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Divis Laboratories Ltd.

BSE: 532488 Sector: Health care
NSE: DIVISLAB ISIN Code: INE361B01024
BSE 00:00 | 23 Jan 1503.70 1.30
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1502.00

HIGH

1511.80

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1496.80

NSE 00:00 | 23 Jan 1503.30 -0.35
(-0.02%)
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1508.00

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1512.55

LOW

1496.05

OPEN 1502.00
PREVIOUS CLOSE 1502.40
VOLUME 10891
52-Week high 1577.00
52-Week low 978.50
P/E 34.71
Mkt Cap.(Rs cr) 39,916
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1502.00
CLOSE 1502.40
VOLUME 10891
52-Week high 1577.00
52-Week low 978.50
P/E 34.71
Mkt Cap.(Rs cr) 39,916
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 Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying standalone financial statements of Divi'sLaboratories Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2018 the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

2. 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 to give a true and financial fair view of thefinancial position financial performance (including other comprehensive income) cashflows and changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specified in theCompanies

(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of 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.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder.

5. We conducted our audit of the standalone Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act and otherapplicable authoritative pronouncements issued by the Institute of Chartered Accountantsof India. Those Standards and pronouncements require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind AS statements. The procedures selected depend onthe auditors' judgment including the assessment of the risks of material misstatement ofthe standalone Ind AS financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.

Opinion

8. 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 of the state of affairs of theCompany as at March 31 2018 and its total comprehensive income (comprising of profit andother comprehensive income) its cash flows and the changes in equity for the year endedon that date.

Other Matter

9. The Ind AS financial statements of the Company for the year ended March 31 2017were audited by another firm of chartered accountants under the Companies Act 2013 whovide their report dated May 26 2017 expressed an unmodified opinion on those financialstatements. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 ofthe Order.

11. 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 (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

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

(e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure A.

(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 knowledge and belief and according to the information andexplanations given to us:

i. The Company has disclosed the impact if any of pending litigations as at March 312018 on its financial position in its standalone Ind AS financial statements – ReferNote 40;

ii. The Company has long-term contracts as at March 31 2018 for which there were nomaterial foreseeable losses. The company did not have any derivative contracts as at March31 2018.

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 March 312018.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2018.

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 11(f) of the Independent Auditors' Report of even date to themembers of Divi's

Laboratories Limited on the standalone financial statements for the year ended March31 2018

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

1. We have audited the internal financial controls over financial reporting of Divi'sLaboratories Limited ("the Company") as of March 31 2018 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

2. The Company's management is responsible for establishing and maintaining financialinternal controls based on the financial internal control over reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of

Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India (ICAI). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

Auditors' Responsibility financial financial 3. Our responsibility is to express anopinion on the Company's internal financial controls over financial reporting based on ouraudit. We conducted our audit in accordance with the

Guidance Note on Audit of Internal Financial Controls Over

Financial Reporting (the "Guidance Note") and the Standards on Auditingdeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal controls both applicable to an audit of internal controls and bothissued by the ICAI. Those

Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether financialadequateinternal financial controls over financial reporting was established and maintained and ifsuch controls operated effectively 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 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.

5. 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.

Referred to in paragraph 11(f) of the Independent Auditors'

Report of even date to the members of Divi's Laboratories Limited on the standalonefinancial statements for the year ended March 31 2018

Meaning of Internal Financial Controls Over Financial Reporting

6. 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 control over reportingincludes those policies and procedures that (1) pertain to the maintenance of recordsthat 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 statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. 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

8. 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 31 2018 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.

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 10 of the Independent Auditors' Report of even date to themembers of Divi's Laboratories Limited on the standalone financial statements as of andfor the year ended March 31 2018 i. (a) The Company is maintaining proper recordsshowing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the Management during the year and no material discrepancies have been noticedon such verification.

(c) The title deeds of immovable properties as disclosed in Note 3 on fixed assets tothe financial statements are held in the name of the Company.

ii. The physical verification of inventory have been conducted at reasonable intervalsby the Management during the year. The discrepancies noticed on physical verification ofinventory as compared to book records were not material.

iii. 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 Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.

iv. 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. Therefore theprovisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. 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.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of customs duty of excise value added tax cess goodsand service tax with effect from July 1 2017 and other material statutory dues asapplicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of sales-tax service-tax and value added taxwhich have not been deposited on account of any dispute. The particulars of dues of incometax duty of customs and duty of excise as at March 31 2018 which have not been depositedon account of a dispute are as follows:

Name of the Statue Nature of Dues Disputed Amount (Rs.) Amount deposit- ed (Rs.) Period to which the amount relates Forum where the dispute is pending
Customs Act 1962 Penalty 30000 - August 2005 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 Penalty 1000000 - January 2007 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Chennai.
Customs Act 1962 Penalty 15148315 - June 2006 to December 2008 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 Custom duty and Penalty 3669894 - March 2012 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 Custom duty and Penalty 6314711 - November 2012 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 Penalty 859631 - June2009 to March 2010 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Customs Act 1962 Custom duty 5460816 5460816 May 2014 to Feb- ruary 2018 The Commissioner of Customs (Appeals)
Central Excise Act 1944 Penalty 24408690 - September 2006 to December 2008 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Central Excise Act 1944 Penalty 937500 - July2009 to March 2010 Customs Excise and Service Tax Appellate Tribunal South Zonal Bench Bangalore.
Central Excise Act 1944 Excise duty and Penalty 1942840 97142 May2011 to De- cember 2011 Excise Customs and Service Tax (Appeals) Vishakapat- nam.
Central Excise Act 1944 Excise duty and Penalty 1391965 94910 December 2013 to September 2014 Commissioner of Central Excise Customs & Service Tax Vishakapatnam.
Central Excise Act 1944 Excise duty and Penalty 332501 25000 October 2014 to September 2015 Commissioner of Customs (Appeals) Custom House Port Area Vishakapatnam.
Central Excise Act 1944 Excise duty and Penalty 92722 6328 August 2013 Commissioner of Customs (Appeals) Custom House Port Area Vishakapatnam.
Central Excise Act 1944 Excise duty and Penalty 59469 4055 September 2013 to October 2013 Commissioner of Customs (Appeals) Custom House Port Area Vishakapatnam.
Central Excise Act 1944 Service tax and Penalty 3506524 263000 April 2012 to March 2013 Assistant Registrar The Customs Excise & Service Tax Appellate Tribunal Khairatabad
Central Excise Act 1944 Service tax and Penalty 4518106 376522 April 2010 to March 2011 Commissioner (Appeal-III) Customs Central Excise & Service Tax Hyderabad.
Entry of Goods in to Local areas Act 2001 Entry Tax 4630657 820083 2004-05 to 2016- 17 Sales Tax appellate tribunal Hyderabad
Income Tax Act 1961 Interest 40512 - 2005-06 Additional Commissioner of Income Tax Range-I Hyderabad.

viii. 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 or dues to debenture holders as at thebalance sheet date.

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.

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. 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.

xii. 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.

xiii. 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/ Indian Accounting Standard (Ind AS)24 Related Party Disclosures specified under Section 133 of the Act.

xiv. 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.

xv. 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.

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

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Sunit Kumar Basu
Place: Hyderabad Partner
Date: May 26 2018 Membership Number: 55000