We have audited the accompanying standalone financial statements of
Unichem Laboratories Limited (the Company), which comprise the
Balance Sheet as at 31 st March, 2016, the Statement of Profit and
Loss, the Cash Flow Statement for the year then ended, and a summary of
the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (the Act) with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
We conducted our audit in accordance 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 the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2016, and its profit and its cash flows for the year
ended on that date.
Emphasis of Matter
We draw attention to Note 34 to the standalone financial statements
relating to increase in the provision for diminution of long-term
investments in Unichem Farmaceutica Do Brazil Ltda, from Rs. 434.50
lacs in the previous year to Rs. 2,277.63 lacs for the year under
report, based on internal assessment and other factors more elaborately
stated in the said Note.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (the
Order), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure A,
a statement on the matters specified in paragraphs 3 and 4 of the
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 best of our knowledge and beliefwere necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under 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 31 st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 st March,
2016 from being appointed as a director in terms of Section 164 (2) of
(f) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in Annexure B.
(g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and 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
financial position in its financial statements - Refer Note no 29 and
30 to the financial statements;
ii. the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
iii. there has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of Independent
Auditors'' Report on standalone financial statements of even date)
(I) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) As explained to us, some of the fixed assets of the Company have
been physically verified during the year by the management in
accordance with a phased program of verification designed to cover all
assets over a period of three years, which in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies were noticed on physical
(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, the title
deeds of immovable properties are held in the name of the Company.
(ii) As explained to us, the inventories have been physically verified
during the year by the management, except for the inventories lying
with the third parties, which have however, been confirmed by them. The
intervals at which the inventories have been verified are, in our
opinion, reasonable in relation to the size of the Company and the
nature of its business. The Company is maintaining proper records of
inventory and no material discrepancies were noticed on physical
(iii) As informed, the Company has not granted any loans, secured or
unsecured to companies, firms, Limited Liability Partnerships or other
parties covered in the register maintained under section 189 of the
Act. Consequently, sub clause (a), (b) and (c) of the paragraph 3 (ii)
are not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
185 and 186 of the Act, in respect of loans, investments, guarantees,
and security given for the year underreport.
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits from the public
during the year. Therefore, paragraph 3(v) of the Order is not
(vi) We have broadly reviewed the books of account and records
maintained by the Company pursuant to the Companies (Cost Records and
Audit) Rules, 2014 as prescribed by the Central Government for the
maintenance of cost records under Section 148 (1) of the Act relating
to the manufacture of Bulk Drugs and pharmaceutical specialties and are
of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained. We have, however, not made a detailed
examination of the said records with a view to determine whether they
are accurate or complete.
(vii) (a) According to information and explanations given to us and
onthe basis of our examination of the records of the Company, amounts
deducted / accrued in the books of account in respect of undisputed
statutory dues including provident fund, employees'' state insurance,
income-tax, sales-tax, service tax, duty of customs, duty of excise,
value added tax, cess and other material statutory dues have been
regularly deposited during the year by the Company with the appropriate
authorities. As explained to us, there were no undisputed statutory
dues as mentioned above in arrears as at 31 st March, 2016 for a period
of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the dues
in respect of income tax (including TDS), sales tax, service tax, duty
of customs, duty of excise and value added tax that have not been
deposited with the appropriate authorities on account of dispute and
the forum where the disputes are pending as on 31 st March, 2016 are as
Name of the Nature of Amount Period to which Forum where
Statutes the dues (Rs. in
lacs) it relates dispute is
Income Tax TDS 31.04 AY: 2008-09 Commissioner
Act, 1961 to AY: 2009-10 Income Tax -
Added Penalty 20.44 FY: 2008-09 Hon''ble High
Excise Duty and 119.38 FY: 2003-2004 Appellate
1944 Penalty to 2008-2009
Excise Duty and 11.05 FY: 2007-08 Commissioner
1944 Penalty to FY:
wance of 12.06 FY: 2005-06 Appellate
Tax Credit to FY: 2010-
owance of 6.38 FY: 2011-12 Commissioner
Tax to FY: 2015-
16 Excise (Appe-
owance of 139.87 January 2012 Appellate Tri-
Tax to March
owance of 10.58 FY: 2007-08 Appellate Tri-
Tax to FY: 2010-
wance of 373.77 FY: 2008-09 Appellate Tri-
Tax to FY: 2012-
(viii) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to financial
institutions, banks and Governments. Therefore, paragraph 3(viii) of
the Order is not applicable.
(ix) The Company did not raise any money by way of initial public offer
or further public offer (including debt instruments). Term loans have
been applied for the purposes for which they were obtained except in
case of term loans amounting to Rs. 29.36 lacs disbursed but pending
utilisation, which were placed in a separate bank account.
(x) To the best of our knowledge and belief and according to the
information and explanations given to us, no material fraud on or by
the Company has been noticed or reported during the course of our
(xi) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
paid/provided for managerial remuneration in accordance with the
requisite approvals mandated by the provisions of section 197 read with
Schedule V to the Act.
(xii) In our opinion and according to the information and explanations
given to us, the Company is not a nidhi company. Therefore, paragraph
3(xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us, and based on our examination of the records of the
Company, all transactions with the related parties are in compliance
with sections 177 and 188 of the Act, where applicable and the details
have been disclosed in the financial statements etc., as required by
the applicable accounting standards.
(xiv) According to the information and explanations given to us and
based on our examination of the records of the Company, no preferential
allotment or private placement of shares or fully or partly convertible
debentures has been made by the Company during the year under review.
Therefore, paragraph 3(xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not entered into any non-cash transactions with directors or persons
connected with him as specified under section 192 of the Act.
Therefore, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA
of the Reserve Bank of India Act, 1934 and therefore the provisions of
paragraph 3(xvi) of the Order is not applicable.
For B. D. Jokhakar & Co.
Firm Registration No.: 104345W
Raman H. Jokhakar
May 20, 2016 Membership No.: 103241