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Unichem Laboratories Ltd.

BSE: 506690 Sector: Health care
NSE: UNICHEMLAB ISIN Code: INE351A01035
BSE LIVE 15:53 | 21 Nov 290.70 0.95
(0.33%)
OPEN

291.30

HIGH

294.25

LOW

288.00

NSE 15:57 | 21 Nov 289.70 0.10
(0.03%)
OPEN

289.70

HIGH

294.00

LOW

287.10

OPEN 291.30
PREVIOUS CLOSE 289.75
VOLUME 23618
52-Week high 350.25
52-Week low 234.10
P/E 25.19
Mkt Cap.(Rs cr) 2,642
Buy Price 0.00
Buy Qty 0.00
Sell Price 290.70
Sell Qty 40.00
OPEN 291.30
CLOSE 289.75
VOLUME 23618
52-Week high 350.25
52-Week low 234.10
P/E 25.19
Mkt Cap.(Rs cr) 2,642
Buy Price 0.00
Buy Qty 0.00
Sell Price 290.70
Sell Qty 40.00

Unichem Laboratories Ltd. (UNICHEMLAB) - Auditors Report

Company auditors report

To

The members of

Unichem Laboratories Limited

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

We have audited the accompanying standalone Ind AS financial statements of UnichemLaboratories 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 the significant accounting policies and other explanatoryinformation.

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 I nd 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 the 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 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.

Emphasis of Matter

We draw attention to Note 41 to the standalone Ind AS financial statements relating toincrease in the provision for diminution of long-term investments in Unichem FarmaceuticaDo Brazil Ltda from Rs. 2277.63 lacs in the previous year to Rs. 2690.78 lacs for theyear under report based on internal assessment and other factors more elaborately statedin the said Note.

Our opinion is not modified in respect of this matter.

Other Matters

The comparative financial information of the Company for the year ended 31st March 2016and the transition date opening balance sheet as at 1st April 2015 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 audited by us whose report for the year ended 31st March 2016 and 31st March2015 dated 20th May 2016 and 9th May 2015 respectively expressed an unmodified opinion onthose standalone financial statements as adjusted for the differences in the accountingprinciples adopted by the Company on transition to the Ind AS which have been audited byus.

Our opinion is not modified in respect of this matter.

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 in terms of section 143 (11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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 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 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 the 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 36 and 37 to thestandalone Ind AS financial statements;

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 by the Company.

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 54 to thestandalone Ind AS financial statements;

For B. D. Jokhakar & Co.
Chartered Accountants
Firm Registration No.: 104345W
Raman H. Jokhakar
Mumbai Partner
May 30 2017 Membership No.: 103241

ANNEXURE A TO THE AUDITOR'S REPORT

(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirementssection of Independent

Auditors' Report on standalone Ind AS financial statements of even date)

(I) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) As explained to us some of the fixed assets of the Company have been physicallyverified during the year by the management in accordance with a phased program ofverification designed to cover all assets over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on physical 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 otherthan self constructed immovable properties (buildings) are held in the name of theCompany.

(ii) As explained to us the inventories have been physically verified during the yearby the management except for the inventories lying with the third parties which havehowever been confirmed by them. The intervals at which the inventories have been verifiedare in our opinion reasonable in relation to the size of the Company and the nature ofits business. The Company is maintaining proper records of inventory and no materialdiscrepancies were noticed on physical verification.

(iii) As informed the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Act. Consequently sub clause (a) (b) and (c) of theparagraph 3 (iii) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act in respect ofloans investments guarantees and security given for the year under report.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public during the year. Therefore paragraph3(v) of the Order is not applicable.

(vi) We have broadly reviewed the books of account and records maintained by theCompany pursuant to the Companies (Cost Records and Audit) Rules 2014 as prescribed bythe Central Government for the maintenance of cost records under Section 148 (1) of theAct relating to the manufacture of Bulk Drugs and pharmaceutical specialties and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. We have however not made a detailed examination of the said records with aview to determine whether they are accurate or complete.

(vii) (a) According to information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues have been regularly deposited during theyear by the Company with the appropriate authorities. As explained to us there were noundisputed statutory dues as mentioned above in arrears as at 31st March 2017 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us the dues in respect ofincome tax (including TDS) sales tax service tax duty of customs duty of excise andvalue added tax that have not been deposited with the appropriate authorities on accountof dispute and the forum where the disputes are pending as on 31st March 2017 are asgiven below:

Name of the Statutes Nature of the dues Amount p in lacs) Period to which it relates Forum where dispute is pending
Income Tax Act 1961 TDS 25.34 AY: 2008-09 to AY: 2009-10 Commissioner of Income Tax - (Appeals)
U.P. Value Added Tax Act 2008 Penalty 20.44 FY: 2008-09 Hon'ble High Court of Judicature at Allahabad
Central Excise Act 1944 Duty and Penalty 211.30 April 2003 to November 2013 Appellate Tribunal (CESTAT)
Central Excise Act 1944 Duty and Penalty 4.09 FY: 2012-13 Commissioner of Central Excise (Appeal)
Service Tax Laws Disallowance of Service Tax Credit 6.39 April 2011 to June 2015 Commissioner of Central Excise (Appeal) Kolkata - III
Service Tax Laws Disallowance of Service Tax Credit & Penalty 139.88 January 2012 to March 2012 Appellate Tribunal (CESTAT)
Service Tax Laws Disallowance of Service Tax Credit & Penalty 498.22 FY: 2008-09 to August 2015 Appellate Tribunal (CESTAT)
Service Tax Laws Disallowance of Service Tax Credit & Penalty 54.31 February 2014 to August 2016 Commissioner of Central Excise & Service Tax - Goa

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of dues to financial institutions banks and Governments.Therefore paragraph 3(viii) of the Order is not applicable.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). Term loans have been applied for the purposesfor which they were obtained except in case of term loans amounting to Rs. 1.80 lacsdisbursed but pending utilisation which were placed in a separate bank account.

(x) To the best of our knowledge and belief and according to the information andexplanations given to us no material fraud on or by the Company has been noticed orreported during the course of our audit.

(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 V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Therefore paragraph 3(xii) of the Order is notapplicable.

(xiii) In our opinion and according to the information and explanations given to usand based on our examination of the records of the Company all transactions with therelated parties are in compliance with sections 177 and 188 of the Act where applicableand the details have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company no preferential allotment or private placementof shares or fully or partly convertible debentures has been made by the Company duringthe year under review. Therefore paragraph 3(xiv) of the Order is not applicable.

(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 him as specified under section 192of the Act. Therefore paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and therefore the provisions of paragraph 3(xvi) of the Order isnot applicable.

For B. D. Jokhakar & Co.
Chartered Accountants
Firm Registration No.: 104345W
Raman H. Jokhakar
Mumbai Partner
May 30 2017 Membership No.: 103241

ANNEXURE B TO THE AUDITOR'S REPORT

(Referred to in paragraph 2 under Report on Other Legal and Regulatory Requirementssection of Independent Auditors' Report on standalone Ind AS financial statements of evendate)

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 UnichemLaboratories Limited ("the Company") as of March 312017 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(2) 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 of the Company are being made only inaccordance with authorisations of management and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial 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 March 312016 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 B. D. Jokhakar & Co.
Chartered Accountants
Firm Registration No.: 104345W
Raman H. Jokhakar
Mumbai Partner
May 30 2017 Membership No.: 103241