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Ipca Laboratories Ltd.

BSE: 524494 Sector: Health care
NSE: IPCALAB ISIN Code: INE571A01020
BSE 00:00 | 20 Feb 801.20 0.65
(0.08%)
OPEN

805.25

HIGH

812.40

LOW

794.40

NSE 00:00 | 20 Feb 799.05 -5.80
(-0.72%)
OPEN

809.70

HIGH

815.00

LOW

793.00

OPEN 805.25
PREVIOUS CLOSE 800.55
VOLUME 4078
52-Week high 828.00
52-Week low 590.10
P/E 25.52
Mkt Cap.(Rs cr) 10,123
Buy Price 801.20
Buy Qty 1.00
Sell Price 810.00
Sell Qty 10.00
OPEN 805.25
CLOSE 800.55
VOLUME 4078
52-Week high 828.00
52-Week low 590.10
P/E 25.52
Mkt Cap.(Rs cr) 10,123
Buy Price 801.20
Buy Qty 1.00
Sell Price 810.00
Sell Qty 10.00

Ipca Laboratories Ltd. (IPCALAB) - Auditors Report

Company auditors report

TO THE MEMBERS OF IPCA LABORATORIES LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of IPCA LABORATORIESLIMITED (the Company) which comprise the Balance Sheet as at March 312018 and theStatement of Profit & Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information (the standalonefinancial statements).

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 (the Act) with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards specified in section 133 of the Act readwith rules made thereunder and the relevant provisions of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

While conducting the audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the rules made thereunder.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the state ofaffairs of the Company as at March 312018 and its profit (including other comprehensiveincome) its cash flows and the changes in equity for the year ended on that date.

Other Matters

The financial statements of the Company for the year ended March 312017 were auditedby predecessor auditor who expressed an unmodified opinion on those statements on May 282017.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued bythe Central Government of India in terms of section 143(11) of the Act we give in the"Annexure A" a statement on the matters specified in the paragraph 3 and 4 ofthe Order.

2. As required by section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet Statement of Profit & Loss the Cash Flow Statement and theStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;

(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards specified under section 133 of the Act;

(e) On the basis of the written representations received from the Directors as on March312018 taken on record by the Board of Directors none of the Directors are 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 controls wegive our separate Report in "Annexure B"; and

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note No. 35 to the standalone financialstatements;

ii. The Company did not have any material foreseeable losses on long-term contractsincluding derivative contracts; and

iii. There has been no amounts which are required to be transferred to the InvestorEducation and Protection Fund by the Company.

For G. M. Kapadia & Co.
Chartered Accountants
Firm Registration No. 104767W
Atul Shah
Mumbai Partner
May 29 2018 Membership No. 39569

Annexure A - referred to in paragraph 1 under "Report on Other Legal andRegulatory Requirements" of our report on even date to the members of the Company onthe standalone financial statements for the year ended March 312018

(i) (a) The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of its Property Plant and Equipment.

(b) According to the information and explanations given to us most of the propertyplant and equipment of the Company were physically verified by the management during theyear. No material discrepancies were noticed on such verification. In our opinion thefrequency of verification is reasonable having regard to the size of the Company and thenature of its Property plant and equipment.

(c) According to the information and explanations given to us and based on auditprocedures performed for the purpose of reporting the true and fair view of the financialstatements we report that the title deeds of immovable properties forming part ofproperty plant and equipment are held in the name of the Company.

(ii) During the year the management has physically verified the inventory atreasonable intervals. We have been informed that the discrepancies noticed on physicalverification as compared to the book records were not material having regards to sizeand nature of operations and have been properly dealt with in the books of account.

(iii) The Company has granted unsecured loans to its associate and joint venturecovered in the register maintained under section 189 of the Act.

(a) In our opinion the terms and conditions of the grant of such loans are notprejudicial to the interest of the Company.

(b) The loans are not due for repayment presently and therefore there is no default inits repayment and there is no overdue. Hence the clause 3(iii) (c) of the Order is notapplicable to the Company.

