We have audited the accompanying standalone
financial statements of Solara Active Pharma Science:
Limited (the "Company”), which comprise the Balance
Sheet as at March 31, 2025, and the Statement of Profii
and Loss (including Other Comprehensive Income), the
Statement of Cash Flows and the Statement of Change:
in Equity for the year ended on that date, and notes to the
financial statements, including a summary of materia
accounting policies and other explanatory information.
In our opinion and to the best of our information anc
according to the explanations given to us, the aforesaid
standalone financial statements give the information
required by the Companies Act, 2013 (the "Act”) ir
the manner so required and give a true and fair view
in conformity with the Indian Accounting Standard:
prescribed under Section 133 of the Act, ("Ind AS”) and
other accounting principles generally accepted in India
of the state of affairs of the Company as at March 31
2025, and its loss, total comprehensive loss, its cash
flows and the changes in equity for the year ended on
that date.
Basis for Opinion
We conducted our audit of the standalone financial
statements in accordance with the Standards on
Auditing ("SA”s) specified under Section 143(10) o1
the Act. Our responsibilities under those Standards are
further described in the Auditor’s Responsibility for the
Audit of the Standalone Financial Statements section
of our report. We are independent of the Company
in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India ("ICAI”)
together with the ethical requirements that are relevant
to our audit of the standalone financial statements
under the provisions of the Act and the Rules made
thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements
and the ICAI’s Code of Ethics. We believe that the audit
evidence obtained by us is sufficient and appropriate to
provide a basis for our audit opinion on the standalone
financial statements.
Key Audit Matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in our
audit of the standalone financial statements of the current
period. These matters were addressed in the context o1
our audit of the standalone financial statements as a
whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. We
have determined the matters described below to be the
key audit matters to be communicated in our report.
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Sr.
No.
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Key Audit Matter
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Auditor’s Response
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1
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Revenue Recognition
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Principal audit procedures performed included the following:
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Refer note 2.1 (iii) and note 26 of the standalone
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We evaluated the design of internal controls over recognition of
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financial statements.
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revenue in the appropriate period in accordance with the Company’s
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The Company’s sales revenue mainly arose from
sale of pharmaceutical products, which are in the
nature of API (i.e. Active Pharmaceutical Ingredient).
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accounting policy. On a sample basis, we tested the operating
effectiveness of the internal control relating to the determination of
point of time at which the transfer of control of the goods occurs.
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The Company recognises sales revenue based on
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We tested the relevant information technology systems used in
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the terms and conditions of transactions, which
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recording the revenue including company’s system generated
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vary with different customers.
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reports, based on which selection of samples was undertaken.
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For sales transactions in a certain period around
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On sample basis, we performed test of details of sales recorded close
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balance sheet date, it is essential to ensure whether
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to year end through following procedures:
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the transfer of control of the goods by the Company
to the customer occurs before the balance sheet
date or otherwise. Considering that there are
significant volume of sales transactions close to
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- Analysed the terms and conditions of the underlying contract with
the customers, and
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the year end, involving material amounts and such
revenue recognition is subject to whether transfer
of control to the customer has occurred before the
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- Verified the evidence for the transfer of control of the goods prior
to the balance sheet date or otherwise, from relevant supporting
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balance sheet date or otherwise, we consider the
risk of revenue from sale of goods being recognised
in the incorrect period, a key audit matter.
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documents.
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Sr.
No.
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Key Audit Matter
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Auditor's Response
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2.
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Carrying Value of Goodwill Relating to Human
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Principal Audit Procedures performed included the following:
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API Business:
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We assessed the Management’s process for impairment assessment
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Refer note 7 of the standalone financial statements.
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of goodwill.
We performed testing of details and operating effectiveness of
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The Company carried Goodwill of '364.90 Crores
as at Balance Sheet date arising from past
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internal controls and substantive testing as follows:
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Acquisitions.
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• Evaluated the design of the Management’s internal control
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As Indicated in note 2.1 (xiv) to the Standalone
financial statements, the Management of the
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around the impairment assessment process.
