of
its assets. Accordingly, certain fixed assets have been physically
verifed by the management during the year and discrepancies noticed on
such verifcation, which were not material, have been properly dealt
with in the books of account.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed of
by the Company during the year.
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(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 such physical verification
carried out.
(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 stated in paragraph 4 (iii)(b), (c) and (d)
of the Order are not applicable.
(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 stated in paragraph 4 (iii)(f) and (g) of the Order are
not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct any major
weakness in the aforesaid internal control system of the Company.
(v) (a) According to the information and explanations given to us, 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 exceeding value of Rs. 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) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(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 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 clause (d) of sub-section (1) of Section 209 of the
Act and we 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 records with a view to determine whether
they are accurate or complete.
(ix) (a) According to the information and explanation given to us and
on the basis of records of the Company examined by us, in our opinion,
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 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 and as informed to us,
there are no dues outstanding of income-tax, sales-tax, wealth- tax,
service tax, customs duty, excise duty and cess that have not been
deposited on account of any dispute, except as follows:
Name of the Nature of dues Amount Period to which the
amount
statute (Rs. in crore) relates
Central
Excise Penalty for
Classification 0.37 February 2001 to
February 2003
Act, 1944
Differential Duty 2.19 November 1996 to
April 1998
Education Cess 0.02 July 2004 to August 2004
Demand and Penalty
for 2.20 September 1991 to
July 1993
Classifcation
Demand and Penalty
for 4.44 April 2005 to March 2009
Classifcation
Name of the statue Forum where the dispute
is pending
Central Excise
Act, 1944 CESTAT
Commissioner, Aurangabad
Joint Commissioner,
Ankleshwar.
CESTAT
CESTAT
Name of the Nature of dues Amount Period to which the
amount
statute (Rs. in crore) relates
Aurangabad Demand Under Local 10.28 July 2011 to August 2011
Municipal Body Tax
Corporation
UP VAT Act Demand under 0.27 April 2009 to March 2011
Section 28 & Section
9(2)
Central Sales Demand under 0.30 April 2005 to March 2006
Tax Section 9(2)
Income Tax
Act, Demand under 4.05 FY 2003-04
1961 Section 143(3)
Demand under 12.80 FY 2006-07
Section 143(3)
Demand under 0.46 FY 2007-08
Section 143(3)
TDS Assessment order 1.00 January 2007 to December
2010
u/s 201/201(A)
Penalty under 3.08 FY 2003-04
Section 271 (1)(c)
Penalty under 2.59 FY 2004-05
Section 271 (1)(c)
Name of the statue Forum where the dispute
is pending
Aurangabad
Municipal
Corporation Bombay High Court
UP VAT Act Add. Commissioner Grade 2
(Appeals) First
Central Sales
Tax Deputy Commissioner
of Sales Tax Appeals - 3,
Mumbai
Income Tax Act,
1961 High Court
Income Tax Appellate
Tribunal
Income Tax Appellate
Tribunal
Commissioner of Income
Tax (Appeals) /TDS Officers
Commissioner of Income
Tax (Appeals)
Commissioner of Income
Tax (Appeals)
Note: Out of the above, amount paid under protest by the Company for
Local Body Tax, Delhi VAT and Income-tax is Rs. 2.00 Crore, 0.13 Crore
and 16.13 Crore respectively.
(x) In our opinion, the accumulated losses of the Company are not more
than fifty percent of its net worth. Further, the Company has not
incurred cash losses during the financial year covered by our audit and
the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
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
(xiii) of paragraph 4 of the Order 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 (xiv) of paragraph 4 of the Order are not
applicable to the Company.
(xv) In our opinion and as explained in Note 46 to the financial
statements, the terms and conditions of the guarantees given by the
Company, for loans taken by its subsidiaries from banks or financial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanation
given to us, the term loans have been applied for the purpose for which
they 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) According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 301 of
the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised money by way of public issue during the
year.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Haribhakti & Co.
Chartered Accountants
Firm Registration No. 103523W
Shailesh Haribhakti
Partner
Membership No. 30823
Place : Mumbai
Date : May 26, 2014
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying financial statements of Wockhardt
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
2. 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.