(iv) Based on audit process applied by us and according to the information andexplanations given to us in our opinion the Company has complied with the provisions ofsection 185 and 186 of the Act in respect of investments made and loans guarantees andsecurities granted as applicable.

(v) In our opinion and according to the information and explanation given to us theCompany has not accepted deposits from the public and therefore the provisions of section73 to 76 or any other relevant provisions of the Act and Rules framed there under are notapplicable to the Company.

We have been informed that no order has been passed by Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any court or any other tribunal in thisregard.

(vi) As informed to us the maintenance of the cost records under section 148(1) of theAct has been prescribed and we are of the opinion that prima facie the prescribedaccounts and records have been maintained. We have not however carried out a detailedexamination of the records to ascertain whether they are accurate or complete.

(vii) (a) Based on the records produced before us the Company is generally regular indepositing with appropriate authorities applicable undisputed statutory dues such asProvident Fund Employees' State Insurance Sales Tax Income Tax Service Tax CustomDuty Excise duty Goods and Service Tax Value Added Tax cess and other applicablestatutory dues with the appropriate authorities. There are no arrears as at March 312018which were due for more than six months from the date they became payable.

(b) The details of dues of Income Tax Sales Tax Service Tax duty of Customs duty ofExcise or Value Added Tax or cess which have not been deposited with the concernedauthorities on account of dispute are given below:

Name of the Statute Nature of Dues Amount (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 Rebate claim rejected due to late filed 0.03 2013-14 Asst Commissioner Central Excise Customs & Service tax Silvassa
Excise Duty Interest and penalty on past anti-dumping duty & excise duty 4.15 High Court Gujarat
Excise Duty Differential Excise Duty on clearance 0.08 April' 11 to March' 13 Deputy Commissioner
Excise Duty Availment of Differential PLA Credit 2.32 2015-16 Commissioner A-Appeal Siliguri
Service Tax Availment of credit of Service Tax on H.O. Invoices 0.64 2006-07 & 2007-08 Commissioner Central Excise
Service Tax Availment of credit of Service Tax on H.O. Invoices 0.23 April'08 to Nov'08 Commissioner Central Excise
Service Tax Availment of credit of Service Tax on H.O. Invoices 0.04 Dec'08 to Sept'09 Deputy Commissioner Central Excise
Service Tax Availment of credit of Service Tax on Telephone/Cell Phone /Taxi Hire charges & Insurance 0.03 2006-07 & 2007-08 Commissioner/ Dy. Commissioner Central Excise
Service Tax Availment of credit of Service Tax on Telephone/Cell Phone / Taxi Hire charges & Insurance 0.01 April'08 to Dec'08 Commissioner/ Dy. Commissioner Central Excise
Service Tax Availment of credit of Service Tax on Telephone /Cell Phone/Taxi Hire charges & Insurance* 0.00 Jan'09 to Sept'09 Dy. Commissioner Central Excise

 

