Mar 31, 2023
Ipca Laboratories Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying Standalone Financial Statements of Ipca Laboratories Limited ("the Company"), which comprise the Balance Sheet as at March 31,2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, and its profit (including other comprehensive income), the changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report.
We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules framed thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone Financial Statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current year. These matters were addressed in the context of our audit of the Standalone financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr No |
Key Audit Matter |
Auditors'' Response |
1. |
Inventory Valuation The Company manufactures and sells pharmaceutical products which carry shelf life. As a result, significant level of judgement is involved in estimating inventory valuation. Judgement is required to assess the appropriate net realisable value for short dated raw material and pharmaceutical products. Such judgements include management expectations for future sales and inventory liquidation plans. |
Our procedures included, amongst others: ⢠We attended stock counts to identify whether any inventory was obsolete; ⢠We assessed the basis for the inventory valuation, the consistency in policy and the rationale in its application; ⢠We tested the accuracy of the ageing of inventories based on system generated reports; ⢠We reviewed the testing done for net realizable value of inventories and future plans for consumptions; ⢠We tested the arithmetical accuracy of valuation files; and ⢠We reviewed product-wise historical data relating to sales return etc. and also its impact on valuation. ⢠We have assessed the adequacy of disclosure in the Standalone Financial Statements. |
Sr No |
Key Audit Matter |
Auditors'' Response |
2. |
Assessment of Accounting pursuant to Scheme approval by NCLT for merger of Ramdev Chemical Private Limited (Ramdev) and Tonira Exports Limited (Tonira) with Ipca Laboratories Limited (Ipca) Pursuant to the Scheme of Merger (''the Scheme'') of Ramdev, Tonira and Ipca under the provisions of Sections 230 to 232 of the Companies Act, 2013 which has been approved by the National Company Law Tribunal vide their order delivered on April 27, 2022, which has been filed with the Registrar of Companies on May 23, 2023, to make the Scheme effective. The Appointed date of the Scheme is April 1,2022. |
Our procedures included, amongst others: ⢠We obtained and read the documents filed by the Company with the Registrar of Companies, including the NCLT order with respect to the merger of Ramdev and Tonira with the Company; ⢠Tested the underlying workings prepared by management for merger of Ramdev and Tonira including the workings prepared for restatement of comparative figures for previous year as required by Appendix C to Ind AS 103; ⢠Tested the underlying workings prepared by management for transfer of assets and liabilities at its carrying values pertaining to business as per the Scheme; ⢠Assessed accounting in accordance with Scheme and as per applicable accounting standards which includes the following ; ⢠Since the Business Combination is of entities under common control in accordance with the Appendix C of Ind AS 103, the financial information in the financial statements in respect of prior periods should be restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. ⢠Accordingly, the Company has accounted for the Scheme in its books of accounts with effect from April 1,2021 as required by Appendix C of Ind AS 103 "Business Combination". ⢠Assessed the disclosures in the standalone Ind AS financial statements for compliance with disclosure requirements. |
3. |
Impairment of Property, plant & equipment There is a risk of impairment of the Company''s Property, plant and equipment (PPE) on account of inherent nature of the PPE and the business environment in which the Company operates. As on March 31, 2023 the carrying amount of PPE & CWIP was '' 2,549.94 crores which represent 30.19 % of total assets. The Management determines at the end of each reporting period the existence of any objective evidence that the Company''s PPE may be impaired. If there are indicators of impairment of class of assets, the deficit between the recoverable amount of the PPE and its carrying amount would be recognised as impairment loss in profit or loss. The process of identifying indicators of impairment and determining the recoverable amount of the PPE by the Management requires significant judgement and estimation. The determination of the recoverable amounts inter alia requires estimates of forecasted revenues, growth rates, profit margins, tax rates and discount rates. |
Our procedures included, amongst others: ⢠We assessed the determination of the recoverable amount of the PPE based on our understanding of the nature of the Company''s business and the economic environment surrounding its operations. ⢠We reviewed the Company''s historical performances and held discussions with the Management to understand their assessment of the Company''s future performance. ⢠This included obtaining an understanding of management''s planned strategies around business expansion and revenue growth strategies. ⢠We also reviewed performance of individual units and carried out analytical review of relevant data. ⢠We assessed management''s estimates applied in the value-in-use model and compared them against historical performance and tested the arithmetical accuracy. ⢠We discussed with the management the matter relating to the determination of the value in use of the PPE at the various plants. ⢠We evaluated the sensitivity of the outcomes by considering the downside scenarios against changes to the key assumptions. ⢠We also assessed the adequacy of the related disclosures in the notes to the Standalone Financial Statements. |
Sr No |
Key Audit Matter |
Auditors'' Response |
4. |
Assessment of Impairment of Investment made in and Loans given to the subsidiaries company, joint ventures and associates. Management is required to review regularly whether there are any indicators of impairment of such investments / loans by reference to the requirements under Ind AS and perform its impairment assessment by comparing the carrying value of these investments made/ loans given to their recoverable amount to determine whether impairment needs to be recognized. For impairment testing, value in use has to be determined by forecasting and discounting future cash flows of subsidiaries, Joint ventures and associates. Further, the value in use is highly sensitive to changes in critical variable used for forecasting the future cash flows including market projections for revenues and discounting rates. The determination of the recoverable amount from subsidiary company involves management estimates and judgment which may affect the outcome. So, there is an inherent risk in the valuation of investment / recoverability of loans, due to the use of estimates and judgements mentioned above and accordingly, the assessment of impairment of investment/loans in subsidiary company has been determined as a key audit matter. Refer Note 2 B (f) for the accounting policy on Impairment of Investments & in Standalone Financials as at March 31,2023. |
Our Audit Procedures included the following :- ⢠We tested the Design, Implementation and Operating effectiveness of controls over impairment assessment process, including those over the forecasts of future revenue and operating margin, and the selection of the discount rate. ⢠Our substantive testing procedures included evaluation of appropriateness of management assumption whether any indicators of loss allowances and impairment existed by verifying a discounted cash flow model prepared by the Management of the Company. ⢠We have tested the reasonableness of key assumptions, including revenue, profit and cash flow growth rates, terminal value and the selection of discount rates management has applied. ⢠We performed our own independent sensitivity analysis to understand the impact of reasonable changes in management assumptions. ⢠Independent assessment of the future cash flows and assessing the appropriateness of the future cash flows estimated. In making this assessment, we also evaluated the objectivity, independence and competency of specialists involved in the process; ⢠Assessing the assumptions around the key drivers of the revenue projections, future cash flow, discount rates / weighted average cost of capital that were used by the management. ⢠Management evaluation of recoverability of loans and granted to its subsidiaries company, joint ventures and associates. ⢠Test the arithmetical accuracy. |
Information Other than the Standalone Financial Statements and Auditor''s Report thereon
The Company''s Board of Directors is responsible for the Other Information. The other information comprises the information included in the Company''s Annual Report but does not include the Standalone and Consolidated Financial Statements and our Independent Auditors'' Report thereon. We have read the Director''s Report and Management Discussion and Analysis forming part of the Annual Report and found the same to be in order. However, the other contents of the Annual Report are expected to be made available to us after the date of this report.
Our opinion on the Standalone Financial Statements does not cover the Other Information and we do not and will not express any form of assurance or conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the Other Information identified above and, in doing so, consider whether the Other Information is materially inconsistent with the Standalone Financial Statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor''s report, we conclude that there is a material misstatement, we are required to report that fact. We have nothing to report in this matter.
Responsibilities of Management and those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of "the Act" with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the accounting Standards specified under section 133 of the Act and relevant provisions of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system with reference to Standalone Financial Statements in place and the operating effectiveness of such controls.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
4. Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, make it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statement.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current year and are therefore the Key Audit Matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
a. The comparative financial information of the company for the year ended March 31,2022 included in these Ind AS financial statements have been audited by the predecessor auditor M/s. G. M. Kapadia & Co. Chartered Accountants who had audited the financial statements for the relevant periods. The report of the predecessor auditor on the comparative financial information dated May 24, 2022 expressed an unmodified opinion. These financial statements have been restated to give effect to the merger as detailed in Note 12(vi).
b. The figures for the comparative period disclosed in these financial statements are restated for giving effect of merger of Ramdev and Tonira with the Company as disclosed in note no 12(vi) and thus the same are not as per the previous signed financial statements.
Our opinion on the Standalone Financial Statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give in the Annexure "A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
a. As required by Section 143(3) of the Act, we report that: We have sought and obtained all the information and explanations, which to the best of our knowledge 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 the Company so far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d. I n our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on March 31, 2023, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023, from being appointed as a director in terms of Section 164 (2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to Standalone Financial Statements.
g. With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.
h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements -Refer Note 37 to the standalone financial statements,
ii. The Company did not have any long-term contracts including derivative contracts for which there were material foreseeable losses,
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The management has represented that, to the best of their knowledge and belief other than as disclosed in Note No.
4 (6)(k) to the financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign entities ("intermediaries") with the understanding whether recorded in writing or otherwise, that the intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security, or the like on behalf of the Ultimate Beneficiaries.
(b) The management has represented that, to the best of its knowledge and belief no funds have been received by the company from any person(s) or entity(ies) including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries as disclosed in Note No. 4 (6)(l) to the financial statements.
(c) Based on such audit procedures considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (iv(a.)) and (iv(b.)) above contain any material misstatement.
v. In the matter of interim dividend declared and paid during the year, the Company is in compliance with section 123 of the Act.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.
For Natvarlal Vepari & Co.
Chartered Accountants Firm Registration No- 106971W
N Jayendran
Partner
Mumbai, M. No. 040441
Dated: May 29, 2023 UDIN: 23040441BGYGGN7780
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of Ipca Laboratories Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2022 and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Financial Statement in accordance with the Standards on Auditing ("SAs") specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules framed thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters:
Sr. No. |
Key Audit Matters (KAMs) |
How the KAMs were addressed in our audit |
1. |
Inventory Valuation Refer note (C)(g) of the Statement of Significant Accounting Policies. The Company manufactures and sells pharmaceutical products which carry shelf life. As a result, significant level of judgement is involved in estimating inventory valuation. Judgement is required to assess the appropriate net realisable value for short dated raw material and finished products. Such judgments include management expectations for future sales and inventory liquidation plans. |
Our procedures included, amongst others: ⢠We attended stock counts to identify whether any inventory was obsolete; ⢠We assessed the basis for the inventory valuation, the consistency in policy and the rationale in its application; ⢠We tested the accuracy of the ageing of inventories based on system generated reports; ⢠We reviewed material testing reports and future plans for consumptions; ⢠We tested the arithmetical accuracy of valuation files; and ⢠We reviewed product-wise historical data relating to sales return etc. and also its impact on valuation. |
Sr. No. |
Key Audit Matters (KAMs) |
How the KAMs were addressed in our audit |
2. |
Impairment of Property, plant & equipment Refer note (C)(b) of the Statement of Significant Accounting Policies. There is a risk of impairment of the Company''s Property, plant and equipment (PPE) on account of inherent nature of the PPE and the business environment in which the Company operates. As on March 31, 2022 the carrying amount of PPE was '' 2037.05 crores which represent 27.28 % of total assets. The Management determines at the end of each reporting period the existence of any objective evidence that the Company''s PPE may be impaired. If there are indicators of impairment of class of assets, the deficit between the recoverable amount of the PPE and its carrying amount would be recognised as impairment loss in profit or loss. The process of identifying indicators of impairment and determining the recoverable amount of the PPE by the Management requires significant judgement and estimation. The determination of the recoverable amounts inter alia requires estimates of forecasted revenues, growth rates, profit margins, tax rates and discount rates. |
⢠We assessed the determination of the recoverable amount of the PPE based on our understanding of the nature of the Company''s business and the economic environment surrounding its operations. ⢠We reviewed the Company''s historical performances and held discussions with the Management to understand their assessment of the Company''s future performance. This included obtaining an understanding of management''s planned strategies around business expansion and revenue growth strategies. ⢠We also reviewed performance of individual units and carried out analytical review of relevant data. ⢠We assessed management''s estimates applied in the value-in-use model and compared them against historical performance and tested the arithmetical accuracy. ⢠We evaluated the sensitivity of the outcomes by considering the downside scenarios against changes to the key assumptions. ⢠We also assessed the adequacy of the related disclosures in the notes to the Standalone Financial Statements. |
Information Other than the Standalone Financial Statements and Our Report thereon
The Company''s Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in Annual Report, but does not include the Standalone and Consolidated Financial Statements and our auditor''s reports thereon. The Annual Report is expected to be made available to us after the date of this report.
Our opinion on the Standalone Financial Statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information, identified above and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to Those Charged With Governance and take necessary actions as applicable under the relevant laws and regulations.
Management''s and Those Charged with Governance Responsibilities for the Standalone Financial Statements
The Company''s Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of the Standalone Financial Statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity, cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS and relevant provisions of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠I dentify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to Standalone Financial Statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management.
⢠Conclude on the appropriateness of Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the "Annexure A", a statement on the matters specified in the paragraph 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge 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 the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss (Including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;
d) In our opinion, the Standalone Financial Statements comply with the Accounting Standards specified under section 133 of the Act, read with relevant rules issued thereunder and relevant provisions of the Act;
e) On the basis of the written representations received from the directors as on March 31,2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2022 from being appointed as a director in terms of section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to Standalone Financial Statements;
g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act; and
h) With respect to the other matters to be included in the Auditor''s Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements. Refer Note 35 to the Standalone Financial Statements;
ii. The Company has made provision, as required under the applicable law or accounting standards for material foreseeable losses, if any, on the long-term contracts including derivative contracts;
iii. There has been no amounts, which are required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. (a) The Management has represented that, to the best of its knowledge and belief, other than as disclosed in
the note 2(vi)(m) to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the note 2(vi)(n) to the accounts, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that has been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of rule 11(e), as provided under (a) and (b) above, contain any material misstatement.; and
(d) The dividend declared and paid during the year by the Company is in compliance with section 123 of the Act.