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Company assesses the Impairment of the Goodwill
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• Understood the key assumptions considered in the
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annually.
The Carrying value of the Goodwill will be recovered
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Management’s estimates of future cash flows.
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through future cash flows and there is a risk of
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• Involving our valuation specialists, we evaluated the short-term
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impairment loss where the actual cash flows are
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and long-term growth rates considered in the estimates of future
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less than expected. The Impairment assessment
performed by the Management contained a
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cash flows and the discount rate used in the calculations.
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number of significant judgements and estimates
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• Compared the historical cash flows (including for current year)
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including short and long term growth rates and
discount rate.
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against past projections of the Management for the same periods
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We focused on this area because of the significance
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and gained understanding of the rationale for the changes.
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of the balance and the significant judgements and
assumptions involved in Impairment assessment
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• Performed sensitivity analysis on the Key assumptions within
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by the Management about the future results of the
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the forecast cash flows and focused our attention on those
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Human API Business.
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assumptions we considered most sensitive to the changes such
as revenue growth and profitability during the forecast period,
the terminal growth rate and discount rate applied to the future
cash flows.
• We ascertained the extent to which a change in these
assumptions both individually or in aggregate would
result in impairment and considered the likelihood of such
events occurring.
We further assessed the adequacy of the disclosures made in the
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Information Other than the Financial Statements
and Auditor's Report Thereon
• The Company’s Board of Directors is responsible
for the other information. The other information
comprises the information included in the Board’s
report, but does not include the consolidated financial
statements, standalone financial statements and our
auditor’s report thereon which we obtained prior to
the date of this auditor’s report and the Management
Discussion and Analysis, Corporate Governance
Report and Business Responsibility and Sustainability
Report which is expected to be made available to us
after that date.
• Our opinion on the standalone financial statements
does not cover the other information and we do not
express any form of assurance conclusion thereon.
• In connection with our audit of the standalone
financial statements, our responsibility is to read the
other information and, in doing so, consider whether
the other information is materially inconsistent
with the standalone financial statements, or our
knowledge obtained during the course of our audit
or otherwise appears to be materially misstated.
• If, based on the work we have performed on the
other information that we obtained prior to the date
of this auditor’s report, we conclude that there is a
material misstatement of this other information, we
are required to report that fact. We have nothing to
report in this regard.
• When we read the Management Discussion
and Analysis, Corporate Governance Report and
Business Responsibility and Sustainability Report, if
we conclude that there is a material misstatement
therein, we are required to communicate the matter
to those charged with governance as required under
SA 720 ‘The Auditor’s responsibilities Relating to
Other Information’.
Responsibilities of Management and Board of
Directors for the Standalone Financial Statements
The Company’s Board of Directors is responsible
for the matters stated in Section 134(5) of 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 including
other comprehensive income, cash flows and changes
in equity of the Company in accordance with the
accounting principles generally accepted in India,
including Ind AS specified under Section 133 of the
Act. 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.
In preparing the standalone financial statements,
Management and Board of Directors are responsible for
assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of
accounting unless the Board of Directors either intend
to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
The Company’s Board of Directors is also responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibility for the Audit of the
Standalone Financial Statements
Our objectives are to obtain reasonable assurance
about whether the standalone financial statements as
a whole are free from material misstatement, whether
due 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 audit
conducted in accordance with SAs will always detect
a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic
decisions of users taken on the basis of these standalone
financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal control.
• Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under
Section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the Company has
adequate internal financial controls with reference
to standalone financial statements in place and the
operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by the Management.
• Conclude on the appropriateness of Management’s
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether
a material uncertainty exists related to events or
conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report
to the related disclosures in the standalone financial
statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and
content of the standalone financial statements,
including the disclosures, and whether the standalone
financial statements represent the underlying
transactions and events in a manner that achieves
fair presentation.
Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or
in aggregate, makes it probable that the economic
decisions of a reasonably knowledgeable user of the
standalone financial statements may be influenced.
