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Glenmark Pharmaceuticals Ltd.

BSE: 532296 Sector: Health care
NSE: GLENMARK ISIN Code: INE935A01035
BSE LIVE 15:45 | 24 Nov 592.95 -0.85
(-0.14%)
OPEN

590.00

HIGH

596.50

LOW

590.00

NSE 15:58 | 24 Nov 593.25 -1.05
(-0.18%)
OPEN

594.50

HIGH

595.90

LOW

591.40

OPEN 590.00
PREVIOUS CLOSE 593.80
VOLUME 34371
52-Week high 973.10
52-Week low 565.00
P/E 9.34
Mkt Cap.(Rs cr) 16,733
Buy Price 592.95
Buy Qty 39.00
Sell Price 0.00
Sell Qty 0.00
OPEN 590.00
CLOSE 593.80
VOLUME 34371
52-Week high 973.10
52-Week low 565.00
P/E 9.34
Mkt Cap.(Rs cr) 16,733
Buy Price 592.95
Buy Qty 39.00
Sell Price 0.00
Sell Qty 0.00

Glenmark Pharmaceuticals Ltd. (GLENMARK) - Auditors Report

Company auditors report

To the Members of Glenmark Pharmaceuticals Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of GlenmarkPharmaceuticals Limited. (‘the Company') which comprise the Balance Sheet as at 31March 2017 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Cash Flow Statement for the year then ended and asummary of the 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 Section134(5) of the Companies Act 2013 (‘the Act') with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs (financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (‘Ind AS') specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair 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 statementsbased on our audit.

4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthese standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial controls relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

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

Opinion

8. 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 Ind AS specified under Section133 of the Act of the state of affairs of the Company as at 31 March 2017 and its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

Other Matter

The Company had prepared separate sets of statutory financial statements for the yearended 31 March 2016 and 31 March 2015 in accordance with Accounting Standards prescribedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 (asamended) and in accordance with the Accounting Standards prescribed under Section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014 on which we issuedauditor's reports to the shareholders of the Company dated 12 May 2016 and 29 May 2015respectively. These financial statements have been adjusted for the differences in theaccounting principles adopted by the Company on transition to Ind AS which have also beenaudited by us. Our opinion is not modified in respect of this matter.

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 Section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. Further to our comments in Annexure A as required by Section 143(3) of the Act wereport that:

a) we have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books;

c) the standalone financial statements dealt with by this report are in agreement withthe books of account;

d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under Section 133 of the Act;

e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2017 from being appointed as a director in terms of Section 164(2) of the Act;

f) we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31 March 2017 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 11 May 2017 as per Annexure B expressed an unqualified opinion;

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 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. as detailed in Note 31 to the standalone financial statements has disclosed theimpact of pending litigations on its financial position;

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

iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company;

iv. the company as detailed in Note 37 to the standalone financial statements hasmade requisite disclosures in these standalone financial statements as to holdings as wellas dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December2016. Based on the audit procedures performed and taking into consideration theinformation and explanations given to us in our opinion these are in accordance with thebooks of account maintained by the company.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

per Ashish Gupta

Partner

Membership No.: 504662

Place: Mumbai

Date: 11 May 2017

ANNEXURE A

Annexure A in the Independent Auditor's report of even date to the members of GlenmarkPharmaceuticals Limited on the standalone financial statements for the year ended 31March 2017

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that: i. (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner over a period of three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. In accordance with this program certain fixed assets were verifiedduring the year and no material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties which are included under the head‘Property plant and equipment' are held in the name of the Company.

ii. In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies between physicalinventory and book records were noticed on physical verification.

iii. The Company has granted unsecured loans to companies covered in the registermaintained under Section 189 of the Act; and with respect to the same:

(a) in our opinion the terms and conditions of grant of such loans are not primafacie prejudicial to the company's interest;

(b) the schedule of repayment of principal and payment of interest has been stipulatedand the receipts of the principal amount and the interest are regular;

(c) there is no overdue amount in respect of loans granted to such companies firmsLLPs or other parties.

iv. In our opinion the Company has complied with the provisions of Sections 185 and186 of the Act in respect of loans investments guarantees and security.

v. In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

vii. (a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and other material statutory dues asapplicable to the appropriate authorities. Further no undisputed amounts payable inrespect thereof were outstanding at the year-end for a period of more than six months fromthe date they became payable.