Chartered Accountants Firm''s Registration No: 104767W
Partner
Mumbai Membership No: 039569
Dated: May 24, 2022 UDIN: 22039569AJMIIS3020
Mar 31, 2021
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of Ipca Laboratories Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2021 and its profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing ("SAs") specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules framed thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters:
Sr. No |
Key Audit Matters (KAMs) |
How the KAMs were addressed in our audit |
|
1. |
Inventory Valuation |
Our procedures included, amongst others: |
|
Refer note (C)(g) of the Statement of Significant Accounting Policies. |
⢠|
We attended stock counts to identify whether any inventory was obsolete; |
|
The Company manufactures and sells pharmaceutical products which carry shelf life. As a result, significant level of judgement is involved in estimating inventory valuation. Judgement is |
⢠|
We assessed the basis for the inventory valuation, the consistency in policy and the rationale in its application; |
|
required to assess the appropriate net realisable value for short dated pharmaceutical products. Such judgements include management expectations for future sales and inventory |
⢠|
We tested the accuracy of the ageing of inventories based on system generated reports; |
|
liquidation plans. |
⢠|
We tested the arithmetical accuracy of valuation files; and |
|
⢠|
We reviewed product-wise historical data relating to sales return etc. and also its impact on valuation. |
Sr. No |
Key Audit Matters (KAMs) |
How the KAMs were addressed in our audit |
2. |
Impairment of Property, plant & equipment Refer note (C)(b) of the Statement of Significant Accounting Policies. There is a risk of impairment on the Company''s property, plant and equipment (PPE) on account of inherent nature of the PPE and the business environment in which the Company operates. As on March 31, 2021 the carrying amount of PPE was '' 1,824.30 crores which represent 30.35 % of total assets. The Management determines at the end of each reporting period the existence of any objective evidence that the Company''s PPE may be impaired. If there are indicators of impairment of class of assets, the deficit between the recoverable amount of the PPE and its carrying amount would be recognised as impairment loss in profit or loss. The process of identifying indicators of impairment and determining the recoverable amount of the PPE by the Management requires significant judgement and estimation. The determination of the recoverable amounts inter alia requires estimates of forecasted revenues, growth rates, profit margins, tax rates and discount rates. |
⢠We assessed the determination of the recoverable amount of the PPE based on our understanding of the nature of the Company''s business and the economic environment surrounding its operations. ⢠We reviewed the Company''s historical performances and held discussions with the Management to understand their assessment of the Company''s future performance. This included obtaining an understanding of management''s planned strategies around business expansion and revenue growth strategies. ⢠We also reviewed performance of individual units and carried out analytical review of relevant data. ⢠We assessed management''s estimates applied in the value-in-use model and compared them against historical performance and tested the arithmetical accuracy. ⢠We evaluated the sensitivity of the outcomes by considering the downside scenarios against changes to the key assumptions. ⢠We also assessed the adequacy of the related disclosures in the notes to the Standalone Financial Statements. |
Information Other than the Standalone Financial Statements and Our Report thereon
The Company''s Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in Annual Report, but does not include the Standalone Financial Statements and our auditor''s report thereon. The Annual Report is expected to be made available to us after the date of this report.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to Those Charged With Governance and take appropriate actions in accordance with Standards on Auditing.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity, cash flows of the Company in accordance with the Ind AS, other accounting principles generally accepted in India and relevant provisions of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of the misstatement in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and evaluating the results of our work; and (ii) to evaluate the effects of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the "Annexure A", a statement on the matters specified in the paragraph 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge 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 the Company so far as it appears from our examination of those books;
c. The Balance Sheet, the Statement of Profit and Loss (Including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid the Standalone Financial Statements comply with Ind AS specified under section 133 of the Act, read with relevant rules issued thereunder and relevant provisions of the Act;
e. On the basis of the written representations received from the directors as on March 31,2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2021 from being appointed as a director in terms of section 164(2) of the Act;
f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to financial statements;
g. With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act; and
h. With respect to the other matters to be included in the Auditor''s Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements. Refer Note 35 to the Standalone Financial Statements;
ii. The Company has made provision, as required under the applicable law or accounting standards for material foreseeable losses, if any, on the long-term contracts including derivative contracts; and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Chartered Accountants Firm''s Registration No: 104767W
Partner
Mumbai Membership No: 039569
Dated: May 28, 2021 UDIN: 21039569AAAAII2963
Mar 31, 2019
INDEPENDENT AUDITOR''S REPORT
To The Members of Ipca Laboratories Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Ipca Laboratories Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019 and its profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statement in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules framed thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statement.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters:
Sr. No. |
Key Audit Matters (KAMs) |
How the KAMs were addressed in our audit |
1. |
Inventory Valuation Refer note (g) of the Statement of Significant Accounting Policies. The Company manufactures and sells pharmaceutical products which carry shelf life. As a result, significant level of judgement is involved in estimating inventory valuation . Judgement is required to assess the appropriate net realisable value for short dated pharmaceutical products. Such judgments include management expectations for future sales and inventory liquidation plans. |
Our procedures included, amongst others: - We attended stock counts to identify whether any inventory was obsolete; - We assessed the basis for the inventory valuation, the consistency in policy and the rationale in its application; - We tested the accuracy of the ageing of inventories based on system generated reports; - We tested the arithmetical accuracy of valuation files; and - We reviewed product-wise historical data relating to sales return etc. and also its impact on valuation. |
2. |
Impairment of Property, plant & equipment Refer note (b) of the Statement of Significant Accounting Policies. There is a risk of impairment on the Company''s property, plant and equipment (PPE) on account of inherent nature of the PPE and the business environment in which the Company operates. As on March 31, 2019 the carrying amount of PPE was Rs,1,706.35 crores which represent 38.28 % of total assets. |
- We assessed the determination of the recoverable amount of the PPE based on our understanding of the nature of the Company''s business and the economic environment surrounding its operations. - We reviewed the Company''s historical performances and held discussions with the Management to understand their assessment of the Company''s future performance. This included obtaining an understanding of management''s planned strategies around business expansion and revenue growth strategies. |
Sr. No. |
Key Audit Matters (KAMs) |
How the KAMs were addressed in our audit |
The Management determines at the end of each reporting period the existence of any objective evidence that the Company''s PPE may be impaired. If there are indicators of impairment of class of assets, the deficit between the recoverable amount of the PPE and its carrying amount would be recognized as impairment loss in profit or loss. The process of identifying indicators of impairment and determining the recoverable amount of the PPE by the Management requires significant judgments and estimation. The determination of the recoverable amounts inter alia requires estimates of forecasted revenues, growth rates, profit margins, tax rates and discount rates. |
- We also reviewed performance of individual units and carried out analytical review of relevant data. - We assessed management''s estimates applied in the value-in-use model and compared them against historical performance and tested the arithmetical accuracy. - We evaluated the sensitivity of the outcomes by considering the downside scenarios against changes to the key assumptions. - We also assessed the adequacy of the related disclosures in the notes to the standalone financial statements. |
|
3. |
Implementation of new accounting standard on revenue recognition Refer note (o) of the Statement of Significant Accounting Policies. The accuracy of recognition, measurement, presentation and disclosure of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" involves certain key judgments relating to identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue. Additionally, Ind AS 115 contains disclosures which involves collation of information in respect of various matters such as disaggregation revenue. |
- We had discussion with the Management about its process to assess implementation issues relating to adoption of Ind AS 115. - Our audit approach consisted testing of the effectiveness of the internal controls relating to such process including substantive testing, which included review of terms and conditions of selected sample of existing contracts and new contracts. - We inter alia tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations, determination of transaction price, criteria relating to transfer of control over the promised goods and measurement and recording of revenue. - We also evaluated appropriateness of the disclosures required under Ind AS 115 and verified the process of compilation and accuracy of such disclosures. - We performed cut-off testing for samples of revenue transactions recorded before and after the financial year end date by comparing with relevant underlying documentation, which included goods dispatch notes and shipping documents, to assess whether the revenue was recognized in the correct period. |
Information Other than the Standalone Financial Statements and Our Report thereon
The Company''s Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in Annual Report, but does not include the standalone financial statements and our auditor''s report thereon. The Annual Report is expected to be made available to us after the date of this report.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to Those Charged With Governance and take appropriate actions in accordance with Standards on Auditing.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity, cash flows of the Company in accordance with the accounting principles generally accepted in India, including Ind AS and relevant provisions of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of the misstatement in the standalone financial statement that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statement may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and evaluating the results of our work; and (ii) to evaluate the effects of any identified misstatements in the standalone financial statement.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A", a statement on the matters specified in the paragraph 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge 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 the Company so far as it appears from our examination of those books;
c. The Balance Sheet, the Statement of Profit and Loss (Including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid the standalone financial statements comply with Ind AS specified under Section 133 of the Act, read with relevant rules issued thereunder and relevant provisions of the Act;
e. On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164(2) of the Act;
f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to financial statements;
g. With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act; and
h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements. Refer Note 35 to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards for material foreseeable losses, if any, on the long-term contracts including derivative contracts; and
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its property, plant and equipment;
(b) According to the information and explanations given to us, most of the property, plant and equipment of the Company were physically verified by the Management during the year. No material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its property, plant and equipment; and
(c) Based on audit procedures performed for the purpose of reporting the true and fair view of the standalone financial statements and according to information and explanations given by the Management and further based on certificate received from the security trustee, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.
(ii) (a) Inventories have been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable; and
(b) The discrepancies noticed on physical verification as compared to the book records were not material and have been properly dealt with in the books of account.
(iii) The Company has granted unsecured loans to its joint venture covered in the register maintained under section 189 of the Act:
(a) In our opinion, the terms and conditions of the grant of such loans are not prejudicial to the interest of the Company; and
(b) The loans are not due for repayment presently and therefore, there is no default in its repayment and there is no overdue. Hence, the paragraph 3(iii)(c) of the Order, is not applicable to the Company.
(iv) Based on audit process applied by us and according to the information and explanations given to us, in our opinion, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of investments made and loans, guarantees and securities granted, as applicable.
(v) In our opinion and according to the information and explanation given to us, the Company has not accepted deposits from the public and therefore, the provisions of section 73 to 76 or other relevant provisions of the Act and rules framed thereunder are not applicable to the Company. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal in this regard;
(vi) The Central Government has prescribed maintenance of cost records under section 148(1) of the Act, for the products manufactured by the Company. We have broadly reviewed the books of account maintained and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
(vii) (a) The Company has generally been regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, goods and services tax, cess and other applicable statutory dues with the appropriate authorities. No undisputed statutory dues payable were in arrears as at March 31, 2019, for a period of more than six months from the date they became payable except a sum of Rs. 54,991 relating to provident fund dues. We have been informed that such dues have remained unpaid due to procedural aspects such as failure to link aadhar number of employees to Universal Account Number allotted by Employees'' Provident Fund Organization, India; and
(b) The details of dues of income tax, sales tax, service tax, duty of customs, duty of excise or value added tax or cess which have not been deposited with the concerned authorities on account of dispute are given below:
Name of statute |
Nature of dues |
Amount (Rs, in Crores) |
Period to which the amount relates |
Forum where dispute is pending |
Excise Duty |
Differential Excise duty on WIP on Debonding |
0.23 |
2009-10 |
CESTAT, Ahmadabad |
Excise Duty |
Rebate claim rejected due to late filing |
0.03 |
2013-14 |
Asst Commissioner Central Excise, Customs & Service tax, Silvassa |
Excise Duty |
Interest and penalty on past anti-dumping duty & excise duty (Relating to erstwhile Tonira Pharma Limited since amalgamated with the Company) |
4.15 |
Feb 2000 - Nov 2001 |
High Court, Gujarat |
Excise Duty |
Availment of Differential PLA Credit |
2.32 |
2015-16 |
Commissioner -Appeal , Siliguri |
Service Tax |
Availment of credit of Service Tax on H.O. Invoices |
2.92 |
April''06 to Sept''09 |
Commissioner, Central Excise, Ujjain (M.P) |
Service Tax |
Availment of credit of Service Tax on Telephone / Cell Phone/Taxi Hire charges & Insurance* |
0.00 |
Jan''09 to Sept''09 |
Dy. Commissioner, Central Excise |
Service Tax |
Non payment of service tax under RCM on remittances in foreign currency for product/ patent registration and facility fees to US FDA. |
4.98 |
July''12 to Sept''13 |
CESTAT, Mumbai |
Name of statute |
Nature of dues |
Amount (Rs, in Crores) |
Period to which the amount relates |
Forum where dispute is pending |
Service Tax |
Nonpayment of Service Tax on Notice pay amount relating to employees |
0.54 |
2015-16 to June''17 |
Addl. Commissioner of Central Tax & GST, Thane |
Service Tax |
Nonpayment of Service Tax on Notice pay amount relating to employees |
0.01 |
2014-15 to June''17 |
Asst .Comm - Central GST & Central Excise, Circle-1, Audit, Vadodara |
Service Tax |
Availment of Credit of Service Tax on Garden Maintenance. |
0.01 |
Feb''17 To June''17 |
Superintendent, CGST & Central Excise, Range-II, Division-VII, Daman Commissioner ate |
Service Tax |
Service Tax paid under RCM on Business Auxiliary Services.(Refund Application Under Rule 142 (3) of CGST Act 2017) |
0.01 |
April''15 To June''17 |
Assistant Commissioner, CGST & Central Excise, Division-VII, Daman. |
Service Tax |
A ailment of Cenvat Credit on Service Tax1 |
0.00 |
2006-07 |
Dy. Commissioner, Central Excise, Indore (M.P) |
Service Tax |
Nonpayment of Service Tax on Notice pay amount relating to employees |
0.03 |
2013-14 to June 2017 |
Office of the commissioner(Audit), Dehradun |
Service Tax |
Nonpayment of Service Tax on Notice pay amount relating to employees |
0.01 |
2013-14 to June 2017 |
Office of the Assistant Commissioner, Raigadh |
Service Tax |
Cenvat Credit of work contract and construction service |
0.22 |
2014-15 to June 2017 |
Office of the Assistant Commissioner, Aurangabad |
Sales Tax |
Jammu & Kashmir Value added tax |
0.05 |
2011-12 |
Deputy Commissioner of Commercial Tax (Appeal), Srinagar |
Sales Tax |
Gujarat value added Tax |
0.07 |
2006-07 |
Gujarat VAT Tribunal, Ahmedabad |
Sales Tax |
Gujarat value added Tax |
0.02 |
2007-08 |
Jt. Commissioner of Commercial Tax, Rajkot |
Sales Tax |
Gujarat value added Tax |
0.28 |
2006-07 |
Additional Commercial Commissioner Ahmedabad |
Sales Tax |
Penalty levied at Check Post |
0.01 |
2014-15 |
Deputy Commissioner, Sales Tax, West Bengal |
Sales Tax |
VAT Assessment |
0.20 |
2014-15 |
Deputy Commissioner of Commercial Tax, Patna |
Sales Tax |
Penalty for delivery address mismatch on E-way Bill |
0.02 |
2018-19 |
Appellate Authority, MPGST, Indore |
Sales Tax |
Demand on regular Assessment |
0.34 |
2014-15 |
The Dy. Commissioner Commercial Tax Ratlam Division-Ratlam (M.P.) |
Sales Tax |
Demand on regular Assessment |
0.27 |
2015-17 |
The Dy.Commissioner Commercial Tax Ratlam Division-Ratlam (M.P.) |
Total |
16.73 |
(viii) The Company has not defaulted in repayment of loans or borrowing to any financial institutions, banks, government or debenture holders.
(ix) In our opinion and according to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable to the Company.
(x) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197, read with schedule V to the Act.
(xii) In our opinion and according to information and explanation given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.
(xiv) Based on our audit procedures performed for the purpose of reporting the true and fair view of the standalone financial statements and according to information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) Based on our audit procedures performed for the purpose of reporting the true and fair view of the standalone financial statements, the Company has not entered into any non-cash transactions with directors. We have been informed that no such transactions have been entered into with person connected with directors. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
(xvi) The Company is not required to get registered under 45-IA of the Reserved Bank of India Act, 1934.
Annexure B - referred to in paragraph 2(f) under "Report on Other Legal and Regulatory Requirements" of our Independent Auditor''s report of even date, to the members of Ipca Laboratories Limited on the Standalone Financial Statements for the year ended March 31, 2019
Report on the Internal Financial Controls under section 143(3)(i) of the Act
We have audited the internal financial controls with reference to standalone financial statements of Ipca Laboratories Limited ("the Company") as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (''Guidance Note'') issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by the ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness.
Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI.
The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system with reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A company''s internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial controls with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2019 based on the internal controls with reference to financial statements criteria established by the Company considering the essential components of internal controls stated in the Guidance Note.
For G. M. Kapadia & Co.
Chartered Accountants
Firm''s Registration No: 104767W
Atul Shah
Partner
Mumbai Membership No: 39569
Dated: May 29, 2019
Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of IPCA LABORATORIES LIMITED (the Company), which comprise the Balance Sheet as at March 31, 2018 and the Statement of Profit & Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (the standalone financial statements).
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (the Act) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in section 133 of the Act, read with rules made thereunder and the relevant provisions of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs of the Company as at March 31, 2018 and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other Matters
The financial statements of the Company for the year ended March 31, 2017 were audited by predecessor auditor who expressed an unmodified opinion on those statements on May 28, 2017.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (the Order) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in the paragraph 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations, which to the best of our knowledge 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 the Company so far as it appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit & Loss, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under section 133 of the Act;
(e) On the basis of the written representations received from the Directors as on March 31, 2018 taken on record by the Board of Directors, none of the Directors are disqualified as on March 31, 2018 from being appointed as a Director in terms of section 164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, we give our separate Report in âAnnexure Bâ; and
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 35 to the standalone financial statements;
ii. The Company did not have any material foreseeable losses on long-term contracts including derivative contracts; and
iii. There has been no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company.
Annexure A - referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ of our report on even date, to the members of the Company on the standalone financial statements for the year ended March 31, 2018
(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its Property, Plant and Equipment.
(b) According to the information and explanations given to us, most of the property, plant and equipment of the Company were physically verified by the management during the year. No material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its Property, plant and equipment.
(c) According to the information and explanations given to us and based on audit procedures performed for the purpose of reporting the true and fair view of the financial statements, we report that the title deeds of immovable properties forming part of property, plant and equipment, are held in the name of the Company.
(ii) During the year, the management has physically verified the inventory at reasonable intervals. We have been informed that the discrepancies noticed on physical verification, as compared to the book records, were not material having regards to size and nature of operations and have been properly dealt with in the books of account.
(iii) The Company has granted unsecured loans to its associate and joint venture covered in the register maintained under section 189 of the Act.
(a) In our opinion, the terms and conditions of the grant of such loans are not prejudicial to the interest of the Company.
(b) The loans are not due for repayment presently and therefore, there is no default in its repayment and there is no overdue. Hence, the clause 3(iii) (c) of the Order, is not applicable to the Company.
(iv) Based on audit process applied by us and according to the information and explanations given to us, in our opinion, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of investments made and loans, guarantees and securities granted, as applicable.
(v) In our opinion and according to the information and explanation given to us, the Company has not accepted deposits from the public and therefore, the provisions of section 73 to 76 or any other relevant provisions of the Act and Rules framed there under are not applicable to the Company.
We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal in this regard.
(vi) As informed to us, the maintenance of the cost records under section 148(1) of the Act has been prescribed and we are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have not, however, carried out a detailed examination of the records to ascertain whether they are accurate or complete.
(vii) (a) Based on the records produced before us, the Company is generally regular in depositing with appropriate authorities applicable undisputed statutory dues such as Provident Fund, Employeesâ State Insurance, Sales Tax, Income Tax, Service Tax, Custom Duty, Excise duty, Goods and Service Tax, Value Added Tax, cess and other applicable statutory dues with the appropriate authorities. There are no arrears as at March 31, 2018 which were due for more than six months from the date they became payable.