We consider quantitative materiality and qualitative
factors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate the
effect of any identified misstatements in the standalone
financial statements.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal financial
controls that we identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and to
communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the standalone
financial statements of the current period and are
therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that
a matter should not be communicated in our report
because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest
benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
1. As required by Section 143(3) of the Act, based on
our audit 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,
except for not complying with the requirement
of audit trail as stated in (i)(vi) below.
c) The Balance Sheet, the Statement of Profit and
Loss including Other Comprehensive Income,
the Statement of Cash Flows and Statement
of Changes in Equity dealt with by this Report
are in agreement with the relevant books
of account.
d) In our opinion, the aforesaid standalone
financial statements comply with the Ind AS
specified under Section 133 of the Act.
e) On the basis of the written representations
received from the directors as on March 31,
2025 taken on record by the Board of Directors,
none of the directors is disqualified as on March
31, 2025 from being appointed as a director in
terms of Section 164(2) of the Act.
f) The modification relating to the maintenance
of accounts and other matters connected
therewith, is as stated in paragraph (b) above.
j) With respect to the adequacy of the internal
financial controls with reference to standalone
financial statements of the Company and the
operating effectiveness of such controls, refer
to our separate Report in "Annexure A”. Our
report expresses an unmodified opinion on
the adequacy and operating effectiveness of
the Company’s internal financial controls with
reference to standalone financial statements.
i) With respect to the other matters to be
included in the Auditor’s Report in accordance
with the requirements of Section 197(16) of
the Act, as amended, in our opinion and to the
best of our information and according to the
explanations given to us, the remuneration
paid by the Company to its directors during
the year is in accordance with the provisions of
Section 197 of the Act.
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, as amended 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 standalone financial statements
- Refer Note 38 to the standalone
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 were no amounts which were
required to be transferred to the Investor
Education and Protection Fund by
the Company.
iv. (a) The Management has represented
that, to the best of its knowledge and
belief as disclosed in the note 49(h) to
the standalone financial statements,
no funds have been advanced or
loaned or invested (either from
borrowed funds or share premium
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 the understanding, whether
recorded in writing or otherwise,
that the Intermediary shall, directly
or indirectly lend or invest in other
persons or entities identified in
any 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 knowledge and
belief as disclosed in the note 49(i) to
the standalone financial statements,
no funds have been received by
the Company from any person(s)
or entity(ies), including foreign
entities ("Funding Parties”), with the
understanding, whether recorded in
writing or otherwise, that the Company
shall, directly or indirectly, lend or
invest in other persons or entities
identified in any manner whatsoever
by or on behalf of the Funding Party
("Ultimate Beneficiaries”) or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures
performed that have been considered
reasonable and appropriate in the
circumstances, nothing has come
to our notice that has caused us to
believe that the representations under
sub-clause (i) and (ii) of Rule 11(e),
as provided under (a) and (b) above,
contain any material misstatement.
v. The Company has not declared or paid
any dividend during the year and has not
proposed final dividend for the year.
vi. Based on our examination, which
included test checks, the Company has
used accounting software systems for
maintaining its books of account for the
year ended March 31, 2025 which has
a feature of recording audit trail (edit
log) facility and the same has operated
throughout the year for all relevant
transactions recorded in the software
except that in respect of one accounting
software, audit trail was not enabled for
certain critical tables (refer note 50 to
the standalone financial statements).
Accordingly, we are unable to comment
on whether there was any instance of the
audit trail feature being tampered with.
Additionally, the audit trail that was enabled
and operated for the year ended March 31,
2024 has been preserved by the Company
as per the statutory requirements for
record retention, as stated in Note 50 to
the standalone financial statements.
2. As required by the Companies (Auditor’s Report)
Order, 2020 ("the Order”) issued by the Central
Government in terms of Section 143(11) of the Act,
we give in "Annexure B” a statement on the matters
specified in paragraphs 3 and 4 of the Order.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
Sandeep Kukreja
(Partner)
(Membership No. 220411)
(UDIN: 25220411BMOQCW4499)
Place: Bengaluru
Date: May 15, 2025
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