Mar 31, 2023
To the Members of Aiembic Pharmaceuticals Limited Basis for Qualified Opinion
Report on the Audit of the Standalone FinancialStatementsQualified Opinion
We have audited the accompanying standalone financial statements of Aiembic Pharmaceuticals Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended and notes to the standalone financial statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the ''Basis for Qualified Opinion'' section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year ended on that date.
We refer to Note No. 27(27(a)&(b)) read with Note No. 26 to the standalone financial statements regarding Draft Scheme of Arrangement ("Scheme") approved by the Board of Directors in its meeting held on March 2, 2023, involving reorganisation/utilisation of General Reserve, between the Company and its shareholders with effect from the appointed date i.e. January 1, 2023 which is pending before regulatory authorities. Further, the company has withdrawn ?1,025.66 crores from General Reserve and transferred the same to the Statement of Profit and Loss for the year ended March 31, 2023 under the head "Exceptional Items". We are of the opinion that the said treatment does not meet the criteria of "Income" under Ind AS and therefore, the same should not be recognised in the Statement of Profit and Loss for the year. Had this transfer not been effected, Profit after tax for the year and consequently Retained Earnings as at March 31, 2023 would have been reduced by ?1,025.66 crores, General Reserve as at March 31, 2023 would have been increased by ?1,025.66 crores and Basic and Diluted Earnings per Share for the year ended March 31, 2023 would have been lower by H52.18 on standalone basis.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors'' 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 made 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 qualified audit opinion.
Attention is drawn to Note No. 27(27)(c) to the standalone financial statements which describes the fact that pending requisite approvals of the Draft Scheme of Arrangement, an amount of H868.63 crores has been transferred from General Reserve to the Retained Earnings under the head "Other Equityâ during the
financial year ended on March 31, 2023, for which there is no specific accounting treatment specified in Ind AS.
Our opinion is not modified in respect of above matter. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of these standalone financial statements of the current year. 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. In addition to the matter described in the Basis for Qualified Opinion section, we have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. |
Key Audit Matters |
How our audit addressed the key audit matters |
|
1 |
Provision for return of non-saleable goods |
Our audit procedures consisted of following: |
|
(Expiry, Breakage and Spoilage) in the market |
1. |
Ossessed the appropriateness of the accounting |
|
in India: |
policy in respect of recognition of provision of |
||
As referred to note 27(12) to the standalone |
EBS estimated in future out of the sales effected |
||
financial statements, the Company, under the |
during the current period; |
||
prevailing trade practice, has an obligation |
2. |
Oested the operating effectiveness of controls |
|
to accept returns of expiry, breakage and |
over Company''s review of recognition of |
||
spoilage (EBS) products, from the customers |
provision for EBS; |
||
in India. This results in deductions to gross amounts invoiced. The methodology and assumptions used to estimate the accruals of EBS are monitored and adjusted regularly by the management in the light of the obligations, historical trends, past experience and prevailing market conditions. This is considered as key audit matter in view of significant estimates and judgements made by the management for recognition and measurement for the same. |
3. O btained management ''s calculations for accruals and assessed management analysis of the historical pattern of accruals to validate management''s assumption for creation of such provisions; 4. O xamined the historical trend of the Company''s estimates to assess the assumptions and judgements used by the Company in accrual of provisions. Conclusion: |
||
We |
did not find any material exceptions to the |
||
calculations made and estimates, assumptions and judgements used by the management on the subject matter. |
Sr. No. |
Key Audit Matters |
How our audit addressed the key audit matters |
2 |
Impairment losses of Formulation plants |
Our audit procedures consisted of the following: |
As referred to Note No. 27(27(a)&(b)) to |
⢠O btained an understanding and assessed |
|
the standalone financial statements, during |
the design, implementation and operating |
|
March 2023 quarter, the management had |
effectiveness of management''s controls to |
|
carried out a comprehensive and systematic |
assess impairment of Formulation plants. |
|
impairment review of the Formulation Plant 2, 3 |
⢠Ovaluated the objectivity, competency and |
|
& 4 which were under construction and became |
independence of the management expert |
|
ready for its intended use on receipt of regulatory approvals and, arrived at their recoverable value. On completion of this review, the Management identified impairment loss of H676.87 crores and provision for impairment amounting to |
engaged by the Company. ⢠O btained management expert''s report on impairment review from the management. ⢠Ossessed the reasonableness of the cashflow |
|
H473.56 crores relating to these plant facilities. |
projections, key management assumptions and |
|
On March 2, 2023, the Board of Directors has |
estimates used in the impairment analysis. |
|
considered impairment review and approved |
⢠Ovaluated the adequacy of the disclosures |
|
the write-off of H676.87 crores and provision for |
made in the standalone financial statements. |
|
impairment of H473.56 crores. |
Conclusion: |
|
Determination of recoverable value and/or |
We did not find any material exceptions to the |
|
impairment assessment involves significant |
conclusion arrived by the Management based on |
|
management judgement and hence it is |
the procedure performed by it, in the impairment |
|
considered as key audit matter. |
assessment carried out for Formulation plants. |
Information Other than the Standalone Financial Statements and Auditors'' Report Thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Board''s Report including Annexures to Board''s Report, Business Responsibility & Sustainability Report and Management Discussion and Analysis but does not include the standalone 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 identified above 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.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements
that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is 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 management 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.
Auditors'' 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 auditors'' 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.
⢠O btain 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 standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠O onclude on the appropriateness of management''s 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 auditors'' 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 auditors'' 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 matters 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. Es required by the Companies (Auditor''s Report) Order, 2020 ("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 A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. Es 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. Except for the effects of the matter described in the Basis for Qualified opinion paragraph, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. the Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;
d. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act;
e. w n the basis of the written representations received from the directors as on March 31, 2023, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023, from being appointed as a director in terms of Section 164(2) of the Act;
f. the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, prima facie, does not appear to have any adverse effects on the functioning of the company;
g. w ith respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B";
h. t he qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above;
i. w ith respect to the other matters to be included in the Auditors'' Report in accordance with the requirements of section 197(16) of the Act, as amended:
I n our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act; and
J. w ith 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements -Refer Note 27(2) to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or Indian accounting
standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;
iii. t here has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) the management has represented that, to the
best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) based on the audit procedures that have been considered reasonable and appropriate in the circumstances nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. bs stated in Note 27(18) to the standalone financial statements
(a) bhe final dividend proposed for the Financial Year 2021-2022, and declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable.
(b) bhe Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.
vi. b roviso to Rule 3(1) of the Companies
(Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company from Financial Year beginning April 1, 2023 and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year 2022-2023.
