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Cipla Ltd(Industry :   Pharmaceuticals - Indian - Bulk Drugs & Formln)
 
BSE Code:500087NSE Symbol: CIPLAP/E  (TTM): 54.19
ISIN Demat:INE059A01026Div Yield %:0.34EPS   (TTM) :10.69
Book Value (Rs):153.1079068Market Cap (RsCr):46591.19Face Value (Rs) :2
  Change Company 

To the Members of Cipla Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Cipla Limited ("the Company"), which comprises the Balance Sheet as at 31st March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in sub-section (5) of section 134 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 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 the assets of the Company, preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. 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 there under.

5. We conducted our audit in accordance with the Standards on Auditing specified under sub-section (10) of section 143 ofthe 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.

6. 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 judgement, 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 ofthe financial statements that give a true and fairview in orderto design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors, as well as evaluating the overall presentation ofthe financial statements.

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

Opinion

8. 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 fairview in conformity with the accounting principles generally accepted in India, ofthe state of affairs of the Company as at 31st March 2016, and its profits and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. 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 Annexure 1, a statement on the matters specified in paragraph 3 and 4 of the Order, to the extent applicable.

10. Further to our comments in Annexure 1, as required by sub-section (3) of section 143 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 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 the Company so far as it appears from our examination ofthose books;

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 31st March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2016 from being appointed as a director in terms of sub-section (2) ofsection 164 ofthe Act;

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 2';

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 Notes 37, 38 and 39 to the financial statements;

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

iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund bythe Company.

For V. Sankar Aiyar & Co. For R.G.N. Price & Co.
Chartered Accountants Chartered Accountants
Firm Reg No. 109208W Firm Reg No. 002785S
V. Mohan R. Rangarajan
Partner Partner
Membership No. 17748 Membership No. 41883
Mumbai, 24th May 2016 Mumbai, 24th May 2016

Annexure 1 to the Independent Auditors' Report

Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and in our opinion, we report that:

1. a. The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets, other than situation of furniture and fixtures and office equipments where the situation recorded is the location of the Company's different establishments.

b. The Company has a policy of physically verifying its fixed assets in a phased manner to cover all the assets of the Company in a block of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its business. During the year, some of the fixed assets have been physically verified by the Management and discrepancies noticed during the physical verification, which were not material, have been appropriately dealt with in the books of account.

c. The title deeds of the immovable properties are held in the name of the Company.

2. The inventory has been physically verified by the Management at reasonable intervals during the year. The verification was done on the basis of the perpetual inventory system operated by the Company. The discrepancies noticed on physical verification of inventory, as compared with the book records, were not material and have been properly dealt with in the books of account. In case of materials lying with third parties, certificates confirming such inventory have been obtained by the Company from most ofthe third parties.

3. The Company has granted interest free unsecured loan to one company, and interest bearing unsecured loans to two companies, which are covered in the Register maintained under section 189 ofthe Companies Act, 2013. With respect to these loans:

a. The terms and conditions on which the loans had been granted were not, prima facie, prejudicial to the Company's interest.

b. The schedule of repayment of principal, in case of interest free loan and schedule of repayment of principal and interest, in case of interest bearing loans are stipulated. The borrowers have been regular in the payment of the principal and interest as stipulated.

c. There are no overdue loans in respect of loans granted.

4. The Company has complied with provisions of sections 185 and 186 of the Act, with respect to loans given, investments made, or any guarantees or securities given.

5. The Company has not accepted any deposits from public. Accordingly, this clause is not applicable.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of section 148 ofthe Act in respect of its products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not carried out a detailed examination ofthe accounts and records with a view to determine whether these are accurate or complete.

7. a. The Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and any other material statutory dues applicable to it with the appropriate authorities. There were no undisputed arrears that were outstanding as at 31st March 2016 for a period of more than six months from the date they became payable.

b. There were no dues in respect of Wealth Tax, Income Tax, Service Tax, Customs Duty, and Cess that have not been deposited with the appropriate authorities on account of dispute.

The particulars of dues towards Excise Duty, Sales Tax and Service Tax that have not been deposited on account of dispute as at 31st March 2016 and the forum where these disputes are pending are as follows:

Name of the statute Nature of dues Financial years to which the matter pertains Forum where the dispute is pending Amount Rs. in crore
The Central Excise Act, 1944 Excise Duty 2000-01 to 2014-15 CESTAT/High Court/ Commissioner 136.66
Finance Act, 1994 Service Tax 2003-04 to 2012-13 Commissioner 25.09
State SalesTaxActs Sales Tax 2001-02 to 2013-14 State Sales Tax Tribunal/Joint Commissioner 2.34

8. The Company has not defaulted in repayment of dues to any financial institutions or banks.

9. The Company did not raise any money by way of initial public offer (including debt instruments) or further public offer and term loans during the year. Accordingly, this clause is not applicable.

10. No material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

11. The Company has paid/provided for managerial remuneration in accordance with the requisite approvals as mandated by the provisions of section 197 read with Schedule V ofthe Act.

12. The Company is not a Nidhi Company. Accordingly, this clause is not applicable.

13. All transactions with related parties are in compliance with section 177 and section 188 of the Companies Act, 2013 where applicable, and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, this clause is not applicable.

15. The Company has not entered into any non-cash transactions with directors or persons connected with them.

16. The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act, 1934.

For V. Sankar Aiyar & Co. For R.G.N. Price & Co.
Chartered Accountants Chartered Accountants
Firm Reg No. 109208W Firm Reg No. 002785S
V. Mohan R. Rangarajan
Partner Partner
Membership No. 17748 Membership No. 41883
Mumbai, 24th May 2016 Mumbai, 24th May 2016

Annexure 2 to the Independent Auditor's Report

Report on the Internal Financial Controls under clause (i) of sub-section (3) of section 143 of the Companies Act, 2013 ("the Act")

1. We have audited the internal financial controls over financial reporting of Cipla Limited ("the Company") as of 31st March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by Institute of Chartered Accountants of India and deemed to be prescribed under sub-section (10) of section 143 of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks 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 to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

5. A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that:

a. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions ofthe assets ofthe Company;

b. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures ofthe Company are being made only in accordance with authorizations of management and directors ofthe Company; and

c. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition ofthe Company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

6. Because ofthe inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management, override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

7. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For V. Sankar Aiyar & Co. For R.G.N. Price & Co.
Chartered Accountants Chartered Accountants
Firm Reg No. 109208W Firm Reg No. 002785S
V. Mohan R. Rangarajan
Partner Partner
Membership No. 17748 Membership No. 41883
Mumbai, 24th May 2016 Mumbai, 24th May 2016

   

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