Auditors'' Responsibility
3. 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
4. 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
5. We draw attention to Note no. 37(i) of the Financial Statements
regarding reassessment and revision thereof of recognition criteria for
capitalization of product development costs incurred by the Company,
which being technical in nature has been relied upon by us.
Consequently, the Company has (a) expensed off carried forward cost of
products under development as at June 30, 2012 amounting to Rs. 319.05
crore to the Statement of Profit and Loss under the head ''Exceptional
Items'' and (b) charged off product development expenditure incurred
during the period July 2012 to March 2013 amounting toRs. 121.05 crore
to the Statement of Profit and Loss under respective expense heads. Our
opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
6. 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.
7. 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;
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.
Referred to in paragraph 6 of the Auditors''Report of even date to the
members of WOCKHARDT LIMITED on the financial statements for the year
ended March 31, 2013.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) The Company has a program for phased physical verification of all
its fixed assets over a period of three years, which, in our opinion,
is reasonable having regard to the size of the Company and nature of
its assets. Accordingly, certain fixed assets have been physically
verified by the management during the year and discrepancies noticed on
such verification, which were not material, have been properly dealt
with in the books of account.
(c) I n our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(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 as
informed, no material discrepancies were noticed on such physical
verification carried out.
(iii) (a) As informed, the Company has not granted any loan, 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 stated in paragraph 4 (iii)(b), (c) and (d) of the Order
are not applicable.
(b) As informed, the Company has not taken any loan, 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 stated in paragraph 4 (iii)(f)and (g) of
the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct any major
weakness in the aforesaid internal control system of the Company.
(v) (a) According to the information and explanations given to us, 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 exceeding value of Rupees five lakhs have been entered
during the year at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(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 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 Clause (d) of sub-section (1) of Section 209 of the
Act and we are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained.
(ix) (a) According to the information and explanations given to us and
on the basis of the records of the Company examined by us, in our
opinion, 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 undisputed statutory dues were outstanding, at the end of the
year, for more than six months from the date they became payable.
(c) According to the records of the Company and as informed to us,
there are no dues outstanding of income-tax, sales-tax, wealth- tax,
service tax, customs duty, excise duty and cess that have not been
deposited on account of any dispute, except as follows:
Name of the Nature of dues Amount
statute (Rs. in
crore)
Central Excise Reversal of CENVAT credit 0.04
Act, 1944
Penalty for classification 0.37
Differential Duty 2.19
Education Cess 0.03
Penalty for Valuation 0.35
Demand and Penalty for 2.20
classification
Demand and penalty for 4.44
fire at Ankleshwar.
Name of the Statute Period to which the amount Forum where the dispute
relates is pending
Central Excise
Act, 1944 April 1999 to August 1999 Commissioner Appeal
February 2001 to February
2003 CESTAT
November 1996 to April 1998 Commissioner
July 2004 to August 2004 Deputy Commissioner
December 2001 to January
2004 Commissioner Appeals
September 1991 to July 1993 CESTAT
April 2005 to March 2009 CESTAT
Name of the Nature of dues Amount
statute (Rs. in
crore)
Himachal Duty demand notice 12.55
Pradesh Excise under M&TP Act.
Act
Aurangabad Demand under Local 10.28
Municipal Body Tax
Corporation
Income Tax Act, Demand under 4.05
1961 Section 143(3)
Demand under 12.80
Section 143(3)
Demand under 0.46
Section 143(3)
TDS Assessment order 3.79
u/s 201/201(IA)
Penalty under 3.08
Section 271(1)(c)
Penalty under 2.59
Section 271(1)(c)
Name of the Statute Period to which the amount Forum where the dispute
relates is pending
Himachal Pradesh
Excise Act July 2012 to December 2012 Shimla High Court
Aurangabab Municipal
Corporation July 2011 to August 2011 Bombay High Court
Income Tax Act, 1961 FY 2003-04 High Court
FY 2006-07 Income Tax Appellate
Tribunal
FY 2007-08 Commissioner of Income
Tax (Appeals)
April 2007 to March 2011 Commissioner of Income
Tax (Appeals)
FY 2003-04 Commissioner of Income
Tax (Appeals)
FY 2004-05 Commissioner of Income
Tax (Appeals)
Note: Out of the above, amount paid under protest by the Company for
Income-tax is Rs. 17.13 crore.