(b) The details of dues of Income Tax, Sales Tax, Service Tax, duty of Customs, duty of Excise or Value Added Tax or cess which have not been deposited with the concerned authorities on account of dispute are given below:
Name of the Statute |
Nature of Dues |
Amount (Rs. Crores) |
Period to which the amount relates |
Forum where dispute is pending |
Excise Duty |
Differential Excise duty on WIP on Debonding |
0.23 |
2009-10 |
CESTAT, Ahmedabad |
Excise Duty |
Rebate claim rejected due to late filed |
0.03 |
2013-14 |
Asst Commissioner Central Excise, Customs & Service tax, Silvassa |
Excise Duty |
Interest and penalty on past anti-dumping duty & excise duty |
4.15 |
High Court, Gujarat |
|
Excise Duty |
Differential Excise Duty on clearance |
0.08 |
AprilRs.11 to MarchRs.13 |
Deputy Commissioner |
Excise Duty |
Availment of Differential PLA Credit |
2.32 |
2015-16 |
Commissioner A-Appeal , Siliguri |
Service Tax |
Availment of credit of Service Tax on H.O. Invoices |
0.64 |
2006-07 & 2007-08 |
Commissioner, Central Excise |
Service Tax |
Availment of credit of Service Tax on H.O. Invoices |
0.23 |
Aprilâ08 to Novâ08 |
Commissioner, Central Excise |
Service Tax |
Availment of credit of Service Tax on H.O. Invoices |
0.04 |
Decâ08 to Septâ09 |
Deputy Commissioner, Central Excise |
Service Tax |
Availment of credit of Service Tax on Telephone/Cell Phone /Taxi Hire charges & Insurance |
0.03 |
2006-07 & 2007-08 |
Commissioner/ Dy. Commissioner, Central Excise |
Service Tax |
Availment of credit of Service Tax on Telephone/Cell Phone / Taxi Hire charges & Insurance |
0.01 |
Aprilâ08 to Decâ08 |
Commissioner/ Dy. Commissioner, Central Excise |
Service Tax |
Availment of credit of Service Tax on Telephone /Cell Phone/Taxi Hire charges & Insurance* |
0.00 |
Janâ09 to Septâ09 |
Dy. Commissioner, Central Excise |
Service Tax |
Availment of credit of Service Tax on H.O. Invoices |
1.42 |
2006-07 & 2007-08 |
Commissioner, Central Excise |
Service Tax |
Availment of credit of Service Tax on H.O. Invoices |
0.34 |
Aprilâ08 to Novâ08 |
Commissioner, Central Excise |
Service Tax |
Availment of credit of Service Tax on H.O. Invoices |
0.30 |
Decâ08 to Septâ09 |
Commissioner, Central Excise |
Service Tax |
Availment of credit of Service Tax on Garden Maintenance Based on EA-2000 audit query |
0.28 |
2012-13 & 2014-15 |
Commissioner Appeal ,Indore |
Service Tax |
Availment of Cenvat Credit on Service Tax* |
0.00 |
2006-07 |
Dy. Commissioner, Central Excise |
Service Tax |
Non-payment of service tax under RCM on remittances in foreign currency for product/ patent registration and facility fees to US FDA. |
4.98 |
Julyâ12 to Septâ13 |
Commissioner Service tax -VI, Mumbai |
Sales Tax |
Jammu & Kashmir Value added tax Act, - Disputed Demand |
0.05 |
2011-2012 |
Deputy Commissioner of Commercial Tax (Appeal), Srinagar |
Sales Tax |
Gujarat value added Tax Act - Disputed demand |
0.07 |
2006-07 |
Gujarat VAT Tribunal, Ahmedabad |
Sales Tax |
Gujarat value added Tax Act - Disputed demand |
0.02 |
2007-08 |
Jt. Commissioner of Commercial Tax, Rajkot |
Sales Tax |
Gujarat value added Tax Act - Disputed demand |
0.28 |
2006-07 |
Additional Commercial Commissioner Ahmedabad |
Sales Tax |
Central Sales Tax - Assessment demand |
0.31 |
2013-14 |
Dy. Commissioner Commercial Tax-Ratlam |
Sales Tax |
Kerala Value Added Tax - Disputed demand* |
0.00 |
2012-13 |
Sales tax Authority |
Sales Tax |
UP, Value Added Tax Act - Disputed demand |
0.27 |
2013-14 |
Commercial Tax Authority, Lucknow |
Sales Tax |
Demand After Assessment |
0.40 |
2014-15 |
The Dy. Commissioner Commercial Tax Ratlam Division-Ratlam (M.P.) |
Sales Tax |
Demand After Assessment |
0.12 |
2015-16 |
The Dy.Commissioner Commercial Tax Ratlam Division-Ratlam (M.P.) |
Sales Tax |
Demand After Assessment* |
0.00 |
2014-15 |
The Add. Commissioner Commercial Tax Indore (M.P.) |
Entry Tax |
Entry Tax |
4.70 |
2013-14 |
Sales Tax Department |
Sales Tax |
Duburdih Check Post Penalty |
0.02 |
2014-15 |
Deputy Commissioner, Sales Tax, West Bengal |
Total |
21.32 |
Note: Balances with values below the rounding off norm adopted by the Company have been reflected as â0.00â.
(viii) The Company has not defaulted in repayment of loans or borrowing to any financial institutions, banks, government or debenture holders.
(ix) The Company has not raised any money by way of Initial Public Offer or further Public offer (including debt instruments). On the basis of the documents submitted to the bankers and the other relevant records perused by us, we state that the term loans taken during the year have been applied for the purpose of which the loans were obtained.
(x) 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, no instances of fraud by the Company or on the Company by its officers and employees have been noticed or reported during the year.
(xi) The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company. Accordingly, Clause 3(xii) of the Order is not applicable.
(xiii) In respect of transactions with related parties, the Company has complied provisions of sections 177 and 188 of the Act where applicable. Necessary disclosures relating to related party transactions have been made in the standalone financial statements as required by the applicable accounting standard.
(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence the clause 3(xiv) of the Order is not applicable to the Company.
(xv) The Company has not entered into any non-cash transaction with directors. We have been informed that no such transactions have been entered into with persons connected with directors. Accordingly, para 3(xv) of the Order is not applicable to the Company.
(xvi) The Company is not required to get registered under 45-IA of the Reserved Bank of India Act, 1934.
For G. M. Kapadia & Co.
Chartered Accountants
Firm Registration No. 104767W
Atul Shah
Mumbai, Partner
May 29, 2018 Membership No. 39569
Mar 31, 2017
INDEPENDENT AUDITORS'' REPORT
To
The Members of
Ipca Laboratories Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Ipca Laboratories Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Cash Flow and Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Ind AS Financial Statement").
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) specified under Section 133 of the Act, read with relevant rules thereon.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these Standalone Ind AS Financial Statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Standalone Ind AS Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the Standalone Ind AS Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company''s directors, as well as evaluating the overall presentation of the Standalone Ind AS Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the Standalone Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs of the Company as at March 31, 2017, its financial performance including other comprehensive income, its cash flows and the statement of changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters Specified in paragraphs 3 and 4 of the said Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge 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 the Company so far as it appears from our examination of those books.
(c) 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.
(d) I n our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules thereon.
(e) On the basis of written representations received from the directors as on March 31, 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Ind AS Financial Statement - Refer Note 35 to the Standalone Ind AS Financial Statement.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There are no delays in payment of amounts to the Investor Education and Protection Fund during the year.
iv. The Company has provided requisite disclosures in its Standalone Ind AS Financial Statements as to holdings as well as dealings in Specified Bank Notes during the period from November 08, 2016 to December 30, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 8 to the Standalone Ind AS Financial Statements.
(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) We have verified the title deeds of immovable properties forming part of Fixed Assets produced before us by the management and based on such verification we confirm that the same are held in the name of the company.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year. The discrepancies noticed between the book stock and the physical stocks were not material and they have been properly dealt with in the books of accounts.
(iii) During the year the Company has granted loan to its associates covered in the register maintained u/ s 189 of the Companies Act 2013.
(a) The terms and conditions of the grant of such loans are not prejudicial to the company''s interest;
(b) The loan is not due for repayment presently and therefore there is no default in its repayment and there is no overdue. Hence, the clause 3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 with respect to loans, investments, guarantees and security given.
(v) The Company has not accepted any deposit from the public pursuant to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under. As informed to us, there is no order that has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of the said sections.
(vi) As informed to us, the maintenance of the cost records under the sub-section (1) of section 148 of the Companies Act, 2013 has been prescribed and we are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have not, however, carried out a detailed examination of the records to ascertain whether they are accurate or complete.
(vii) (a) The Company has been regular in depositing undisputed statutory dues including Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at March 31, 2017 for a period of more than six months from the date of becoming payable.
(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or Duty of Excise or Value Added Tax which have not been deposited on account of any dispute except as given in the statement attached herewith.
(viii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to the financial institution or banks or to the debenture holders.
(ix) The Company has not raised any money by way of public issue / follow-on offer (including debt instruments). On the basis of the documents submitted to the bankers and the other records perused by us, we have to state that the term loans which are in the nature of External Commercial Borrowings and the buyers credit for purchase of fixed assets taken during the year have been applied for the purpose for which the loans were obtained.
(x) According to the information and explanations given to us and to the best of our knowledge and belief no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
(xi) The managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company hence clause 3(xii) of Companies (Auditors Report) Order, 2016 is not applicable to the Company.
(xiii) All transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 in so far as our examination of the proceedings of the meetings of the Audit Committee and Board of Directors are concerned. The details of related party transactions have been disclosed in the Standalone Ind AS Financial Statements as required by the applicable Accounting Standard.
(xiv) The Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and hence the clause 3(xiv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.
(xv) The Company has not entered into any non-cash transactions with directors or persons connected with him and hence the clause 3(xv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.
(xvi) The nature of business and the activities of the Company are such that the Company is not required to obtain registration under section 45-IA of the Reserve Bank of India Act 1934.
Name of the Statute |
Nature of Dues |
Amount ('' crores) |
Period to which the amount relates |
Forum where dispute is pending |
Excise Duty |
Valuation of as such clearance of RM/ PM on 115% |
0.12 |
Apr''01 to Feb'' 03 |
Commissioner, Central Excise, Ujjain |
Excise Duty |
Wrong a ailment of PLA recredit in respect of education cess and secondary & higher education cess at Ipca Sikkim |
0.68 |
Dec''11 to Dec''13 |
Commissioner (Appeals), Kolkata |
Excise Duty |
Wrong a ailment of PLA recredit in respect of education cess and secondary & higher education cess at Ipca Sikkim |
0.49 |
Jan''14 to Dec''14 |
Commissioner (Appeals), Kolkata |
Excise Duty |
Wrong a ailment of PLA recredit in respect of education cess and secondary & higher education cess at Ipca Sikkim |
0.09 |
Jan''15 & Feb''15 |
Commissioner (Appeals), Kolkata |
Excise Duty |
Differential Excise duty on WIP on Deboning |
0.23 |
2009-10 |
CESTAT, Ahmadabad |
Excise Duty |
Rebate claim rejected due to late filed |
0.03 |
2013-14 |
Asst Commissioner Central Excise, Customs & Service tax, Silvassa |
Excise Duty |
Interest and penalty on past anti-dumping duty & excise duty |
4.15 |
High Court, Gujarat |
|
Service Tax |
Service Tax Credit on Garden Maintenance charges disallowed during EA-2000 audit |
0.07 |
2012-13 to 2016-17 |
Asst Commissioner Central Excise, Customs & Service tax, Silvassa |
Service Tax |
A ailment of credit of Service Tax on H.O. Invoices |
0.64 |
2006-07 & 2007-08 |
Commissioner, Central Excise |
Service Tax |
A ailment of credit of Service Tax on H.O. Invoices |
0.23 |
Apr''08 to Nov''08 |
Commissioner, Central Excise |
Service Tax |
A ailment of credit of Service Tax on H.O. Invoices |
0.04 |
Dec''08 to Sept''09 |
Commissioner, Central Excise |
Service Tax |
A ailment of credit of Service Tax on Telephone/ Cell Phone/ Taxi Hire charges & Insurance |
0.03 |
2006-07 & 2007-08 |
Commissioner/ Dy. Commissioner, Central Excise |
Service Tax |
A ailment of credit of Service Tax on Telephone/ Cell Phone/ Taxi Hire charges & Insurance |
0.01 |
April''08 to Dec''08 |
Commissioner/ Dy. Commissioner, Central Excise |
Service Tax |
A ailment of credit of Service Tax on Telephone/ Cell Phone/ Taxi Hire charges & Insurance |
0.01 |
Jan''09 to Sept''09 |
Asst. Commissioner/ Dy. Commissioner, Central Excise |
Service Tax |
A ailment of credit of Service Tax on H.O. Invoices |
1.42 |
2006-07 & 2007-08 |
Commissioner, Central Excise |
Service Tax |
A ailment of credit of Service Tax on H.O. Invoices |
0.34 |
April''08 to Nov''08 |
Commissioner, Central Excise |
Service Tax |
A ailment of credit of Service Tax on H.O. Invoices |
0.30 |
Dec''08 to Sept''09 |
Commissioner, Central Excise |
Service Tax |
Non reversal of proportionate amount of Service Tax credit on GTA against input credit reversal on short received and destruction of RM/ PM |
0.01 |
2005-06 to 2007-08 |
Asst. Commissioner, Central Excise & Service Tax |
Service Tax |
A ailment of credit of Service Tax on outward Freight based on CERA audit query |
0.02 |
2009-10 & 2010-11 |
Commissioner, (Appeals) Central Excise & Service Tax |
Service Tax |
A ailment of credit of Service Tax on Garden Maintenance Based on EA-2000 audit query |
0.28 |
2012-13 & 2014-15 |
Dy. Commissioner, Central Excise & Service Tax, DIVISION, RATLAM |
Service Tax |
A ailment of Cenvat Credit on Service Tax |
0.01 |
2006-07 |
Asst. Commissioner/ Dy. Commissioner, Central Excise |
Service Tax |
Non - Payment of Service tax on import of Service |
0.61 |
2006-2007 & 20072008 |
CESTAT, Mumbai |
Service Tax |
Non - payment of Service tax under RCM on remittances in foreign currency for product/ patent registration and facility fees to US FDA |
2.49 |
July''12 to Sept''13 |
Commissioner Service Tax -VI, Mumbai |
Sales Tax |
Jammu & Kashmir Value added tax Act, (2011-12) -Disputed Demand |
0.05 |
2011-2012 |
Dy. Commissioner of Commercial Tax (Appeal), Srinagar |
Sales Tax |
Gujarat Value Added Tax Act (2006-07) - Disputed demand |
0.07 |
2006-07 |
Gujarat VAT Tribunal, Ahmadabad |
Sales Tax |
Gujarat Value Added Tax Act (2007-2008) - Disputed demand |
0.02 |
2007-08 |
Jt. Commissioner of Commercial Tax, Rajkot |
Sales Tax |
Gujarat Value Added Tax Act (2006-2007) - Disputed demand |
0.28 |
2006-07 |
Additional Commercial Commissioner Ahmadabad |
Sales Tax |
Central Sales Tax - Assessment Demand |
0.22 |
2012-13 |
Commercial Tax |
Sales Tax |
Central Sales Tax - Assessment Demand |
0.37 |
2013-14 |
Commercial Tax |
Sales Tax |
VAT - Assessment Demand |
0.10 |
2013-14 |
Commercial Tax |
Sales Tax |
Demand after Assessment |
0.52 |
2014-15 |
The Dy. Commissioner Commercial Tax Ratlam Division-Ratlam (M.P.) |
Sales Tax |
Demand after Assessment |
0.01 |
2014-15 |
The Add. Commissioner Commercial Tax Indore (M.P.) |
Entry Tax |
Entry Tax |
4.70 |
2013-14 |
Sales Tax Department |
Sales Tax |
Duburdih Check Post Penalty |
0.01 |
2014-15 |
Deputy Commissioner, Sales Tax , West Bengal |
Total |
18.65 |
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Ipca Laboratories Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the Standalone Ind AS Financial Statement of the Company for the year ended on that date. Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No. 106971W N. Jayendran
Mumbai, Partner
28th May, 2017 M. No. 40441
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Ipca Laboratories Limited("the Company"), which comprises the Balance
Sheet as at March 31,2016, the Statement of Profit and Loss, Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by Company''s directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at March 31,2016, its profit and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure A,
a statement on the matters Specified in paragraphs 3 and 4 of the said
Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge 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 the Company so far as it appears from our examination of
those books.
(c) 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.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of written representations received from the directors
as on March 31,2016 and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,2016 from being
appointed as a director in terms of section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 34 to the
financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There are no delays in payment of amounts to the Investor
Education and Protection Fund during the year.
(i) (a) The Company has generally maintained proper records showing
full particulars including quantitative details and situation of its
fixed assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
(c) We have verified the title deeds of immovable properties forming
part of Fixed Assets produced before us by the management and based on
such verification we confirm that the same are held in the name of the
company.
(ii) The management has conducted physical verification of inventory at
reasonable intervals during the year. The discrepancies noticed between
the book stock and the physical stocks were not material and they have
been properly dealt with in the books of accounts.
(iii) During the year the Company has granted loan to its associates
covered in the register maintained u/s 189 of the Companies Act 2013.
(a) The terms and conditions of the grant of such loans are not
prejudicial to the company''s interest;
(b) The loan is not due for repayment presently and therefore there is
no default in its repayment and there is no overdue. Hence, the clause
3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not
applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of section
185 and 186 of the Companies Act, 2013 with respect to loans,
investments, guarantees and security given.
(v) The Company has not accepted any deposit from the public pursuant
to sections 73 to 76 or any other relevant provisions of the Companies
Act, 2013 and rules framed there under. As informed to us, there is no
order that has been passed by Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal in
respect of the said sections.
(vi) As informed to us, the maintenance of the cost records under the
sub-section (1) of section 148 of the Companies Act, 2013 has been
prescribed and we are of the opinion that prima facie, the prescribed
accounts and records have been maintained. We have not, however,
carried out a detailed examination of the records to ascertain whether
they are accurate or complete.
(vii) (a) The Company has been regular in depositing undisputed
statutory dues including Provident fund, Employees State Insurance,
Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other statutory dues with the appropriate authorities during the year.
According to the information and explanations given to us, no
undisputed amount payable in respect of the aforesaid dues were
outstanding as at March 31, 2016 for a period of more than six months
from the date of becoming payable.
(b) According to the information and explanations given to us, there
are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or
Duty of Excise or Value Added Tax which have not been deposited on
account of any dispute except as given in the statement attached
herewith.
(viii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
defaulted in repayment of dues to the financial institution or banks or
to the debenture holders.
(ix) The Company has not raised any money by way of public issue
/follow-on offer (including debt instruments). On the basis of the
documents submitted to the bankers and the other records perused by us,
we have to state that the term loans which are in the nature of
External Commercial Borrowings and the buyers credit for purchase of
fixed assets taken during the year have been applied for the purpose
for which the loans were obtained.
(x) According to the information and explanations given to us and to
the best of our knowledge and belief no fraud by the Company or on the
Company by its officers or employees has been noticed or reported
during the year.
(xi) The managerial remuneration has been paid / provided in accordance
with the requisite approvals mandated by the provisions of section 197
read with schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company hence clause 3(xii) of
Companies (Auditors Report) Order 2016 is not applicable to the
Company.
(xiii) All transactions with the related parties are in compliance with
sections 177 and 188 of the Companies Act, 2013 in so far as our
examination of the proceedings of the meetings of the Audit Committee
and Board of Directors are concerned. The details of related party
transactions have been disclosed in the financial statements as
required by the Accounting Standard 18 - Related Party Disclosures of
the Companies (Accounting Standards) Rules, 2006.
(xiv) The Company has not made any preferential allotment / private
placement of shares or fully or partly convertible debentures during
the year under review and hence the clause 3(xiv) of the Companies
(Auditors Report) Order, 2016 is not applicable to the Company.
(xv) The Company has not entered into any non-cash transactions with
directors or persons connected with them and hence the clause 3(xv) of
the Companies (Auditors Report) Order, 2016 is not applicable to the
Company.
(xvi) The nature of business and the activities of the Company are such
that the Company is not required to obtain registration under section
45-IA of the Reserve Bank of India Act 1934.
