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TO THE MEMBERS OF CIPLA LIMITED
1. We have audited the attached Balance Sheet of Cipla Limited (the Company) as at 31st
March 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the
year ended on that date annexed thereto. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted
in India. These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by the management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditors ’ Report) Order, 2003, (hereinafter
referred to as "the Order"), as amended, issued by the Central Government of
India in terms of section 227(4A) of the Companies Act, 1956 (the Act) and on the basis of
such checks of the books and records of the Company as we considered appropriate and
according to the information and explanations given to us, we enclose in the Annexure,
a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we
report that:
a. We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purposes of our audit;
b. In our opinion, proper books of account as required by law have been kept by the
Company, so far as appears from our examination of those books;
c. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt
with by this report are in agreement with the books of account;
d. In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report comply with the Accounting Standards referred to in
section 211(3C) of the Companies Act,1956;
e. On the basis of the written representations received from the Directors of the
Company as on 31st March 2011 and taken on record by the Board of Directors of
the Company, we report that none of the Directors is disqualified as on 31st
March 2011, from being appointed as a Director in terms of section 274(1)(g) of the
Companies Act, 1956;
f. In our opinion and to the best of our information and according to the explanations
given to us, the said financial statements, together with the notes thereto, give the
information required by the Companies Act, 1956, in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India:
i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st
March 2011;
ii. In the case of the Profit and Loss Account, of the Profit for the year ended on
that date; and iii. In the case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
| For V. Sankar Aiyar & Co., |
For R.G.N. Price & Co., |
| Chartered Accountants |
Chartered Accountants |
| Firm Reg. No. 109208W |
Firm Reg. No. 002785S |
| V. Mohan |
R. Rangarajan |
| Partner |
Partner |
| Membership No.17748 |
Membership No. 41883 |
| Mumbai, 29th June 2011 |
Mumbai, 29th June 2011 |
ANNEXURE TO THE AUDITORS ’ REPORT
(Referred to in paragraph 3 of our report of even date to the Members of Cipla Limited
(the Company) for the year ended 31st March 2011)
1. a. The Company has generally maintained proper records showing full particulars
including quantitative details and situation of fixed assets, other than the situation of
furniture and fixtures and office equipment where the situation recorded is the location
of the Company’s different establishments.
b. The Company has a policy of physically verifying its fixed assets periodically,
which in our opinion, is reasonable having regard to the size of the Company and the
nature of its business. During the year, some of the fixed assets have been physically
verified by the management and discrepancies noticed during the physical verification and
the assets scrapped during the year has been properly dealt with in the books of account.
c. The fixed assets that have been sold/disposed of during the year do not constitute a
substantial part of the total fixed assets of the Company. Hence, the going concern
concept has not been affected.
2. a. The inventory, except goods in transit, has been physically verified by the
Management at reasonable intervals during the year. The verification was done on the basis
of the perpetual inventory system operated by the Company. In case of materials lying with
third parties, certificates confirming such inventory have been obtained by the Company
from most of the third parties.
b. In our opinion and on the basis of the information and explanations given to us, the
procedures for physical verification of inventory followed by the Management are
reasonable and adequate in relation to the size of the Company and the nature of its
business.
c. On the basis of our examination of the inventory records, in our opinion, the
Company has maintained proper records of inventory. The discrepancies noticed on physical
verification of inventory as compared to the book records were not material and have been
properly dealt with in the books of account.
3. a. As informed to us, the Company has not granted any loans, secured or unsecured to
companies, firms or other parties listed in the Register maintained under section 301 of
the Companies Act, 1956. The loans outstanding that were repayable on demand have been
recovered along with interest; as applicable.
b. The Company has not taken any loans from parties covered in the Register maintained
under section 301 of the Companies Act, 1956. Consequently, the requirements of clause
(iii-f) and (iii-g) of paragraph 4 of the Order are not applicable to the Company.
4. In our opinion and according to the information and explanations given to us, there
are generally adequate internal control systems commensurate with the size of the Company
and the nature of its business for purchase of inventory and fixed assets and for the sale
of goods and services. Further, on the basis of our examination of the books and records
of the Company, and according to the information and explanations given to us during the
course of audit, no major weakness has been noticed in these internal control systems.
