You are here » Home » Companies » Company Overview » IOL Chemicals & Pharmaceuticals Ltd

IOL Chemicals & Pharmaceuticals Ltd.

BSE: 524164 Sector: Health care
NSE: IOLCP ISIN Code: INE485C01011
BSE 16:00 | 03 Dec 451.05 -3.50
(-0.77%)
OPEN

454.00

HIGH

459.15

LOW

449.50

NSE 15:59 | 03 Dec 450.85 -3.35
(-0.74%)
OPEN

455.00

HIGH

460.00

LOW

448.15

OPEN 454.00
PREVIOUS CLOSE 454.55
VOLUME 31825
52-Week high 807.30
52-Week low 434.40
P/E 8.88
Mkt Cap.(Rs cr) 2,648
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 454.00
CLOSE 454.55
VOLUME 31825
52-Week high 807.30
52-Week low 434.40
P/E 8.88
Mkt Cap.(Rs cr) 2,648
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

IOL Chemicals & Pharmaceuticals Ltd. (IOLCP) - Auditors Report

Company auditors report

TO THE MEMBERS OF

IOL CHEMICALS AND PHARMACEUTICALS LIMITED Report on the Audit of the FinancialStatements Opinion

We have audited the accompanying financial statements of IOL Chemicals andPharmaceuticals Limited ("the Company") which comprise the Balance Sheet as atMarch 312021 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year ended onthat date and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 312021 the profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theFinancial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Financial Statements of the current period. These matterswere addressed in the context of our audit of the Financial Statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

S. No. Key Audit Matter Auditor's Response
1. Revenue recognition: Principal Audit Procedures:
Refer note 2(i)(v) and note 26 of the financial statements. The Company's sales revenue mainly arose from sale of Bulk Drugs and Chemical products. The Company recognizes sales revenue based on the terms and conditions of transactions which vary with different customers. For sales transactions in a certain period around balance sheet date it is essential to ensure whether the transfer of control of the goods by the Company to the customer occurs before the balance sheet date or otherwise. Considering that there are significant volume of sales transactions close to the year end involving material amounts and such revenue recognition is subject to whether transfer of control to the customers has occurred before the balance sheet date or otherwise we consider the risk of revenue from sale of goods being recognised in the incorrect period a key audit matter. We evaluated the design of internal controls over recognition of revenue in the appropriate period in accordance with the Company's accounting policy. On a sample basis we tested the operating effectiveness of the internal control relating to determination of point in time at which the transfer of control of the goods occurs.
We tested the relevant information technology systems used in recording revenue including company's system generated reports based on which selection of samples was undertaken. On sample basis we performed test of details of sales recorded close to the year-end through following procedures:
i) Analysed the terms and conditions of the underlying contract with the customer and
ii) Verified evidence for transfer of control of the goods prior to the balance sheet date or otherwise from relevant supporting documents.
2. Allowance for Credit Losses: Principal Audit Procedures:
The Company determines the allowance for credit losses on the following basis: - Our audit procedures related to the allowance for credit losses for trade receivables included the following among others:
a) Historical loss experience which is adjusted to reflect current and estimated future economic conditions. We tested the effectiveness of controls over the : -
b) Consideration of Current and anticipated future economic conditions relating to the industries the Company deals with and the countries in which its suppliers and customers are situated. (a) Development of the methodology for the allowance for credit losses including consideration of the current and estimated future economic conditions.
c) Consideration of credit reports and other related credit information for its customers to estimate the probability of default in future. (b) Completeness and accuracy of information used in the estimation of probability of default and (c) computation of the allowance for credit losses.
d) For the current year estimates of possible effect from the pandemic relating to COVID-19. For a sample of customers:
We identified allowance for credit losses as a key audit matter because of possible effects of COVID-19 pandemic. We tested the input data such as credit reports and other credit related information used in estimating the probability of default by comparing them to external and internal sources of information.
(Refer Note 2(i)(XX) 2(iii) and Note 9 of the Financial Statements.) We tested the mathematical accuracy and computation of the allowances by using the same input data used by the Company.

Other Information

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the Financial Statements and our auditor's report thereon.

Our opinion on the Financial Statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in

accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance

is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

As part of our audit procedures in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the Financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.

• Evaluate the overall presentation structure and content of the Financialstatements including the disclosures and whether the Financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguard.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Financial Statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Companies (Auditor's Report) Order 2016 ('the Order') issued byCentral Government of India in terms of subsection (11) of section 143 of the Act we givein 'Annexure-A a statement on the matters specified in paragraphs 3 and 4 of the Orderto the extent applicable.

