Solvay Pharma India Ltd merged Auditor Reports

SOLVAY PHARMA INDIA LIMITED ANNUAL REPORT 2010 AUDITORS REPORT TO THE MEMBERS OF SOLVAY PHARMA INDIA LIMITED 1. We have audited the attached Balance Sheet of SOLVAY PHARMA INDIA LIMITED (the Company) as at December 31, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the 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 misstatements, An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the 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 (CARO) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph 3 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 it appears from our examination of those books; (iii) 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; (iv) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956; (v) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Balance Sheet, of the state of affairs of the Company as at December 31, 2010; (b) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and (c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. 5. On the basis of written representations received from the Directors as on December 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on December 31, 2010 from being appointed as a Director in terms of Section 274(1)(g) of the Companies Act, 1956. For Deloitte Haskins & Sells Chartered Accountants (Registration No. 117366W) Rajesh K. Hiranandani Partner (Membership No. 36920) Place: Mumbai Date : February 10, 2011 ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date) (i) In respect of its fixed assets: (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. (b) The assets have been physically verified by the Management once during the year, which in our opinion is reasonable, As explained to us, no material discrepancies were noticed on such verification. (c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company. (ii) In respect of its inventories: (a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals. (b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business. (c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification, (iii) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. (iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods; there is no sale of services during the year. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system. (v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the Pest of our knowledge and belief and according to the information and explanations given to us: (a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered. (b) The transactions in pursuance of such contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party, because of the unique and specialised nature and in the absence of any comparable alternative quotations produced to us, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time. (vi) The Company has not accepted any deposits from the public to which the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Rules framed thereunder would apply. (vii) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business. (viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956 in respect of pharmaceutical formulations, and are of the opinion that prima-facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of such records with a view to determining whether they are accurate and complete. (ix) According to the information and explanations given to us in respect of statutory dues: (a) The Company has been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities though there have been delays in few cases in respect of Service Tax, (b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at December 31, 2010 for a period of more than six months from the date they became payable. (c) Details of dues not deposited as on December 31, 2010 on account of disputes, which relate to Sales Tax and Income-tax are given below: Statute Nature of Dues Forum where Period to Amount Dispute is pending which the involved amount relates (Rs. in thousands) West Bengal Sales Tax and Deputy 2005 452 Sales Tax penalty Commissioner of Act 1994 Commercial Taxes, West Bengal West Bengal Sales Tax and Commercial Taxes, 2006 1,536 Sales Tax penalty Appellate and Act 1994 Revisional Board West Bengal West Bengal Sales Tax and Deputy 2007 12,172 Sales Tax penalty Commissioner of Act 1994 Commercial Taxes, West Bengal Income Tax Income-tax and Income Tax A.Y. 2006-07 157 Act, 1961 Interest Appellate Tribunal, Mumbai (x) The Company does not have any accumulated losses at the end of the financial year. (xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks The Company does not have any dues to financial institutions and has not issued any debentures. (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 nidhi/mutual benefit fund/society. (xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. (xv) According to the information and explanations give to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. (xvi) The Company has not obtained any term loans. (xvii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year 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 not issued any debentures. (xx) The Company has not raised any money by public issues during the year. (xxi) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year. For Deloitte Haskins & Sells Chartered Accountants (Registration No. 117366W) Rajesh K. Hiranandani Partner (Membership No. 36920) Place: Mumbai Date : February 10, 2011