Chartered Accountants Firm''s Registration No. 106237W/W100829
Partner
Membership No. 101533 UDIN: 23101533BGSTCH6730
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements post approval of the Scheme of ArrangementOpinion
We have audited the accompanying standalone financial statements of Alembic Pharmaceuticals Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended and notes to the standalone financial statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements"). These standalone financial statements are prepared and presented after incorporating the effect of the Scheme of Arrangement approved by National Company Law Tribunal (NCLT).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors'' 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 made 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 audit opinion.
Emphasis of Matter
We refer to note 28.27 of these standalone financial statements, detailing the Scheme of Arrangement and it''s effect in these financial statements. The Standalone financial statements for the year ended on March 31, 2022, subject to approval of the scheme of arrangement were earlier approved by Board of Directors on May 2, 2022. We had issued our audit report with modified opinion on May 2, 2022. The Board of Directors of the Company had at their meeting held on 29th March, 2022 inter alia approved the Scheme of Arrangement in nature of Amalgamation of Aleor Dermaceuticals Ltd. (''the Transferor Company'') with Alembic Pharmaceuticals Ltd. (''the Transferee Company'') and their respective shareholders (''the Scheme'') with effect from the appointed date i.e. 1st April, 2021 has been sanctioned by the Hon''ble National Company Law Tribunal, Ahmedabad Bench (''NCLT'') vide its order dated August 29, 2022. The Scheme has become effective upon filing of the certified copy of order of the NCLT, sanctioning the Scheme with Registrar of Companies, Gujarat at Ahmedabad by way of filing required e-forms with Ministry of Corporate Affairs'' portal on September 5, 2022. Basis the Order of NCLT approving the Scheme, these standalone financial statements for the year ended March 31, 2022 are prepared and presented after giving effect to the Scheme.
Our opinion is not modified in respect of this matter. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of these standalone financial statements of the current year. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters
described below to be the key audit matters to be communicated in our report. |
||
Sr. No. |
Key Audit Matters |
How our audit addressed the key audit matters |
1 |
Provision for return of non-saleable goods (Expiry, Breakage and Spoilage) in the market in India: The Company, under the prevailing trade practice, has an obligation to accept returns of expiry, breakage and spoilage (EBS) products, from the customers in India. This results in deductions to gross amounts invoiced. The methodology and assumptions used to estimate the accruals of EBS are monitored and adjusted regularly by the management in the light of the obligations, historical trends, past experience and prevailing market conditions. This is considered as key audit matter in view of significant estimates and judgements made by the management for recognition and measurement for the same. |
Our audit procedures consisted of following: 1. Assessed the appropriateness of the accounting policy in respect of recognition of provision of EBS estimated in future out of the sales effected during the current period; 2. Tested the operating effectiveness of controls over Company''s review of recognition of provision for EBS; 3. Obtained management''s calculations for accruals and assessed management analysis of the historical pattern of accruals to validate management''s assumption for creation of such provisions; 4. Examined the historical trend of the Company''s estimates to assess the assumptions and judgements used by the Company in accrual of provisions. Conclusion: We found that the calculation and estimates used to assess the assumptions and judgements made by the company are appropriate. |
Information Other than the Standalone Financial Statements and Auditors'' Report Thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Board''s Report including Annexures to Board''s Report and Management Discussion and Analysis but does not include the standalone 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 identified above 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.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation
and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is 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 management 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.
Auditors'' 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 auditors'' report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s 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 auditors'' 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 auditors'' 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 matters or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. the Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;
d. in our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act;
e. on the basis of the written representations received from the directors as on March 31, 2022, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022, from being appointed as a director in terms of Section 164(2) of the Act;
f. with respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B";
g. with respect to the other matters to be included in the Auditors'' Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act; and
h. 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 28.2 to the standalone financial statements;
ii. the Company has made provision, as required under the applicable law or Indian accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. (a) The management has represented
that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether
Place: Vadodara
Date: 13th September, 2022
recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and (b) above, contain any material misstatement.
v. As stated in Note 28.9 to the standalone
financial statements
(a) The final dividend proposed for the Financial Year 2020-2021, was declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable.
(b) The Board of Directors have approved interim dividend for Financial Year 2021-2022, is in accordance with section 123 of the Act, as applicable.
Chartered Accountants Firm''s Registration No. 106237W/W100829
Partner
Membership No. 101533 UDIN: 22101533ARZOIU9171
Mar 31, 2019
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of Alembic Pharmaceuticals Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2019, and the statement of profit and loss (including other comprehensive income), statement of changes in equity and statement of cash flows for the year ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2019, and its profit, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Companies Act, 2013 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.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the following matter as Key Audit Matter/s for the year.
1. Provision for return of non-saleable goods (Expiry, Breakage and Spoilage) in the market in India
This is considered as key audit matter in view of significant estimates and judgements made by the management for recognition and measurement for the same.
The Company, under the prevailing trade practice, has an obligation to accept returns of expiry, breakage and spoilage (EBS) products, from the stockiest (customers) in India. The methodology and assumptions used to estimate the accruals of EBS are monitored and adjusted regularly by the management in the light of the obligations, historical trends, past experience and prevailing market conditions.
The Company makes provision for accrual of EBS estimated in future out of the sales effected during the current period. The said provision is used for settling claims made by the customers in future. Actual returns on account of EBS can vary materially from period to period based upon actual sales volume, product mix, etc.
Refer accounting policy stated at 2.16 and note 27(11) in the standalone financial statements.
Principal Audit Procedures
We verified managementâs calculations in respect of estimate made by the management towards provision for accruals of EBS. We have examined the methodology and the assumptions made by the management while making this provision.
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Boardâs Report and Annexures thereto and Report on Corporate Governance but does not include the standalone financial statements and our auditorâs report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information 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.
We have been provided the aforesaid reports and based on the work we have performed, we did not observe any material misstatement of this other information and accordingly, we have nothing to report in this regard.
Responsibilities of Management and those charged with Governance for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Board of Directors is responsible for assessing the Companyâs ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has internal financial controls system with reference to financial statements in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its Directors during the year is in accordance with the provisions of section 197 of the Act and is not in excess of the limit laid down under this section.
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 27(2)(ii) to the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts, for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
(Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date to the Members of Alembic Pharmaceuticals Limited)
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets i.e. Property, Plant and Equipment (PPE).
