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Hikal Ltd.

BSE: 524735 Sector: Health care
NSE: HIKAL ISIN Code: INE475B01022
BSE LIVE 15:59 | 18 Oct 255.75 -2.60
(-1.01%)
OPEN

257.00

HIGH

259.00

LOW

252.00

NSE 15:59 | 18 Oct 255.75 -1.05
(-0.41%)
OPEN

255.30

HIGH

258.90

LOW

252.00

OPEN 257.00
PREVIOUS CLOSE 258.35
VOLUME 49657
52-Week high 262.50
52-Week low 181.00
P/E 30.37
Mkt Cap.(Rs cr) 2,102
Buy Price 0.00
Buy Qty 0.00
Sell Price 255.75
Sell Qty 949.00
OPEN 257.00
CLOSE 258.35
VOLUME 49657
52-Week high 262.50
52-Week low 181.00
P/E 30.37
Mkt Cap.(Rs cr) 2,102
Buy Price 0.00
Buy Qty 0.00
Sell Price 255.75
Sell Qty 949.00

Hikal Ltd. (HIKAL) - Auditors Report

Company auditors report

To the members of Hikal Limited

Report on the standalone financial statements

We have audited the accompanying standalone financial statements of Hikal Limited ('theCompany1) which comprise the balance sheet as at 31 March 2017 the statement of profitand loss and the cash flow statement for the year then ended and a summary of thesignificant accounting policies and other explanatory information.

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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting 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 and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair 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 statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the rules made there under.

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 anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 31 March 2017 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 bythe Central Government of India in terms of sub-section (11) of Section 143 of the Act wegive in the "Annexure A" a statement on the matters specified in paragraphs 3and 4 of the said Order to the extent applicable.

2. As required by Section 143 (3) oftheAct 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 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 31 March2017 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31 March 2017 from being appointed as a director in terms of Section 164(2) of theAct;

(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"; and

(g) with respect to the other matters to be included in the Auditors' 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 27 to the standalone financialstatements;

ii. the Company did not have any long-term contracts including derivative contractsfor which 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 by the Company during the year ended 31 March2017; and

iv. the Company has provided requisite disclosure in the standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016. However as stated in Note 41 to the standalonefinancial statements amounts aggregating Rs 280000 as represented to us by themanagement have been utilised for other than permitted transactions. As represented to usby the management these transactions pertain to payments made to the transporters fortransport of goods in the ordinary course of business.

For BSR& Co. LLP
Chartered Accountants
Mumbai Firm's Registration No: 101248W/W-100022
10 May 2017 Aniruddha Godbole
Partner
Membership No: 105149

Annexure A to the Independent Auditors' Report - 31 March 2017

With reference to the Annexure A referred to in the Independent Auditors' Report to themembers of the Company on the standalone financial statements for the year ended 31 March2017 we report the following:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment (fixed assets).

(b) The Company has a regular program of physical verification of its property plantand equipment (fixed assets) which includes freehold and leasehold land by which allproperty plant and equipment (fixed assets) are verified in a phased manner over a periodof three years. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets. In accordance withthe above programme the Company has verified certain property plant and equipment(fixedassets) during the year and we are informed that material discrepancies were noticed onsuch verification and the same have been properly dealt with in the books of account.

(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 (otherthan leasehold land) as disclosed in Note 11 to the standalone financial statements areheld in the name of the Company. In respect of leasehold lands we have verified the leaseagreements duly registered with the appropriate authorities as disclosed in Note 11 to thestandalone financial statements.

(ii) The inventory except goods-in-transit and stocks lying with third parties hasbeen physically verified by the management during the year. In our opinion the frequencyof such verification is reasonable. For stocks lying with third parties at the year-endwritten confirmations have been obtained. The discrepancies noticed on verificationbetween the physical stocks and the book records were not material and have been dealtwith in books of account.

(iii) (a) The Company has granted unsecured loans to a body corporate covered in theregister maintained under Section 189 of the Companies Act 2013 ('the Act'). The Companyhas not granted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theAct. In our opinion the rate of interest and other terms and conditions on which loanshave been granted to a body corporate listed in the register maintained under Section 189of the Act are not prima facie prejudicial to the interest of the Company.

(b) The loans granted to a body corporate covered in the register maintained underSection 189 of the Act and the interest thereon are repayable on demand. As mentioned inNote 44 to the standalone financial statements as at year-end such loans along withinterest have been written-off by the Company.

(c) There are no overdue amounts of more than 90 days in respect of the unsecured loansgranted by the Company. As mentioned in Note 44 to the standalone financial statements asat year-end such loans along with interest have been written-off by the Company.

(iv) In our opinion and according to the information and explanations given to us inrespect of the loans given to a body corporate the Company has complied with theprovisions of Sections 186 of the Act. The Company has not given any loan under Section185 of the Act. The Company has not made any investment given any guarantee or providedany security under Sections 185 and 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of Sections 73 to 76 or any other relevant provisions of theAct and the rules framed there under. Accordingly paragraph 3 (v) of the Order is notapplicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148 (1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have notmade a detailedexamination of the records.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Service Tax Sales Tax Value-added Tax Professional Tax Duty of CustomsDuty of Excise Cess and other material statutory dues have been regularly deposited withthe appropriate authorities. According to the information and explanations given to us andon the basis of our examination of records of the Company amounts deducted/ accrued inthe books of account in respect of Income Tax have generally been regularly deposited withthe appropriate authorities though there have been slight delays in a few cases.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income Tax Service TaxSales Tax Value-added Tax Professional Tax Duty of Customs Duty of Excise Cess andother material statutory dues were in arrears as at 31 March 2017 for a period of morethan six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofService Tax Sales Tax Value-added Tax and Duty of Customs which have not been depositedwith the appropriate authorities on account of any dispute. According to the informationand explanations given to us the following dues of Income Tax and Duty of Excise have notbeen deposited as on 31 March 2017 by the Company on account of disputes:

Name of the statute Nature of the dues Demand (Rs) Amount not deposited on A/c of demand (Rs) Period to which the amount relates Forum where dispute is pending
IncomeTaxAct 1961 Income-tax 15292537 15292537 2006-07 Deputy Commissioner of Income-Tax
IncomeTaxAct 1961 Income-tax 108810783 92691237 2009-10 Commissioner of Income-Tax (appeals)
Central Excise Act 1932 Excise duty 40126609 34126609 July-2007 to December2011 Customs Excise and Service Tax Appellate Tribunal Bangalore

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to financial institutions or banksduring the year. The Company does not have any loans or borrowings from government or duesto debenture holders during the year.

(ix) The Company did not raise any money byway of initial public offer or furtherpublic offer (including debt instruments) during the year. In our opinion and according tothe information and explanations given to us the term loans taken by the Company havebeen applied for the purpose for which they were raised.

(x) 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.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule Vto the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is nota Nidhi company and the Nidhi Rules 2014 are notapplicable to it.Accordingly paragraph 3 (xii) of the Order is notapplicableto the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable to the Company.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is notapplicable to the Company.

ForBSR& Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Aniruddha Godbole
Mumbai Partner
10 May 2017 Membership No: 105149

Annexure B to the Independent Auditors' Report - 31 March 2017

(Referred to in 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 HikalLimited ("the Company") as of 31 March 2017 in conjunction with our audit of thestandalone 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 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 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 underthe Act.

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 deemed tobe prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wereestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgement 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 31 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 ICAI.

ForBSR& Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Aniruddha Godbole
Mumbai Partner
10 May 2017 Membership No: 105149