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Ipca Laboratories Ltd.

BSE: 524494 Sector: Health care
NSE: IPCALAB ISIN Code: INE571A01038
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OPEN 868.55
PREVIOUS CLOSE 850.60
VOLUME 725
52-Week high 1089.00
52-Week low 830.00
P/E 34.20
Mkt Cap.(Rs cr) 21,891
Buy Price 861.25
Buy Qty 2.00
Sell Price 862.35
Sell Qty 5.00
OPEN 868.55
CLOSE 850.60
VOLUME 725
52-Week high 1089.00
52-Week low 830.00
P/E 34.20
Mkt Cap.(Rs cr) 21,891
Buy Price 861.25
Buy Qty 2.00
Sell Price 862.35
Sell Qty 5.00

Ipca Laboratories Ltd. (IPCALAB) - Auditors Report

Company auditors report

To the Members of Ipca Laboratories Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of IpcaLaboratories Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2022 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 thenended and a summary of significant accounting policies and other explanatory information(hereinafter referred to as "the Standalone Financial Statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022and its profit total comprehensive income the changes in equity and its cash flows forthe year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statement inaccordance with the Standards on Auditing ("SAs") specified under section143(10) of the Act. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India("ICAI") together with the ethical requirements that are relevant to our auditof the Standalone Financial Statements under the provisions of the Act and the Rulesframed thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters:

Key Audit Matters (KAMs) How the KAMs were addressed in our audit
1. Inventory Valuation Our procedures included amongst others:
Refer note (C)(g) of the Statement of Significant Accounting Policies. ? We attended stock counts to identify whether any inventory was obsolete;
The Company manufactures and sells pharmaceutical products which carry shelf life. As a result significant level of judgement is involved in estimating inventory valuation. ? We assessed the basis for the inventory valuation the consistency in policy and the rationale in its application;
Judgement is required to assess the appropriate net realisable value for short dated raw material and finished products. Such judgments include management expectations for future sales and inventory liquidation plans. ? We tested the accuracy of the ageing of inventories based on system generated reports;
? We reviewed material testing reports and future plans for consumptions;
? We tested the arithmetical accuracy of valuation files; and
? We reviewed product-wise historical data relating to sales return etc. and also its impact on valuation.
2. Impairment of Property plant & equipment ? We assessed the determination of the recoverable amount of the PPE based on our understanding of the nature of the Company's business and the economic environment surrounding its operations.
Refer note (C)(b) of the Statement of Significant Accounting Policies.
There is a risk of impairment of the Company's Property plant
and equipment (PPE) on account of inherent nature of the PPE and the business environment in which the Company operates. As on March 31 2022 the carrying amount of PPE was Rs 2037.05 crores which represent 27.28 % of total assets. ? We reviewed the Company's historical performances and held discussions with the Management to understand their assessment of the Company's future performance. This included obtaining an understanding of management's planned strategies around business expansion and revenue growth strategies.
The Management determines at the end of each reporting period the existence of any objective evidence that the Company's PPE may be impaired. If there are indicators of impairment of class of assets the deficit between the recoverable amount of the PPE and its carrying amount would be recognised as impairment loss in profit or loss. ? We also reviewed performance of individual units and carried out analytical review of relevant data.
? We assessed management's estimates applied in the value-in-use model and compared them against historical performance and tested the arithmetical accuracy.
The process of identifying indicators of impairment and determining the recoverable amount of the PPE by the Management requires significant judgement and estimation. ? We evaluated the sensitivity of the outcomes by considering the downside scenarios against changes to the key assumptions.
The determination of the recoverable amounts inter alia requires estimates of forecasted revenues growth rates profit margins tax rates and discount rates. ? We also assessed the adequacy of the related disclosures in the notes to the Standalone Financial Statements.

Information Other than the Standalone Financial Statements and OurReport thereon

The Company's Management and Board of Directors are responsiblefor the preparation of the other information. The other information comprises theinformation included in Annual Report but does not include the Standalone andConsolidated Financial Statements and our auditor's reports thereon. The AnnualReport is expected to be made available to us after the date of this report.

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

In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information identified above and in doing soconsider whether the other information is materially inconsistent with the StandaloneFinancial Statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the Annual Report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to Those Charged WithGovernance and take necessary actions as applicable under the relevant laws andregulations.

