WOCKHARDT LIMITED
ANNUAL REPORT 2011-2012
AUDITORS` REPORT
To
The Members of
Wockhardt Limited
1. We have audited the attached Balance Sheet of Wockhardt Limited (`the
Company`) as at March 31, 2012 and also the Statement of Profit and Loss
and the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the Company`s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor`s Report) Order, 2003, (as
amended), issued by the Central Government of India in terms of sub-section
(4A) of Section 227 of `The Companies Act, 1956` of India (the `Act`) and
on the basis of such checks of the books and records of the Company as we
considered appropriate and according to the information and explanations
given to us, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report
that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) In our opinion, the Company has kept proper books of account as
required by law, so far as it appears from our examination of those books;
(iii) The balance sheet, statement of Profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the balance sheet, statement of Profit and loss and
cash flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Companies
Act, 1956;
(v) On the basis of the written representations received from the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on March
31, 2012 from being appointed as a director in terms of clause (g) of sub-
section (1) of Section 274 of the Companies Act, 1956.
5. In our opinion, and to the best of our information and according to the
explanations given to us, the said accounts give the information required
by the Act in the manner so required and also give a true and fair view in
conformity with the accounting principles generally accepted in India;
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(b) in the case of the Statement of Profit and Loss, of the Profit for the
year ended on that date; and
(c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
For Haribhakti & Co.
Chartered Accountants
FRN No.103523W
Shailesh Haribhakti
Partner
Membership No. 30823
Place : Mumbai
Date : May 22, 2012
ANNEXURE TO AUDITORS` REPORT
Referred to in paragraph 3 of the Auditors` Report of even date to the
members of WOCKHARDT LIMITED on the financial statements for the year ended
March 31, 2012.
(i) (a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of its fixed assets.
(b) The Company has a program for phased physical verification of all its
fixed assets over a period of three years, which, in our opinion, is
reasonable having regard to the size of the Company and nature of its
assets. Accordingly, certain fixed assets have been physically verified by
the management during the year and discrepancies noticed on such
verification, which were not material, have been properly dealt with in the
books of account.
(c) In our opinion and according to the information and explanations given
to us, a substantial part of fixed assets has not been disposed off by the
Company during the year.
(ii) (a) The inventory (excluding stocks with third parties) has been
physically verified by the management during the year. In respect of
inventory lying with third parties, these have substantially been confirmed
by them. In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and as informed,
no material discrepancies were noticed on such physical verification
carried out.
(iii) (a) As informed, the Company has not granted any loan, secured or
unsecured to companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Accordingly, the
provisions stated in paragraph 4 (iii)(b), (c) and (d) of the Order are not
applicable.
(b) As informed, the Company has not taken any loan, secured or unsecured
from companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Accordingly, the provisions
stated in paragraph 4 (iii)(f) and (g) of the Order are not applicable.
(iv) In our opinion and according to the information and explanations given
to us, there exists an adequate internal control system commensurate with
the size of the Company and the nature of its business with regard to
purchase of inventory, fixed assets and with regard to the sale of goods
and services. During the course of our audit, we have not observed any
continuing failure to correct any major weakness in the aforesaid internal
control system of the Company.
(v) (a) According to the information and explanations given to us, we are
of the opinion that the particulars of contracts or arrangements referred
to in Section 301 of the Companies Act, 1956 that need to be entered into
the register maintained under Section 301 have been so entered.
(b) In our opinion and according to the information and explanations given
to us, the transactions made in pursuance of such contracts or arrangements
exceeding value of Rupees five lakhs have been entered during the year at
prices which are reasonable having regard to the prevailing market prices
at the relevant time.
(vi) In our opinion and according to the information and explanations given
to us, the Company has not accepted any deposits from the public within the
meaning of Sections 58A and 58AA of the Act and the rules framed there
under.
(vii) In our opinion, the Company has an internal audit system commensurate
with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under Clause (d) of sub-section (1) of Section 209 of the Act
and we are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained.