(x) In our opinion, the accumulated losses of the Company are not more
than fifty percent of its net worth. Further, the Company has not
incurred any cash losses during the financial year covered by our audit
and the immediately preceding financial year.
(xi) (a) In our opinion and according to the information and
explanations given to us, considering the loan liabilities being
restructured under the aegis of Corporate Debt Restructuring (CDR)
Scheme, there has been no default in repayment of principal and
interest to CDR lenders as per the terms of CDR Scheme.
(b) With respect to the amount due towards Zero Coupon Foreign Currency
Convertible Bonds which were due for repayment in October 2009, the
Company has filed a consent decree in the Hon''ble High Court of Bombay
and has agreed to pay the FCCB holders, the amounts outstanding along
with interest on reducing balance by August, 2012. In accordance with
the orders passed by Hon''ble High Court of Bombay, the Company has
repaid entire amount along with interest on reducing balance to the
FCCB holders by August 2012 and has complied with the orders of Hon''ble
High Court of Bombay.
(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) In our opinion and as explained in Note 46(c) to the financial
statements, the terms and conditions of the guarantees given by the
Company, for loans taken by its subsidiaries from banks or financial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanation
given to us, the term loans have been applied for the purpose for which
the loans were raised.
(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 funds raised on short-term basis to the tune of Rs. 325.56 crore
have been used for long-term investment by way of capital expenditure,
Research & Development and repayment of borrowings.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Act.
(xix) According to the information and explanations given to us, the
Company has created security in respect of debentures outstanding
during the year.
(xx) The Company has not raised any money by public issue during the
year covered under our audit.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Haribhakti & Co.
Chartered Accountants
Firm Registration No. 103523W
Shailesh Haribhakti
Partner
Membership No. 30823
Place : Mumbai
Date : May 27, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of Wockhardt 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' of India
(the 'Act') and on the basis of such checks of the books and records of
the Company as we considered appropriate and according to the
information and explanations given to us, we give 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 purposes of our
audit;
(ii) In our opinion, the Company has kept proper books of account as
required by law, so far as it 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.
5. 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 Act in the manner so required and also 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 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 TO AUDITORS' REPORT
Referred to in paragraph 3 of the Auditors' Report of even date to the
members of WOCKHARDT LIMITED on the financial statements for the year
ended March 31, 2012.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) The Company has a program for phased physical verification of all
its fixed assets over a period of three years, which, in our opinion,
is reasonable having regard to the size of the Company and nature of
its assets. Accordingly, certain fixed assets have been physically
verified by the management during the year and discrepancies noticed on
such verification, which were not material, have been properly dealt
with in the books of account.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(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 as
informed, no material discrepancies were noticed on such physical
verification carried out.
(iii) (a) As informed, the Company has not granted any loan, 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 stated in paragraph 4 (iii)(b), (c) and (d) of the Order
are not applicable.
(b) As informed, the Company has not taken any loan, 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 stated in paragraph 4 (iii)(f) and (g) of
the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct any major
weakness in the aforesaid internal control system of the Company.
(v) (a) According to the information and explanations given to us, 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 exceeding value of Rupees five lakhs have been entered
during the year at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(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 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 Clause (d) of sub-section (1) of Section 209 of the
Act and we are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained.
(ix) (a) According to the information and explanations given to us and
on the basis of the records of the Company examined by us, in our
opinion, 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 undisputed statutory dues were outstanding, at the
end of the year, for more than six months from the date they became
payable.
