TO THE MEMBERS OF
MYLAN LABORATORIES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of MYLAN LABORATORIES LIMITED ("theCompany") which comprise the Balance Sheet as at 31st March 2014 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Management is responsible for the preparation of these financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the Accounting Standards notified underthe Companies Act 1956 ("the Act") (which continue to be applicable in respectof Section 133 of the Companies Act 2013 in terms of General Circular 15/2013 dated 13*September 2013 of the Ministry of Corporate Affairs) and in accordance with theaccounting principles generally accepted in India. This responsibility includes thedesign implementation and maintenance of internal control relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor'sudgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal control relevant to the Company's preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances but not for the purpose of expressing an opinion on theeffectiveness of the Company's internal control. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Management as well as evaluating the overall presentation of thefinancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(a) in the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2014
(b) in the case of the Statement of Profit and Loss of the profit of the Company forthe year ended on that date and
(c) in the case of the Cash Flow Statement of the cash flows of the Company for theyear 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 in terms of Section 227(4A) of the Act we give in theAnnexure 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 ourknowledge 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 theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt 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 CashFlow Statement comply with the Accounting Standards notified under the Act (which continueto be applicable in respect of Section 133 of the Companies Act 2013 in terms of GeneralCircular 15/2013 dated 13* September 2013 of the Ministry of Corporate Affairs).
(e) On the basis of the written representations received from the directors as on31" March 2014 taken on record by the Board of Directors none of the directors isdisqualified as on 31sr March 2014 from being appointed as a director in termsof Section 274(l)(g) of the Act.
For DELOITTE HASKINS & SELLS
(Firm's Registration No. 008072S)
(Membership No. 201193)
Place : Hyderabad
Date : 31st October 2014
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
(i) Having regard to the nature of the Company's business / activities / results duringthe year clauses (vi) (xii) (xiii) (xiv) and (xx) of the paragraph 4 of the Order arenot applicable to the Company.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the Management during the year. Accordingto the information and explanation given to us no material discrepancies were noticed onsuch verification.
(c) The fixed assets disposed off during the year in our opinion do not constitute asubstantial part of the fixed assets of the Company and such disposal has in our opinionnot affected the going concern status of the Company.
(iii) In respect of its inventories:
(a) As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) In our opinion and according to the information and explanations given to us theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.
(iv) The Company has neither granted nor taken any loans secured or unsecured to/fromcompanies firms or other parties covered in the Register maintained under Section 301 ofthe Companies Act 1956.
(v) In our opinion and according to the information and explanations given to us thereis an adequate internal control system commensurate with the size of the Company and thenature of its business for the purchase of inventory and fixed assets and for the sale ofgoods and services and during the course of our audit we have not observed any majorweaknesses in such internal control system.
(vi) To the best of our knowledge and belief and according to the information andexplanations given to us there are no contracts or arrangements that needed to be enteredin the Register maintained in pursuance of Section 301 of the Companies Act 1956.
(vii) In our opinion the Company has an adequate internal audit system commensuratewith the size and the nature of its business.
(viii) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Accounting Records) Rules 2011 and the Cost Accounting Records(Pharmaceutical Industry) Rules 2011 prescribed by the Central Government under Section209(1) (d) of the Companies Act 1956 and are of the opinion that prima facie theprescribed cost records have been made and maintained. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.
(ix) According to the information and explanations given to us in respect of statutorydues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Investor Education and Protection Fund Employees' StateInsurance Income-tax Sales Tax Wealth Tax Service Tax Customs Duty Excise Duty Cessand other material statutory dues applicable to it with the appropriate authorities duringthe year.
(b) There were no undisputed amounts payable in respect of Provident Fund InvestorEducation and Protection Fund Employees' State Insurance Income-tax Sales Tax WealthTax Service Tax Customs Duty Excise Duty Cess and other material statutory dues inarrears as at 31st March 2014 for a period of more than six months from thedate they became payable except for the following:
|Name of Statute ||Nature of Dues ||Amount involved ( Rs. million) ||Period to which the Amount Relates |
|Customs Act 1962 ||CustomsDuty ||0.68 ||2006-09 |
(c) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Excise Dutyand Cess which have not been deposited as on 31st March 2014 on account ofdisputes are given below:
|Name of Statute ||Nature of dues ||Forum where dispute is pending ||Period to which the amount relates ||Amount involved ( Rs. in Million) |
| || ||Income tax Appellate Tribunal ||2000-012005-06 to 2008-09 ||1251.03 |
|Income-tax Act 1961 ||Income tax ||High Court of Andhra Pradesh ||2004-05 ||569.58 |
| || ||Commissioner of Income Tax (Appeals) ||2009-10 ||173.441 |
|Andhra Pradesh VAT Act 2005 / CST Act 1956 ||Sales tax/ Value Added tax ||Sales Tax Appellate Tribunal High Court of Andhra Pradesh ||2006-09 2005-06 ||14.23206.07 |
| || ||High Court of Andhra Pradesh ||2003-04 ||18.78 |
|Finance Act 1994 ||Service tax ||Customs Excise and Service Tax Appellate Tribunal (CESTAT) ||2004-09 ||1105.76 |
| || ||High Court of Andhra Pradesh 4 ||1995-96 and 1999-00 ||47.13 |
|Customs Act 1962 ||Customs duty ||CESTAT ||1998-99 2000-01 and 2008-09 ||19.20 |
|Central Excise Act 1944 ||Excise duty' ||High Court of Andhra Pradesh ||2005- 06 2009-10 ||7.94 |
| || ||ESTAT ||2006-12 ||612.49 |
(x) The Company does not have accumulated losses at the end of the financial year andthe Company has not incurred cash losses during the financial year covered by our auditand in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to ushaving regard to the rollover of the working capital loans from the banks the Company hasnot defaulted in the repayment of dues to banks and debenture holders.
(xii) According to the information and explanations given to us the Company has notgiven guarantees for loans taken by others from banks and financial institutions.
(xiii) In our opinion and according to the information and explanations given to usthe term loans have been applied by the Company during the year for the purposes for whichthey were obtained other than temporary deployment pending application.
(xiv) In our opinion and according to the information and explanations given to us andon an overall examination of the Balance Sheet of the Company we report that funds raisedon short-term basis have prima facie not been used during the year for long-terminvestment.
(xv) During the year the Company has not made any preferential allotment of shares tothe parties and companies covered in the Register maintained under Section 301 of theCompanies Act 1956.
(xvi) During the period covered by our audit report the Company had issued unsecureddebentures.
(xvii) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company has been noticedor reported during the year.
For DELOITTE HAS KINS & SELLS
(Firm's Registration No. 008072S)
(Membership No. 201193)
Place : Hyderabad
Date : 31st October 2014