Tonira Pharma Ltd merged Auditor Reports

TONIRA PHARMA LIMITED. ANNUAL REPORT 2010-2011 AUDITORS REPORT To, The Members of Tonira Pharma Limited. We have audited the attached Balance Sheet of M/s. TONIRA PHARMA LIMITED, as at 31st March, 2011, the annexed Profit and Loss Account for the year ended on that date and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 1. We conducted our audit in accordance with 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 from any material misstatements. 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 principle 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. 2. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 & 5 of the said order. 3. Further to our comments in the Annexure referred to above, we report that: A. We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the purpose of our audit; B. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of the books of the Company; 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 of the Company; 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 sub-section (3C) of Section 211 of the Companies Act, 1956. E. Based on the representations made by the Directors as on 31st March, 2011 and taken on record by the Board of Directors of the Company and the information and explanations given to us, none of the Directors is, as at 31st March, 2011, prima facie disqualified from being appointed as director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; Subject to the above, in our opinion and to the best of our information and according to explanations given to us, the said financial statements, read together with the notes thereon give the information required by the Companies Act, 1956 in the manner so required and present 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 Loss for the year ended on that date; and iii) in the case of Cash Flow Statements, of the cash flows for the year ended on that date. For MITESH P. VORA & COMPANY (Firm Regn. No. 116071W) CHARTERED ACCOUNTANTS PLACE: MUMBAI DATE : 20th MAY 2011 C.A. MITESH P. VORA PARTNER (M. No. 37530) ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2011 OF M/S TONIRA PHARMA LTD. 1. (a) The company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets. However updation w.r.t. the additions to the fixed assets showing full details is required. (b) As explained to us and on the basis of representations received from the management of the Company, fixed assets, according to the practice of the Company, are physically verified by the management at reasonable intervals, which in our opinion, is reasonable, looking to the size of the Company and the nature of its business. According to the information and explanations given to us, discrepancies noticed on such verification were not material compared to the available records. (c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern. 2. (a) As explained to us, inventories have been physically verified during the year by the management. (b) The procedures explained to us, which are followed by the management for physical verification of inventories, are, in our opinion, 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 of the Company, we are of the opinion that, the Company is maintaining proper records of its inventory. Discrepancies noticed on verification between physical stocks and book records were not material. 3. According to the information and explanations given to us, the Company has taken unsecured loans from one party covered under register maintained u/s 301 of the Companies Act, 1956. However the terms at which the loans have been taken are not prejudicial to the interest of the company. 4. During the year company has not granted loans & advances, unsecured loans, to the parties covered under register maintained u/s 301 of the Companies Act, 1956. 5. On the basis of appropriate audit procedure followed by us and in terms of the information and explanations given to us, we are of the opinion that there are generally adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods. During the course of our previous assessment, no major weakness in internal control has come to our notice. 6. On the basis of audit procedures performed by us, and according to the information, explanations and representations given to us, we are of the opinion that there are such transaction in which directors were interested as contemplated under Section 297and sub-section (6) of Section 299 of the Companies Act, 1956 and required to be entered in the register maintained under Section 301 of the said Act, and same are reasonable having regard to the prevailing market prices at the relevant time. 7. In our opinion and according to the information and explanation given to us, the Company has not invited any deposits from the public for which provision of Section 58-A of the Companies Act, 1956 and its Rules are applicable. 8. The Company has Internal audit system, in our opinion it commensurates with its size and nature of its business. 9. As explained through management representation made, all records regarding material, labour etc. as required under Section 209(1)(d) of the Companies Act, 1956 have been maintained by the company, however we have not examined the same during the course of our audit. 10. (a) According to the records of the Company, it has been regular in depositing the undisputed Statutory dues including provident fund, Employees State Insurance, Income tax, Sales tax, Excise Duty and other Statutory Dues with the appropriate authorities. (b) As explained to us, and on the basis of our examination of the records, there are no disputed statutory dues pending before any authorities; except the following: Income Tax Liabilities: Asst. Year Demand Remarks (Rs. in lacs) 2003-04 141.81 The matter is pending for disposal before the Honble CIT (Appeal) III, Baroda. 2004-05 32.25 The matter is pending for disposal before the Honble CIT (Appeal) III, Baroda. 2005-06 122.69 The matter is pending for disposal before the Honble CIT (Appeal) III, Baroda. 2007-08 69.38 The matter is pending for disposal before the Honble CIT (Appeal) III, Baroda. Total 366.13 Less: (67.40) The amount represents the amount deposited under protest and refunds adjusted by I.T. Dept. against above demands raised. Net 298.73 Excise Liability: Nature of Dues Amount Forum where dispute (Rs. In Lacs) is pending 1. Excise Duty on 23.07 Commissioner of Central WIP on de-bonding Excise & Custom, Surat 2. Interest and 415.28 High Court, Gujarat. penalty on past anti-dumping duty and excise duty The Department of Central Excise and Customs, Surat (the Department) has raised demand of Rs. 415.28 lacs against the Company towards interest and penalty on past anti-dumping duty and excise liabilities. The said amount of interest and penalty demanded is not payable in accordance with the order passed by the Honble Central Excise and Service Tax Appellate Tribunal (CESTAT). The Department had moved the Honble Gujarat High Court against the said CESTAT order and as per the order of the said Honble High Court, the Company has furnished a Bank Guarantee of Rs.200 lacs to the Department. 11. The Company has neither cash loss nor accumulated losses at the end of the year under report. 12. On the basis of the records examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. 13. As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of share, debentures or any other securities. 14. 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 any bank or financial institutions. However, the company has given a counter guarantee of Rs. 3000.00 lacs to IPCA LABORATORIES LTD. for guarantee given by them for credit facilities availed by the company from Kotak Mahindra Bank. 15. In our opinion, the term loans availed by the company during the year were prima facie, applied for the purpose for which they were obtained, other than temporary deployment pending application. 16. On the overall examination of the financial statements of the company, funds raised on short-term basis have, prima facie not been used during the year for long-term investment. 17. The provisions of Paragraph 4 (xviii) of Companies (Auditors Report) Order, 2003 are not applicable to the Company, since the Company is a listed Company. 18. The Company has not issued any debentures during the year. Accordingly, the Clause 4 (xix) of Companies (Auditors Report) Order, 2003 are not applicable to the Company. 19. The Company has not raised any money by public issue during the year. 20. According to the information and explanations given to us, and to the best of our knowledge and belief, no fraud on or by the Company, has been noticed by the Company during the year. Looking to the nature of activities being carried on, at present, by the Company and also considering the nature of the matters referred to in the various clauses of the Companies (Auditors Report) Order, 2003, Clauses (iii)(b), (iii)(c), (iii) (d), xiii and xiv of paragraph 4 of the aforesaid Order, are in our opinion, not applicable to the Company. For MITESH P. VORA & COMPANY (Firm Regn. No. 116071W) CHARTERED ACCOUNTANTS C.A. MITESH P. VORA PLACE: MUMBAI PARTNER DATE : 20th MAY 2011 (M. No. 37530)