(c) According to the records of the Company and as informed to us,
there are no dues outstanding of income- tax, sales-tax, wealth-tax,
service tax, customs duty, excise duty and cess that have not been
deposited on account of any dispute, except as follows:
Name of the Nature of dues Amount Period to which
the amount Forum where
the dispute
statute (Rs. in
crore) relates is pending
Central
Excise Reversal of
CENVAT 0.04 April 1999 to
August 1999 Commissioner
Appeal
Act, 1944 credit
Penalty for 0.37 February 2001 to
February 2003 CESTAT
classification
Differential
Duty 2.19 November 1996 to
April 1998 Commissioner
Education Cess 0.03 July 2004 to
August 2004 Deputy
Commissioner
Penalty for
Valuation 0.35 December 2001 to
January 2004 Additional
Commissioner
Demand and
Penalty 2.20 September 1991 to
July 1993 CESTAT
for
classification
Income Tax Demand under 4.05 FY 2003-04 High Court
Act, 1961 Section 143(3)
Demand under 12.80 FY 2006-07 Commissioner
of Income
Section 143(3) Tax (Appeals)
Demand under 0.46 FY 2007-08 Commissioner
of Income
Section 143(3) Tax (Appeals)
TDS Assessment 3.79 April 2007 to
March 2011 Commissioner
of Income
order u/s
201/201(IA) Tax (Appeals)
Note: Out of the above, amount paid under protest by the Company for
Income tax is Rs. 16.13 crore.
(x) In our opinion, the accumulated losses of the Company are not more
than fifty percent of its net worth. The Company has not incurred any
cash losses during the current financial year but had incurred cash
losses during the preceding financial year.
(xi) (a) In our opinion and according to the information and
explanations given to us, considering the loan liabilities being
restructured under the aegis of Corporate Debt Restructuring (CDR)
Scheme, there has been no default in repayment of principal and
interest to CDR lenders as per the terms of CDR Scheme.
(b) As explained in Note 48 to the financial statements, with respect
to the amount due towards Zero Coupon Foreign Currency Convertible
Bonds which were due for repayment in October 2009, the Company has
filed a consent decree in the Hon'ble High Court of Bombay and has
agreed to pay the FCCB holders, the amounts outstanding alongwith
interest on reducing balance by August, 2012. The Company has been
depositing with the High Court, the installments as per the dates
specified by the Hon'ble High Court.
(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) In our opinion and as explained in Note 47(c) to the financial
statements, the terms and conditions of the guarantees given by the
Company, for loans taken by its subsidiaries from banks or financial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanation
given to us, the term loans have been applied for the purpose for which
the loans were raised.
(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 funds raised on short-term basis to the tune of Rs. 411.73 crore
have been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Act.
(xix) According to the information and explanations given to us, the
Company has created security in respect of debentures outstanding
during the year.
(xx) The Company has not raised any money by public issue during the
year covered under our audit.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Haribhakti & Co.
Chartered Accountants
FRN No.103523W
Shailesh Haribhakti
Partner
Membership No. 30823
Place : Mumbai
Date : May 22, 2012
Mar 31, 2011
1. We have audited the attached balance sheet of Wockhardt 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 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' of India
(the 'Act'), we give 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 purposes of our
audit;
(ii) In our opinion, the Company has kept proper books of account as
required by law, so far as it 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.
5. Without qualifying our opinion, we draw attention
(a) to Note 32 of the financial statements, wherein as explained,
Corporate Debt Restructuring (CDR) Scheme is effective from April 15,
2009. The outstanding liabilities of the Company have been
substantially restructured under the aegis of CDR Scheme, which extends
till 2018.
(b) to Note 36 and 37 of the financial statements, wherein as
explained, certain lenders have filed winding up petitions against the
Company and the Company has filed affidavit in reply. In one case, the
Hon'ble High Court of Bombay has admitted winding up petition filed by
certain holders of Zero Coupon Foreign Currency Convertible Bonds and
the High Court has granted stay thereon upon appeal by the Company. The
matter is sub-judice and outcome of which cannot be currently
ascertained. The Company's ability to continue as a going concern is
dependent on the successful outcome of the winding up petitions.
(c) to Note 35(c) of the financial statements, wherein as explained,
the Company has given corporate guarantee for US$ 250 million syndicate
loan obtained by its Swiss subsidiary, which is being rescheduled.
Terms and conditions for rescheduling of 31% of the loan are still
under negotiation.
6. In respect of crystallized derivative losses oft 1,843.79 million
forming part of 'exceptional items', we have relied on appropriate
written representations.
1. As explained in Note 35(e) to the financial statements, the Company
and its Swiss subsidiary had, on certain derivative contracts with
banks/financial institutions, stopped payment of margins called by the
banks/financial institutions. The banks/financial institutions, based
on the Early Termination clause in the agreement, terminated these
contracts and claimed an amount of Rs. 3,322.51 million (including a
demand oft 669.15 million as guarantor for derivatives contracts
executed by Swiss subsidiary), being the loss incurred on termination
of such contracts, which the Company and its subsidiary have disputed.