(b) These fixed assets (PPE) have been physically verified by the management during the year as per the phased programme of physical verification of fixed assets (PPE). As informed to us the programme is such that all the fixed assets (PPE) will get physically verified once in three year time. In our opinion the same is reasonable having regard to the size of the Company and the nature of its fixed assets (PPE). No material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the Company except for Land having book value of Rs.1.19 crores still being held in the names of erstwhile demerged companies.
(ii) Physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed on such physical verification.
(iii) The Company has not granted any secured or unsecured loans to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore the requirements of sub-clause (a), (b) and (c) of clause (iii), are not applicable to the Company.
(iv) In respect of loans, investments, guarantees and security provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.
(v) The Company has not accepted any deposits during the year. Therefore the question of complying with directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder does not arise.
(vi) The Central Government has specified the maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013. Such accounts and records have been made and maintained by the Company.
(vii) (a) The Company is generally regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income tax, duty of customs, goods and service tax (GST), cess and any other statutory dues to the appropriate authorities. There were no undisputed amounts payable in respect of these dues in arrears as at 31st March, 2019 for a period of more than six months from the date they became payable.
(b) Dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax or goods and service tax (GST) that have not been deposited on account of any dispute are as under:
Nature of dues |
Amount not deposited (Rs. in Crores) |
Forum where dispute is pending |
Period |
Sales Tax, interest and penalty |
0.13 |
High Court |
1999-2000 |
1.64 |
Asst. Commissioner Demand |
2003-04 |
|
@ |
Additional Commissioner |
2004-05 |
|
0.02 |
Revisional Board (Tribunal) |
2006-07 |
|
0.21 |
Jt. Commissioner Appeals |
2013-14 |
|
0.08 |
Jt. Commissioner Appeals |
2006-07 |
|
0.08 |
Tribunal |
2009-10 |
|
0.02 |
Additional Commissioner |
1st April,2006 to 30th Nov,2008 |
|
0.15 |
Additional Commissioner |
2007-08 |
|
0.11 |
Deputy Commissioner II |
2006-07 |
|
Central Sales Tax |
0.02 |
Addl. Commissioner Sales Tax |
1st April,2006 to 30th Nov,2008 |
0.01 |
Jt. Commissioner Appeals |
2006-07 |
|
0.03 |
Jt. Commissioner Appeals |
2010-11 |
|
Entry Tax |
0.03 |
Revisional Authority |
2013-14 |
Professional Tax |
0.05 |
Jt. Commissioner |
2014-15 |
Excise duty, interest & penalty |
2.14 |
CESTAT |
2005-06 |
0.10 |
CESTAT |
2011-12 |
|
Remand Back |
2007-08 |
||
0.02 |
CESTAT |
1998-99 |
# |
Commissioner Appeal |
2009-10 |
|
0.50 |
Supreme Court |
2005-06 |
|
1.21 |
Supreme Court |
2005-06 |
|
# # |
CESTAT |
2008-09 |
|
0.01 |
CESTAT |
2010-11 |
|
1.02 |
CESTAT |
2006-11 |
|
0.24 |
Commissioner Appeals |
2013-14 |
|
0.04 |
Commissioner Appeals |
2013-14 |
|
0.03 |
CESTAT |
2012-13 |
|
$$ |
Commissioner Appeals |
2011-12 |
|
0.01 |
Commissioner Appeals |
2006-11 |
|
AA |
Commissioner (Appeals) |
2008-09 |
|
* |
Commissioner (Appeals) |
2009 |
|
** |
Commissioner (Appeals) |
2009-10 |
|
|
Commissioner (Appeals) |
2007-08 |
@ Rs.44,830/- @@ Rs.16,091/- # Rs.35,000/- ## Rs.55,306/- $$ Rs.13,588/-AA Rs.25,153/- *Rs.25,183/- **Rs.47,936/- Rs.11,316/-
(viii) The Company has not defaulted in repayment of loans or borrowings to a financial institution, bank, government or dues to debenture holders.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). The term loans raised during the year have been applied for the purpose for which they were raised.
(x) Any fraud by the Company or any fraud on the Company by its officers or employees has not been noticed or reported during the year.
(xi) Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
(xii) The Company is not a Nidhi Company and therefore the compliance requirements relevant to a Nidhi Company are not applicable.
(xiii) All transactions with related parties are in compliance with section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the standalone financial statements as required by the applicable accounting standards.
(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 the compliance of the requirement of section 42 of the Companies Act, 2013 are not applicable.
(xv) Pursuant to the provisions of section 192 of the Companies Act, 2013, the Company has not entered into any non-cash transactions with directors or persons connected with him/her.
(xvi) The Company is not required to be registered under section 45-1(A) of the Reserve Bank of lndia Act, 1934.
(Referred to in paragraph 2(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date to the Members of Alembic Pharmaceuticals Limited)
Report on the Internal Financial Controls 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 Alembic Pharmaceuticals Limited (âthe Companyâ) as of 31st March, 2019 in conjunction with our audit of the standalone 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. These responsibilities include the design, implementation and maintenance of adequate internal financial controls with reference to the standalone financial statements of the Company 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 prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 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 auditorâs judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls 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 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 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 standalone 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 internal financial controls system with reference to the standalone financial statements of the Company and such internal financial controls over financial reporting were operating effectively as at 31st March, 2019 , 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.
For K. S. Aiyar & Co.
Chartered Accountants
Firmâs Registration No. 100186W
Rajesh S. Joshi
Partner
Membership No.38526
Place: Vadodara
Date: 8th May, 2019
Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of ALEMBIC PHARMACEUTICALS LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 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 the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone 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 financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018 and its profit, total comprehensive income and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) I n our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position (net of provision made) in its financial statements Refer note no 26 (2) (ii).
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts that were required to be transferred to the Investor Education and Protection Fund by the Company during the year.
Re: Alembic Pharmaceuticals Limited.
(Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ Section of our report of even date to the Members of Alembic Pharmaceuticals Limited)
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) These fixed assets have been physically verified by the management during the year as per the phased programme of physical verification of fixed assets. As informed to us the programme is such that all the fixed assets will get physically verified once in three year time. In our opinion the same is reasonable having regard to the size of the Company and the nature of its fixed assets. No material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the company except for Land having book value of Rs.1.88 Crores still being held in the names erstwhile demerged companies.
(ii) Physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed on such physical verification.
(iii) The Company has not granted any secured or unsecured loans to companies, firms, limited liability partnership or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Therefore the requirements of sub-clause (a), (b) and (c) of clause (iii) are not applicable to the Company.
(iv) In respect of loans, investments, guarantees, and security provisions of Section 185 and 186 of the Companies Act, 2013 have been complied with.