Name of the Nature of Dues Amount Period to which the
Statute (Rs, crores) amount relates
Excise Duty Valuation of as
Such clearance of
RM/PM 0.12 April''2001 to Feb''2003
115%
Excise Duty Payment of Excise
duty on 4-OH 0.33 April''2003 to Sept''2007
(Intermediate
stage of 4-7
DCQ)
Excise Duty Payment of Excise
duty on 4-OH 0.19 Oct''2007 to Dec''2008
(Intermediate
stage of 4-7
DCQ)_
Excise Duty Differential
Excise
duty on WIP on 0.23 2009-10
Excise Duty Wrong availmentof
PL Arecreditin 0.68 Dec''2011 to Dec''2013
respect of
education cess
and secondary &
higher education
cess at Sikkim_
Excise Duty Wrong availmentof
PLArecredit in 0.49 Jan''2014toDec''2014
respect of
education cess
and secondary &
higher education
cess at Sikkim
Excise Duty Wrong availmentof
PLArecredit in 0.09 Jan''2015&Feb''2015
respect of
education cess
and secondary &
higher education
cess at Sikki
Excise Duty Interest and
penalty on past 4.15 -
anti-dumping
duty & excise
duty
Service Tax Availment of
credit
of service tax 0.64 2006-07
& 2007-08
Service Tax Availmentof credit
of service tax on
H.O. 0.23 April''08 to
Invoices_ Nov''08
Service Tax Availmentof credit
of service tax on
H.O. 0.04 Dec''08 to
Sept''09
Invoices
Service Tax Availmentof credit
of service tax on 0.03 2006-07 & 2007-08
telephone/cell phone
/taxi hire
charges
Service Tax Availmentof credit
of service tax on 0.01 April''08 to Dec''08
telephone/cell phone
/taxi hire charges
Service Tax Availmentof credit
of service tax on 0.01 Jan''09 to Sept''09
telephone/cell phone
/taxi hire
charges
Service Tax Availmentof credit
of service tax on
H.O. 1.42 2006-07 &
2007-08
Invoice
Service Tax Availmentof credit
of service tax on
H.O. 0.34 April''08 to
Nov''08
Service Tax Availmentof credit
of service tax on
H.O. 0.30 Dec''08 to
Sept''09
Invoices
Service Tax Non reversal of
proportionate
amount of 0.01 2005-06 to
2007-08
tax credit on
GTA against
Input Mumbai
credit reversal
on short
received and
destruction of
RM/PM
Service Tax Availmentof credit
of service tax on 0.02 2009-10&2010-11
outward freight
based on CERA audit
queryf
Service Tax Availmentof Cenvat
credit of service
tax 0.01 2006-07
services
Service Tax Availmentof Cenvat
credit on service
tax 0.61 2006-07 &
2007-08
Service Tax Non payment of
service tax under
RCM 2.49 July''2012
to Sept''2013
remittences in
foreign currency
for product/ patent
registration and
facility fees
to US FDA
Sales Tax Jammu& Kashmir
Value Added Tax
Act, 0.05 2011-12 Deputy
(2011 -12) -
Disputed
Demand
Sales Tax Gujarat Value
Added Tax Act 0.07 2006-07
(2006-07)
demand
Sales Tax Gujarat Value
Added Tax Act 0.02 2007-08
(2007-2008)
demand
Sales Tax UP Value Added
Tax Act 0.01 2008-09
(2008-09)-
Disputed demand
Sales Tax Gujarat Value
Added Tax
(Ankleshwar) - 0.08 2010-11
Disputed demand
Sales Tax CST
0.30 2012-13
Sales Tax CST Assessment 0.47 2013-14
Sales Tax VAT Assessment
demand 0.10 2013-14
Sales Tax Duburdih Check
Post Penalty 0.01 2014-15
Total 13.55
Name of the Forum where
dispute is pending
Excise Duty Commissioner, C. Ex. LTU, Mumbai on
Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7
Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7
Excise Duty CESTAT, Ahmadabad
Excise Duty LTU,Mumbai
Excise Duty LTU,Mumbai
Excise Duty LTU,Mumbai
Excise Duty High Court, Gujarat
Service CESTAT, Mumbai
Service Tax Commissioner, C. Ex. LTU Invoices_
Service Tax Commissioner, C. Ex. LTU, Mumbai
Invoices
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai
Service Tax Commissioner, C. Ex. LTU, Mumbai
Service Tax Commissioner, C. Ex. LTU, Mumba _Invoices
Service Tax Commissioner, C. Ex. LTU, Mumbai
Service Tax Asstt. Commissioner, Central Excise & service
tax. LTU, Mumbai
Service Tax Deputy. Commissioner, C. Ex. & S.T, LTU, mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai services
Service Tax CESTAT, Mumbai
Service Tax Commissioner of Central Excise & Service Tax, LTU-
Sales Tax Deputy Commissioner of Commercial Tax (Appeal),
Srinagar_
Sales Tax Gujarat VATTribunal,Ahmedabad
Sales Tax Jt. Commissioner of Commercial Tax, Rajkot
Sales Tax Sales Tax Authority, UP_
Sales Tax Deputy Commissioner of VAT,
Sales Tax Deputy Commissioner, Commercial Tax.Ratlam
Sales Tax Deputy Commissioner, Commercial Tax.Ratlam
Sales Tax Addl.Commissioner (Appeal), Commercial Tax.lndore
Sales Tax Deputy Commissioner,Sales Tax, West Bengal
Total
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No. 106971W
N Jayendran
Mumbai, Partner
30th May, 2016 M. No. 40441
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Ipca Laboratories Limited("the Company"), which comprises the Balance
Sheet as at March 31,2016, the Statement of Profit and Loss, Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by Company''s directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at March 31,2016, its profit and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure A,
a statement on the matters Specified in paragraphs 3 and 4 of the said
Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge 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 the Company so far as it appears from our examination of
those books.
(c) 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.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of written representations received from the directors
as on March 31,2016 and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,2016 from being
appointed as a director in terms of section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 34 to the
financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There are no delays in payment of amounts to the Investor
Education and Protection Fund during the year.
(i) (a) The Company has generally maintained proper records showing
full particulars including quantitative details and situation of its
fixed assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
(c) We have verified the title deeds of immovable properties forming
part of Fixed Assets produced before us by the management and based on
such verification we confirm that the same are held in the name of the
company.
(ii) The management has conducted physical verification of inventory at
reasonable intervals during the year. The discrepancies noticed between
the book stock and the physical stocks were not material and they have
been properly dealt with in the books of accounts.
(iii) During the year the Company has granted loan to its associates
covered in the register maintained u/s 189 of the Companies Act 2013.
(a) The terms and conditions of the grant of such loans are not
prejudicial to the company''s interest;
(b) The loan is not due for repayment presently and therefore there is
no default in its repayment and there is no overdue. Hence, the clause
3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not
applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of section
185 and 186 of the Companies Act, 2013 with respect to loans,
investments, guarantees and security given.
(v) The Company has not accepted any deposit from the public pursuant
to sections 73 to 76 or any other relevant provisions of the Companies
Act, 2013 and rules framed there under. As informed to us, there is no
order that has been passed by Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal in
respect of the said sections.
(vi) As informed to us, the maintenance of the cost records under the
sub-section (1) of section 148 of the Companies Act, 2013 has been
prescribed and we are of the opinion that prima facie, the prescribed
accounts and records have been maintained. We have not, however,
carried out a detailed examination of the records to ascertain whether
they are accurate or complete.
(vii) (a) The Company has been regular in depositing undisputed
statutory dues including Provident fund, Employees State Insurance,
Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other statutory dues with the appropriate authorities during the year.
According to the information and explanations given to us, no
undisputed amount payable in respect of the aforesaid dues were
outstanding as at March 31, 2016 for a period of more than six months
from the date of becoming payable.
(b) According to the information and explanations given to us, there
are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or
Duty of Excise or Value Added Tax which have not been deposited on
account of any dispute except as given in the statement attached
herewith.
(viii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
defaulted in repayment of dues to the financial institution or banks or
to the debenture holders.
(ix) The Company has not raised any money by way of public issue
/follow-on offer (including debt instruments). On the basis of the
documents submitted to the bankers and the other records perused by us,
we have to state that the term loans which are in the nature of
External Commercial Borrowings and the buyers credit for purchase of
fixed assets taken during the year have been applied for the purpose
for which the loans were obtained.
(x) According to the information and explanations given to us and to
the best of our knowledge and belief no fraud by the Company or on the
Company by its officers or employees has been noticed or reported
during the year.
(xi) The managerial remuneration has been paid / provided in accordance
with the requisite approvals mandated by the provisions of section 197
read with schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company hence clause 3(xii) of
Companies (Auditors Report) Order 2016 is not applicable to the
Company.
(xiii) All transactions with the related parties are in compliance with
sections 177 and 188 of the Companies Act, 2013 in so far as our
examination of the proceedings of the meetings of the Audit Committee
and Board of Directors are concerned. The details of related party
transactions have been disclosed in the financial statements as
required by the Accounting Standard 18 - Related Party Disclosures of
the Companies (Accounting Standards) Rules, 2006.
(xiv) The Company has not made any preferential allotment / private
placement of shares or fully or partly convertible debentures during
the year under review and hence the clause 3(xiv) of the Companies
(Auditors Report) Order, 2016 is not applicable to the Company.
(xv) The Company has not entered into any non-cash transactions with
directors or persons connected with them and hence the clause 3(xv) of
the Companies (Auditors Report) Order, 2016 is not applicable to the
Company.
(xvi) The nature of business and the activities of the Company are such
that the Company is not required to obtain registration under section
45-IA of the Reserve Bank of India Act 1934.
Name of the Nature of Dues Amount Period to which the
Statute (Rs, crores) amount relates
Excise Duty Valuation of as
Such clearance of
RM/PM 0.12 April''2001 to Feb''2003
115%
Excise Duty Payment of Excise
duty on 4-OH 0.33 April''2003 to Sept''2007
(Intermediate
stage of 4-7
DCQ)
Excise Duty Payment of Excise
duty on 4-OH 0.19 Oct''2007 to Dec''2008
(Intermediate
stage of 4-7
DCQ)_
Excise Duty Differential
Excise
duty on WIP on 0.23 2009-10
Excise Duty Wrong availmentof
PL Arecreditin 0.68 Dec''2011 to Dec''2013
respect of
education cess
and secondary &
higher education
cess at Sikkim_
Excise Duty Wrong availmentof
PLArecredit in 0.49 Jan''2014toDec''2014
respect of
education cess
and secondary &
higher education
cess at Sikkim
Excise Duty Wrong availmentof
PLArecredit in 0.09 Jan''2015&Feb''2015
respect of
education cess
and secondary &
higher education
cess at Sikki
Excise Duty Interest and
penalty on past 4.15 -
anti-dumping
duty & excise
duty
Service Tax Availment of
credit
of service tax 0.64 2006-07
& 2007-08
Service Tax Availmentof credit
of service tax on
H.O. 0.23 April''08 to
Invoices_ Nov''08
Service Tax Availmentof credit
of service tax on
H.O. 0.04 Dec''08 to
Sept''09
Invoices
Service Tax Availmentof credit
of service tax on 0.03 2006-07 & 2007-08
telephone/cell phone
/taxi hire
charges
Service Tax Availmentof credit
of service tax on 0.01 April''08 to Dec''08
telephone/cell phone
/taxi hire charges
Service Tax Availmentof credit
of service tax on 0.01 Jan''09 to Sept''09
telephone/cell phone
/taxi hire
charges
Service Tax Availmentof credit
of service tax on
H.O. 1.42 2006-07 &
2007-08
Invoice
Service Tax Availmentof credit
of service tax on
H.O. 0.34 April''08 to
Nov''08
Service Tax Availmentof credit
of service tax on
H.O. 0.30 Dec''08 to
Sept''09
Invoices
Service Tax Non reversal of
proportionate
amount of 0.01 2005-06 to
2007-08
tax credit on
GTA against
Input Mumbai
credit reversal
on short
received and
destruction of
RM/PM
Service Tax Availmentof credit
of service tax on 0.02 2009-10&2010-11
outward freight
based on CERA audit
queryf
Service Tax Availmentof Cenvat
credit of service
tax 0.01 2006-07
services
Service Tax Availmentof Cenvat
credit on service
tax 0.61 2006-07 &
2007-08
Service Tax Non payment of
service tax under
RCM 2.49 July''2012
to Sept''2013
remittences in
foreign currency
for product/ patent
registration and
facility fees
to US FDA
Sales Tax Jammu& Kashmir
Value Added Tax
Act, 0.05 2011-12 Deputy
(2011 -12) -
Disputed
Demand
Sales Tax Gujarat Value
Added Tax Act 0.07 2006-07
(2006-07)
demand
Sales Tax Gujarat Value
Added Tax Act 0.02 2007-08
(2007-2008)
demand
Sales Tax UP Value Added
Tax Act 0.01 2008-09
(2008-09)-
Disputed demand
Sales Tax Gujarat Value
Added Tax
(Ankleshwar) - 0.08 2010-11
Disputed demand
Sales Tax CST
0.30 2012-13
Sales Tax CST Assessment 0.47 2013-14
Sales Tax VAT Assessment
demand 0.10 2013-14
Sales Tax Duburdih Check
Post Penalty 0.01 2014-15
Total 13.55
Name of the Forum where
dispute is pending
Excise Duty Commissioner, C. Ex. LTU, Mumbai on
Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7
Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7
Excise Duty CESTAT, Ahmadabad
Excise Duty LTU,Mumbai
Excise Duty LTU,Mumbai
Excise Duty LTU,Mumbai
Excise Duty High Court, Gujarat
Service CESTAT, Mumbai
Service Tax Commissioner, C. Ex. LTU Invoices_
Service Tax Commissioner, C. Ex. LTU, Mumbai
Invoices
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai
Service Tax Commissioner, C. Ex. LTU, Mumbai
Service Tax Commissioner, C. Ex. LTU, Mumba _Invoices
Service Tax Commissioner, C. Ex. LTU, Mumbai
Service Tax Asstt. Commissioner, Central Excise & service
tax. LTU, Mumbai
Service Tax Deputy. Commissioner, C. Ex. & S.T, LTU, mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai services
Service Tax CESTAT, Mumbai
Service Tax Commissioner of Central Excise & Service Tax, LTU-
Sales Tax Deputy Commissioner of Commercial Tax (Appeal),
Srinagar_
Sales Tax Gujarat VATTribunal,Ahmedabad
Sales Tax Jt. Commissioner of Commercial Tax, Rajkot
Sales Tax Sales Tax Authority, UP_
Sales Tax Deputy Commissioner of VAT,
Sales Tax Deputy Commissioner, Commercial Tax.Ratlam
Sales Tax Deputy Commissioner, Commercial Tax.Ratlam
Sales Tax Addl.Commissioner (Appeal), Commercial Tax.lndore
Sales Tax Deputy Commissioner,Sales Tax, West Bengal
Total
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No. 106971W
N Jayendran
Mumbai, Partner
30th May, 2016 M. No. 40441
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Ipca Laboratories Limited("the Company"), which comprises the Balance
Sheet as at March 31,2016, the Statement of Profit and Loss, Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by Company''s directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at March 31,2016, its profit and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure A,
a statement on the matters Specified in paragraphs 3 and 4 of the said
Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge 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 the Company so far as it appears from our examination of
those books.
(c) 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.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of written representations received from the directors
as on March 31,2016 and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,2016 from being
appointed as a director in terms of section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 34 to the
financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There are no delays in payment of amounts to the Investor
Education and Protection Fund during the year.
(i) (a) The Company has generally maintained proper records showing
full particulars including quantitative details and situation of its
fixed assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
(c) We have verified the title deeds of immovable properties forming
part of Fixed Assets produced before us by the management and based on
such verification we confirm that the same are held in the name of the
company.
(ii) The management has conducted physical verification of inventory at
reasonable intervals during the year. The discrepancies noticed between
the book stock and the physical stocks were not material and they have
been properly dealt with in the books of accounts.
(iii) During the year the Company has granted loan to its associates
covered in the register maintained u/s 189 of the Companies Act 2013.
(a) The terms and conditions of the grant of such loans are not
prejudicial to the company''s interest;
(b) The loan is not due for repayment presently and therefore there is
no default in its repayment and there is no overdue. Hence, the clause
3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not
applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of section
185 and 186 of the Companies Act, 2013 with respect to loans,
investments, guarantees and security given.
(v) The Company has not accepted any deposit from the public pursuant
to sections 73 to 76 or any other relevant provisions of the Companies
Act, 2013 and rules framed there under. As informed to us, there is no
order that has been passed by Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal in
respect of the said sections.
(vi) As informed to us, the maintenance of the cost records under the
sub-section (1) of section 148 of the Companies Act, 2013 has been
prescribed and we are of the opinion that prima facie, the prescribed
accounts and records have been maintained. We have not, however,
carried out a detailed examination of the records to ascertain whether
they are accurate or complete.
(vii) (a) The Company has been regular in depositing undisputed
statutory dues including Provident fund, Employees State Insurance,
Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other statutory dues with the appropriate authorities during the year.
According to the information and explanations given to us, no
undisputed amount payable in respect of the aforesaid dues were
outstanding as at March 31, 2016 for a period of more than six months
from the date of becoming payable.
(b) According to the information and explanations given to us, there
are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or
Duty of Excise or Value Added Tax which have not been deposited on
account of any dispute except as given in the statement attached
herewith.
(viii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
defaulted in repayment of dues to the financial institution or banks or
to the debenture holders.
(ix) The Company has not raised any money by way of public issue
/follow-on offer (including debt instruments). On the basis of the
documents submitted to the bankers and the other records perused by us,
we have to state that the term loans which are in the nature of
External Commercial Borrowings and the buyers credit for purchase of
fixed assets taken during the year have been applied for the purpose
for which the loans were obtained.
(x) According to the information and explanations given to us and to
the best of our knowledge and belief no fraud by the Company or on the
Company by its officers or employees has been noticed or reported
during the year.
(xi) The managerial remuneration has been paid / provided in accordance
with the requisite approvals mandated by the provisions of section 197
read with schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company hence clause 3(xii) of
Companies (Auditors Report) Order 2016 is not applicable to the
Company.
(xiii) All transactions with the related parties are in compliance with
sections 177 and 188 of the Companies Act, 2013 in so far as our
examination of the proceedings of the meetings of the Audit Committee
and Board of Directors are concerned. The details of related party
transactions have been disclosed in the financial statements as
required by the Accounting Standard 18 - Related Party Disclosures of
the Companies (Accounting Standards) Rules, 2006.