No provision has been made in the accounts for above amounts, which
have been considered as contingent liabilities. The consequential
impact upon relevant assets and liabilities and loss for the year is
not ascertainable.
8. In our opinion, and to the best of our information and according to
the explanations given to us, subject to the matter included in
paragraph 6 and 7 above, the effect of which cannot be currently
ascertained, the said accounts give the information required by the Act
in the manner so required and also 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 loss 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 TO AUDITORS' REPORT
Referred to in paragraph 3 of the Auditors' Report of even date to the
members of WOCKHARDT LIMITED on the financial statements for the year
ended 31st March, 2011.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of its fixed
assets.
(b) The Company has a program for phased physical verification of all
its fixed assets over a period of three years, which, in our opinion,
is reasonable having regard to the size of the Company and nature of
its assets. Accordingly, certain fixed assets have been physically
verified by the management during the year and discrepancies noticed on
such verification, which were not material, have been properly dealt
with in the books of accounts.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(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 as
informed, no material discrepancies were noticed on such physical
verification carried out.
(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 stated in paragraph 4 (iii)(b),(c) and (d)
of the Order are not applicable.
(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 stated in paragraph 4 (iii)(f) and (g) of
the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct any major
weakness in the aforesaid internal control system of the Company.
(v) (a) According to the information and explanations given to us, 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 exceeding value of Rs. five lakhs have been entered during
the year at prices which are reasonable having regard to the prevailing
market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business, except that
scope needs to be enlarged in respect of Treasury Operations.
(viii) 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 Clause (d) of sub-section (1) of Section 209 of the
Act and we are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained.
(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.
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 end of the
year, for more than six months from the date they became payable.
(c) According to the records of the Company and as informed to us,
there are no dues outstanding of income-tax, sales-tax, wealth-tax,
service tax, customs duty, excise duty and cess that have not been
deposited on account of any dispute, except as follows:
Name of the Nature of
dues Amount Period to which
the amount Forum where the
dispute
statute (Rs. in
millions) relates is pending
Central
Excise Reversal of
CENVAT 0.40 April 1999 to
August 1999 Commissioner
Appeal
Act, 1944 credit
Penalty for 3.66 February 2001 to
February 2003 CESTAT
classification
Differential
Duty 21.92 November 1996 to
April 1998 Commissioner
Education Cess 0.24 July 2004 to
August 2004 Deputy
Commissioner
Penalty for
Valuation 3.62 December 2001 to
January 2004 Additional
Commissioner
Demand and
Penalty 21.96 September 1991 to
July 1993 CESTAT
for
classification
Income Tax Demand under 36.42 April 2001 to
March 2002 High Court
Act, 1961 Section 143(3)
Demand under 231.21 April 2005 to
March 2006 Commissioner of
Income
Section 143(3) Tax (Appeals)
Demand under 128.01 April 2006 to
March 2007 Commissioner of
Income
Section 143(3) Tax (Appeals)
TDS Assessment 25.98 April 2007 to
March 2009 Commissioner of
Income
order u/s
201/201 (IA) Tax (Appeals)
Note: Amount paid under protest by the Company and not included above
for Income tax are Rs. 202.66 million.
(x) In our opinion, the accumulated losses of the Company are not more
than fifty percent of its net worth. The Company has incurred cash
losses during the current financial year as well as during the
preceding financial period. This is without considering the effect of
the qualifications in our main report on accumulated losses, net worth,
and cash losses, as the resulting financial impact is not quantifiable.
(xi) (a) In our opinion and according to the information and
explanations given to us, considering the loan liabilities being
restructured under the aegis of Corporate Debt Restructuring (CDR)
Scheme and Master Restructuring Agreement being signed by lenders, as
per the terms of CDR Scheme, there has been no default in repayment of
principal and interest to CDR lenders.
(b) With respect to Foreign Currency Convertible Bonds aggregating Rs.
4,588.23 million which were due for repayment in October 2009, no
repayment has been made and as informed, CDR Scheme comprehensively
covers FCCB liabilities.