5. a. In our opinion and according to the information and explanations given to us, 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 contracts or agreements referred to in 5.a. above and
exceeding the value of rupees five lakhs in respect of any party during the year have been
made at prices which are reasonable having regard to the prevailing market prices at the
relevant time.
6. In our opinion and according to the information and explanations given to us, the
Company has not accepted any deposit from the public within the meaning of sections 58A,
58AA or any other relevant provisions of Companies Act, 1956 and the Companies (Acceptance
of Deposits) Rules, 1975.
7. In our opinion, the Company has an internal audit system commensurate with its size
and the nature of its business.
8. We have broadly reviewed the books of account maintained by the Company Pursuant to
the Rules made by the Central Government for the maintenance of cost records under section
209(1)(d) of the Companies Act, 1956 in respect of its products and are of the opinion
that, prima facie, the prescribed accounts and records have been made and
maintained. However, we have not carried out a detailed examination of the accounts and
records with a view to determine whether these are accurate or complete.
9. a. According to the information and explanations provided to us and the records of
the Company examined by us, in our opinion, the Company was regular in depositing
undisputed statutory dues including Provident Fund, Investor Education and Protection
Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with
the appropriate authorities. There were no undisputed arrears that were outstanding as at
31st March 2011 for a period of more than six months from the date they became
payable.
b. According to the information and explanations given to us and based on the records
of the Company examined by us, as on 31st March 2011, there were no dues in
respect of Wealth Tax, Service Tax, Customs Duty and Cess that have not been deposited
with the appropriate authorities on account of dispute.
The particulars of dues towards Excise Duty, Sales Tax and Income Tax that have not
been deposited on account of dispute as at 31st March 2011 and the forum where
these disputes are pending are as follows:
| Name of the statute |
Nature of dues |
Financial years to which the matter pertains |
Forum where the dispute is pending |
Amount Rs in crore |
| The Central Excise Act, 1944 |
Excise Duty |
2002 - 03 to 2009 - 10 |
CESTAT/Commissioner (Appeals) |
49.23 |
| State Sales Tax Acts |
Sales Tax |
2001 - 02 to 2008 - 09 |
State Sales Tax Tribunal |
4.02 |
| Income Tax Act, 1961 |
Income Tax |
2008 - 09 |
Commissioner of Income Tax (Appeals) |
73.99 |
10. The Company does not have accumulated losses at the end of the financial year and
has not incurred cash losses in the financial year under report or in the immediately
preceding financial year.
11. According to the information and explanations given to us and based on our audit
procedures, the Company has not defaulted in repayment of dues to any financial
institutions or banks.
12. 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.
13. In our opinion, the Company is not a chit fund or a nidhi mutual benefit
fund/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable
to the Company.
14. In our opinion and according to the information and explanations given to us, the
Company is not a dealer or trader in shares, securities, debentures or other investments.
Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the
Company.
15. According to the information and explanations given to us and the representations
made by the management, the Company has not given any guarantee for loans taken by others
from banks or financial institutions.
16. The Company has not obtained any term loans. Accordingly, the provisions of clause
4(xvi) of the Order are not applicable to the Company.
17. According to the information and explanations given to us and on an overall
examination of the Balance Sheet of the Company, we report that no funds raised on short
term basis have been used for long term investment.
18. The Company has not made preferential allotment of shares during the year to
parties and companies covered in the Register maintained under section 301 of the
Companies Act, 1956.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money through public issue of securities during the
year.
21. During the course of our examination of the books of account and records of the
Company, and according to the information and explanations given to us, no fraud on or by
the Company has been noticed or reported by the Company during the year.
| For V. Sankar Aiyar & Co., |
For R.G.N. Price & Co., |
| Chartered Accountants |
Chartered Accountants |
| Firm Reg. No. 109208W |
Firm Reg. No. 002785S |
| V. Mohan |
R. Rangarajan |
| Partner |
Partner |
| Membership No. 17748 |
Membership No. 41883 |
| Mumbai, 29th June 2011 |
Mumbai, 29th June 2011 |