Management's and Those Charged with Governance Responsibilitiesfor the Standalone Financial Statements

The Company's Management and Board of Directors are responsiblefor the matters stated in section 134(5) of the Act with respect to the preparation of theStandalone Financial Statements that give a true and fair view of the financial positionfinancial performance (including other comprehensive income) changes in equity cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS and relevant provisions of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Financial Statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements Management and Boardof Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so. The Board ofDirectors are also responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue to fraud or error and 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of the Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also: ?Identify and assess the risks of material misstatement of the Standalone 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 to design auditprocedures that are appropriate in the circumstances. Under section 143(3)(i) of the Actwe are also responsible for expressing our opinion on whether the Company has adequateinternal financial controls system with reference to Standalone Financial Statements inplace and the operating effectiveness of such controls. ? Evaluate theappropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made by the Management. ? Conclude on theappropriateness of Management and Board of Directors use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern. ?Evaluate the overall presentation structure and content of the Standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of section143(11) of the Act we give in the "Annexure A" a statement on the mattersspecified in the paragraph 3 and 4 of the Order.

2. 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 have beenkept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss (Including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsdealt with by this Report are in agreement with the books of account;

d) In our opinion the Standalone Financial Statements comply with theAccounting Standards specified under section 133 of the Act read with relevant rulesissued thereunder and relevant provisions of the Act;

e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director in termsof section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls withreference to Standalone Financial Statements of the Company and the operatingeffectiveness of such controls refer to our separate report in "Annexure B".Our report expresses an unmodified opinion on the adequacy and operating effectiveness ofthe Company's internal financial controls with reference to Standalone FinancialStatements;

g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended: In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act; and

h) With respect to the other matters to be included in theAuditor's Report in accordance with rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and accordingto the explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Financial Statements. Refer Note 35 to the StandaloneFinancial Statements;

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on the long-termcontracts including derivative contracts;

iii. There has been no amounts which are required to be transferredto the Investor Education and Protection Fund by the Company;

iv. (a) The Management has represented that to the best of itsknowledge and belief other than as disclosed in the note 2(vi)(m) to the accounts nofunds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Company to or in any other person(s)or entity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries")or provide any guarantee security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that to the best of its knowledgeand belief other than as disclosed in the note 2(vi)(n) to the accounts no funds havebeen received by the Company from any person(s) or entity(ies) including foreign entities("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that has been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of rule 11(e) as providedunder (a) and (b) above contain any material misstatement.; and (d) The dividend declaredand paid during the year by the Company is in compliance with section 123 of the Act.

For G. M. Kapadia & Co.
Chartered Accountants
Firm's Registration No: 104767W
Atul Shah
Partner
Mumbai Membership No: 039569
Dated: May 24 2022 UDIN: 22039569AJMIIS3020

Annexure A - referred to in paragraph 1 under "Report on OtherLegal and Regulatory Requirements" of our report of even date to the members of theCompany on the Standalone Financial Statements for the year ended March 31 2022

In terms of the information and explanations sought by us and given bythe Company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we state that: (i) (a) (A) The Companyis maintaining proper records showing full particulars including quantitative details andsituation of Property plant and equipment.

(B) The Company has maintained proper records showing full particularsof Intangible assets.

(b) The Company has a regular programme of physical verification ofProperty plant and equipment by which all Property plant and equipment of the Companyare being verified in a phased manner over a period of three years which in our opinionis reasonable having regard to the size of the Company and nature of its business.Pursuant to the program a portion of Property plant and equipment has been physicallyverified by the Management during the year and no material discrepancies were noticed onverification conducted during the year as compared with the book records.

(c) The title deeds of immovable properties (other than immovableproperties where the Company is the lessee and the lease agreements are duly executed infavour of the lessee) disclosed in the Standalone Financial Statements are held in thename of the Company except for following:

Description of item of property Gross carrying value (Rs In crores) Title deeds held in the name of Whether title deed holder is a promoter director or relative of promoter/ director or employee of promoter/director Property held since which date Reason for not being held in the name of the company
Freehold Land Leasehold Land Buildings 37.90 24.50 10.63 Noble Explochem Limited No 22.01.2020 Acquisition under the Insolvency & Bankruptcy Code 2016. Name transfer work is in progress.