Name of the Statute Nature of Dues Amount (Rs Crores) Period to which the amount relates Forum where dispute is pending
Service Tax Availment of credit of Service Tax on H.O. Invoices 1.42 2006-07 & 2007-08 Commissioner Central Excise
Service Tax Availment of credit of Service Tax on H.O. Invoices 0.34 April'08 to Nov'08 Commissioner Central Excise
Service Tax Availment of credit of Service Tax on H.O. Invoices 0.30 Dec'08 to Sept'09 Commissioner Central Excise
Service Tax Availment of credit of Service Tax on Garden Maintenance Based on EA-2000 audit query 0.28 2012-13 & 2014-15 Commissioner Appeal Indore
Service Tax Availment of Cenvat Credit on Service Tax* 0.00 2006-07 Dy. Commissioner Central Excise
Service Tax Non-payment of service tax under RCM on remittances in foreign currency for product/ patent registration and facility fees to US FDA. 4.98 July'12 to Sept'13 Commissioner Service tax -VI Mumbai
Sales Tax Jammu & Kashmir Value added tax Act - Disputed Demand 0.05 2011-2012 Deputy Commissioner of Commercial Tax (Appeal) Srinagar
Sales Tax Gujarat value added Tax Act - Disputed demand 0.07 2006-07 Gujarat VAT Tribunal Ahmedabad
Sales Tax Gujarat value added Tax Act - Disputed demand 0.02 2007-08 Jt. Commissioner of Commercial Tax Rajkot
Sales Tax Gujarat value added Tax Act - Disputed demand 0.28 2006-07 Additional Commercial Commissioner Ahmedabad
Sales Tax Central Sales Tax - Assessment demand 0.31 2013-14 Dy. Commissioner Commercial Tax-Ratlam
Sales Tax Kerala Value Added Tax - Disputed demand* 0.00 2012-13 Sales tax Authority
Sales Tax UP Value Added Tax Act - Disputed demand 0.27 2013-14 Commercial Tax Authority Lucknow
Sales Tax Demand After Assessment 0.40 2014-15 The Dy. Commissioner Commercial Tax Ratlam Division-Ratlam (M.P.)
Sales Tax Demand After Assessment 0.12 2015-16 The Dy.Commissioner Commercial Tax Ratlam Division-Ratlam (M.P.)
Sales Tax Demand After Assessment* 0.00 2014-15 The Add. Commissioner Commercial Tax Indore (M.P.)
Entry Tax Entry Tax 4.70 2013-14 Sales Tax Department
Sales Tax Duburdih Check Post Penalty 0.02 2014-15 Deputy Commissioner Sales Tax West Bengal
Total 21.32

Note: Balances with values below the rounding off norm adopted by the Company have beenreflected as "0.00".

(viii) The Company has not defaulted in repayment of loans or borrowing to anyfinancial institutions banks government or debenture holders.

(ix) The Company has not raised any money by way of Initial Public Offer or furtherPublic offer (including debt instruments). On the basis of the documents submitted to thebankers and the other relevant records perused by us we state that the term loans takenduring the year have been applied for the purpose of which the loans were obtained.

(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 no instances of fraud by theCompany or on the Company by its officers and employees have been noticed or reportedduring the year.

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

(xiii) In respect of transactions with related parties the Company has compliedprovisions of sections 177 and 188 of the Act where applicable. Necessary disclosuresrelating to related party transactions have been made in the standalone financialstatements as required by the applicable accounting standard.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review and hencethe clause 3(xiv) of the Order is not applicable to the Company.

(xv) The Company has not entered into any non-cash transaction with directors. We havebeen informed that no such transactions have been entered into with persons connected withdirectors. Accordingly para 3(xv) of the Order is not applicable to the Company.

(xvi) The Company is not required to get registered under 45-IA of the Reserved Bank ofIndia Act 1934.

For G. M. Kapadia & Co.

Chartered Accountants Firm Registration No. 104767W

Mumbai

May 29 2018

Atul Shah

Partner

Membership No. 39569

Annexure B referred to in paragraph 2(f) under "Report on Other Legal andRegulatory Requirements" of our Independent Auditor's report of even date to themembers of Ipca Laboratories Limited (the Company) on the Standalone Financial Statementsfor the year ended March 312018

Report on the Internal Financial Controls under section 143(3)(i) of the Companies Act2013 (the Act)

We have audited the internal financial controls with reference to financial statementsof the Company as of March 31 2018 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control with reference to financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the Guidance Note) issued by the Institute of Chartered Accountantsof India (ICAI). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding 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 Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued 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 adequate internalfinancial controls with reference to financial statements were established and maintainedand if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control with reference to financial statements 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 withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 312018 based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

For G. M. Kapadia & Co.
Chartered Accountants
Firm Registration No. 104767W
Atul Shah
Mumbai Partner
May 29 2018 Membership No. 39569