(c) As informed, the Company is in dispute with certain lenders whose
liabilities as per books of accounts aggregate Rs. 261.50 million.
Further as stated in Note 35(e), the Company has not acknowledged as
debt the demand raised on account of unilateral termination of certain
derivative contracts. We are unable to comment in respect of such
liabilities whether there has been any default in view of the dispute.
(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) In our opinion and as explained in Note 35(c) to the financial
statements, the terms and conditions of the guarantees given by the
Company, for loans taken by its subsidiaries from banks or financial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, funds
raised on short-term basis to the tune of Rs. 2,671.26 million have been
used for long-term investment mainly on account of losses incurred
during the year and demerger of nutrition business of wholly owned
subsidiary into the Company.
(xviii) According to the information and explanations given to us, the
Company has made preferential allotment of shares to parties and
companies covered in the register maintained under Section 301 of the
Act as required by the Corporate Debt Restructuring Scheme.
Accordingly, in our opinion, the prices at which such shares have been
issued are not prejudicial to the interest of the Company.
(xix) According to the information and explanations given to us, the
Company has created adequate security or charge in respect of
debentures outstanding during the year.
(xx) The Company has not raised any money by public issue during the
year covered under our audit.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Haribhakti & Co.
Chartered Accountants
FRN NO.103523W
Shailesh Haribhakti
Partner
Membership No. 30823
Place : Mumbai
Date : May 19, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Wockhardt Limited
(the Company) as at March 31, 2010 and also the Profit and Loss
Account and the cash flow statement for the period 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 by the Companies (Auditors Report) (Amendment) Order, 2004,
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of The Companies Act, 1956 of India (the Act) and on
the basis of such checks of the books and records of the Company as we
considered appropriate and according to the information and
explanations given to us, we give 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 purposes of our
audit;
(ii) In our opinion, the Company has kept proper books of account as
required by law, so far as it 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.
5. Without qualifying our opinion, we draw attention
(a) to Note 32 of the financial statements, wherein as explained, the
Companys outstanding liabilities are being restructured under the
aegis of Corporate Debt Restructuring Scheme (CDR) with effect
fromApril 15, 2009 and as required by the Scheme, the Master
Restructuring Agreement (MRA) and other necessary documents have been
executed and are effective.
(b) to Note 36 of the financial statements, wherein as explained,
certain lenders have filed winding up petitions against the Company in
Bombay High Court and the Company has filed affidavit in reply. The
matter is sub judice and outcome of which cannot be currently
ascertained.
The Companys ability to continue as a going concern is dependent on
the Company being able to successfully implement the actions proposed
in the CDR Scheme and outcome of winding up petition in favour of the
Company.
6. (a) With regard to outstanding derivative contracts as on March 31,
2010, the premiums aggregating ? 1,843.79 million are unconfirmed and
we are informed that the relevant documents are being put in place. The
consequential effect of subsequent adjustment/s - if any - on relevant
assets and liabilities and loss for the period is not ascertainable.
(b) In respect of crystallized derivative losses of? 11,303.80 million
forming part of exceptional items, we have relied on appropriate
written representations.
7. As explained in Note 35(e) to the financial statements, the Company
had, on certain derivative contracts with banks, stopped payment of
margins called by the banks. The banks, based on the Early Termination
clause in the agreement, terminated these contracts and claimed an
amount of ? 8,483.22 million, being the loss incurred on termination of
such contracts, which the Company has disputed and not acknowledged as
debt.
No provision has been made in the accounts for above amount, which has
been considered as contingent liability. The consequential impact upon
relevant assets and liabilities and loss for the period is not
ascertainable.
8. In our opinion, and to the best of our information and according to
the explanations given to us, subject to the matter included in
paragraph 6 and 7 above, the effect of which cannot be currently
ascertained, the said accounts give the information required by the Act
in the manner so required and also 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 loss for the
period ended on that date; and
(c) in the case of cash flow statement, of the cash flows for the
period ended on that date.