2. As required by Section 143(3) of the Act based on our audit 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 Statement of Changes in Equity and the Statement of Cash Flow dealt

with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on March 312021 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

h) 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 as amended 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 its financialposition in its Financial Statements - Refer Note 36

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 ifany to the Investor Education and Protection Fund by the company.

For and on behalf of
Ashwani & Associates
Chartered Accountants
Firm Registration Number: 000497N
by the hand of
sd/-
Arvind Jain
Partner
Place: Ludhiana Membership No.: 097549
Dated: 4th June 2021 UDIN: 21097549AAAABP2059

ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report to the Members of IOL Chemicals and Pharmaceuticals Limited of evendate)

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:

1. In respect of Fixed Assets:

a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

b) The Company has a regular program of physical verification of the fixed assets atreasonable intervals. In accordance with this program certain fixed assets were verifiedduring the year and no material discrepancies were noticed on such verification.

c) The Company has all the original title deeds of immovable properties in its ownname.

2. The inventory has been physically verified by the management during the year. In ouropinion the frequency of verification is reasonable and the discrepancies noticed onphysical verification of inventory were not material.

3. The Company has not granted any loans secured or unsecured to Companies firms orother parties covered in the register maintained under Section 189 of the Act.

4. According to the information and explanations given to us during the year theCompany has not given any loans purchased any investment given any guarantees and anysecurity as provided under sections 185 and 186 of the Act. Therefore the provisions ofclause 3(iv) is not applicable to the Company.

5. The Company has not accepted any deposits from the Public. Therefore the provisionsof Clause 3(v) of the order is not applicable to the Company.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of Cost records under section148 of the Companies Act 2013 and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have however not made a detailedexamination of such records with a view to determine whether they are accurate orcomplete.

7. (a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositing

the undisputed statutory dues including provident fund employees' state insuranceincome tax goods and services tax sales tax service tax excise duty customs dutyvalue added tax cess and other material statutory dues 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 income-tax cess goods and services taxsales tax service tax value added tax customs duty and excise duty which have not beendeposited on account of a dispute except the following:

Sr. Name of No the Statute Nature of the Dues Amount (in Rs.) Period to which amount relates (A.Y.) Forum where dispute is pending
1. Income-Tax Act 1961 Income Tax 40250/- 2018-19 CIT-(Appeals) National Faceless Appeal Centre

8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowing to a financial institutiongovernment Bank or dues to debenture holders.

9. In our opinion and according to the information and explanations given to us theCompany has not raised any money by way of initial public offer or further public offer(Including Debt instruments). No new term loans have been raised by the Company during theyear.

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 acrossany instance of fraud by the Company or any fraud on the company by its officers oremployees noticed or reported during the year nor have we been informed of such case bythe management.

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. The Company is not a Nidhi Company. Therefore the provision of clause 3(xii) isnot applicable to the Company.

13. The Company has entered into transactions with related parties in compliance withthe provisions of sections 177 and 188 the Act. The details of such related partytransactions have been disclosed in the financial statements as required by Ind AS-24'Related Party Disclosures'.

14. During the year the Company has made a preferential allotment of 1818000 equityshares at a price of Rs. 205/- per share to a Company. The said equity shares have beenallotted on the conversion of equivalent number of shares warrants earlier issued to thesaid Company during FY 2018-19. The Company has complied with requirements of Section 42of Act with respect to such preferential allotment and the amounts so raised have beenused for the purposes for which the funds were raised.

15. In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transaction with directors or persons connectedwith them.

16. In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For and on behalf of
Ashwani & Associates
Chartered Accountants
Firm Registration Number: 000497N
by the hand of
sd/-
Arvind Jain
Partner
Place: Ludhiana Membership No.: 097549
Dated: 4th June 2021 UDIN: 21097549AAAABP2059

ANNEXURE 'B' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of IOL Chemicals and PharmaceuticalsLimited of even date)

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

We have audited the internal financial controls over financial reporting of IOLChemicals and Pharmaceuticals Limited ("the Company") as of March 312021 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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

included 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 auditor's judgement including the assessment of therisks of material 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 internal financial controls system overfinancial reporting of the Company.

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.

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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financial

reporting were operating effectively as at March 31 2021 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For and on behalf of
Ashwani & Associates
Chartered Accountants
Firm Registration Number: 000497N
by the hand of
sd/-
Arvind Jain
Partner
Place: Ludhiana Membership No.: 097549
Dated: 4th June 2021 UDIN: 21097549AAAABP2059

.