(xiv) The Company has not made any preferential allotment / private
placement of shares or fully or partly convertible debentures during
the year under review and hence the clause 3(xiv) of the Companies
(Auditors Report) Order, 2016 is not applicable to the Company.
(xv) The Company has not entered into any non-cash transactions with
directors or persons connected with them and hence the clause 3(xv) of
the Companies (Auditors Report) Order, 2016 is not applicable to the
Company.
(xvi) The nature of business and the activities of the Company are such
that the Company is not required to obtain registration under section
45-IA of the Reserve Bank of India Act 1934.
Name of the Nature of Dues Amount Period to which the
Statute (Rs, crores) amount relates
Excise Duty Valuation of as
Such clearance of
RM/PM 0.12 April''2001 to Feb''2003
115%
Excise Duty Payment of Excise
duty on 4-OH 0.33 April''2003 to Sept''2007
(Intermediate
stage of 4-7
DCQ)
Excise Duty Payment of Excise
duty on 4-OH 0.19 Oct''2007 to Dec''2008
(Intermediate
stage of 4-7
DCQ)_
Excise Duty Differential
Excise
duty on WIP on 0.23 2009-10
Excise Duty Wrong availmentof
PL Arecreditin 0.68 Dec''2011 to Dec''2013
respect of
education cess
and secondary &
higher education
cess at Sikkim_
Excise Duty Wrong availmentof
PLArecredit in 0.49 Jan''2014toDec''2014
respect of
education cess
and secondary &
higher education
cess at Sikkim
Excise Duty Wrong availmentof
PLArecredit in 0.09 Jan''2015&Feb''2015
respect of
education cess
and secondary &
higher education
cess at Sikki
Excise Duty Interest and
penalty on past 4.15 -
anti-dumping
duty & excise
duty
Service Tax Availment of
credit
of service tax 0.64 2006-07
& 2007-08
Service Tax Availmentof credit
of service tax on
H.O. 0.23 April''08 to
Invoices_ Nov''08
Service Tax Availmentof credit
of service tax on
H.O. 0.04 Dec''08 to
Sept''09
Invoices
Service Tax Availmentof credit
of service tax on 0.03 2006-07 & 2007-08
telephone/cell phone
/taxi hire
charges
Service Tax Availmentof credit
of service tax on 0.01 April''08 to Dec''08
telephone/cell phone
/taxi hire charges
Service Tax Availmentof credit
of service tax on 0.01 Jan''09 to Sept''09
telephone/cell phone
/taxi hire
charges
Service Tax Availmentof credit
of service tax on
H.O. 1.42 2006-07 &
2007-08
Invoice
Service Tax Availmentof credit
of service tax on
H.O. 0.34 April''08 to
Nov''08
Service Tax Availmentof credit
of service tax on
H.O. 0.30 Dec''08 to
Sept''09
Invoices
Service Tax Non reversal of
proportionate
amount of 0.01 2005-06 to
2007-08
tax credit on
GTA against
Input Mumbai
credit reversal
on short
received and
destruction of
RM/PM
Service Tax Availmentof credit
of service tax on 0.02 2009-10&2010-11
outward freight
based on CERA audit
queryf
Service Tax Availmentof Cenvat
credit of service
tax 0.01 2006-07
services
Service Tax Availmentof Cenvat
credit on service
tax 0.61 2006-07 &
2007-08
Service Tax Non payment of
service tax under
RCM 2.49 July''2012
to Sept''2013
remittences in
foreign currency
for product/ patent
registration and
facility fees
to US FDA
Sales Tax Jammu& Kashmir
Value Added Tax
Act, 0.05 2011-12 Deputy
(2011 -12) -
Disputed
Demand
Sales Tax Gujarat Value
Added Tax Act 0.07 2006-07
(2006-07)
demand
Sales Tax Gujarat Value
Added Tax Act 0.02 2007-08
(2007-2008)
demand
Sales Tax UP Value Added
Tax Act 0.01 2008-09
(2008-09)-
Disputed demand
Sales Tax Gujarat Value
Added Tax
(Ankleshwar) - 0.08 2010-11
Disputed demand
Sales Tax CST
0.30 2012-13
Sales Tax CST Assessment 0.47 2013-14
Sales Tax VAT Assessment
demand 0.10 2013-14
Sales Tax Duburdih Check
Post Penalty 0.01 2014-15
Total 13.55
Name of the Forum where
dispute is pending
Excise Duty Commissioner, C. Ex. LTU, Mumbai on
Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7
Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7
Excise Duty CESTAT, Ahmadabad
Excise Duty LTU,Mumbai
Excise Duty LTU,Mumbai
Excise Duty LTU,Mumbai
Excise Duty High Court, Gujarat
Service CESTAT, Mumbai
Service Tax Commissioner, C. Ex. LTU Invoices_
Service Tax Commissioner, C. Ex. LTU, Mumbai
Invoices
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai
Service Tax Commissioner, C. Ex. LTU, Mumbai
Service Tax Commissioner, C. Ex. LTU, Mumba _Invoices
Service Tax Commissioner, C. Ex. LTU, Mumbai
Service Tax Asstt. Commissioner, Central Excise & service
tax. LTU, Mumbai
Service Tax Deputy. Commissioner, C. Ex. & S.T, LTU, mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai services
Service Tax CESTAT, Mumbai
Service Tax Commissioner of Central Excise & Service Tax, LTU-
Sales Tax Deputy Commissioner of Commercial Tax (Appeal),
Srinagar_
Sales Tax Gujarat VATTribunal,Ahmedabad
Sales Tax Jt. Commissioner of Commercial Tax, Rajkot
Sales Tax Sales Tax Authority, UP_
Sales Tax Deputy Commissioner of VAT,
Sales Tax Deputy Commissioner, Commercial Tax.Ratlam
Sales Tax Deputy Commissioner, Commercial Tax.Ratlam
Sales Tax Addl.Commissioner (Appeal), Commercial Tax.lndore
Sales Tax Deputy Commissioner,Sales Tax, West Bengal
Total
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No. 106971W
N Jayendran
Mumbai, Partner
30th May, 2016 M. No. 40441
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Ipca Laboratories Limited("the Company"), which comprises the Balance
Sheet as at March 31,2016, the Statement of Profit and Loss, Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by Company''s directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at March 31,2016, its profit and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure A,
a statement on the matters Specified in paragraphs 3 and 4 of the said
Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge 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 the Company so far as it appears from our examination of
those books.
(c) 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.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of written representations received from the directors
as on March 31,2016 and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,2016 from being
appointed as a director in terms of section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 34 to the
financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There are no delays in payment of amounts to the Investor
Education and Protection Fund during the year.
(i) (a) The Company has generally maintained proper records showing
full particulars including quantitative details and situation of its
fixed assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
(c) We have verified the title deeds of immovable properties forming
part of Fixed Assets produced before us by the management and based on
such verification we confirm that the same are held in the name of the
company.
(ii) The management has conducted physical verification of inventory at
reasonable intervals during the year. The discrepancies noticed between
the book stock and the physical stocks were not material and they have
been properly dealt with in the books of accounts.
(iii) During the year the Company has granted loan to its associates
covered in the register maintained u/s 189 of the Companies Act 2013.
(a) The terms and conditions of the grant of such loans are not
prejudicial to the company''s interest;
(b) The loan is not due for repayment presently and therefore there is
no default in its repayment and there is no overdue. Hence, the clause
3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not
applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of section
185 and 186 of the Companies Act, 2013 with respect to loans,
investments, guarantees and security given.
(v) The Company has not accepted any deposit from the public pursuant
to sections 73 to 76 or any other relevant provisions of the Companies
Act, 2013 and rules framed there under. As informed to us, there is no
order that has been passed by Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal in
respect of the said sections.
(vi) As informed to us, the maintenance of the cost records under the
sub-section (1) of section 148 of the Companies Act, 2013 has been
prescribed and we are of the opinion that prima facie, the prescribed
accounts and records have been maintained. We have not, however,
carried out a detailed examination of the records to ascertain whether
they are accurate or complete.
(vii) (a) The Company has been regular in depositing undisputed
statutory dues including Provident fund, Employees State Insurance,
Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other statutory dues with the appropriate authorities during the year.
According to the information and explanations given to us, no
undisputed amount payable in respect of the aforesaid dues were
outstanding as at March 31, 2016 for a period of more than six months
from the date of becoming payable.
(b) According to the information and explanations given to us, there
are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or
Duty of Excise or Value Added Tax which have not been deposited on
account of any dispute except as given in the statement attached
herewith.
(viii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
defaulted in repayment of dues to the financial institution or banks or
to the debenture holders.
(ix) The Company has not raised any money by way of public issue
/follow-on offer (including debt instruments). On the basis of the
documents submitted to the bankers and the other records perused by us,
we have to state that the term loans which are in the nature of
External Commercial Borrowings and the buyers credit for purchase of
fixed assets taken during the year have been applied for the purpose
for which the loans were obtained.
(x) According to the information and explanations given to us and to
the best of our knowledge and belief no fraud by the Company or on the
Company by its officers or employees has been noticed or reported
during the year.
(xi) The managerial remuneration has been paid / provided in accordance
with the requisite approvals mandated by the provisions of section 197
read with schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company hence clause 3(xii) of
Companies (Auditors Report) Order 2016 is not applicable to the
Company.
(xiii) All transactions with the related parties are in compliance with
sections 177 and 188 of the Companies Act, 2013 in so far as our
examination of the proceedings of the meetings of the Audit Committee
and Board of Directors are concerned. The details of related party
transactions have been disclosed in the financial statements as
required by the Accounting Standard 18 - Related Party Disclosures of
the Companies (Accounting Standards) Rules, 2006.
(xiv) The Company has not made any preferential allotment / private
placement of shares or fully or partly convertible debentures during
the year under review and hence the clause 3(xiv) of the Companies
(Auditors Report) Order, 2016 is not applicable to the Company.
(xv) The Company has not entered into any non-cash transactions with
directors or persons connected with them and hence the clause 3(xv) of
the Companies (Auditors Report) Order, 2016 is not applicable to the
Company.
(xvi) The nature of business and the activities of the Company are such
that the Company is not required to obtain registration under section
45-IA of the Reserve Bank of India Act 1934.
Name of the Nature of Dues Amount Period to which the
Statute (Rs, crores) amount relates
Excise Duty Valuation of as
Such clearance of
RM/PM 0.12 April''2001 to Feb''2003
115%
Excise Duty Payment of Excise
duty on 4-OH 0.33 April''2003 to Sept''2007
(Intermediate
stage of 4-7
DCQ)
Excise Duty Payment of Excise
duty on 4-OH 0.19 Oct''2007 to Dec''2008
(Intermediate
stage of 4-7
DCQ)_
Excise Duty Differential
Excise
duty on WIP on 0.23 2009-10
Excise Duty Wrong availmentof
PL Arecreditin 0.68 Dec''2011 to Dec''2013
respect of
education cess
and secondary &
higher education
cess at Sikkim_
Excise Duty Wrong availmentof
PLArecredit in 0.49 Jan''2014toDec''2014
respect of
education cess
and secondary &
higher education
cess at Sikkim
Excise Duty Wrong availmentof
PLArecredit in 0.09 Jan''2015&Feb''2015
respect of
education cess
and secondary &
higher education
cess at Sikki
Excise Duty Interest and
penalty on past 4.15 -
anti-dumping
duty & excise
duty
Service Tax Availment of
credit
of service tax 0.64 2006-07
& 2007-08
Service Tax Availmentof credit
of service tax on
H.O. 0.23 April''08 to
Invoices_ Nov''08
Service Tax Availmentof credit
of service tax on
H.O. 0.04 Dec''08 to
Sept''09
Invoices
Service Tax Availmentof credit
of service tax on 0.03 2006-07 & 2007-08
telephone/cell phone
/taxi hire
charges
Service Tax Availmentof credit
of service tax on 0.01 April''08 to Dec''08
telephone/cell phone
/taxi hire charges
Service Tax Availmentof credit
of service tax on 0.01 Jan''09 to Sept''09
telephone/cell phone
/taxi hire
charges
Service Tax Availmentof credit
of service tax on
H.O. 1.42 2006-07 &
2007-08
Invoice
Service Tax Availmentof credit
of service tax on
H.O. 0.34 April''08 to
Nov''08
Service Tax Availmentof credit
of service tax on
H.O. 0.30 Dec''08 to
Sept''09
Invoices
Service Tax Non reversal of
proportionate
amount of 0.01 2005-06 to
2007-08
tax credit on
GTA against
Input Mumbai
credit reversal
on short
received and
destruction of
RM/PM
Service Tax Availmentof credit
of service tax on 0.02 2009-10&2010-11
outward freight
based on CERA audit
queryf
Service Tax Availmentof Cenvat
credit of service
tax 0.01 2006-07
services
Service Tax Availmentof Cenvat
credit on service
tax 0.61 2006-07 &
2007-08
Service Tax Non payment of
service tax under
RCM 2.49 July''2012
to Sept''2013
remittences in
foreign currency
for product/ patent
registration and
facility fees
to US FDA
Sales Tax Jammu& Kashmir
Value Added Tax
Act, 0.05 2011-12 Deputy
(2011 -12) -
Disputed
Demand
Sales Tax Gujarat Value
Added Tax Act 0.07 2006-07
(2006-07)
demand
Sales Tax Gujarat Value
Added Tax Act 0.02 2007-08
(2007-2008)
demand
Sales Tax UP Value Added
Tax Act 0.01 2008-09
(2008-09)-
Disputed demand
Sales Tax Gujarat Value
Added Tax
(Ankleshwar) - 0.08 2010-11
Disputed demand
Sales Tax CST
0.30 2012-13
Sales Tax CST Assessment 0.47 2013-14
Sales Tax VAT Assessment
demand 0.10 2013-14
Sales Tax Duburdih Check
Post Penalty 0.01 2014-15
Total 13.55
Name of the Forum where
dispute is pending
Excise Duty Commissioner, C. Ex. LTU, Mumbai on
Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7
Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7
Excise Duty CESTAT, Ahmadabad
Excise Duty LTU,Mumbai
Excise Duty LTU,Mumbai
Excise Duty LTU,Mumbai
Excise Duty High Court, Gujarat
Service CESTAT, Mumbai
Service Tax Commissioner, C. Ex. LTU Invoices_
Service Tax Commissioner, C. Ex. LTU, Mumbai
Invoices
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai
Service Tax Commissioner, C. Ex. LTU, Mumbai
Service Tax Commissioner, C. Ex. LTU, Mumba _Invoices
Service Tax Commissioner, C. Ex. LTU, Mumbai
Service Tax Asstt. Commissioner, Central Excise & service
tax. LTU, Mumbai
Service Tax Deputy. Commissioner, C. Ex. & S.T, LTU, mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai services
Service Tax CESTAT, Mumbai
Service Tax Commissioner of Central Excise & Service Tax, LTU-
Sales Tax Deputy Commissioner of Commercial Tax (Appeal),
Srinagar_
Sales Tax Gujarat VATTribunal,Ahmedabad
Sales Tax Jt. Commissioner of Commercial Tax, Rajkot
Sales Tax Sales Tax Authority, UP_
Sales Tax Deputy Commissioner of VAT,
Sales Tax Deputy Commissioner, Commercial Tax.Ratlam
Sales Tax Deputy Commissioner, Commercial Tax.Ratlam
Sales Tax Addl.Commissioner (Appeal), Commercial Tax.lndore
Sales Tax Deputy Commissioner,Sales Tax, West Bengal
Total
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No. 106971W
N Jayendran
Mumbai, Partner
30th May, 2016 M. No. 40441
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Ipca Laboratories Limited("the Company"), which comprises the Balance
Sheet as at March 31,2016, the Statement of Profit and Loss, Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by Company''s directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at March 31,2016, its profit and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure A,
a statement on the matters Specified in paragraphs 3 and 4 of the said
Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge 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 the Company so far as it appears from our examination of
those books.
(c) 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.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of written representations received from the directors
as on March 31,2016 and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,2016 from being
appointed as a director in terms of section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 34 to the
financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There are no delays in payment of amounts to the Investor
Education and Protection Fund during the year.
(i) (a) The Company has generally maintained proper records showing
full particulars including quantitative details and situation of its
fixed assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
(c) We have verified the title deeds of immovable properties forming
part of Fixed Assets produced before us by the management and based on
such verification we confirm that the same are held in the name of the
company.
(ii) The management has conducted physical verification of inventory at
reasonable intervals during the year. The discrepancies noticed between
the book stock and the physical stocks were not material and they have
been properly dealt with in the books of accounts.
(iii) During the year the Company has granted loan to its associates
covered in the register maintained u/s 189 of the Companies Act 2013.
(a) The terms and conditions of the grant of such loans are not
prejudicial to the company''s interest;
(b) The loan is not due for repayment presently and therefore there is
no default in its repayment and there is no overdue. Hence, the clause
3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not
applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of section
185 and 186 of the Companies Act, 2013 with respect to loans,
investments, guarantees and security given.
(v) The Company has not accepted any deposit from the public pursuant
to sections 73 to 76 or any other relevant provisions of the Companies
Act, 2013 and rules framed there under. As informed to us, there is no
order that has been passed by Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal in
respect of the said sections.
(vi) As informed to us, the maintenance of the cost records under the
sub-section (1) of section 148 of the Companies Act, 2013 has been
prescribed and we are of the opinion that prima facie, the prescribed
accounts and records have been maintained. We have not, however,
carried out a detailed examination of the records to ascertain whether
they are accurate or complete.
(vii) (a) The Company has been regular in depositing undisputed
statutory dues including Provident fund, Employees State Insurance,
Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other statutory dues with the appropriate authorities during the year.
According to the information and explanations given to us, no
undisputed amount payable in respect of the aforesaid dues were
outstanding as at March 31, 2016 for a period of more than six months
from the date of becoming payable.
(b) According to the information and explanations given to us, there
are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or
Duty of Excise or Value Added Tax which have not been deposited on
account of any dispute except as given in the statement attached
herewith.
(viii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
defaulted in repayment of dues to the financial institution or banks or
to the debenture holders.
