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Cipla Ltd.

BSE: 500087 Sector: Health care
NSE: CIPLA ISIN Code: INE059A01026
BSE LIVE 15:45 | 02 Dec 571.40 3.25
(0.57%)
OPEN

565.05

HIGH

573.00

LOW

565.05

NSE LIVE 15:53 | 02 Dec 571.20 3.00
(0.53%)
OPEN

566.00

HIGH

573.90

LOW

566.00

OPEN 565.05
PREVIOUS CLOSE 568.15
VOLUME 87823
52-Week high 660.00
52-Week low 458.25
P/E 48.92
Mkt Cap.(Rs cr) 45954.85
Buy Price 0.00
Buy Qty 0.00
Sell Price 571.40
Sell Qty 45.00
OPEN 565.05
CLOSE 568.15
VOLUME 87823
52-Week high 660.00
52-Week low 458.25
P/E 48.92
Mkt Cap.(Rs cr) 45954.85
Buy Price 0.00
Buy Qty 0.00
Sell Price 571.40
Sell Qty 45.00

Cipla Ltd. (CIPLA) - Auditors Report

Company auditors report

To the Members of Cipla Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Cipla Limited("the Company") which comprises the Balance Sheet as at 31st March2016 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. The Company's Board of Directors is responsible for the matters stated insub-section (5) of section 134 of the Companies Act 2013 ("the Act") withrespect to the preparation of these standalone financial statements that give a true andfair view of the financial position financial performance and cash flows of the Companyin accordance with the accounting principles generally accepted in India includingAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgements andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

5. We conducted our audit in accordance with the Standards on Auditing specified undersub-section (10) of section 143 ofthe Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation ofthefinancial statements that give a true and fairview in orderto design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness ofthe accountingestimates made by the Company's Directors as well as evaluating the overall presentationofthe financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fairview in conformity with theaccounting principles generally accepted in India ofthe state of affairs of the Companyas at 31st March 2016 and its profits and its cash flows for the year ended onthat date.

Report on Other Legal and Regulatory Requirements

9. 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 ofthe Act we give in Annexure 1 a statement on the matters specified in paragraph 3 and 4of the Order to the extent applicable.

10. Further to our comments in Annexure 1 as required by sub-section (3) of section143 of the Act we report that:

a. we have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination ofthose books;

c. the Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d. in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e. on the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in termsof sub-section (2) ofsection 164 ofthe Act;

f. with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in 'Annexure 2';

g. with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements - Refer Notes 37 38 and 39 to the financialstatements;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund bythe Company.

For V. Sankar Aiyar & Co. For R.G.N. Price & Co.
Chartered Accountants Chartered Accountants
Firm Reg No. 109208W Firm Reg No. 002785S
V. Mohan R. Rangarajan
Partner Partner
Membership No. 17748 Membership No. 41883
Mumbai 24th May 2016 Mumbai 24th May 2016

Annexure 1 to the Independent Auditors' Report

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and in our opinion we report that:

1. a. The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets other than situation offurniture and fixtures and office equipments where the situation recorded is the locationof the Company's different establishments.

b. The Company has a policy of physically verifying its fixed assets in a phased mannerto cover all the assets of the Company in a block of three years which in our opinion isreasonable having regard to the size of the Company and the nature of its business. Duringthe year some of the fixed assets have been physically verified by the Management anddiscrepancies noticed during the physical verification which were not material have beenappropriately dealt with in the books of account.

c. The title deeds of the immovable properties are held in the name of the Company.

2. The inventory has been physically verified by the Management at reasonable intervalsduring the year. The verification was done on the basis of the perpetual inventory systemoperated by the Company. The discrepancies noticed on physical verification of inventoryas compared with the book records were not material and have been properly dealt with inthe books of account. In case of materials lying with third parties certificatesconfirming such inventory have been obtained by the Company from most ofthe third parties.