(d) The Company has not revalued its Property plant and equipment(including Right-of-use assets) or Intangible assets or both during the year ended March31 2022.

(e) There are no proceedings initiated during the year or are pendingagainst the Company as at March 31 2022 for holding any benami property under the BenamiTransactions (Prohibition) Act 1988 and rules made thereunder.

(ii) (a) The inventory has been physically verified by the Managementduring the year. In our opinion the frequency of such verification is reasonable andprocedures and coverage as followed by the Management were appropriate. No discrepancieswere noticed on verification between the physical stocks and the book records that were10% or more in the aggregate for each class of inventory.

(b) The Company has been sanctioned working capital limits in excess ofRs 5 crores in aggregate from banks on the basis of security of current assets. Thedetails filed with such banks on quarterly are in agreement with the books of account ofthe Company.

(iii) During the year the Company has made investments in companieslimited liability partnerships and granted unsecured loans to other parties in respect ofwhich: (a) The Company has granted unsecured loans to its subsidiary associates and otherrelated party during the year. The details are as under:

Particulars (Rs Crores)
A. Aggregate amount granted/ provided during the year
- Subsidiary Associates and other related party 59.85
- Other 35.00
B. Balance outstanding as at balance sheet date in respect of above cases
- Subsidiary Associates and other related party 55.90
- Other -

(b) The investments made during the year and the terms and conditionsof the grant of all loans are prima facie not prejudicial to the Company'sinterest.

(c) In respect of loans granted by the Company during the year theschedule of repayment of principal and payment of interest has been stipulated and therepayment of principal amounts and receipts of interest are generally been regular as perstipulation except in case of one company where schedule of payments of interest is notstipulated.

(d) There is no overdue amount for more than ninety days in respect ofloans given.

(e) Loan given to one of the subsidiaries was fallen due during theyear which has been renewed or extended.

Particulars (Rs Crores)
Aggregate amount of such dues renewed or extended 34.00
Percentage of the aggregate to the total loans or advances in the nature of loans granted during the year 26.39%

(f) During the year the Company has not granted any loans or advancesin the nature of loans either repayable on demand or without specifying any terms orperiod of repayment.

(iv) The Company has complied with the provisions of section 185 and186 of the Act to the extent applicable.

(v) The Company has not accepted any deposits or amounts which aredeemed to be deposits from the public. Accordingly paragraph 3(v) of the Order is notapplicable. We are informed by the Management that no order has been passed by the CompanyLaw Board or National Company Law Tribunal or Reserve Bank of India or any court or anyother tribunal in this regard.

(vi) The Central Government has prescribed maintenance of cost recordsunder section 148(1) of the Act for the products manufactured by the Company. We havebroadly reviewed the books of account maintained and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained by the Company. We havenot however made a detailed examination of the records with a view to determine whetherthey are accurate or complete.

(vii) (a) The Company has generally been regular in depositingundisputed statutory dues including provident fund employees' state insuranceincome tax sales tax service tax duty of customs duty of excise value added taxgoods and services tax cess and other applicable statutory dues with the appropriateauthorities.

No undisputed statutory dues payable were in arrears as at March 312022 for a period of more than six months from the date they became payable.

(b) The details of statutory dues referred to in sub-clause (a) whichhave not been deposited with the concerned authorities on account of dispute are givenbelow:

Name of statute Nature of dues (Rs Crores) Period to which the amount relates Forum where dispute is pending
Excise Duty Differential Excise duty on WIP on Debonding 0.23 2009-10 CESTAT Ahmedabad
Excise Duty Recovery of refund (SAD and CVD paid on import of material) 0.20 2019-20 Asst. Commissioner CGST & Central Excise Division VII Silvassa Daman
Excise Duty Interest and penalty on anti- dumping duty & excise duty (Relating to erstwhile Tonira Pharma Limited since amalgamated with the Company) 4.15 Feb-2000 - Nov-2001 High Court Gujarat
Service Tax Availment of credit of Service Tax on H.O. Invoices 2.92 April'06 to Sept'09 Addl.Commissioner CGST & Central Excise Ujjain (M.P)
Service Tax Availment of credit of Service Tax on certain expenses* 0.00 2006-07 Dy.Commissioner Central Excise Indore (M.P.)
Service Tax Non payment of service tax under RCM on remittances in foreign currency for certain expenses. 4.80 July'12 to Sept'13 CESTAT Mumbai
Service Tax Non payment of Service tax Under RCM on ‘Ocean Freight' on objection raised during CERA audit. 0.26 Apr‘17 to Jun'17 Dy./ Asst. Commissioner Central GST & CE Vadodara
Sales Tax Jammu & Kashmir Value Added Tax 0.05 2011-12 Deputy Commissioner of Commercial Tax (Appeal) Srinagar
Sales Tax Gujarat Value Added Tax 0.07 2006-07 Gujarat VAT Tribunal Ahmedabad
Sales Tax Gujarat Value Added Tax 0.28 2006-07 Additional Commercial Commissioner Ahmedabad
Sales Tax Regular assessment 0.20 2014-15 Deputy Commissioner of Commercial Tax Patna
Sales Tax Regular assessment 0.02 2017-18 The Asst. Commissioner of Commercial Tax Ratlam Division-Ratlam (M.P.)
Sales Tax Regular assessment 0.02 2016-17 Sales Tax Department Kolkata
Sales Tax Penalty levied at Check Post 0.01 2014-15 Sales Tax Department Kolkata
GST Ineligible Transitional credit 0.46 Dec-2017 The Deputy/Assistant Commissioner of Central Tax (Adjudication Authority) Vijayawada. CGST Division
GST Transitional credit verification 0.15 Dec-2017 Deputy Commissioner CGST and Central Excise Gangtok Division
GST Transitional credit verification 0.55 Dec-2017 Assistant Commissioner of Central Tax Jaipur Division
GST Difference between GSTR-3B and GSTR-2A 0.03 2019-20 Assistant Commissioner of State Tax Raipur Division
GST Transitional credit verification 0.01 Dec-2017 Assistant Commissioner of Central Tax Hyderabad Uppal Division
GST Difference between GSTR-3B and GSTR-2A 0.15 2020-21 Assistant Commissioner of State Tax Raipur Division
GST ISD credit disallowance 0.09 2017-18 State Tax officer Mumbai
Income Tax Regular assessment 0.51 A.Y.2016-17 Appeal before CIT(A)
Income Tax Penalty u/s 271(1)(c) 6.88 A.Y.2009-10 to A.Y.2014-15 Appeal filed before CIT(A)
Income Tax Regular assessment 0.09 A.Y.2017-18 Appeal filed before CIT(A)
Income Tax Regular assessment 0.42 A.Y.2018-19 Appeal filed before CIT(A)
Total 22.55

* Note: Balances with values below the rounding off norm adopted by theCompany have been reflected as "0.00".

(viii) There were no transactions relating to previously unrecordedincome that were surrendered or disclosed as income in the tax assessments under theIncome Tax Act 1961 during the year.

(ix) (a) The Company has not defaulted in the repayment of loans orother borrowings or in the payment of interest thereon to any lender.

(b) The Company has not been declared willful defaulter by any bank orfinancial institution or other lender.

(c) The Company has applied term loans for the purpose for which theloans were obtained.

(d) On an overall examination of the Standalone Financial Statements ofthe Company funds raised on short-term basis have prima facie not been used during theyear for long-term purposes by the Company.

(e) On an overall examination of the Standalone Financial Statements ofthe Company the Company has not taken any funds from any entity or person on account ofor to meet the obligations of its subsidiaries associates or joint venture.

(f) The Company has not raised loans during the year on pledge ofsecurities held in its subsidiaries. Accordingly paragraph 3(ix)(f) of the Order is notapplicable.

(x) (a) The Company has not raised monies by way of Initial PublicOffer or Further Public Offer (including debt instruments) during the year.

(b) During the year the Company has not made preferential allotment orprivate placement of shares or convertible debentures (fully or partly or optionally).

(xi) (a) No fraud by the Company and no material fraud on the Companyhas been noticed or reported during the year.

(b) During the year and up to the date of this report no report undersection 143(12) of the Act has been filed by the auditors in Form ADT-4 as prescribedunder rule 13 of Companies (Audit and Auditors) Rules 2014 with the Central Government.

(c) We have considered whistle blower complaints received during theyear by the Company.

(xii) The Company is not a Nidhi Company. Accordingly paragraph 3(xii)of the Order is not applicable to the Company.