(v) The Company has not accepted any deposits during the year. Therefore the question of complying with directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder does not arise.
(vi) The Central Government has specified the maintenance of cost records under Sub-section (1) of Section 148 of the Companies Act, 2013. Such accounts and records have been made and maintained by the Company.
(vii) (a) The Company is generally regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax (GST), cess and any other statutory dues to the appropriate authorities. There were no undisputed amounts payable in respect of these dues in arrears as at 31st March, 2018 for a period of more than six months from the date they became payable.
(b) Dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax or goods and service tax (GST) that have not been deposited on account of any dispute are as under:
Nature of dues |
Amount not deposited (Rs. in Crores) |
Forum where dispute is pending |
Period |
Sales Tax, interest and |
0.13 |
High Court |
1999-2000 |
penalty |
1.64 |
Asst. Commissioner Demand |
2003-2004 |
@ |
Additional Commissioner |
2004-2005 |
|
0.02 |
Revisional Board (Tribunal) |
2006-2007 |
|
0.21 |
Jt. Commissioner Appeals |
2013-2014 |
|
0.08 |
Jt. Commissioner Appeals |
2006-2007 |
|
0.08 |
Tribunal |
2009-2010 |
|
0.02 |
Additional Commissioner |
1st April, 2006 to 30th Nov, 2008 |
|
0.15 |
Additional Commissioner |
2007-2008 |
Central Sales Tax |
0.11 |
Deputy Commissioner II |
2006-2007 |
0.02 |
Addl. Commissioner Sales Tax |
1st April, 2006 to 30th Nov, 2008 |
|
0.01 |
Jt. Commissioner Appeals |
2006-2007 |
|
0.03 |
Jt. Commissioner Appeals |
2010-2011 |
|
Entry Tax |
0.03 |
Revisional Authority |
2013-2014 |
Professional Tax |
0.05 |
Jt. Commissioner |
2014-2015 |
Excise duty, interest & |
2.14 |
CESTAT |
2005-2006 |
penalty |
0.10 |
CESTAT |
2011-2012 |
Remand Back |
2007-2008 |
||
0.02 |
CESTAT |
1998-1999 |
|
* |
Commissioner Appeal |
2009-2010 |
|
0.50 |
Supreme Court |
2005-2006 |
|
1.21 |
Supreme Court |
2005-2006 |
|
* * |
CESTAT |
2008-2009 |
|
0.01 |
CESTAT |
2010-2011 |
|
1.02 |
CESTAT |
2006-2011 |
|
0.24 |
Commissioner Appeals |
2013-2014 |
|
$ |
CESTAT |
2011-2012 |
|
0.04 |
Commissioner Appeals |
2013-2014 |
|
0.03 |
CESTAT |
2012-2013 |
|
$ $ |
Commissioner Appeals |
2011-2012 |
|
0.01 |
Commissioner Appeals |
2006-2011 |
|
0.28 |
CESTAT |
2015-2016 |
|
0.03 |
CESTAT |
2014-2015 |
|
0.04 |
CESTAT |
2014-2015 |
|
A |
CESTAT |
2012-2014 |
|
AA |
Commissioner (Appeals) |
2008-2009 |
|
* |
Commissioner (Appeals) |
2009 |
|
** |
Commissioner (Appeals) |
2009-2010 |
|
|
Commissioner (Appeals) |
2007-2008 |
|
0.22 |
CESTAT |
2015-2016 |
44,830/- @@ Rs.16,091/- * Rs.35,000/- ** Rs.55,306/- $ Rs.56,760/- $$ Rs.13,588 a Rs.35,963/- aa Rs.25,153/ * Rs.25,183/- ** Rs.47,936/- Rs.11,316/-
(viii) The Company has not defaulted in repayment of loans or borrowings to a financial institution, bank, government or dues to debenture holders.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. The term loan raised during the year have been applied for the purpose for which they were raised.
(x) Any fraud by the Company or any fraud on the Company by its officers or employees has not been noticed or reported during the year.
(xi) Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act.
(xii) The Company is not a Nidhi Company and therefore the compliance requirements relevant to a Nidhi Company are not applicable.
(xiii) All transactions with related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the standalone financial statements etc. as required by the applicable accounting standards.
(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 the compliance of the requirement of Section 42 of the Companies Act, 2013 are not applicable.
(xv) Pursuant to the provisions of Section 192 of the Companies Act, 2013, the Company has not entered into any noncash transactions with directors or persons connected with him/her.
(xvi) The Company is not required to be registered under Section 45-1(A) of the Reserve Bank of lndia Act, 1934.
For K. S. AIYAR & Co.
Chartered Accountants
(Firmâs Registration No. 100186W)
Rajesh S. Joshi
Partner
Membership No. 38526
Place of Signature: Vadodara
Date: 16th May, 2018
Mar 31, 2017
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Alembic Pharmaceuticals Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2017, and 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 the Significant Accounting Policies and Other Explanatory Information.
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 or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We 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 31st March, 2017, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements; refer note no 27.2.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv The Company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 at Note No. 38 and these are in accordance with the books of accounts maintained by the Company.
Annexure âAâ to the Independent Auditorâs Report
Re: Alembic Pharmaceuticals Limited.
Referred to in paragraph 1 on Report on Other Legal and Regulatory Requirements of our report.
(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) These fixed assets have been physically verified by the management during the year as per the phased programme of physical verification of fixed assets. As informed to us the programme is such that all the fixed assets will get physically verified in three year time. In our opinion the same is reasonable having regard to the size of the Company and the nature of its fixed assets. No material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the company.
(ii) Physical verification of inventory has been conducted at reasonable intervals by the management and No material discrepancies were noticed on physical verification.
(iii) The Company has not granted any secured or unsecured loans to companies, firms, limited liability partnership or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore the requirements of sub-clause (a), (b) and (c) of clause (iii) are not applicable to the Company.
(iv) In respect of loans, investments, guarantees, and security provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.
(v) The Company has not accepted any deposits during the year. Therefore the question of complying with directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder do not arise.
(vi) The Central Government has specified the maintenance of cost records under sub-section (1) of section 148 of the Companies Act, 2013. Such accounts and records have been made and maintained by the Company.
(vii) (a) The Company is generally regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities.
(b) Dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax that have not been deposited on account of any dispute are on the next page.