3. The Company has granted interest free unsecured loan to one company and interestbearing unsecured loans to two companies which are covered in the Register maintainedunder section 189 ofthe Companies Act 2013. With respect to these loans:

a. The terms and conditions on which the loans had been granted were not primafacie prejudicial to the Company's interest.

b. The schedule of repayment of principal in case of interest free loan and scheduleof repayment of principal and interest in case of interest bearing loans are stipulated.The borrowers have been regular in the payment of the principal and interest asstipulated.

c. There are no overdue loans in respect of loans granted.

4. The Company has complied with provisions of sections 185 and 186 of the Act withrespect to loans given investments made or any guarantees or securities given.

5. The Company has not accepted any deposits from public. Accordingly this clause isnot applicable.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records undersub-section (1) of section 148 ofthe Act in respect of its products and are of the opinionthat prima facie the prescribed accounts and records have been made andmaintained. However we have not carried out a detailed examination ofthe accounts andrecords with a view to determine whether these are accurate or complete.

7. a. The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Wealth Tax ServiceTax Customs Duty Excise Duty Value Added Tax Cess and any other material statutorydues applicable to it with the appropriate authorities. There were no undisputed arrearsthat were outstanding as at 31st March 2016 for a period of more than sixmonths from the date they became payable.

b. There were no dues in respect of Wealth Tax Income Tax Service Tax Customs Dutyand Cess that have not been deposited with the appropriate authorities on account ofdispute.

The particulars of dues towards Excise Duty Sales Tax and Service Tax that have notbeen deposited on account of dispute as at 31st March 2016 and the forum wherethese disputes are pending are as follows:

Name of the statute Nature of dues Financial years to which the matter pertains Forum where the dispute is pending Amount Rs. in crore
The Central Excise Act 1944 Excise Duty 2000-01 to 2014-15 CESTAT/High Court/ Commissioner 136.66
Finance Act 1994 Service Tax 2003-04 to 2012-13 Commissioner 25.09
State SalesTaxActs Sales Tax 2001-02 to 2013-14 State Sales Tax Tribunal/Joint Commissioner 2.34

8. The Company has not defaulted in repayment of dues to any financial institutions orbanks.

9. The Company did not raise any money by way of initial public offer (including debtinstruments) or further public offer and term loans during the year. Accordingly thisclause is not applicable.

10. No material fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the course of our audit.

11. The Company has paid/provided for managerial remuneration in accordance with therequisite approvals as mandated by the provisions of section 197 read with Schedule Vofthe Act.

12. The Company is not a Nidhi Company. Accordingly this clause is not applicable.

13. All transactions with related parties are in compliance with section 177 andsection 188 of the Companies Act 2013 where applicable and details of such transactionshave been disclosed in the financial statements as required by the applicable accountingstandards.

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Accordingly this clause is notapplicable.

15. The Company has not entered into any non-cash transactions with directors orpersons connected with them.

16. The Company is not required to be registered under section 45-IA ofthe Reserve Bankof India Act 1934.

For V. Sankar Aiyar & Co. For R.G.N. Price & Co.
Chartered Accountants Chartered Accountants
Firm Reg No. 109208W Firm Reg No. 002785S
V. Mohan R. Rangarajan
Partner Partner
Membership No. 17748 Membership No. 41883
Mumbai 24th May 2016 Mumbai 24th May 2016

Annexure 2 to the Independent Auditor's Report

Report on the Internal Financial Controls under clause (i) of sub-section (3) ofsection 143 of the Companies Act 2013 ("the Act")

1. We have audited the internal financial controls over financial reporting of CiplaLimited ("the Company") as of 31st March 2016 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by Institute ofChartered Accountants of India and deemed to be prescribed under sub-section (10) ofsection 143 of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

5. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that:

a. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions ofthe assets ofthe Company;

b. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures ofthe Company are being made only inaccordance with authorizations of management and directors ofthe Company; and

c. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition ofthe Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

6. Because ofthe inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

7. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2016based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For V. Sankar Aiyar & Co. For R.G.N. Price & Co.
Chartered Accountants Chartered Accountants
Firm Reg No. 109208W Firm Reg No. 002785S
V. Mohan R. Rangarajan
Partner Partner
Membership No. 17748 Membership No. 41883
Mumbai 24th May 2016 Mumbai 24th May 2016

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