| Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of
Shasun Pharmaceuticals Limited ("the Company"), which comprise the
balance sheet as at 31 March 2015, 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
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 and presentation 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 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.
Auditors' responsibility
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
thereunder.
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, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. 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
financial statements.
Opinion
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 31 March 2015, its profit and its cash flows for the year ended on
that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we enclose in the Annexure
a statement on the matters specified in paragraphs 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 explanations
which to the best of our knowledge and belief were necessary for the
purpose 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
those 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 written representations received from the directors
as on 31 March 2015, taken on record by the Board of Directors, none of
the directors is disqualified as on 31 March 2015 from being appointed
as a director in terms of Section 164(2) of the Act.
(f) 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 31(a) to
the financial statements;
ii. the Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts - Refer Note 8
and Note 12 to the financial statements;
iii. there has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Independent Auditors' Report to the members of Shasun
Pharmaceuticals Limited for the year ended 31 March 2015
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of three years. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the
Company and the nature of its assets. In accordance with this programme
certain fixed assets were physically verified by the management during
the year and as explained to us, no material discrepancies were noticed
on such verification.
(ii) (a) The inventory, except the goods in transit, has been
physically verified by the management during the year. In our opinion,
the frequency of such verification is reasonable. For stocks lying with
the third parties at the year-end, written confirmations have been
obtained.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
book records were not material.
(iii) The Company has granted loans to one party covered in the
register maintained under section 189 of the Companies Act, 2013. The
maximum amount outstanding during the year was Rs. 219.47 million and
the year end balance of such loan was Rs. 217.59 million.
The terms of agreement do not stipulate any repayment schedule in
respect of principal amount or interest. Accordingly paragraph 3(iii)
(a) and (b) of the Order is not applicable to the Company in respect of
repayment of principal amount and interest.
(iv) In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories are for the Company's specialised
requirements and similarly certain goods sold and services rendered are
for the specialised requirements of the buyers and suitable alternative
sources are not available to obtain comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchase of
inventories and fixed assets, and with regard to the sale of goods and
services. In our opinion and according to the information and
explanations given to us, we have not observed any major weakness in
the internal control system during the course of audit.
(v) In our opinion, and according to the information and explanations
given to us, the Company has not accepted any deposits.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under Section 148(1) of the Companies Act,
2013 in respect of manufacture of Bulk Drugs and Formulations and are
of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained. However, we have not made a detailed
examination of the records.
(vii) (a) According to the information and explanations given to us and
on the 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, Wealth tax,
Duty of Excise, Value Added Tax and other material statutory dues
have generally been regularly deposited during the year by the Company
with the appropriate authorities. As explained to us, the Company did
not have any dues on account of Cess. According to the information and
explanations given to us, no undisputed amounts payable in respect of
Provident fund, Employees' State Insurance, Income-tax, Sales tax,
Service tax, Duty of Customs, Wealth tax, Duty of Excise, Value Added
Tax and other material statutory dues were in arrears as at March 31,
2015 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
set out in Appendix I in respect of Service tax, Customs duty and
Excise duty have not been deposited with the appropriate authorities on
account of disputes.
(c) The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 1956 and the rules
made thereunder.
(viii) The Company does not have any accumulated losses at the end of
the financial year and has not incurred any cash losses in the
financial year and in the immediately preceding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers or to any financial institutions. The Company did not have any
outstanding debentures during the year.
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given
guarantees for loans taken by others from banks or financial
institutions are not prejudicial to the interest of the Company.
(xi) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
(xii) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Appendix I as referred to in Para vii (b) of Annexure to the
Independent Auditors' report:
Rs. in Millions
Name of Period to Forum pending
Statute which
the amount Commissioner Excise, High Total
relates to of Customs Court
Central and of Madras
Excise, Service Appellate
Customs Tax Tribunal
and
Service
Tax
Finance Less than 0.66 - - 0.66
Act, 3 years
1994
(Service 3 years to
tax) 7 years 11.72 0.56 - 12.28
Greater 26.16 0.76 - 26.92
than 7
years
Central Less than 35.46 28.72 - 64.18
Excise 3 years
Act, 3 years to
1944 7 years 1.98 70.87 - 72.85
Greater 4.32 41.93 5.63 51.88
than 7
years
Customs Greater 22.66 - - 22.66
Act, than 7
1962 years
Grand total 251.43
for B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No: 101248W/W-100022
S Sethuraman
Partner
Membership No. 203491
Place: Chennai
Date : April 30, 2015
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