(xiii) Transactions with the related parties are in compliance withsections 177 and 188 of the Act where applicable and details of such transactions havebeen disclosed in the Standalone Financial Statements as required by the applicableaccounting standards.

(xiv) (a) The Company has an internal audit system commensurate withthe size and nature of its business.

(b) We have considered the internal audit reports issued to theCompany during the year and covering the period upto March 2022.

(xv) The Company has not entered into any non-cash transactions withany of its directors or directors of it's holding company subsidiary company orpersons connected with such directors and hence provisions of section 192 of the Act arenot applicable to the Company.

(xvi) (a) The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934 (RBI Act). Accordingly paragraph 3(xvi)(a)of the Order is not applicable.

(b) The Company has not conducted any Non-Banking Finance or HousingFinance activities which would require the Company to hold valid certificate ofRegistration from the Reserve Bank of India (RBI) as per the RBI Act.

(c) The Company is not a Core Investment Company (CIC) as defined inthe regulation made by the RBI. Accordingly paragraph 3(xvi)(c) of the Order is notapplicable.

(d) The Group has two CICs.

(xvii) The Company has not entered into any non-cash transactions withdirectors. We have been informed that no such transactions have been entered into withperson connected with directors. Accordingly paragraph 3(xv) of the Order is notapplicable to the Company.

(xviii) There has been no resignation of the statutory auditors of theCompany during the year.

(xix) On the basis of the financial ratios ageing and expected datesof realization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company. We further state thatour reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of oneyear from the balance sheet date will get discharged by the Company as and when they falldue.

(xx) (a) In respect of other than ongoing projects there are nounspent amounts that are required to be transferred to a fund specified in Schedule VII ofthe Act in compliance with second proviso to sub section 5 of section 135 of the Act.This matter has been disclosed in note 34 to the Standalone Financial Statements.

(b) The Company has transferred unspent amount to a special account incompliance of provision of sub-section (6) of section 135 of the said Act against theongoing project. This matter has been disclosed in note 34 to the Standalone FinancialStatements.

For G. M. Kapadia & Co.
Chartered Accountants
Firm's Registration No: 104767W
Atul Shah
Partner
Mumbai Membership No: 039569
Dated: May 24 2022 UDIN: 22039569AJMIIS3020

Annexure B - referred to in paragraph 2(f) under "Report on OtherLegal and Regulatory Requirements" of report of even date to the members of theCompany on the Standalone Financial Statements for the year ended March 31 2022

Report on the Internal Financial Controls with reference to StandaloneFinancial Statements under section 143(3)(i) of the Act

Opinion

We have audited the internal financial controls with reference toStandalone Financial Statements of Ipca Laboratories Limited ("theCompany") as of March 31 2022 in conjunction with our audit of the StandaloneFinancial Statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects an adequateinternal financial controls system with reference to Standalone Financial Statements andsuch internal financial controls with reference to Standalone Financial Statements wereoperating effectively as at March 31 2022 based on the internal controls with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal controls stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting ("Guidance Note") issued by the Institute ofChartered Accountants of India ("ICAI").

Management's Responsibility for Internal Financial Controls withreference to Standalone Financial Statements

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding 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 Act.

Auditor's Responsibility for Internal Financial Controls withreference to Standalone Financial Statements

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to Standalone Financial Statements based on ouraudit. We conducted our audit in accordance with the Guidance Note and the Standards onAuditing prescribed under section 143(10) of the Act to the extent applicable to an auditof internal financial controls. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatements was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness.

Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk.

The procedures selected depend on the auditor's judgmentincluding the assessment of the risks of material misstatement of the Standalone FinancialStatements whether due to 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 internalfinancial controls system with reference to Standalone Financial Statements.

Meaning of Internal Financial Controls with reference to StandaloneFinancial Statements

A company's internal financial controls with reference tofinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the Company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of Standalone Financial Statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of the Companyare being made only in accordance with authorizations of management and directors of theCompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could havea material effect on the Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls with reference toStandalone Financial Statements

Because of the inherent limitations of internal financial controls withreference to Standalone Financial Statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to Standalone Financial Statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

For G. M. Kapadia & Co.
Chartered Accountants
Firm's Registration No: 104767W
Atul Shah
Partner
Mumbai Membership No: 039569
Dated: May 24 2022 UDIN: 22039569AJMIIS3020

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