Nature of dues |
Amount not deposited Rs. |
Forum where dispute is pending |
Period to which the amount relates |
Sales Tax, interest and penalty |
13,12,295 |
High Court |
1999-2000 |
1,63,84,603 |
Asst. Commissioner Demand |
2003-04 |
|
44,830 |
Additional Commissioner |
2004-05 |
|
1,53,406 |
Revisional Board (Tribunal) |
2006-07 |
|
20,92,750 |
Jt. Commissioner Appeals |
2013-14 |
|
7,65,686 |
Jt. Commissioner Appeals |
2006-07 |
|
8,27,211 |
Tribunal |
2009-10 |
|
7,81,346 |
Tribunal |
2009-10 |
|
1,84,321 |
Additional Commissioner |
01-04-2006 to 30-11-2008 |
|
15,06,831 |
Additional Commissioner |
2007-08 |
|
36,46,047 |
Revisional Authority |
2012-13 |
|
Central Sales Tax |
1,51,971 |
Additional Commissioner |
01-04-2006 to 30-11-2008 |
10,93,955 |
Deputy Commissioner II |
2006-07 |
|
4,837 |
Tribunal |
2009-10 |
|
1,23,800 |
Jt. Commissioner Appeals |
2006-07 |
|
3,24,342 |
Jt. Commissioner Appeals |
2010-11 |
|
Excise Duty, Interest & Penalty |
2,13,95,574 |
CESTAT |
2005-06 |
9,85,233 |
CESTAT |
2011-12 |
|
16,091 |
CESTAT |
2007-08 |
|
2,10,579 |
CESTAT |
1998-99 |
|
35,000 |
Commissioner (Appeal) |
2009-10 |
|
50,03,165 |
High Court |
2005-06 |
|
1,20,99,486 |
High Court |
2005-06 |
|
55,306 |
CESTAT |
2008-09 |
|
121,276 |
CESTAT |
2010-11 |
|
10,181,463 |
CESTAT |
2006 to 2011 |
|
24,11,210 |
Commissioner (Appeals) |
2013-14 |
|
2,75,323 |
CESTAT |
2007-08 to July 2011 |
|
56,760 |
CESTAT |
2011-12 |
|
4,12,504 |
Commissioner (Appeals) |
2013-14 |
|
3,45,902 |
CESTAT |
2012-13 |
|
1,18,282 |
CESTAT |
2013-14 |
|
1,26,179 |
Commissioner Appeals |
2006 to 2011 |
|
25,23,209 |
CESTAT |
2011 to 2015 |
|
27,99,431 |
CESTAT |
2015-16 |
|
3,18,507 |
CESTAT |
2014-15 |
|
3,68,256 |
CESTAT |
2014-15 |
|
35,964 |
CESTAT |
2012 to 2014 |
|
Stamp duty |
5,01,18,535 |
Supreme Court |
2011-12 |
(viii) The Company has not defaulted in repayment of loans or borrowings to a financial institution, bank, government or dues to debenture holders.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) or any term loans during the year.
(x) Any fraud by the Company or any fraud on the Company by its officers or employees has not been noticed or reported during the year.
(xi) Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
(xii) The Company is not a Nidhi Company and therefore the compliance requirements relevant to a Nidhi Company are not applicable.
(xiii) All transactions with related parties are in compliance with section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the standalone Ind AS financial statements etc. as required by the applicable accounting standards.
(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 the compliance of the requirement of section 42 of the Companies Act, 2013 are not applicable.
(xv) Pursuant to the provisions of section 192 of the Companies Act, 2013, the Company has not entered into any non-cash transactions with directors or persons connected with him/her.
(xvi) The Company is not required to be registered under section 45-1(A) of the Reserve Bank of lndia Act, 1934.
For K.S.AIYAR & Co
Chartered Accountants
Firm Registration Number: 100186W
RAGHUVIR M. AIYAR
Mumbai Partner
Date: 3rd May, 2017 Membership No. 38128
Mar 31, 2014
We have audited the accompanying financial statements of Alembic
Pharmaceuticals Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2014, and the Statement of Profit and Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act").
Read with the General Circular 15/2013 dated 13 September 2013 of the
Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
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 entity''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of sub-
section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956 read with the General Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013.
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 Companies Act, 1956.
Referred to in paragraph 1 on Report on Other Legal and Regulatory
Requirements of our report.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of Fixed
Assets. However, item wise value in respect of assets other than land,
buildings and vehicles prior to 1982 are not available.
(b) Fixed assets have been physically verified by the management during
the year as per the phased programme of physical verification of fixed
assets. As informed to us the programme is such that all the fixed
assets will get physically verified in three years time. In our
opinion the same is reasonable having regard to the size of the Company
and the nature of its fixed assets. No material discrepancies were
noticed on such verification.
(c) During the year, the Company has not disposed off any substantial
part of its fixed assets.
(ii) (a) The inventory has been physically verified during the year by
the management at reasonable intervals.
(b) The procedures for physical verification of inventory followed by
the management are reasonable and adequate in relation to size of the
Company and nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) (a) The Company has granted unsecured loan to one company covered
in the register maintained under section 301 of the Companies Act, 1956
wherein the balance recoverable as at the year end is Rs. Nil (Maximum
balance during the year Rs. 4,205 Lacs).
(b) In our opinion, the rate of interest and other terms and conditions
of loans given by the Company, secured or unsecured, to parties listed
in the register maintained under section 301 of the Companies Act, 1956
are not, prima-facie, prejudicial to the interest of the Company.
(c) In respect of the above loans granted, receipt/renewal of the
principal amount and interest were regular, as stipulated.
(d) There is no overdue amount of more than rupees one lakh of loans
granted to companies, firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956.
(e) The Company has not taken any unsecured loan from any party covered
in the register maintained under section 301 of the Companies Act,
1956. Therefore, the requirement of clause (f) and (g) are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in the internal control
system.
(v) (a) The particulars of contracts or arrangements referred to in
section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under that section. (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 Rs. 5,00,000 have been made 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 complied with provisions of Section 58A
and 58AA and any other relevant provision of the Companies Act, 1956
and the Companies (Acceptance of Deposits) Rules, 1975 with regard to
the deposits accepted from the public. No order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209 (1)(d) of the Companies
Act, 1956 and we are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the records for determining whether
they are accurate or complete.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities, undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employee''s State
Insurance, Income
Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess
and any other material statutory dues applicable to it and there are no
arrears outstanding as at the year end for a period of more than six
months from the date they became payable.
(b) According to the records of the Company, the following dues of
Sales Tax, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty and Cess have not been deposited on account of some dispute or are
partially deposited under protest.
