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Hikal Ltd.

BSE: 524735 Sector: Health care
NSE: HIKAL ISIN Code: INE475B01022
BSE 00:00 | 22 Jan 131.75 2.90
(2.25%)
OPEN

130.00

HIGH

134.35

LOW

128.30

NSE 00:00 | 22 Jan 131.60 2.90
(2.25%)
OPEN

130.00

HIGH

134.50

LOW

128.25

OPEN 130.00
PREVIOUS CLOSE 128.85
VOLUME 92870
52-Week high 187.15
52-Week low 100.75
P/E 15.27
Mkt Cap.(Rs cr) 1,624
Buy Price 131.75
Buy Qty 775.00
Sell Price 132.55
Sell Qty 25.00
OPEN 130.00
CLOSE 128.85
VOLUME 92870
52-Week high 187.15
52-Week low 100.75
P/E 15.27
Mkt Cap.(Rs cr) 1,624
Buy Price 131.75
Buy Qty 775.00
Sell Price 132.55
Sell Qty 25.00

Hikal Ltd. (HIKAL) - Auditors Report

Company auditors report

To the members of Hikal Limited

Report on the Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statementsof Hikal Limited (“the Company”) which comprise the standalone balance sheet asat 31 March 2018 the standalone Statement of profit and loss (including othercomprehensive income) the standalone Statement of changes in equity and the standaloneStatement of cash flows for the year then ended and a summary of the significantaccounting policies and other explanatory information (hereinafter referred to as“standalone Ind AS financial statements”).

Management's Responsibility for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the matters statedin Section 134 (5) of the Companies Act 2013 (“the Act”) with respect to thepreparation of these standalone Ind AS financial statements that give a true and fair viewof the state of affairs profit (including other comprehensive income) changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act. read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

In preparing the Ind AS financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Auditors' responsibility

Our responsibility is to express an opinion on these standalone Ind ASfinancial statements based 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 report under the provisions of theAct and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing specified under Section 143 (10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the standalone Ind AS financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the standalone Ind AS financial statements. Theprocedures selected depend on the auditors' judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the standalone Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company's Directors as well as evaluating the overall presentation of the standaloneInd AS financial statements.

We are responsible to conclude on the appropriateness of management'suse of the going concern basis of accounting and based on the audit evidence obtainedwhether a material uncertainty exists related to events or conditions that may castsignificant doubt on the entity's ability to continue as going concern. If we concludethat a material uncertainty exists we are required to draw attention in the auditors'report to the related disclosures in the standalone Ind AS financial statements or ifsuch disclosures are inadequate to modify the opinion. Our conclusions are based on theaudit evidence obtained up to the date of auditors' report. However future events orconditions may cause an entity to cease to continue as a going concern.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the statement ofaffairs of the Company as at 31 March 2018 its profit and other comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Report on other legal and regulatory requirements

As required by the Companies (Auditor's Report) Order 2016 ('theOrder') issued by the Central Government of India in terms of Section 143 (11) of theAct we give in “Annexure A” a statement on the matters specified in theparagraphs 3 and 4 of the Order.

As required by Section 143 (3) of the Act we report that:

(a) we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(b) in our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) the standalone balance sheet the standalone Statement of profitand loss (including other comprehensive income) the standalone cash flow statements andthe standalone Statement of changes in equity dealt with by this report are in agreementwith the books of account;

(d) in our opinion the aforesaid standalone Ind AS financialstatements comply with the Indian Accounting Standards

(Ind AS) prescribed under Section 133 of the Act;

(e) on the basis of the written representations received from thedirectors as on 31 March 2018 taken on record by the board of directors none of thedirectors are disqualified as on 31 March 2018 from being appointed as a director in termsof Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controlswith reference to standalone Ind AS financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in “Annexure B”;and

(g) with respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. the Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements Refer Note 40 to thestandalone Ind AS financial statements;

ii. the Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. there has been no delay in transferring amounts required to betransferred to the Investor Education and

Protection Fund by the Company during the year ended 31 March 2018; and

iv. the disclosure in the standalone Ind AS financial statementsregarding holdings as well as dealings in Specified Bank Notes during the period from 8November 2016 to 30 December 2016 have not been made since they do not pertain to thefinancial year ended 31 March 2018. However amounts as appearing in the auditedstandalone Ind AS financial statements for the period ended 31 March 2017 have beendisclosed.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No: 101248W/W-100022

Vijay Bhatt

Partner

Membership No: 036647

Mumbai

9 May 2018

Annexure A to the Independent Auditors' Report - 31 March 2018

With reference to the Annexure A referred to in the IndependentAuditors' Report to the members of the Company on

the standalone Ind AS financial statements for the year ended 31 March2018 we report the following:

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and

situation of property plant and equipment.

