You are here » Home » Companies » Company Overview » Divis Laboratories Ltd

Divis Laboratories Ltd.

BSE: 532488 Sector: Health care
NSE: DIVISLAB ISIN Code: INE361B01024
BSE LIVE 15:40 | 23 Aug 638.95 8.70
(1.38%)
OPEN

635.85

HIGH

643.30

LOW

626.80

NSE 15:56 | 23 Aug 638.40 9.20
(1.46%)
OPEN

635.00

HIGH

643.90

LOW

626.00

OPEN 635.85
PREVIOUS CLOSE 630.25
VOLUME 55759
52-Week high 1380.00
52-Week low 533.10
P/E 18.28
Mkt Cap.(Rs cr) 16,961
Buy Price 640.05
Buy Qty 50.00
Sell Price 0.00
Sell Qty 0.00
OPEN 635.85
CLOSE 630.25
VOLUME 55759
52-Week high 1380.00
52-Week low 533.10
P/E 18.28
Mkt Cap.(Rs cr) 16,961
Buy Price 640.05
Buy Qty 50.00
Sell Price 0.00
Sell Qty 0.00

Divis Laboratories Ltd. (DIVISLAB) - Auditors Report

Company auditors report

To

The Members of

DIVI’S LABORATORIES LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of DIVI’SLABORATORIES LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2016 the Statement of Profit and Loss and the Cash Flow Statement for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.

Management’s Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows ofthe Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

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

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 thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment 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 of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

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

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 fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 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 2016 ("the Order")issued by the Central Government of India in terms of Sub-section (11) of Section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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 bestof our knowledge and belief were necessary for the purpose of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

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

(d) In our opinion the 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 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 terms of Section164 (2) of the 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 B".

(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 Note No.29.II.3.A to the financialstatements;

ii. The Company did not have any long-term contracts with material foreseeable lossesand did not have any long-term derivative contracts as at 31st March 2016;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31stMarch 2016.

For P.V.R.K. NAGESWARA RAO & CO.
Chartered Accountants
Firm's Registration Number: 002283S
N. ANKA RAO
Partner
Membership Number :23939
HYDERABAD
28.05.2016

Annexure A to Independent Auditor’s Report Referred to in Paragraph 1 under theheading of 'Report on Other Legal and Regulatory Requirements’ of our report of evendate

1 (a) The company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.

(b) The fixed assets have been physically verified by the management according to thephased programme designed to cover all the fixed assets on rotation basis. In respect offixed assets verified according to this programme which is considered reasonable nomaterial discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

2 The inventories of the company have been physically verified by the Management duringthe year at reasonable intervals except stocks lying with others which have been verifiedwith reference to confirmations certificates and other relevant documents whereavailable. The discrepancies noticed on physical verification of stocks as compared tobook records which in our opinion were not material have been properly dealt with in thebooks of account.

3 The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of

the Companies Act 2013 ("the Act"). Therefore the provisions of Clause3(iii) (iii)(a) (iii)(b) and (iii)(c) of the Order are not applicable to the Company.

4 The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186 of the Act.Therefore the provisions of Clause 3(iv) of the Order are not applicable to the Company.

5 The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the rules framed there under to the extentnotified.

6 We have broadly reviewed the books of account maintained by the company in respect ofproducts where pursuant to the Rules made by the Central Government of India themaintenance of cost records has been prescribed under Subsection (1) of Section 148 of theAct and are of the opinion that prima facie the prescribed accounts and records have beenmaintained and are being made up. We have not however made a detailed examination of therecords with a view to determine whether they are accurate or complete.

7 (a) According to the records of the Company and as per the information andexplanations given to us the company is generally regular in depositing undisputedstatutory dues including provident fund employees state insurance income tax sales taxservice tax duty of customs duty of excise value added tax cess and any otherstatutory dues applicable to it with appropriate authorities. In respect of thesestatutory dues there are no outstanding dues as on 31.03.2016 which are outstanding for aperiod of more than six months from the date they became payable.

(b) According to the records of the Company and as per the information and explanationsgiven to us there are no dues of sales tax or service tax or value added tax which hasnot been deposited on account of dispute as on 31.03.2016 except income tax duty ofcustoms and duty of excise the details of which are as given below:

Name of the Statute Period to which the amount relates Nature of dues Amount Rs in Lakhs Forum where dispute is pending
Customs Act 1962 August 2005 Penalty 0.30 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 January 2007 Penalty 10.00 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Chennai.
Customs Act 1962 June 2006 to December 2008 Customs duty and Penalty 18.00 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 March 2012 Customs duty and Penalty 36.70 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 November 2012 Customs duty and Penalty 63.15 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Name of the Statute Period to which the amount relates Nature of dues

Amount Lakhs

Forum where dispute is pending
Customs Act 1962 June2009 to March2010 Penalty

1.25

Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Central Excise Act1944 September 2006 to December 2008 Excise duty and Penalty

244.09

Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Central Excise Act1944 July 2009 to March2010 Excise duty and Penalty

9.37

Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Central Excise Act1944 June 2010 to March 2011 Excise duty and Penalty

39.04

Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Central Excise Act1944 May 2011 to December 2011 Excise duty and Penalty

19.43

Excise Customs and Service Tax (Appeals) Vishakapatnam.
Central Excise Act1944 December 2013 to March 2015 Excise duty and Penalty

11.34

Commissioner of Central Excise (Appeals) Hyderabad.
Central Excise Act1944 December 2013 to September 2014 Excise duty and Penalty

13.92

Commissioner of Central Excise Customs & Service Tax Vishakapatnam.
Income Tax Act 1961 2005-06 Interest

0.41

Additional Commissioner of Income Tax Range-I Hyderabad.
Income Tax Act 1961 2007-08 Income Tax and Interest

7.08

Income Tax Appellate Tribunal Hyderabad.
Income Tax Act 1961 2009-10 Income Tax and Interest

104.91

Commissioner of Income Tax (Appeals)-II Hyderabad.
Income Tax Act 1961 2010-11 Income Tax and Interest

59.85

Commissioner of Income Tax (Appeals)-X Hyderabad.
Income Tax Act 1961 2011-12 Income Tax and Interest

130.27

Commissioner of Income Tax (Appeals)-V Hyderabad.

8 According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government as at the balance sheet date. There wasno amount raised by the Company through the issue of Debentures.

9 The Company has not raised any moneys by way of initial public offer further publicoffer (including debt instruments) and term loans. Accordingly the provisions of Clause3(ix) of the Order are not applicable to the Company.

10 During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

11 The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

12 As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

13 The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandard (AS) 18 Related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.

14 The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

15 The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

16 The Company is not required to be registered under Section 45-IA of the Reserve Bankof India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For P.V.R.K. NAGESWARA RAO & CO.
Chartered Accountants
Firm's Registration Number: 002283S
N. ANKA RAO
Partner
Membership Number :23939
HYDERABAD
28.05.2016

Annexure B to Independent Auditor’s Report Referred to in Paragraph 2(f) under theheading of Rs Report on Other Legal and Regulatory Requirements’ of our report ofeven date

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of DIVI’SLABORATORIES LIMITED ("the Company") as of 31st March 2016 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management’s Responsibility for Internal Financial Controls

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 ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors’ Responsibility

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 ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe 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 a 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly refiectthe transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors ofthe company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 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

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 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For P.V.R.K. NAGESWARA RAO & CO.
Chartered Accountants
Firm's Registration Number: 002283S
N. ANKA RAO
Partner
Membership Number :23939
HYDERABAD
28.05.2016