Statute & Nature of
dues Amount not Forum where dispute Period
deposited
in Rs. is pending
Sales Tax Act 4,82,244 Joint Commissioner
Appeals 2008-09
Sales Tax, Interest
and penalty 13,12,295 High Court 1999-2000
1,63,84,603 Asst.Commissioner
Demand 2003-04
44,830 Additional Commissioner 2004-05
1,53,406 Sr.Joint Commissioner 2006-07
17,49,933 Joint Commissioner
Appeals 2009-10
1,84,321 Additional Commissioner 01-04-2006
to
30-11-2008
24,654 Additional Commissioner 01-12-2008
to
31-10-2009
34,11,482 Additional Commissioner 2007-08
53,89,411 Additional Commissioner 2008-09
64,32,292 Additional Commissioner 2009-10
2,95,000 Joint Commissioner
Appeals 2013-14
9,56,484 Jt.Comissioner,
Commercial Tax 2010-11
Central Sales Tax Act 1,51,971 Additional Commissioner 01-04-2006
to
30-11-2008
75,612 Additional Commissioner 01-12-2008
to
31-10-2009
2,46,931 Deputy Commissioner II 2003-04
1,50,355 Joint Commissioner
(Appeals) 2005-06
10,93,955 Deputy Commissioner II 2006-07
26,302 Additional Commissioner 2008-09
28,481 Additional Commissioner 2009-10
1,52,810 Jt.Commissioner,
Commercial tax 2010-11
The Central Excise
Act 2,13,95,574 CESTAT 2005-06
Excise Duty,
Interest & Penalty 56,07,997 CESTAT 2007-08
16,091 Commissioner (Appeal) 2007-08
23,53,824 CESTAT 2001-02
2,10,579 CESTAT 1998-99
35,000 Commissioner (Appeal) 2009-10
50,03,165 High Court 2005-06
1,20,99,486 High Court 2005-06
Statute & Nature of
dues Amount not Forum where dispute Period
deposited
in Rs. is pending
55,306 Commissioner (Appeals) 2008-09
1,21,276 Commissioner (Appeals) 2010-11
1,01,81,463 CESTAT 2006-11
34,712 Asst. Commissioner 2007-08
2,75,323 CESTAT 2007-08 to
July 2011
56,760 CESTAT 2011-12
95,029 CESTAT 2011-12
The Bombay Stamp
Act 5,01,18,535 Supreme Court 2011-12
Income Tax Act 3,19,955 Commissioner (Appeals) 2010-11
Income Tax 4,58,530 Commissioner (Appeals) 2011-12
4,53,951 Commissioner (Appeals) 2012-13
(x) As the Company is registered for a period less than 5 years, the
requirement of the Order of reporting on accumulated losses and cash
losses is not applicable.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit
Fund/Society. Therefore, the provisions of Clauses 4(xiii) of the
Companies (Auditor''s Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) According to the information and explanations given to us, the
term loans have been applied for the purpose for which the loans were
obtained.
(xvii) According to the information and explanations given to us, and
on an overall examination of Balance Sheet of the Company, we report
that no funds raised on short- term basis have been used for long term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company does not have any Debentures outstanding as at the
year end.
(xx) The Company has not raised any money during the year by public
issue.
(xxi) As per the information and explanations given to us, no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For K.S.Aiyar & Co;
Chartered Accountants
Firm Registration No: 100186W
RAGHUVIR M. AIYAR
Mumbai Partner
Date: 28th April, 2014 Membership No. 38128
Mar 31, 2013
We have audited the accompanying financial statements of Alembic
Pharmaceuticals Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2013, and the Statement of Profit and Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 2||
of the Companies Act, |956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956;
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Referred to in paragraph 1 on Report on Other Legal and Regulatory
Requirements of our report.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of Fixed
Assets. However, item wise value in respect of assets other than land,
buildings and vehicles prior to 1982 are not available.
(b) Fixed assets have been physically verified by the management during
the year as per the phased programme of physical verification of fixed
assets. As informed to us the programme is such that all the fixed
assets will get physically verified in three years time. In our opinion
the same is reasonable having regard to the size of the Company and the
nature of its fixed assets. No material discrepancies were noticed on
such verification.
(c) During the year, the Company has not disposed off any substantial
part of its fixed assets.
(ii) (a) The inventory has been physically verified during the year by
the management at reasonable intervals.
(b) The procedures for physical verification of inventory followed by
the management are reasonable and adequate in relation to size of the
Company and nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) (a) The Company has granted unsecured loan to one company covered
in the register maintained under section 301 of the Companies Act, 1956
wherein the balance recoverable as at the year end is H Nil (Maximum
balance during the year H 7,950 Lacs).
(b) In our opinion, the rate of interest and other terms and conditions
of loans given by the Company, secured or unsecured, to parties listed
in the register maintained under section 301 of the Companies Act, 1956
are not, prima-facie, prejudicial to the interest of the Company.
(c) In respect of the above loans granted, receipt/renewal of the
principal amount and interest were regular, as stipulated.
(d) There is no overdue amount of more than rupees one lakh of loans
granted to companies, firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956.
(e) The Company has not taken any unsecured loan from any party covered
in the register maintained under section 301 of the Companies Act,
1956. Therefore, the requirement of clause (f) and (g) are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in the internal control
system.
(v) (a) The particulars of contracts or arrangements referred to in
section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under that section.
(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 ''5,00,000 have been made 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 complied with provisions of Section 58A
and 58AA or any other relevant provision of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. No order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209 (l)(d) of the Companies
Act, 1956 and we are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. However we have not
made a detailed examination of the records for determining whether they
are accurate or complete.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities, undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employee''s State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and any other material statutory dues applicable to
it and there are no arrears outstanding as at the year end for a period
of more than six months from the date they became payable.
(b) According to the records of the Company the following dues of Sales
Tax, Income Tax, Wealth Tax, Service Tax, Custom Duty Excise Duty and
Cess have not been deposited on account of some dispute or are
partially deposited under protest.
(x) As the Company is registered for a period less than 5 years, the
requirement of the Order of reporting on accumulated losses and cash
losses is not applicable.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit
Fund/Society Therefore, the provisions of Clauses 4(xiii) of the
Companies (Auditor''s Report) Order, 2003 (as amended) are not
applicable to the Company
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) According to the information and explanations given to us, the
term loans have been applied for the purpose for which the loans were
obtained.
(xvii) According to the information and explanations given to us, and
on an overall examination of Balance Sheet of the Company we report
that no funds raised on short-term basis have been used for long term
investment.
(xviii)The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956.
(xix) The Company does not have any Debentures outstanding as at the
year end.