(b) The Company has a regular programme of physical verification of itsproperty plant and equipment which includes freehold and leasehold land by which theproperty plant and equipment are verified by the management in a phased manner over aperiod of three years. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Inaccordance with the policy the Company has physically verified property plant andequipment during the year and no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties (other than leasehold land) as disclosed in Note 4 and Note 5 to the standaloneInd AS financial statements are held in the name of the Company. In respect of leaseholdlands we have verified the lease agreements duly registered with the appropriateauthorities as disclosed in Note 4 to the standalone Ind AS financial statements.

(ii) The inventory except for goods-in-transit and stocks lying withthird parties has been physically verified by the management during the year. In ouropinion the frequency of such verification is reasonable. In respect of stocks lying withthird parties at the year-end written confirmations have been obtained. The discrepanciesnoticed on verification between the physical stocks and the book records were not materialand have been dealt with in books of account.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Companies Act 2013 ('the Act'). Accordingly paragraphs 3 (iii) (a) (b) and(c) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanationgiven to us the Company has not granted any loans or provided any guarantees or securityto the parties covered under Section 185 of the Act. The Company has complied with theprovisions of Section 186 of the Act in respect of the investments made.

(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted deposits as per the directives issued by theReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder. Accordingly paragraph 3 (v) of theOrder is not applicable to the Company.

(vi) We have broadly reviewed the books of accounts maintained by theCompany pursuant to the rules prescribed by the Central Government for the maintenance ofcost records under Section 148(1) of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the records.

(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted / accruedin the books of account in respect of undisputed statutory dues including Profession taxIncome-tax Duty of customs Duty of excise Goods and Service tax Cess and othermaterial statutory dues have been regularly deposited during the year with the appropriateauthorities. According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees' StateInsurance Sales-tax Service tax Value added tax and other material statutory dues havegenerally been regularly deposited during the year with the appropriate authoritiesthough there have been slight delays in few cases.

According to the information and explanations given to us noundisputed amounts payable in respect of Provident fund Employees' State InsuranceProfession tax Income-tax Duty of customs Duty of excise Sales-tax Service tax Goodsand Services tax and Value added tax Cess and other material statutory dues were inarrears as at 31 March 2018 for a period of more than six months from the date they becamepayable.

(b) According to the information and explanations given to us thereare no dues of Sales tax Service tax Duty of customs Goods and Service tax and Valueadded tax as at 31 March 2018 which have not been deposited with the appropriateauthorities on account of any dispute except as stated below:

Name of the Act Nature of the dues

Amount Demanded (`)

Amount not deposited under disputes

Period to which amount relates

Forum where dispute is pending
Income Tax Act 1961 Income-tax

15292537

15292537

2006-07

Deputy Commissioner of Income-Tax
Income Tax Act 1961 Income-tax

108810783

92691237

2009-10

Commissioner of Income-Tax (appeals)
Central Excise Act 1944 Excise duty

40126609

34126609

July-2007 to

Customs Excise and Service Tax

December 2011

Appellate Tribunal Bangalore

(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of dues financial institutions orbank during the year. The Company does not have any loan or borrowing from government ordues to debenture holders during the year.

(ix) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not raised anymoneys by way of initial public offer or further public offer (including debt instruments)during the year. In our opinion and according to the information and explanations given tous the term loans taken by the Company have been applied for the purpose for which theywere raised.

(x) During the course of our examination of the books and records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the management.

(xi) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid / providedfor managerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company and the Nidhi Rules 2014 are notapplicable to it. Accordingly paragraph 3 (xii) of the Order is not applicable to theCompany.

(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with Sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone Ind AS financialstatements as required by applicable Ind AS.

(xiv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3 (xiv) of the Order is not applicableto the Company.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intoany non-cash transactions with directors or persons connected with them. Accordinglyparagraph 3 (xv) of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is notapplicable to the Company.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No: 101248W/W-100022

Vijay Bhatt

Partner

Membership No: 036647

Mumbai

09 May 2018

(Referred to in our report of even date)

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financialreporting of Hikal Limited (“the Company”) as of 31 March 2018 in conjunctionwith

our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the “Guidance Note”) and the Standards on Auditing issued by ICAIand deemed to be prescribed under Section 143(10) of the Act to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors' judgement including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal

financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2018 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Vijay Bhatt
Mumbai Partner
9 May 2018 Membership No: 036647