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Divis Laboratories Ltd.

BSE: 532488 Sector: Health care
NSE: DIVISLAB ISIN Code: INE361B01024
BSE LIVE 15:40 | 14 Dec 1059.30 19.00
(1.83%)
OPEN

1049.00

HIGH

1064.15

LOW

1042.00

NSE 15:57 | 14 Dec 1060.85 18.65
(1.79%)
OPEN

1051.90

HIGH

1065.00

LOW

1042.40

OPEN 1049.00
PREVIOUS CLOSE 1040.30
VOLUME 20717
52-Week high 1184.00
52-Week low 533.10
P/E 30.87
Mkt Cap.(Rs cr) 28,119
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1049.00
CLOSE 1040.30
VOLUME 20717
52-Week high 1184.00
52-Week low 533.10
P/E 30.87
Mkt Cap.(Rs cr) 28,119
Buy Price 0.00
Buy Qty 0.00
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 Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of DIVI'SLABORATORIES LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2017 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the stateof affairs (financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with provisions of the Act for safeguarding the assets of the Company and forpreventing 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 standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based 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 of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Company as at 31st March 2017 and itsprofit (financial performance including other comprehensive income) its cash flows andthe 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 Section143(11) of the Act we givein "Annexure A" a statement on the matters specified in paragraphs 3 and 4 ofthe 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 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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act.

(e) On the basis of written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 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 standalone Ind AS financial statements - Refer Note No.43 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 2017;

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 2017.

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management - Refer Note No.49.

For P. V. R. K. NAGESWARA RAO & CO.
Chartered Accountants
Firm's Registration Number: 002283S
P. V. R.K. NAGESWARA RAO
Hyderabad Partner
26.05.2017 Membership Number: 18840

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

Referred to in Paragraph 1 under the heading of 'Report on Other Legal and RegulatoryRequirements' of our report of even date

1 (a) The company has maintained proper records showing full

particulars including quantitative 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 ofClause 3(iii) (iii)(a) (iii)(b) and (iii)(c) of the Order are not applicable to theCompany.

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 Sub-section (1) of Section 148 ofthe Act and are of the opinion that prima facie the prescribed accounts and records havebeen maintained and are being made up. We have not however made a detailed examinationof the records 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 31.03.2017 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 value added tax which has not beendeposited on account of dispute as on 31.03.2017 except income tax service 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 Custom duty and Penalty 18.00 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 March 2012 Custom duty and Penalty 36.70 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 November 2012 Custom duty and Penalty 63.15 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 June2009 to March2010 Penalty 1.25 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Central Excise Act 1944 September2006 to December2008 Excise duty and Penalty 244.09 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Central Excise Act 1944 July 2009 to March2010 Excise duty and Penalty 9.37 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Central Excise Act 1944 June 2010 to March 2011 Excise duty and Penalty 39.04 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Central Excise Act 1944 May 2011 to December 2011 Excise duty and Penalty 18.46 Excise Customs and Service Tax (Appeals) Vishakapatnam.
Central Excise Act 1944 December 2013 to September 2014 Excise duty and Penalty 12.97 Commissioner of Central Excise Customs & Service Tax Vishakapatnam.
Central Excise Act 1944 October 2014 to September 2015 Excise duty and Penalty 3.08 Commissioner of Customs (Appeals) Custom House Port Area Vishakapatnam.
Central Excise Act 1944 August 2013 Excise duty and Penalty 0.86 Commissioner of Customs (Appeals) Custom House Port Area Vishakapatnam.
Central Excise Act 1944 September 2013 to October 2013 Excise duty and Penalty 0.55 Commissioner of Customs (Appeals) Custom House Port Area Vishakapatnam.
Central Excise Act 1944 April 2012 to March 2013 Service tax and Penalty 32.44 Assistant Registrar The Customs Excise & Service Tax Appellate Tribunal Khairatabad.
Central Excise Act 1944 April 2010 to March 2011 Service tax and Penalty 45.18 Commissioner (Appeal-III) Customs Central Excise & Service Tax Hyderabad.
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 2011-12 Income Tax and Interest 130.27 Commissioner of Income Tax (Appeals)-V Hyderabad.
Income Tax Act 1961 2012-13 Income Tax and Interest 134.98 Assistant Commissioner of Income Tax Circle-17(1) 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 IndianAccounting Standard (Ind AS) 24 Related Party Disclosures specified under Section 133 ofthe Act.

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
P. V. R.K. NAGESWARA RAO
Hyderabad Partner
26.05.2017 Membership Number: 18840

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT

Referred to in Paragraph 2(f) under the heading of 'Report on Other Legal andRegulatory Requirements' of our report of even 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 2017 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.

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 reflect the 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 of the 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 2017 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
P. V. R.K. NAGESWARA RAO
Hyderabad Partner
26.05.2017 Membership Number: 18840