(xx) The Company has not raised any money during the year by public
issue.
(xxi) As per the information and explanations given to us, no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For K.S. Aiyar & Co;
Chartered Accountants
FRN: 100186W
Raghuvir M.Aiyar
Mumbai Partner
Date: 2nd May 2013 Membership No.38128
Mar 31, 2012
We have audited the attached Balance Sheet of Alembic Pharmaceuticals
Limited as at 31st March, 2012, the Profit and Loss Account and also
the Cash Flow Statement for the year ended 31st March, 2012 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.
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.
As required by the Companies (Auditor's Report) Order, 2003 as amended
by Companies (Auditor's 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, we enclose in the Annexure a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account maintained.;
(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 2II of
the Companies Act, 1956
(v) On the basis of written representations received from the
Directors, as on 31st March, 2012, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 20I2 from being appointed as a Director in terms of clause
(g) of sub-section(I) of section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the Balance Sheet of the state of the affairs of the
Company as at 31st March, 2012;
b) in case of the Profit and Loss Account, 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.
Referred to in paragraph 3 of our report of even date,
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of Fixed
Assets. However, item wise value in respect of assets other than land,
buildings and vehicles prior to 1982 are not available.
(b) Fixed assets have been physically verified by the management during
the year as per the phased programme of physical verification of fixed
assets. As informed to us the programme is such that all the fixed
assets will get physically verified in three years time. In our opinion
the same is reasonable having regard to the size of the Company and the
nature of its fixed assets. No material discrepancies were noticed on
such verification.
(c) During the year, the Company has not disposed off any substantial
part of its fixed assets.
(ii) (a) The inventory has been physically verified during the year by
the management at reasonable intervals.
(b) The procedures for physical verification of inventory followed by
the management are reasonable and adequate in relation to size of the
Company and nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) (a) The Company has granted unsecured loans to three companies
covered in the register maintained under section 301 of the Companies
Act, 1956 wherein the balance recoverable as at the year end is Rs6300
Lacs (Maximum balance during the year Rs 11850 Lacs).
(b) In our opinion, the rate of interest and other terms and conditions
of loans given by the Company, secured or unsecured, to parties listed
in the register maintained under section 301 of the Companies Act, 1956
are not, prima- facie, prejudicial to the interest of the Company.
(c) In respect of the above loans granted, receipt/renewal of the
principal amount and interest were regular, as stipulated.
(d) There is no overdue amount of more than rupees one lakh of loans
granted to companies, firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956.
(e) The Company has not taken any unsecured loan from any party covered
in the register maintained under section 301 of the Companies Act,
1956. Therefore, the requirement of clause (f) and (g) are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in the internal control
system.
(v) (a) The particulars of contracts or arrangements referred to in
section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under that section.
(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 Rs5,00,000 have been made 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 complied with provisions of Section 58A
and 58AA or any other relevant provision of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. No order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209 (I)(d) of the Companies
Act, 1956 and we are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the records for determining whether
they are accurate or complete.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities, undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employee's State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and any other material statutory dues applicable to
it and there are no arrears outstanding as at the year end for a period
of more than six months from the date they became payable.
(b) According to the records of the Company, the following dues of
Sales Tax, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty and Cess have not been deposited on account of some dispute or are
partially deposited under protest.
Amount not Forum where
Statute & Nature
of dues deposited Period
dispute is pending
Sales Tax Act 4,82,244 Joint Commissioner
Appeals 2008-09
Sales Tax,
interest and
penalty.
13,12,295 High Court 1999-2000
1,63,84,603 Asst.Commissioner
Demand 2003-04
44,830 Additional
Commissioner 2004-05
276,334 Sr.Joint
Commissioner 2006-07
17,49,933 Joint Commissioner
Appeals 2009-10
1,84,321 Additional
Commissioner 01-04-2006 to
30-11-2008
24,654 Additional
Commissioner 01-12-2008 to
31-10-2009
34,11,482 Additional
Commissioner 2007-08
53,89,411 Additional
Commissioner 2008-09
Central Sales
Tax Act 5,20,052 Commissioner 2005-06
1,51,971 Additional
Commissioner 01-04-2006 to
30-11-2008
75,612 Additional
Commissioner 01-12-2008 to
31-10-2009
2,46,931 Deputy
Commissioner II 2003-04
1,50,355 Joint Commissioner
(Appeals) 2005-06
10,93,955 Deputy
CommissionerII 2006-07
26,302 Additional
Commissioner 2008-09
The Central
Excise Act 2,13,95,574 CESTAT, Comm.( A) 2005-06
Excise Duty,
Interest & Penalty. 56,58,800 CESTAT, Comm. (A) 2007-08
23,53,824 CESTAT, Comm. (A) 2001-02
2,10,579 CESTAT, Comm. (A) 1998-99
35,000 CESTAT, Comm. (A) 2009-10
50,03,165 High Court 2005-06
1,20,99,486 High Court 2005-06
1,01,19,859 Deputy Commissioner 2001-02
50,11,283 Deputy Commissioner 2006-07
17,03,220 Deputy Commissioner 1996-97
1,15,584 Deputy Commissioner 2001-02
11,316 Deputy Commissioner 2007-08
1,138 Deputy Commissioner 2009-10
25,153 Deputy Commissioner 2008-09
1,18,111 Deputy Commissioner 2008-09
55,306 Deputy Commissioner 2008-09
25,183 Deputy Commissioner 2009-10
47,936 Deputy Commissioner 2009-10
1,12,061 Deputy Commissioner 2009-10
21,688 Deputy Commissioner 2010-11
34,268 Deputy Commissioner 2010-11
13,588 Deputy Commissioner 2011-12
1,21,276 Deputy Commissioner 2010-11
47,151 Deputy Commissioner 2010-11
1,01,81,463 Commissioner 2006-11
The Bombay
Stamp Act. 5,01,18,535 The Hon'ble Chief
Controlling 2011-12
Revenue Authority,
Gandhinagar
(x) As the Company is registered for a period less than 5 years, the
requirement of the Order of reporting on accumulated losses and cash
losses is not applicable.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit
Fund/Society. Therefore, the provisions of Clauses 4(xiii) of the
Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) According to the information and explanations given to us, the
term loans have been applied for the purpose for which the loans were
obtained.
(xvii) According to the information and explanations given to us, and
on an overall examination of Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company has created security in respect of debentures issued.
(xx) The Company has not raised any money during the year by public
issue.
(xxi) As per the information and explanations given to us, no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For K. S. AIYAR & CO.