(ix)(a) According to the information and explanations given to us and on
the basis of the records of the Company examined by us, in our opinion, the
Company is generally regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education and
protection fund, employees` state insurance, income-tax, sales-tax, wealth-
tax, service tax, customs duty, excise duty, cess and other material
statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor education
and protection fund, employees` state insurance, income-tax, wealth tax,
service tax, sales-tax, customs duty, excise duty, cess and other
undisputed statutory dues were outstanding, at the end of the year, for
more than six months from the date they became payable.
(c) According to the records of the Company and as informed to us, there
are no dues outstanding of income tax, sales-tax, wealth-tax, service tax,
customs duty, excise duty and cess that have not been deposited on account
of any dispute, except as follows:
A B C D
Central Excise
Act, 1944:
Reversal of 0.04 April 1999 to August 1999 Commissioner Appeal
CENVAT credit
Penalty for 0.37 February 2001 to Feb., 2003 CESTAT
classifi cation
Differential 2.19 November 1996 to April 1998 Commissioner
Duty
Education Cess 0.03 July 2004 to August 2004 Deputy Commissioner
Penalty for 0.35 December 2001 to Jan., 2004 Additional
Valuation Commissioner
Demand & Penalty 2.20 September 1991 to July 1993 CESTAT
for
classification
Income Tax
Act, 1961:
Demand under 4.05 FY 2003-04 High Court
Section 143(3)
Demand under 12.80 FY 2006-07 Commissioner of
Section 143(3) Income Tax (Appeals)
Demand under 0.46 FY 2007-08 Commissioner of
Section 143(3) Income Tax (Appeals)
TDS Assessment 3.79 April 2007 to March 2011 Commissioner of
order u/s Income
201/201(IA) Tax (Appeals)
A = Name of the statute
B = Nature of dues Amount (Rs.in crore)
C = Period to which the amount relates
D = Forum where the dispute is pending
Note: Out of the above, amount paid under protest by the Company for Income
tax is Rs. 16.13 crore.
(x) In our opinion, the accumulated losses of the Company are not more than
fifty percent of its net worth. The Company has not incurred any cash
losses during the current financial year but had incurred cash losses
during the preceding financial year.
(xi) (a) In our opinion and according to the information and explanations
given to us, considering the loan liabilities being restructured under the
aegis of Corporate Debt Restructuring (CDR) Scheme, there has been no
default in repayment of principal and interest to CDR lenders as per the
terms of CDR Scheme.
(b) As explained in Note 48 to the financial statements, with respect to
the amount due towards Zero Coupon Foreign Currency Convertible Bonds which
were due for repayment in October 2009, the Company has filed a consent
decree in the Hon`ble High Court of Bombay and has agreed to pay the FCCB
holders, the amounts outstanding alongwith interest on reducing balance by
August, 2012. The Company has been depositing with the High Court, the
installments as per the dates specified by the Hon`ble High Court.
(xii) According to the information and explanations given to us and based
on the documents and records produced to us, the Company has not granted
loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of Clause 4(xiii) of the
Companies (Auditor`s Report) Order, 2003 (as amended) are not applicable to
the Company.
(xiv) In our opinion, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the provisions
of Clause 4(xiv) of the Companies (Auditor`s Report) Order, 2003 (as
amended) are not applicable to the Company.
(xv) In our opinion and as explained in Note 47(c) to the financial
statements, the terms and conditions of the guarantees given by the
Company, for loans taken by its subsidiaries from banks or financial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanation given
to us, the term loans have been applied for the purpose for which the loans
were raised.
(xvii) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that
funds raised on short-term basis to the tune of Rs. 411.73 crore have been
used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties and
companies covered in the register maintained under Section 301 of the Act.
(xix) According to the information and explanations given to us, the
Company has created security in respect of debentures outstanding during
the year.
(xx) The Company has not raised any money by public issue during the year
covered under our audit.
(xxi) During the course of our examination of the books and records of the
Company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations given
to us, we have neither come across any instance of fraud on or by the
Company, noticed or reported during the year, nor have we been informed of
such case by the management.
For Haribhakti & Co.
Chartered Accountants
FRN No.103523W
Shailesh Haribhakti
Partner
Membership No. 30823
Place : Mumbai
Date : May 22, 2012 |