(ix) The Company has not raised any money by way of public issue
/follow-on offer (including debt instruments). On the basis of the
documents submitted to the bankers and the other records perused by us,
we have to state that the term loans which are in the nature of
External Commercial Borrowings and the buyers credit for purchase of
fixed assets taken during the year have been applied for the purpose
for which the loans were obtained.
(x) According to the information and explanations given to us and to
the best of our knowledge and belief no fraud by the Company or on the
Company by its officers or employees has been noticed or reported
during the year.
(xi) The managerial remuneration has been paid / provided in accordance
with the requisite approvals mandated by the provisions of section 197
read with schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company hence clause 3(xii) of
Companies (Auditors Report) Order 2016 is not applicable to the
Company.
(xiii) All transactions with the related parties are in compliance with
sections 177 and 188 of the Companies Act, 2013 in so far as our
examination of the proceedings of the meetings of the Audit Committee
and Board of Directors are concerned. The details of related party
transactions have been disclosed in the financial statements as
required by the Accounting Standard 18 - Related Party Disclosures of
the Companies (Accounting Standards) Rules, 2006.
(xiv) The Company has not made any preferential allotment / private
placement of shares or fully or partly convertible debentures during
the year under review and hence the clause 3(xiv) of the Companies
(Auditors Report) Order, 2016 is not applicable to the Company.
(xv) The Company has not entered into any non-cash transactions with
directors or persons connected with them and hence the clause 3(xv) of
the Companies (Auditors Report) Order, 2016 is not applicable to the
Company.
(xvi) The nature of business and the activities of the Company are such
that the Company is not required to obtain registration under section
45-IA of the Reserve Bank of India Act 1934.
Name of the Nature of Dues Amount Period to which the
Statute (Rs, crores) amount relates
Excise Duty Valuation of as
Such clearance of
RM/PM 0.12 April''2001 to Feb''2003
115%
Excise Duty Payment of Excise
duty on 4-OH 0.33 April''2003 to Sept''2007
(Intermediate
stage of 4-7
DCQ)
Excise Duty Payment of Excise
duty on 4-OH 0.19 Oct''2007 to Dec''2008
(Intermediate
stage of 4-7
DCQ)_
Excise Duty Differential
Excise
duty on WIP on 0.23 2009-10
Excise Duty Wrong availmentof
PL Arecreditin 0.68 Dec''2011 to Dec''2013
respect of
education cess
and secondary &
higher education
cess at Sikkim_
Excise Duty Wrong availmentof
PLArecredit in 0.49 Jan''2014toDec''2014
respect of
education cess
and secondary &
higher education
cess at Sikkim
Excise Duty Wrong availmentof
PLArecredit in 0.09 Jan''2015&Feb''2015
respect of
education cess
and secondary &
higher education
cess at Sikki
Excise Duty Interest and
penalty on past 4.15 -
anti-dumping
duty & excise
duty
Service Tax Availment of
credit
of service tax 0.64 2006-07
& 2007-08
Service Tax Availmentof credit
of service tax on
H.O. 0.23 April''08 to
Invoices_ Nov''08
Service Tax Availmentof credit
of service tax on
H.O. 0.04 Dec''08 to
Sept''09
Invoices
Service Tax Availmentof credit
of service tax on 0.03 2006-07 & 2007-08
telephone/cell phone
/taxi hire
charges
Service Tax Availmentof credit
of service tax on 0.01 April''08 to Dec''08
telephone/cell phone
/taxi hire charges
Service Tax Availmentof credit
of service tax on 0.01 Jan''09 to Sept''09
telephone/cell phone
/taxi hire
charges
Service Tax Availmentof credit
of service tax on
H.O. 1.42 2006-07 &
2007-08
Invoice
Service Tax Availmentof credit
of service tax on
H.O. 0.34 April''08 to
Nov''08
Service Tax Availmentof credit
of service tax on
H.O. 0.30 Dec''08 to
Sept''09
Invoices
Service Tax Non reversal of
proportionate
amount of 0.01 2005-06 to
2007-08
tax credit on
GTA against
Input Mumbai
credit reversal
on short
received and
destruction of
RM/PM
Service Tax Availmentof credit
of service tax on 0.02 2009-10&2010-11
outward freight
based on CERA audit
queryf
Service Tax Availmentof Cenvat
credit of service
tax 0.01 2006-07
services
Service Tax Availmentof Cenvat
credit on service
tax 0.61 2006-07 &
2007-08
Service Tax Non payment of
service tax under
RCM 2.49 July''2012
to Sept''2013
remittences in
foreign currency
for product/ patent
registration and
facility fees
to US FDA
Sales Tax Jammu& Kashmir
Value Added Tax
Act, 0.05 2011-12 Deputy
(2011 -12) -
Disputed
Demand
Sales Tax Gujarat Value
Added Tax Act 0.07 2006-07
(2006-07)
demand
Sales Tax Gujarat Value
Added Tax Act 0.02 2007-08
(2007-2008)
demand
Sales Tax UP Value Added
Tax Act 0.01 2008-09
(2008-09)-
Disputed demand
Sales Tax Gujarat Value
Added Tax
(Ankleshwar) - 0.08 2010-11
Disputed demand
Sales Tax CST
0.30 2012-13
Sales Tax CST Assessment 0.47 2013-14
Sales Tax VAT Assessment
demand 0.10 2013-14
Sales Tax Duburdih Check
Post Penalty 0.01 2014-15
Total 13.55
Name of the Forum where
dispute is pending
Excise Duty Commissioner, C. Ex. LTU, Mumbai on
Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7
Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7
Excise Duty CESTAT, Ahmadabad
Excise Duty LTU,Mumbai
Excise Duty LTU,Mumbai
Excise Duty LTU,Mumbai
Excise Duty High Court, Gujarat
Service CESTAT, Mumbai
Service Tax Commissioner, C. Ex. LTU Invoices_
Service Tax Commissioner, C. Ex. LTU, Mumbai
Invoices
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai
Service Tax Commissioner, C. Ex. LTU, Mumbai
Service Tax Commissioner, C. Ex. LTU, Mumba _Invoices
Service Tax Commissioner, C. Ex. LTU, Mumbai
Service Tax Asstt. Commissioner, Central Excise & service
tax. LTU, Mumbai
Service Tax Deputy. Commissioner, C. Ex. & S.T, LTU, mumbai
Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU,
Mumbai services
Service Tax CESTAT, Mumbai
Service Tax Commissioner of Central Excise & Service Tax, LTU-
Sales Tax Deputy Commissioner of Commercial Tax (Appeal),
Srinagar_
Sales Tax Gujarat VATTribunal,Ahmedabad
Sales Tax Jt. Commissioner of Commercial Tax, Rajkot
Sales Tax Sales Tax Authority, UP_
Sales Tax Deputy Commissioner of VAT,
Sales Tax Deputy Commissioner, Commercial Tax.Ratlam
Sales Tax Deputy Commissioner, Commercial Tax.Ratlam
Sales Tax Addl.Commissioner (Appeal), Commercial Tax.lndore
Sales Tax Deputy Commissioner,Sales Tax, West Bengal
Total
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No. 106971W
N Jayendran
Mumbai, Partner
30th May, 2016 M. No. 40441
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Ipca Laboratories Limited ("the Company"), which comprise the Balance
Sheet as at 31st March, 2015, the Statement of Profit and Loss, the
Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its profit and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section143 of the Act, we give in the Annexure a
statement on the matters Specified in paragraphs 3 and 4 of the said
Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
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 it appears from our examination of
those books.
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
accounts.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of written representations received from the directors
as on 31st March, 2015 and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2015 from being
appointed as a director in terms of section 164(2) of the Act.
(f) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 34 to the
financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There are no delays in payment of amounts to the Investor
Education and Protection Fund during the year.
Annexure referred to in paragraph 1 of Report on Other Legal and
Regulatory Requirements of our report of even date
(i) (a) The Company has generally maintained proper records showing
full particulars, including quantitative details and situation of its
fixed assets.
(b) Fixed assets have been physically verified by the management during
the year and no material discrepancies were identified on such
verification.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
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 explanation
given to us, the company has maintained proper records of inventory. No
material discrepancies were noticed on physical verification of
inventory as compared to book records.
(iii) (a) The Company has granted interest free unsecured loan to its
wholly owned subsidiary and a joint venture company covered in the
register maintained u/s 189 of the Companies Act 2013.
(b) The Loan is not due for repayment presently and therefore there is
no default in its repayment and there is no overdue.
(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, for the
purchase of inventory and fixed assets and for sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) The Company has not accepted any deposit from the public pursuant
to sections 73 to 76 or any other relevant provisions of the Companies
Act, 2013 and rules framed thereunder. Therefore, the provisions of
clause 3(v) of the Companies (Auditors Report) Order 2015 are not
applicable to the Company. As informed to us, there is no order that
has been passed by Company Law Board or National Company Law Tribunal
or Reserve Bank of India or any Court or any other Tribunal in respect
of the said sections.
(vi) As informed to us, the maintenance of the cost records under the
sub-section (1) of section 148 of the Companies Act, 2013 has been
prescribed and we are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained. We have not however
carried out a detailed examination of the records to ascertain whether
they are accurate or complete.
(vii) (a) The Company has been regular in depositing undisputed
statutory dues including Provident Fund, Employees State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty, Excise
duty, Value Added Tax, Cess and other statutory dues with the
appropriate authorities during the year. According to the information
and explanations given to us, no undisputed amount payable in respect
of the aforesaid dues were outstanding as at 31st March, 2015 for a
period of more than six months from the date of becoming payable.
(b) According to the information and explanations given to us, there
are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom
duty, Excise duty, Value Added Tax, Cess which have not been deposited
on account of any dispute except as given in the statement attached
herewith.
(c) The amounts to be transferred to the Investor Education and
Protection Fund have been transferred on time as required by the extant
laws.
(viii) The Company does not have any accumulated losses and has not
incurred cash losses during the financial year and also in the
immediately preceding financial year.
(ix) According to the information and explanations given to us and
based on the documents and records produced to us, the company has not
defaulted in repayment of dues to any Financial Institution, Bank or
Debenture Holders.
(x) According to the information and explanations given to us and the
records examined by us, the terms and conditions of guarantee given by
the Company for loan taken by its wholly owned subsidiary from bank are
not prima facie prejudicial to the interest of the Company.
(xi) On the basis of the documents submitted to the bankers and the
other records perused by us, we have to state that the term loans which
are in the nature of External Commercial Borrowings and the buyers
credit for purchase of fixed assets taken during the year have been
applied for the purpose for which the loans were obtained.
(xii) 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 or reported during the year.
Statement of statutory dues outstanding on account of disputes, as on
31st March, 2015, referred to in para (vii)(b) of the Annexure to
Auditors'' Report
Name of the Nature of Dues Amount
Statute (Rs. crores)
Excise Duty Valuation of as such clearance of 0.12
RM/PM on 115%
Excise Duty Payment of Excise duty on 4-OH 0.33
(Intermediate stage of 4-7 DCQ)
Excise Duty Payment of Excise duty on 4-OH 0.19
(Intermediate stage of 4-7 DCQ)
Excise Duty Differential Excise duty on WIP on 0.23
Debonding
Excise Duty Interest and penalty on past anti- 4.15
dumping duty & excise duty
Service Tax Availment of credit of service tax 0.64
Service Tax Availment of credit of service tax on 0.23
H.O. Invoices
Service Tax Availment of credit of service tax on 0.04
H.O. Invoices
Service Tax Availment of credit of service tax 0.03
on Telephone/Cell phone/Taxi hire charges
Service Tax Availment of credit of service tax 0.01
on Telephone/Cell phone/Taxi hire charges
Service Tax Availment of credit of service tax 0.01
on Telephone/Cell phone/Taxi hire charges
Service Tax Availment of credit of service tax on 1.42
H.O. Invoices
Service Tax Availment of credit of service tax on 0.34
H.O. Invoices
Service Tax Availment of credit of service tax on 0.30
H.O. Invoices
Service Tax Non reversal of proportionate 0.01
amount of service tax credit on GTA
against Input credit reversal on
short received and destruction of RM/PM
Service Tax Availment of credit of service tax 0.02
on Outward freight based on CERA audit
query
Service Tax Availment of Cenvat credit of 0.01
service tax on Telephone, Courier &
construction services
Service Tax Availment of Cenvat Credit of 0.61
Service Tax
Sales Tax Central Sales Tax, Orissa (2006- 0.01
2007)- Disputed demand
Sales Tax Gujarat VAT Act (2006-07)-Disputed 0.07
demand
Sales Tax Gujarat VAT Act 0.02
(2007-2008)-Disputed demand
Sales Tax UP VAT Act (2008-09)-Disputed 0.01
demand
Sales Tax Gujrat VAT (Ankleshwar, Nandesari) - 0.08
Disputed demand
Sales Tax CST Assessment 0.34
Sales Tax Sendhwa Check post penalty 0.04
Sales Tax Sendhwa Check post penalty 0.01
Sales Tax Duburdih Check Post Penalty 0.01
Income Tax Disputed disallowances 2.03
Income Tax Disputed disallowances 0.57
Income Tax Disputed demand 0.31
Income Tax Appeal against penalty order 0.09
Total 12.28
Name of the Period to which the Forum where dispute is pending
Statute amount relates
Excise Duty April''2001 to Commissioner, C. Ex. LTU, Mumbai
Feb''2003
Excise Duty April''2003 to CESTAT, New Delhi
Sept''2007
Excise Duty Oct''2007 to CESTAT, New Delhi
Dec''2008
Excise Duty 2009- 10 CESTAT, Ahmedabad
Excise Duty - High Court, Gujarat
Service Tax 2006-07 & 2007-08 CESTAT, Mumbai
Service Tax April''08 to Nov''08 Commissioner, C. Ex. LTU, Mumbai
Service Tax Dec''08 to Sept''09 Commissioner, C. Ex. LTU, Mumbai
Service Tax 2006-07 & 2007-08 Asstt. Commissioner/ Dy.
Commissioner, C. Ex. LTU, Mumbai
Service Tax April''08 to Dec''08 Asstt. Commissioner/ Dy.
Commissioner, C. Ex. LTU, Mumbai
Service Tax Jan''09 to Sept''09 Asstt. Commissioner/ Dy.
Commissioner, C. Ex. LTU, Mumbai
Service Tax 2006-07 & 2007-08 Commissioner, C. Ex. LTU, Mumbai
Service Tax April''08 to Nov''08 Commissioner, C. Ex. LTU, Mumbai
Service Tax Dec''08 to Sept''09 Commissioner, C. Ex. LTU, Mumbai
Service Tax 2005- 06 to 2007-08 Asstt. Commissioner, Central
Excise & service tax. LTU, Mumbai
Service Tax 2009-10 & 2010-11 Deputy Commissioner, C. Ex. &
S.T, LTU, Mumbai
Service Tax 2006-07 Asstt. Commissioner/ Dy. Commissioner,
C. Ex. LTU, Mumbai
Service Tax 2006- 2007 & 2007- CESTAT, Mumbai
2008
Sales Tax 2006-07 Sales Tax Authority, Cuttack
Sales Tax 2006- 07 Gujarat VAT Tribunal, Ahmedabad
Sales Tax 2007- 08 Jt. Commissioner of Commercial
Tax, Rajkot
Sales Tax 2008- 09 Sales Tax Authority, UP
Sales Tax 2010- 11 Deputy Commissioner of VAT, Baroda
Sales Tax 2011- 12 Application filed before Assessing
Authority (Re- assessment), Ratlam
Sales Tax 2014-15 Deputy Commissioner, Sales Tax
(appeal), LTU Indore
Sales Tax 2014-15 Deputy Commissioner, Sales Tax
(appeal), LTU Indore
Sales Tax 2014-15 Deputy Commissioner, Sales Tax ,
West Bengal
Income Tax A.Y.2008-09 ITAT, Mumbai
Income Tax A.Y.2007-08 ITAT, Mumbai
Income Tax A.Y.2005-06 ITAT, Ahmedabad
Income Tax A.Y.2008-09 ITAT, Ahmedabad
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No. 106971W
N Jayendran
Partner
M. No. 40441
Mumbai,
30th May, 2015
Mar 31, 2014
We have audited the accompanying Financial Statements of Ipca
Laboratories Limited ("the Company"), which comprises the Balance Sheet
as at 31st March, 2014, the Statement of Profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory notes.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dated September 13,2013 of the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013 and General Circular
08/2014 dated April 4, 2014 with respect to the Financial Statements.
This responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation and fair presentation
of the financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a reasonable basis for our opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act 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 31st March, 2014;
(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 the Cash Flow Statement, of the cash flow for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
2. As required by Section 227(3) of the Companies Act 1956, 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 purpose of our
audit.
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as it appears from our examination of
the 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
accounts.
iv) In our opinion, the Balance Sheet, Statement of 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 read with the General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013.
v) On the basis of the written representation received from the
directors and taken on record by the Board of Directors, we report that
none of the directors is disqualified as on 31st March, 2014 from being
appointed as a director in terms of Clause (g) of Sub-section (1) of
section 274 of the Companies Act, 1956 on the said date.
Annexure to the Auditors'' Report
(Referred to in our report of even date)
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) The fixed assets have been physically verified by the management at
reasonable intervals and material discrepancies, if any, noticed on
such verification have been properly dealt with in the books of
account;
(c) The Company has not disposed off any substantial part of fixed
assets.
(ii) (a) Stock of finished goods, stores, spare parts and raw materials
has been physically verified by the management at reasonable intervals
during the year.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of stock followed
by the management is reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The valuation of stock has been done on the basis of physically
verified quantity. Therefore shortage / excess automatically gets
adjusted and the same is properly dealt in the books of accounts.
(iii) The Company has neither granted nor taken any fresh loan from
parties listed in the register maintained under section 301 of the
Companies Act. Therefore, the other sub-clauses of clause 4(iii) of the
Companies (Auditors'' Report) Order, 2003 are not applicable.
(iv) In our opinion and according to the information and explanations
given to us there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory, fixed assets and for the sale
of goods. During the course of our audit, we have not come across any
major weaknesses or continuing failure to correct any major weaknesses
in the internal control system of the Company in respect of this area.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
that need to be entered in the register maintained under section 301 of
the Act have been entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (v)(a) above and exceeding the value ofRs.