(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:

Statement of Disputed Dues

Name of the statute Nature of dues Amount ( Rs in million) Amount paid under Protest ( Rs in million) Period to which the amount relates Forum where dispute is pending
Income tax Act 1961 Disallowed development of new product expenditure u/s 35(2AB)* 49.23 - A.Y. 2005-06 High Court Mumbai
Income tax Act 1961 Disallowance for income added to MAT book profit 0.82 - A.Y. 2006-07 Commissioner of Income Tax (Appeal)
Income tax Act 1961 Transfer pricing adjustment disallowances of sales promotion expenses 20.45 - A.Y. 2013-14 Income Tax Appellate Tribunal Mumbai
Income tax Act 1961 Disallowance of R&D expenses 15.76 - A.Y. 2009-10 Commissioner of Income Tax (Appeal)

 

Name of the statute Nature of dues Amount ( Rs in million) Amount paid under Protest ( Rs in million) Period to which the amount relates Forum where dispute is pending
Income tax Act 1961 Transfer Pricing adjustment & allocation of R&D expenses to tax holiday units 39.82 - A.Y. 2009-10 High Court Mumbai
Central Sales tax Act 1956 Rejection of C forms 2.89 - F.Y. 2007-08 Deputy Commissioner of Commercial Taxes (Appeals) Gujarat
Central Sales tax Act 1956 Rejection of C forms 1.24 - F.Y. 2011-12 Additional Commissioner of Commercial Taxes (Appeals) Goa
The Goa VAT Act 2005 Disallowance of Input tax Credit 5.36 - F.Y. 2011-12 Deputy Commissioner of Commercial Taxes (Appeals) Goa
The Gujarat VAT Act 2003 Disallowance of Input tax Credit 1.11 - FY 2011-12 Joint commissioner of commercial taxes (Appeals) Gujarat
The Goa VAT Act 2005 Disallowance of Input tax Credit on capital goods 3.88 - F.Y. 2012-13 Deputy Commissioner of Commercial Taxes (Appeals) Goa
The Central Excise Act 1944 Levy of penalty for non- submission of proof of exports 10.00 - Apr 2003 to Sept 2007 Customs Excise and Service Tax Appellate Tribunal Mumbai
The Central Excise Act 1944 Levy of penalty for non- submission of proof of exports* 16.31 - Apr 2003 to Sept 2007 Customs Excise and Service Tax Appellate Tribunal Mumbai
The Central Excise Act 1944 Disallowances of Rebate claims* 17.19 17.19 F.Y. 2010-11 Jt. Secretary Dept. of Revenue Ministry of Finance
The Central Excise Act 1944 Excise Duty on domestic clearance 14.18 14.18 Apr 2005 to Apr 2009 Customs Excise and Service Tax Appellate Tribunal Mumbai
The Central Excise Act 1944 Excise Duty on domestic clearance* 7.99 7.99 Jan 2010 to Mar 2011 Customs Excise and Service Tax Appellate Tribunal Mumbai
The Central Excise Act 1944 Disallowances of Rebate claims 5.48 5.48 Apr 2008 to Mar 2011 Jt. Secretary Dept. of Revenue Ministry of Finance
The Finance Act 1994 Disallowance of availment of Cenvat credit of service tax 2.25 - Apr 2008 to Mar 2012 Customs Excise and Service Tax Appellate Tribunal Mumbai
The Finance Act 1994 Demand for service tax under reverse mechanism 29.68 - Apr 2004 to Apr 2006 Customs Excise and Service Tax Appellate Tribunal Mumbai

* These cases have been decided in favour of the Company by the appellate authorities.The concerned revenue department has gone for further appeal against the decision.

** A.Y. / F.Y. – Assessment year / Financial year viii. The Company has notdefaulted in repayment of loans or borrowings to any bank or financial institution orgovernment during the year. The Company did not have any outstanding debentures during theyear.

ix. The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.

x. No fraud by the Company or on the company by its officers or employees has beennoticed or reported during the period covered by our audit.

xi. Managerial remuneration has been paid and provided by the company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.

xii. In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.

xiii. In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.

xiv. During the year the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

xv. In our opinion the company has not entered into any non-cash transactions with thedirectors or persons connected with them covered under Section 192 of the Act.

xvi. The company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

per Ashish Gupta

Partner

Membership No.: 504662

Place: Mumbai

Date: 11 May 2017