Good Health Can’t Wait.

Good Health Can’t Wait.
Dr. Reddy’s Laboratories Limited
ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT ON THE STANDALONE FINANCIAL STATEMENTS
The Annexure referred to in the independent auditors’ report of even date to the members of Dr. Reddy’s Laboratories Limited (“the Company”) on the
standalone financial statements for the year ended 31 March 2015, we report that:
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all the fixed assets are verified in a phased manner over
a period of 3 years. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature
of its assets. No material discrepancies were noticed on such verification.
ii.
(a) Inventories, except goods-in-transit and stocks lying with third parties have been physically verified by the management during the year. In our
opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been
obtained.
(b) In our opinion, the procedures of physical verification of inventories 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. The discrepancies noticed on verification between the physical stocks and the book
records were not material.
iii. (a) The Company has granted unsecured loans to seven subsidiary companies covered in the register maintained under Section 189 of the
Companies Act, 2013 (“the Act”).
(b) In the case of the loans granted to the companies listed in the register maintained under Section 189 of the Act, the borrowers have been regular
in repaying the principal amounts as stipulated and in the payment of interest, wherever applicable.
(c) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to any of the companies, firms and other parties
covered in the register maintained under section 189 of the Act.
iv. In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of
inventories are for the Company’s specialized requirements and similarly certain goods sold are for the specialized requirements of the buyers and
suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the
size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods and
services. We have not observed any major weakness in the internal control system during the course of the audit.
v. The Company has not accepted any deposits from the public.
vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for the
maintenance of cost records under Section 148(1) of the Act, and are of the opinion that prima facie the prescribed accounts and records have been
made and maintained. However, we have not made a detailed examination of the records.
vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/
accrued in the books of account in respect of undisputed statutory dues including provident fund, employees’ state insurance, income tax, sales
tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have been generally regularly
deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state
insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues
were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the dues set out in Appendix - 1 in respect of income tax, sales tax, service tax, duty
of customs, duty of excise and value added tax have not been deposited with the appropriate authorities on account of disputes. As explained to
us, the Company did not have any disputed dues on account of wealth tax and cess.
(c) According to the information and explanations given to us, the amounts which were required to be transferred to the investor education and
protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to
such fund within time.
viii. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the
immediately preceding financial year.
ix. In our opinion and according to the information and explanations given to us, the Company, has not defaulted in repayment of dues to its bankers or
to any financial institutions, or to debenture holders during the year.
x. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees
for loans taken by others from banks or financial institutions are not prejudicial to the interests of the Company.
112