ANNEXURE TO AUDITORS REPORT
Referred to in paragraph 3 of the Auditors Report of even date to the
members of WOCKHARDT LIMITED on the financial statements for the period
ended 31st March, 2010.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a program for phased physical verification of all
its fixed assets over a period of three years, which, in our opinion,
is reasonable having regard to the size of the Company and nature of
its assets. Accordingly, certain fixed assets have been physically
verified by the management during the period and discrepancies noticed
on such verification, which were not material, have been properly dealt
with in the books of accounts.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the period.
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the period. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(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 as
informed, no material discrepancies were noticed on such physical
verification carried out.
(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.
(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.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct any major
weaknesses in aforesaid internal control system of the Company.
(v) (a) According to the information and explanations given to us, 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 exceeding value of ? five lakhs have been entered during
the period 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 within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business, except that
scope needs to be enlarged in respect of Treasury Operations.
(viii) 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 clause (d) of sub-section (1) of Section 209 of the
Act and we are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained.
(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.
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 end of the
period, for 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 and cess on account of any dispute, are as follows:
Name of the Nature of dues Amount Period to which the
statute (Rs in millions) amount relates
Central Excise Reversal of CENVAT 0.40 April 1999 to August 1999
Act, 1944 credit
Penalty for 3.66 February 2001 to
February 2003
classification
Differential Duty 21.92 November 1996to April 1998-
Education Cess 0.24 July 2004 to August 2004
Penalty for
valuation 3.62 December 2001 to January
2004
Demand and Penalty 21.96 September 1991 to July 1993
for classification
Name of the Forum where the
Statue dispute is pending
Central Excise Act,1944 Commissioner Appeal
CESTAT
Commissioner
Deputy Commissioner
Additional Commissioner
CESTAT
Name of the Nature of dues Amount Period to which the
statute ( In millions) amount relates
Income Tax Demand under 36.42 April 2001 to March 2002
Act, 1961 Section 143(3)
Demand under 47.90 April 2004 to March 2005
Section 143(3)
Demand under 231.21 April 2005 to March 2006
Section 143(3)
Demand under 128.01 April 2006 to March 2007
Section 143(3)
Name of the Statue Forum where the
dispute is pending
Income Tax Act, 1961 High Court
Commissioner of Income
Tax (Appeals)
Commissioner of Income
Tax (Appeals)
Commissioner of Income
Tax (Appeals)
(x) In our opinion and according to the information and explanation
given to us, the accumulated losses of the Company are not more than
fifty percent of its net worth. The Company has incurred cash losses
only during the current financial year and not during the preceding
financial year. This is without considering the effect of the
qualifications in the main report on accumulated losses, net worth, and
cash losses, as the resulting financial impact is not quantifiable.
(xi) (a) In our opinion and according to the information and
explanations given to us, considering the loan liabilities being
restructured under the aegis of Corporate Debt Restructuring (CDR)
Scheme and Master Restructuring Agreement being signed by lenders, as
per the terms of CDR Scheme, there has been no default in repayment of
principal and interest to CDR lenders.
(b) With respect to Foreign Currency Convertible Bonds aggregating ?
4,464.02 million which were due for repayment in October 2009, no
repayment has been made and as informed, CDR Scheme comprehensively
covers FCCB liabilities.
(c) As informed, the Company is in dispute with certain lenders whose
liabilities as per books of accounts aggregate ? 1,490.70 million.
Further, as stated in Note 35(e), the Company has not acknowledged as
debt the demand raised on account of unilateral termination of certain
derivative contracts. We are unable to comment in respect of such
liabilities whether there has been any default in view of the dispute.
(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) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the period, are not prejudicial to the interest of the Company.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(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) According to the information and explanations given to us, the
Company has made preferential allotment of shares to parties and
Companies covered in the register maintained under Section 301 of the
Act as required by the Corporate Debt Restructuring Scheme.
Accordingly, in our opinion, the prices at which shares have been
issued are not prejudicial to the interest of the Company.
(xix) According to the information and explanations given to us, the
Company has created adequate security or charge in respect of
debentures outstanding during the period.
(xx) The Company has not made any public issues during the period
covered under our audit.
(xxi) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the period, nor
have we been informed of such case by the management.
For Haribhakti & Co.
Chartered Accountants
FRN No. 103523W
Shailesh Haribhakti
Partner
Membership No. 30823
Place : Mumbai
Date : May 20, 2010