5.00 lacs with any party during the year have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
(vi) The Company has not accepted any deposits from the public during
the year under review, and consequently the directives issued by the
Reserve Bank of India and the provisions of sections 58A and 58AA of
the Act and the rules framed there under are not applicable. There is
no order that has been passed by Company Law Board or National Company
Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal in respect of the said sections.
(vii) In our opinion the Company has an internal audit system
commensurate with the size of the Company and the nature of its
business.
(viii) According to the records produced and information given to us,
the cost records and accounts as prescribed by the Central Government
under section 209(1 )(d) of the Companies Act, 1956 have been made and
maintained by the Company but no detailed examination of such records
and accounts has been carried out by us.
(ix) (a) The Company is by and large regular in depositing provident
fund, employees state insurance, income tax, sales tax, service tax,
customs duty, excise duty and cess dues with the appropriate
authorities.
(b) There are no arrears of outstanding statutory dues as at the last
day of the financial year for a period of more than six months from the
date they became payable.
(c) According to the information and explanations given to us, details
of dues of income tax, sales tax/VAT, service tax, customs duty, excise
duty and cess, which have not been deposited on account of any dispute,
are stated in the statement attached herewith.
(x) The Company does not have any accumulated losses and has not
incurred cash losses during the financial year and also in the
immediately preceding financial year.
(xi) In our opinion and according to the information and explanation
given to us by the Management, the Company has not defaulted in
repayment of dues to any financial institution or bank or debenture
holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans or advances on the basis of security by way of pledge
of shares, debentures and other securities. Accordingly the provisions
of clause 4(xii) of the Companies (Auditors'' Report) Order, 2003 are
not applicable..
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society and accordingly the provisions of clause
4(xiii) of the Companies (Auditors'' Report) Order, 2003 are not
applicable.
(xiv) According to the information and explanations given to us, 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 (Auditors'' Report) Order, 2003 are not applicable.
(xv) According to the information and explanations given to us and the
records examined by us, the terms and conditions of guarantee given by
the Company for loan taken by its wholly owned subsidiary from bank are
not prima facie prejudicial to the interest of the Company.
(xvi) On the basis of the documents submitted to the bankers and the
other records perused by us, we have to state that the term loans which
are in the nature of External Commercial Borrowings taken during the
year have been applied for the purpose for which the loans were
obtained.
(xvii) According to the information and explanation given to us, on an
overall examination of the Balance Sheet of the Company and the
necessary representations from the management, we report that no short
term funds raised by the Company have been applied towards long term
assets / investments.
(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 Act. Accordingly clause 4(xviii) of the Companies
(Auditors'' Report) Order, 2003 is not applicable.
(xix) The company did not issue any debentures during the period and
therefore the provisions of clause 4(xix) of the Companies
(Auditors'' Report) Order, 2003 are not applicable.
(xx) The Company has not raised any money by public issues during the
year and accordingly clause 4(xx) of Companies (Auditors'' Report) Order,
2003 is not applicable;
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the company has been noticed or reported during
the period.
Statement Of Statutory Dues Outstanding On Account Of Disputes, As On
March 31,2014, Referred To In Para 4(ix)(c) of The Annexure To Auditors''
Report
Name of the Amount Period to which the
Nature of Dues
Statute (Rs.
crores) amount relates
Excise Duty/ Availment of Cenvat
Credits on 0.03 2006-2007 &
Service Tax Input Services. 2007-2008
Excise Duty/ Availment of Cenvat
Credits on 0.01 April 2008 -
Service Tax Input Services. Dec 2008
Excise Duty/ Availment of Cenvat
Credits on 0.01 Jan 2009-
Service Tax Input Services. Sept 2009
Service Tax Availment of Credit of
Service Tax 2.06 April 2006-
on H.O. invoices. Sept 2009
Service Tax Availment of Credit of
Service Tax 0.91 April 2006-
on H.O. invoices. Sept 2009
Service Tax Non reversal of
proportionate 0.01 2005-2006 to
amount of service tax
credit against 2007-2008
input credit reversal
on short receipt and
destruction of
RM/PM
Excise Duty Differential Excise
Duty on WIP on 0.23 2009-2010
de-bonding
Excise Duty Interest and penalty
on past anti- 4.15 -
dumping duty and
excise duty
Service Tax Availment Of Cenvat
Credit on 0.01 2006-2007
Service Tax
Service Tax Availment Of Cenvat
Credit on 0.02 2009-2010&
Service Tax 2010-2011
Service Tax Availment Of Cenvat
Credit on 0.02 2009-2010&
Service Tax 2010-2011
Excise Duty Valuation of as such
clearances of 0.12 2001-2002 &
RM/PM on 115% 2002-2003
Excise Duty Payment of excise
duty on 4-OH 0.33 Apr 2003-
Sept2007
Excise Duty Payment of excise
duty on 4-OH 0.18 Oct 2007-
Dec 2008
Service Tax Availment Of Cenvat
Credit on 0.76 2006-2007 &
Service Tax 2007-2008
Service Tax Service tax on
import of services 0.20 Oct 2008-
Dec 2012
Sales Tax Disputed Demand 0.08 2010-2011
Sales Tax Demand due to non-
submission of 0.04 2010-2011
Form C
Sales Tax Check post penalty 0.04 2013-2014
Sales Tax Check post penalty 0.01 2013-2014
Sales Tax Check post penalty 0.03 2013-2014
Sales Tax Check post penalty 0.01 2013-2014
Sales Tax Disputed demand 0.01 2006-2007
Sales Tax Disputed demand 0.07 2006-2007
Sales Tax Disputed demand 0.02 2007-2008
Sales Tax Disputed demand 0.01 2008-2009
Income Tax Disputed
disallowances 0.57 AY:-2007-08
Income Tax Disputed
disallowances 2.03 AY:-2008-09
Income Tax Disputed Demand 0.31 AY:-2005-06
Income Tax Appeal against
penalty order 0.09 AY:-2008-09
Total 12.37
Name of the
Statute Forum where dispute is pending
Excise Duty/
Service Tax Assistant Commissioner/Deputy Commissioner,
Central Excise, LTU Mumbai
Excise Duty /
Service Tax Assistant Commissioner/Deputy Commissioner,
Central Excise, LTU Mumbai
Excise Duty /
Service Tax Assistant Commissioner/Deputy Commissioner,
Central Excise, LTU Mumbai
Service Tax Commissioner of Central Excise, LTU Mumbai
Service Tax Commissioner of Central Excise, LTU Mumbai
Service Tax Assistant Commissioner of Central Excise &
Service Tax, LTU Mumbai
Excise Duty CESTAT. Ahmedabad
Excise Duty High Court, Gujarat
Service Tax Assistant Commissioner/Deputy Commissioner,
Central Excise & Service Tax, LTU Mumbai
Service Tax Deputy Commissioner, Central
Excise & Service
Tax, LTU Mumbai
Service Tax Deputy Commissioner, Central Excise & Service
Tax, LTU Mumbai
Excise Duty Commissioner, Central Excise & Service Tax, LTU
Mumbai
Excise Duty CESTAT,
New Delhi
Excise Duty CESTAT,
New Delhi
Service Tax CESTAT,
Mumbai
Service Tax Service Tax, LTU Mumbai
Sales Tax Deputy Commissioner of VAT, Baroda
Sales Tax Additional Commissioner, Sales Tax, Indore
Sales Tax Deputy Commissioner, Sales Tax (appeal),
LTU Indore
Sales Tax Deputy Commissioner, Sales Tax (appeal),
LTU Indore
Sales Tax Deputy Commissioner, Sales Tax (appeal),
LTU Indore
Sales Tax Deputy Commissioner, Sales Tax (appeal),
LTU Indore
Sales Tax Sales Tax Authority, Cuttack
Sales Tax Gujarat VATThbunal, Ahmedabad
Sales Tax Jt. Commissioner of Commercial Tax, Rajkot
Sales Tax Sales Tax Authority, UP
Income Tax ITAT, Mumbai
Income Tax ITAT, Mumbai
Income Tax ITAT, Ahmedabad
Income Tax CIT(A),Vadodara
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No 106971W
N Jayendran
Partner
M. No. 40441
Mumbai,
29th May, 2014
Mar 31, 2013
Report on Financial Statements
We have audited the accompanying Financial Statements of Ipca
Laboratories Limited ("the Company"), which comprises the Balance Sheet
as at 31st March, 2013 and the Statement of Profit and Loss and the
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory notes.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and fair presentation of the financial statements
that are free from material misstatement, whether due to fraud or
error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a reasonable basis for our opinion. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act 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 March 31, 2013;
(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 the Cash Flow Statement, of the cash flow for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2003 issued
by the Central Government of India in terms of sub- section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
2. As required by Section 227(3) of the Companies Act 1956, 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 purpose of our
audit.
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as it appears from our examination of
the 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
accounts.
iv) In our opinion, the Balance Sheet, Statement of Profit and Loss 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.
v) On the basis of the written representation received from the
directors and taken on record by the Board of Directors, we report that
none of the directors is disqualified as on 31st March 2013 from being
appointed as a director in terms of Clause (g) of Sub-section (1) of
section 274 of the Companies Act, 1956 on the said date.
Annexure to the Auditors'' Report
(Referred to in our report of even date)
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) The fi xed assets have been physically verified by the management
at reasonable intervals and any material discrepancies noticed on such
verification have been properly dealt with in the books of account;
(c) The Company has not disposed off any substantial part of fixed
assets.
(ii) (a) Stock of finished goods, stores, spare parts and raw materials
has been physically verified by the management at reasonable intervals
during the year.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of stock followed
by the management is reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The valuation of stock has been done on the basis of physically
verifi ed quantity. Therefore shortage / excess automatically gets
adjusted and the same is properly dealt in the books of accounts.
(iii) The Company has neither granted nor taken any fresh loan from
parties listed in the register maintained under section 301 of the
Companies Act. Therefore the provisions of clause 4(iii) of the
Companies (Auditors'' Report) Order, 2003 is not applicable.
(iv) In our opinion and according to the information and explanations
given to us there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory, fixed assets and for the sale
of goods. We have not come across any continuing failure to correct
major weaknesses in internal control.
(v) (a) In our opinion and according to the information and
explanations given to us the transactions that need to be entered into
a register in pursuance of section 301 of the Act has been properly
entered.
(b) All the transactions have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time and
the nature of services rendered by such party.
(vi) The Company has not accepted any deposits from the public during
the year under review, and consequently the directives issued by the
Reserve Bank of India and the provisions of sections 58A and 58AA of
the Act and the rules framed there under are not applicable.
(vii) In our opinion the Company has an internal audit system
commensurate with the size of the Company and the nature of its
business.
(viii) According to the records produced and information given to us,
the cost records and accounts as prescribed by the Central Government
under section 209(1)(d) of the Companies Act, 1956 have been made and
maintained by the Company but no detailed examination of such records
and accounts has been carried out by us.
(ix) (a) The Company is regular in depositing provident fund, employees
state insurance, income tax, sales tax, service tax, customs duty and
excise duty dues with the appropriate authorities and there are no
arrears of outstanding statutory dues as at the last day of the
financial year for a period of more than six months from the date they
became payable.
(b) According to the information and explanation given to us, the
following tax / duty etc has not been deposited on account of dispute.
(x) The Company does not have any accumulated losses and has not
incurred cash losses in current year and in the previous year.
(xi) We are informed that the Company has not defaulted in repayment of
dues to any financial institution or bank or debenture holders.
(xii) On the basis of the audit procedures followed and the
representations from the management, we report that the Company has not
granted loans or advances on the basis of security by way of pledge of
shares, debentures and other securities. Therefore the provisions of
clause 4(xii) of the Companies (Auditors'' Report) Order, 2003 is not
applicable.
(xiii) The Company is not a nidhi/ mutual benefit fund/society and
accordingly clause 4(xiii) of the Companies (Auditors''Report) Order,
2003 is not applicable.
(xiv) The Company does not deal or trade in shares, securities,
debentures and other investments. Therefore clause 4(xiv) of the
Companies (Auditors'' Report) Order, 2003 is not applicable.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
bank, and therefore clause 4(xv) of the Companies (Auditors'' Report)
Order, 2003 is not applicable.
(xvi) On the basis of the documents submitted to the bankers and the
other records perused by us we have to state that the term loans which
are in the nature of External Commercial Borrowings taken during the
year have been applied for the purpose for which the loans were
obtained.
(xvii) According to the information and explanation given to us, on an
overall examination of the Balance Sheet of the Company and the
necessary representations from the management, we report that no short
term funds raised by the Company have been applied towards long term
assets / investments.
(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 Act. Accordingly clause 4(xviii) of the Companies (Auditors''
Report) Order, 2003 is not applicable.
(xix) The Company has made fresh issue of debentures during the year.
The Company has executed the debenture trust deed as per section 117A
of the Act and proper security or charge has been created in favour of
the debenture trust.
(xx) The Company has not raised any money by public issues during the
year and accordingly clause 4(xx) of Companies (Auditors'' Report)
Order, 2003 is not applicable;
(xxi) Based on the audit procedures performed and the information and
explanation given by the management we report that no fraud on or by
the Company has been noticed or reported during the year.
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No 106971W
N Jayendran
Mumbai, Partner
May 30, 2013 M. No. 40441
Mar 31, 2012
1. We have audited the attached Balance Sheet of Ipca Laboratories
Limited as at 31st March, 2012 and 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, we enclose
in the Annexure Statement on the matters specified in paragraphs 4 and
5 of the said Order.
4. Pursuant to the Amalgamation of Tonira Pharma Limited into the
Company, the effect for which is given in the attached Balance Sheet,
Statement of Profit and Loss and the Cash flow statement, the Company
has treated the business of the said Tonira Pharma Limited as a Branch
and the accounts have been separately audited by M/s Mitesh P Vora &
Co., Chartered Accountants the Statutory auditors of the erstwhile
Tonira Pharma Limited as the Branch Auditor who has been appointed as
such by the Board of Directors. The Branch Auditors' report provided
to us has been considered for overall reporting of the Company.
5. 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 purpose of our
audit.
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as it appears from our examination of
the 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
accounts.
iv) In our opinion, the Balance Sheet, Statement of Profit and Loss 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.
v) On the basis of the written representation received from the
directors and taken on record by the Board of Directors, we report that
none of the directors is disqualified as on 31st March, 2012 from being
appointed as a director in terms of Clause (g) of Sub-section (1) of
section 274 of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanation given to us, the accounts and the other notes thereon
give the information required by the Companies Act, 1956 in the manner
so required and give a true and fair view
(a) in the case of Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2012 and
(b) in the case of the Statement of Profit and Loss, of the Profit for
the year ended on 31st March, 2012 and
(c) in the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
Annexure to the Auditors' Report
(Referred to in our report of even date)
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) The fixed assets have been physically verified by the management at
reasonable intervals and any material discrepancies noticed on such
verification have been properly dealt with in the books of account;
(c) The Company has not disposed off any substantial part of fixed
assets.
(ii) (a) Stock of finished goods, stores, spare parts and raw materials
has been physically verified by the management at reasonable intervals
during the year.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of stock followed
by the management is reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The valuation of stock has been done on the basis of physically
verified quantity. Therefore shortage / excess automatically gets
adjusted and the same is properly dealt in the books of accounts.
(iii) The Company has not taken any fresh loan from parties listed in
the register maintained under section 301 of the Companies Act.
The Company has given loans to parties listed in the register
maintained under section 301 of the Companies Act. The balance
outstanding is NIL and the maximum amount outstanding during the period
is Rs. 5.77 crores. The terms and conditions of the loan are prima
facie not prejudicial to the interests of the Company and the principal
is being repaid as stipulated. There is no outstanding at the end of
the year.
(iv) In our opinion and according to the information and explanations
given to us there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods. We have not come across any continuing failure to
correct major weaknesses in internal control.
(v) (a) In our opinion and according to the information and
explanations given to us the transactions that need to be entered into
a register in pursuance of section 301 of the Act has been properly
entered.
(b) All the transactions have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time and
the nature of services rendered by such party.
(vi) The Company has not accepted any deposits from the public during
the year under review, and consequently the directives issued by the
Reserve Bank of India and the provisions of sections 58A and 58AA of
the Act and the rules framed there under are not applicable.
(vii) In our opinion the Company has an internal audit system
commensurate with the size of the Company and the nature of its
business.
(viii) According to the records produced and information given to us,
the cost records and accounts as prescribed by the Central Government
under section 209(1)(d) of the Companies Act, 1956 have been made and
maintained by the Company but no detailed examination of such records
and accounts has been carried out by us.
(ix) (a) The Company is regular in depositing provident fund, employees
state insurance, income tax, sales tax, service tax, customs duty and
excise duty dues with the appropriate authorities and there are no
arrears of outstanding statutory dues as at the last day of the
financial year for a period of more than six months from the date they
became payable.
(b) According to the information and explanation given to us, the
following tax / duty, etc. has not been deposited on account of
dispute.
Name of the Nature of Dues Amount Period to
which the Forum where
dispute is
pending
Statute (Rs. in
crores) amount
relates
Excise Duty Valuation of
Inputs 0.12 2001-2002
&
2002-2003 Commissioner
of Central Excise
Cenvat availed
on direct
clearance of
Excise Duty 0.34 April 2002
- Jan 2005 CESTAT
goods from job
worker's
premises.