Chartered Accountants;
FRN:100186W
RAGHUVIR M. AIYAR
Mumbai Partner
DATE: 26th April, 2012 Membership No.38128
Mar 31, 2011
We have audited the attached Balance Sheet of Alembic Pharmaceuticals
Limited as at 31st March, 2011, the Profit and Loss Account and also
the Cash Flow Statement for the period from date of incorporation
i.e.16th June, 2010 to 31st March, 2011 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.
We state that the ÃPharmaceutical undertaking' of Alembic Limited got
demerged and transferred to the Company pursuance to the Scheme of
Arrangement as approved by the Hon'ble Gujarat High Court. Accordingly
these financial statements include the Financial Statements of the said
ÃPharmaceutical undertaking' of Alembic Limited for the period from the
Appointed date i.e. 01-04-2010 to 31-03-2011.
We further state that these Financial Statements pertaining to the said
Pharmaceutical undertaking have been extracted from the books of
account and records maintained by Alembic Limited jointly with its
Vadodara undertaking in its SAP ERP system. This extraction and
compilation of Financial Statements of the said Pharmaceutical
undertaking is as envisaged in the Scheme and is based on various
allocations made by the management on reasonable bases as detailed in
Note No. 2 of Schedule T to the Financial Statements and have been
relied upon by us.
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.
As required by the Companies (Auditor's Report) Order, 2003 as amended
by Companies (Auditor's 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, we enclose in the Annexure a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account maintained as disclosed at Para 3 above;
(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 written representations received from the
Directors, as on 31st March, 2011, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2011 from being appointed as a Director in terms of clause
(g) of sub-section(1) of section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the Balance Sheet of the state of the affairs of the
Company as at 31st March, 2011;
b) in case of the Profit and Loss Account, of the Profit 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 the Auditors' Report
Re : Alembic Pharmaceuticals Limited
Referred to in paragraph 3 of our report of even date,
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of Fixed
Assets. However, item wise value in respect of assets other than land,
buildings and vehicles acquired prior to 1982 are not available.
(b) Fixed assets have been physically verified by the management during
the year as per the phased programme of physical verification of fixed
assets. As informed to us the programme is such that all the fixed
assets will get physically verified in three years time. In our opinion
the same is reasonable having regard to the size of the Company and the
nature of its fixed assets. No material discrepancies were noticed on
such verification.
(c) During the year, the Company has not disposed off substantial part
of its fixed assets.
(ii) (a) The inventory has been physically verified during the year by
the management at reasonable intervals.
(b) The procedures for physical verification of inventory followed by
the management are reasonable and adequate in relation to size of the
Company and nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) (a) The Company has granted unsecured loans to five companies
covered in the register maintained under section 301 of the Companies
Act, 1956 wherein the balance recoverable as at the period end is
Rs.26,40,00,000/- (Maximum balance during the year Rs.80,96,00,000/-).
(b) In our opinion, the rate of interest and other terms and conditions
of loans given by the Company, secured or unsecured, to parties listed
in the register maintained under section 301 of the Companies Act, 1956
are not, prima- facie, prejudicial to the interest of the Company.
(c) In respect of the above loans granted, receipt/renewal of the
principal amount and interest were regular, as stipulated.
(d) There is no overdue amount of more than rupees one lakh of loans
granted to companies, firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956.
(e) The Company has not taken any unsecured loan from any party covered
in the register maintained under section 301 of the Companies Act,
1956. Therefore, the requirement of clause (f) and (g) are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in the internal control
system.
(v) (a) The particulars of contracts or arrangements referred to in
section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under that section.
(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 Rs.5,00,000 have been made 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 complied with provisions of Section 58A
and 58AA or any other relevant provision of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. No order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under Section 209 (1)(d) of the Companies
Act, 1956 and we are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the records for determining whether
they are accurate or complete.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities, undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employee's
State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom
Duty, Excise Duty, Cess and any other material statutory dues
applicable to it and there are no arrears outstanding as at the year
end for a period of more than six months from the date they became
payable.
(b) According to the records of the Company, the following dues of
Sales Tax, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty and Cess have not been deposited on account of some dispute or are
partially deposited under protest.
Statue & Nature Amount not Forum where Period
of dues. deposited dispute is
pending.
Sales Tax Act. 4,82,244 Joint Commissioner 2008-09
Sales Tax, Appeals
interest and
penalty.
13,12,295 High Court 1999-2000
1,63,84,603 Asst. Commissioner
Demand 2003-04
44,830 Additional Commissioner 2004-05
3,99,262 Sr. Joint Commissioner 2006-07
17,49,933 Joint Commissioner
Appeals 2009-10
7,38,67,430 Additional Commissioner
(Appeals) 2007-08
1,84,321 Additional Commissioner 01-04-2006
to
30-11-2008
24,654 Additional Commissioner 01-12-2008
to
31-10-2009
34,11,482 Additional Commissioner 2007-08
Central Sales Tax 1,00,00,000 Additional Commissioner
Appeals 2007-08
5,20,052 Commissioner 2005-06
1,51,971 Additional Commissioner 01-04-2006
to
30-11-2008
75,612 Additional Commissioner 01-12-2008
to
31-10-2009
2,46,931 Deputy Commissioner II 2003-04
1,50,355 Joint Commissioner
(Appeals) 2005-06
10,93,955 Deputy Commissioner II 2006-07
71,728 Sr. Joint Commissioner 2006-07
The Central
Excise Act. 2,13,95,574 CESTAT, Comm.(A) 2005-06
Excise Duty,
Interest &
Penalty. 56,58,800 CESTAT, Comm. (A) 2007-08
23,53,824 CESTAT, Comm. (A) 2001-02
2,10,579 CESTAT, Comm. (A) 1998-99
35,000 CESTAT, Comm. (A) 2009-10
50,03,165 High Court 1995-96
1,20,99,486 Supreme Court 1996-97
(x) As the Company is registered for a period less than 5 years, the
requirement of the Order of reporting on accumulated losses and cash
losses is not applicable.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit
Fund/Society. Therefore, the provisions of Clauses 4(xiii) of the
Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) According to the information and explanations given to us, the
term loans have been applied for the purpose for which the loans were
obtained.
(xvii) According to the information and explanations given to us, and
on an overall examination of Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company has created security in respect of debentures issued.
(xx) The Company has not raised any money during the year by public
issue.
(xxi) As per the information and explanations given to us, no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For K. S. AIYAR & CO.
Chartered Accountants;
FRN:100186W
RAGHUVIR M. AIYAR
Partner
Membership No.38128
Mumbai
DATE: 2nd May, 2011