Excise Duty Availment of
Cenvat Credos on 0.03 2006-2007
&
2007-2008 Assistant
Commissioner of
Central Excise
Service Tax Input Services
Excise Duty/ Availment of
Cenvat Credits on
Service Tax Input Services 0.01 April 2008
- Dec 2008 Assistant
Commissioner of
Central Excise
Excise Duty/ Availment of
Cenvat Credits on
Service Tax Input Services 0.01 Jan 2009
- Sep 2009 Assistant
Commissioner of
Central Excise
Service Tax Availment of
Cenvat Credits on 0.91 April 2006
-Nov 2008 Commissioner of
Central Excise
H.O invoices
Service Tax Availment of
Cenvat Credits on 2.06 April 2006
-Nov 2008 Commissioner
of Central Excise
H.O invoices
Excise Duty / Availment of
Cenvat Credits on
Service Tax Common Inputs 5.76 May 2007
-March 2008 Commissioner of
Central Exase
Excise Duty Non reversal of
service tax
credit on short 0.01 2005-2006
to
2007-2008 Assistant
Commissioner of
Central Excise
receipt and
destruction of
RM/PM
Excise Duty Payment of
Excise Duty 0.51 April 2003
to Dec 2008 CESTAT - New
Delhi
Commissioner of
Central Excise &
Excise Duty Excise Duty
on WIP on de-
bonding 0.23 Customs, Surat
Interest and
penalty on past
Excise Duty 4.15 High Court,
Gujarat
anti-dumping
duty and excise
duty
Availment of
Cenvat Credit
on Service Deputy
Commissioner,
CX & ST,
Service Tax 0.02 2009-2010
& 2010-2011
Tax on outward
freight LTU Mumbai
Service Tax Availment of
Cenvat Credit on 0.01 2006-2007 Assistant
Commissioner of
Central Excise
Service Tax
Sales Tax Disputed demand 0.01 2001-2002 Sales Tax
authority-Patna
Sales Tax Disputed demand 0.03 2004-2005 Sales Tax
authority-Jaipur
Sales Tax Disputed demand 0.08 2006-2007 Gujarat VAT
Tribunal,
Ahmedabad
Jt. Commissioner
of Commercial
Sales Tax Disputed demand 0.03 2007-2008 Tax, Rajkot
Sales Tax Disputed demand 0.01 2008-2009 Sales Tax
authority-U.P.
Deputy
Commissioner of
Commercial
Sales Tax Disputed demand 1.23 2006-2007 Tax (Appeal),
Baroda
Income tax Disputed
disallowances 0.57 AY:-2007
-08 ITAT Mumbai
Income tax Disputed
disallowances 2.03 AY:-2008
-09 CIT(A)
Income tax Disputed Demand 0.31 AY:-2005
-06 ITAT, Ahmedabad
Income tax Appeal against
penalty order 0.09 AY:-2008
-09 CIT(A), Baroda
(x) The Company does not have any accumulated losses and has not
incurred cash losses in current year and the previous year.
(xi) We are informed that the Company has not defaulted in repayment of
dues to any financial institution or bank or debenture holders.
(xii) On the basis of the audit procedures followed and the
representations from the management, we report that the Company has not
granted loans or advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) The Company is not a nidhi/ mutual benefit fund/society and
accordingly clause (xiii) of the Companies (Auditors' Report) Order,
2003 is not applicable.
(xiv) The Company does not deal or trade in shares and securities and
other investments. Therefore clause (xiv) of the Companies (Auditors'
Report) Order, 2003 is not applicable.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
bank, and therefore clause (xv) of the Companies (Auditors' Report)
Order, 2003 is not applicable.
(xvi) On the basis of the documents submitted to the bankers and the
other records perused by us we have to state that the term loans which
are in the nature of External Commercial Borrowings taken during the
year have been applied for the purpose for which the loans were
obtained.
(xvii) According to the information and explanation given to us, on an
over all examination of the Balance Sheet of the Company and the
necessary representations from the management, we report that no short
term funds raised by the Company have been applied towards long term
assets / investments.
(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 Act. Accordingly clause (xviii) of the Companies
(Auditors' Report) Order, 2003 is not applicable.
(xix) The Company has made fresh issue of debentures during the year.
The Company has executed the debenture trust deed as per section 117A
of the Act and proper security or charge has been created in favour of
the debenture trust.
(xx) The Company has not raised any money by public issues during the
year and accordingly clause (xx) of Companies (Auditors' Report)
Order, 2003 is not applicable;
(xxi) Based on the audit procedures performed and the information and
explanation given by the management we report that no fraud on or by
the Company has been noticed or reported during the year.
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No. 106971W
N. Jayendran
Mumbai, Partner
May 29, 2012 M. No. 40441
Mar 31, 2011
We have audited the attached Balance Sheet of Ipca Laboratories Limited
as at 31st March, 2011 and also the Profit and Loss Account and 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.
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.
As required by the Companies (Auditors 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, we enclose
in the Annexure Statement on the matters specified in paragraphs 4 and
5 of the said Order.
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 purpose of our
audit.
ii) In our opinion, proper books of accounts as required by law have
been kept by the company so far as it appears from our examination of
the books.
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts.
iv) In our opinion, the Balance Sheet, 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.
v) On the basis of the written representation received from the
directors and taken on record by the Board of Directors, we report that
none of the directors is disqualified as on 31st March, 2011 from being
appointed as a director in terms of Clause (g) of Sub-section (1) of
section 274 of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanation given to us, the accounts and the other notes thereon
give the information required by the Companies Act, 1956 in the manner
so required and give a true and fair view.
(a) in the case of Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2011 and
(b) in the case of Profit and Loss Account, of the Profit for the year
ended on 31st March 2011.
(c) in the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT (Referred to in our report of even
& date)
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) The fixed assets have been physically verified by the management at
reasonable intervals and any material discrepancies noticed on such
verification have been properly dealt with in the books of account;
(c) The Company has not disposed off any substantial part of fixed
assets.
(ii) (a) Stock of finished goods, stores, spare parts and raw materials
has been physically verified by the management at reasonable intervals
during the year.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of stock followed
by the management is reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) The valuation of stock has been done on the basis of physically
verified quantity. Therefore shortage / excess automatically gets
adjusted and the same is properly dealt in the books of accounts.
(iii) The Company has not taken / given any loan from / to any party
listed in the register maintained under Section 301.
(iv) In our opinion and according to the information and explanations
given to us there is an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods. We have not come across any continuing failure to
correct major weaknesses in internal control.
(v) (a) In our opinion and according to the information and
explanations given to us the transactions that need to be entered into
a register in pursuance of Section 301 of the Act has been properly
entered.
(b) All the transactions have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time and
the nature of services rendered by such party.
(vi) The Company has not accepted any deposits from the public during
the year under review, and consequently the directives issued by the
Reserve Bank of India and the provisions of Sections 58A and 58AA of
the Act and the rules framed there under are not applicable.
(vii) In our opinion the Company has an internal audit system
commensurate with the size of the company and the nature of its
business.
(viii) According to the records produced and information given to us,
the cost records and accounts as prescribed by the Central Government
under Section 209(1)(d) of the Companies Act, 1956 have been made and
maintained by the company but no examination of such records and
accounts has been carried out by us.
(ix) (a) The Company is regular in depositing provident fund, employees
state insurance, income tax, sales tax, service tax, customs duty and
excise duty dues with the appropriate authorities and there are no
arrears of outstanding statutory dues as at the last day of the
financial year for a period of more than six months from the date they
became payable.
(b) According to the information and explanation given to us, the
following tax / duty, etc., has not been deposited on account of
dispute.
Name of the Nature of Dues Amount Period to which the
Statute (Rs in amount relates
crores)
Excise Duty Valuation of Inputs 0.12 2001-2002 & 2002-2003
Excise Duty Cenvat availed on direct 0.34 April 2002 - Jan 2005
clearance of goods from
job workers premises.
Excise Duty/ Availment of Cenvat 0.03 2006-2007 and 2007-
Service Tax Credits on Input 2008
Services.
Excise Duty / Availment of Cenvat 0.01 April 2008 - Dec 2008
Service Tax Credits on Input
Services.
Excise Duty / Availment of Cenvat 0.01 Jan 2009 - Sep 2009
Service Tax Credits on Input
Services.
Service Tax Availment of Cenvat 0.91 April 2006 -Nov 2008
Credits on H.O invoices.
Service Tax Availment of Cenvat 2.06 April 2006 -Nov 2008
Credits on H.O invoices.
Excise Duty / Availment of Cenvat 5.76 May 2007 -March 2008
Service Tax Credits on Common
Inputs.
Excise Duty Non reversal of service 0.01 2005-2006 to 2007-2008
tax credit on short
receipt and destruction
of RM/PM
Excise Duty Payment of Excise Duty 0.51 April 2003 to Dec 2008
Service Tax Availment Of Cenvat 0.01 2006-2007
Credit on Service Tax
Sales Tax Disputed demand 0.01 2001-2002
Sales Tax Disputed demand 0.03 2004-2005
Sales Tax Disputed Demand 0.95 2006-2007
Sales Tax Disputed Demand 0.08 2008-2009
Income tax Disputed disallowances 0.57 AY:-2007-08
Name of the Forum where dispute is
statute pending
Excise Duty Commissioner of Central Excise
Excise Duty CESTAT
Excise Duty/ Assistant Commissioner of
Service Tax Central Excise
Excise Duty / Assistant Commissioner of
Service Tax Central Excise
Excise Duty / Assistant Commissioner of
Service Tax Central Excise
Service Tax Commissioner of Central
Excise.
Service Tax Commissioner of Central
Excise.
Excise Duty / Commissioner of Central
Service Tax Excise.
Excise Duty Assistant Commissioner of
Central Excise
Excise Duty CESTAT-New Delhi
Service Tax Asst Commissioner of
Central Excise
Sales Tax Sales Tax Authority- Patna
Sales Tax Sales Tax Authority -
Jaipur
Sales Tax Gujarat Sales Tax
Sales Tax Sales Tax Authority-UP
Income tax CIT(Appeal)
(x) The Company does not have any accumulated losses and has not
incurred cash losses in current year and the previous year.
(xi) We are informed that the Company has not defaulted in repayment of
dues to any financial institution or bank or debenture holders.
(xii) On the basis of the audit procedures followed and the
representations from the management, we report that the Company has not
granted loans or advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) The Company is not a nidhi/ mutual benefit fund/society and
accordingly clause (xiii) of the Companies (Auditors Report) Order,
2003 is not applicable.
(xiv) The company does not trade in securities and other investments.
However in respect of shares and other securities held as investments,
the said investments are in the name of the company.
(xv) According to the information and explanations given to us, the
company has given guarantee for loans taken by others from bank, the
terms and conditions whereof are not prejudicial to the interest of the
company.
(xvi) On the basis of the documents submitted to the bankers and the
other records perused by us we have to state that the term loans which
are in the nature of External Commercial Borrowings taken during the
year have been applied for the purpose for which the loans were
obtained.
(xvii) According to the information and explanation given to us, on an
over all examination of the Balance Sheet of the company and the
necessary representations from the management, we report that no short
term funds raised by the company have been applied towards long term
assets / investments.
(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 Act. Accordingly clause (xviii) of the Companies
(Auditors Report) Order, 2003 is not applicable.
(xix) The Company has not made any fresh issue of debentures during the
year and accordingly clause (xix) of Companies (Auditors Report)
Order, 2003 is not applicable
(xx) The Company has not raised any money by public issues during the
year and accordingly clause (xx) of Companies (Auditors Report) Order,
2003 is not applicable;
(xxi) Based on the audit procedures performed and the information and
explanation given by the management we report that no fraud on or by
the company has been noticed or reported during the year.
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No. 106971W
N. Jayendran
Partner
M.No. 40441
Mumbai,
May 24, 2011
Mar 31, 2010
We have audited the attached Balance Sheet of Ipca Laboratories Limited
as at 31st March, 2010 and also the Profit and Loss Account and 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.
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.
As required by the Companies (Auditors 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, we enclose
in the Annexure Statement on the matters specified in paragraphs 4 and
5 of the said Order.
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 purpose of our
Audit.
ii) In our opinion, proper books of accounts as required by law have
been kept by the company so far as it appears from our examination of
the books.
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts.
iv) In our opinion, the Balance Sheet, 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.
v) On the basis of the written representation received from the
directors and taken on record by the Board of Directors, we report that
none of the directors is disqualified as on Sis5* March, 2010 from
being appointed as a director in terms of Clause (g) of Sub-section (1)
of Section 274 of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanation given to us, the accounts and the other notes thereon
give the information required by the Companies Act, 1956 in the manner
so required and give a true and fair view.
(a) in the case of Balance Sheet, of the State of Affairs of the
Company as at 31 * March, 2010 and
(b) in the case of Profit and Loss Account, of the Profit for the year
ended on 31s March 2010.
(c) in the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in our report of even date)
(i) (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) The fixed assets have been physically verified by the management at
reasonable intervals and any material discrepancies noticed on such
verification have been properly dealt with in the books of account;
(c) The Company has not disposed off any substantial part of fixed
assets.
(ii) (a) Stock of finished goods, stores, spare parts and raw materials
has been physically verified by the management at reasonable intervals
during the year.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of stock followed
by the management is reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) The valuation of stock has been done on the basis of physically
verified quantity. Therefore Shortage/Excess automatically gets
adjusted and the same is properly dealt in the books of accounts.
(iii) The Company has not taken/given any loan from/to any party listed
in the register maintained under Section 301.
(iv) In our opinion and according to the information and explanations
given to us there is an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods. We have not come across any continuing failure to
correct major weaknesses in internal control.
(v) (a) In our opinion and according to the information and
explanations given to us the transactions that need to be entered into
a register in pursuance of Section 301 of the Act has been properly
entered.
(b) All the transactions have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time and
the nature of services rendered by such parties.
(vi) The Company has not accepted any deposits from the public during
the year under review, and consequently the directives issued by the
Reserve Bank of India and the provisions of Sections 58A and 58AA of
the Act and the rules framed there under are not applicable.
(vii) In our opinion the Company has an Internal Audit system
commensurate with the size of the company and the nature of its
business.
(viii) According to the records produced and information given to us,
the cost records and accounts as prescribed by the Central Government
under Section 209(1 )(d) of the Companies Act, 1956 have been made and
maintained by the company but no examination of such records and
accounts has been carried out by us.
(ix) (a) The Company is regular in depositing Provident Fund, Employees
State Insurance, income tax, sales tax, service tax, customs duty and
excise duty dues with the appropriate authorities and there are no
arrears of outstanding statutory dues as at the last day of the
financial year for a period of more than six months from the date they
became payable.
(b) According to the information and explanation given to us, the
following Tax/duty, etc, has not been deposited on account of dispute.
Name of the Nature of Dues Amount (Rs) Period to Forum where
which the dispute is
Statute amount pending
relates
Excise Duty Valuation of Inputs 12,00,441 2001-02 & Commissioner of
2002-03 Central Exclse
Excise Duty Cenvat availed on 34,37,000 April 2002
- Jan 2005 CESTAT
direct clearance of
goods from job workers
premises.
Excise Duty Availment of Cenvat 2,84,190 2006-2007
and 2007- Assistant
Commissioner of
Service Tax Credits on Input 2008 Central Excise
Services.
Excise Duty Availment of Cenvat 1,01,888 April 2008
- Dec 2008 Assistant
Commissioner of
Service Tax Credits on Input Central Excise
Services.
Excise Duty Availment of Cenvat 40,477 Jan 2009 -
Sep 2009 Assistant
Commissioner of
Service Tax Credits on Input Central Excise
Services.
Service Tax Availment of Cenvat 90,58,560 April 2006
Nov 2008 Commissioner of
Central
Credits on H.O invoices. Excise.
Service Tax Availment of Cenvat 2,05,49,912 April 2006
Nov 2008 Commissioner of
Central
Credits on H.O invoices. Excise.
Excise Duly Incorrect
classification 13,47,42,700 March 2005
March Commissioner of
Central
of derivative product, 2008 Excise
Service Tax Incorrect
classification 2,22,664 March 2005
March Commissioner of
Central
of derivative product, 2008 Excise
Excise Duty Availment of Cenvat 5,75,52,022 May 2007
March 2008 Commissioner of
Central
Service Tax Credits on Common Excise.
Inputs
Excise Duty Non reversal of
service 1,06,865 2005-06 to
2007-08 Assistant
Commissioner of
tax credit on short Central Excise
receipt and destruction
of RM/PM
Excise Duty Service Tax on 3,58,05,442 2002-03 to
inport of 2005-06 Commissioner of
Service
services Tax Mumbai
Sales Tax Disputed demand 67,846 2001-2002 Sales Tax
authority- Patna
Sales Tax Disputed demand 2,98,219 2004-2005 Sales Tax
authority -
Jaipur
Income Tax Disallowances and 1,82,45,741 A.Y:-2005
-2006 CIT(A) XIX,
Mumbai,
additions during
assessments
Income Tax Disputed Demands 3,28,66,390 A.Y:-2004
-2005 Mumbai High
Court
Income Tax Order u/s 143(3) 45,84,510 A.Y:-2006
-2007 DRP-1, Mumbai
(x) The Company does not have any accumulated losses and has not
incurred cash losses in current year and the previous year.
(xi) We are informed that the Company has not defaulted in repayment of
dues to any financial institution or bank or debenture holders.
(xii) On the basis of the audit procedures followed and the
representations from the management, we report that the Company has not
granted loans or advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiiij The Company is not a nidhi/mutual benefit fund/society and
accordingly Clause (xiii) of the Companies (Auditors Report) Order,
2003 is not applicable.
(xiv) The company has maintained proper records of securities and other
investments, which it has traded in and also in respect of shares and
other securities, held as investments and the sdid investments are in
the name of the company.
(xv) According to the information and explanations given to us, the
company has given guarantee for loans taken by others from bank, the
terms and conditions whereof are not prejudicial to the interest of the
company.
(xvi) The term loans which are in the nature of External Commercial
Borrowings taken during the year have been applied for the purpose for
which the loans were obtained,
(xvii) According to the information and explanation given to us, on an
over all examination of the Balance sheet of the company and the
necessary representations from the management, we report that no short
term funds raised by the company have been applied towards long term
assets/investments,
(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 Act. Accordingly Clause (xviii) of the Companies (Auditors
Report) Order, 2003 is not applicable,
(xix) The Company has not made any fresh issue of debentures during the
year and accordingly Clause (xix) of Companies (Auditors Report)
Order, 2003 is not applicable.
(xx) The Company has not raised any money by public issues during the
year and accordingly Clause (xx) of Companies (Auditors Report) Order,
2003 is not applicable.
(xxi) Based on the audit procedures performed and the information and
explanation given by the management we report that no fraud on or by
the company has been noticed or reported during the year.
For Natvarlal Vepari & Co.
Chartered Accountants
Firm Registration No. 106971W
N. Jayendran
Mumbai Partner
28th May, 2010 M.No. 40441
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