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Sun Pharma Advanced Research Company Ltd.

BSE: 532872 Sector: Others
NSE: SPARC ISIN Code: INE232I01014
BSE 10:21 | 24 May 358.00 -0.40
(-0.11%)
OPEN

361.00

HIGH

363.20

LOW

356.60

NSE 10:14 | 24 May 360.00 0.25
(0.07%)
OPEN

359.05

HIGH

362.80

LOW

355.05

OPEN 361.00
PREVIOUS CLOSE 358.40
VOLUME 1888
52-Week high 532.40
52-Week low 273.00
P/E
Mkt Cap.(Rs cr) 8,982
Buy Price 358.45
Buy Qty 48.00
Sell Price 359.80
Sell Qty 39.00
OPEN 361.00
CLOSE 358.40
VOLUME 1888
52-Week high 532.40
52-Week low 273.00
P/E
Mkt Cap.(Rs cr) 8,982
Buy Price 358.45
Buy Qty 48.00
Sell Price 359.80
Sell Qty 39.00

Sun Pharma Advanced Research Company Ltd. (SPARC) - Auditors Report

Company auditors report

TO THE MEMBERS OF SUN PHARMA ADVANCED RESEARCH COMPANY LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of SUN PHARMA ADVANCED RESEARCHCOMPANY LIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss and the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Financial Statements The Company's Board ofDirectors is responsible for the matters stated in Section 134(5) of the Companies Act2013 ("the Act") with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe 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 control 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.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements 1. As required by Section 143 (3) ofthe Act based on our audit we report to the extent applicable that:

a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books and the reports of theother auditors.

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid financial statements comply with the AccountingStandards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company refer to our separate Report in "Annexure A". Ourreport expresses an unmodified opinion on the adequacy and operating effectiveness of theCompany's internal financial controls over financial reporting.

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. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 24(i)(b) and (c) to the financialstatements;

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 has provided requisite disclosures in the financial statements asregards its holding and dealings in Specified Bank Notes as defined in the NotificationS.O. 3407(E) dated the 8th November 2016 of the Ministry of Finance during the periodfrom 8th November 2016 to 30th December 2016. Based on audit procedures performed andthe representations provided to us by the management we report that the disclosures are inaccordance with the books of account maintained by the Company and as produced to us bythe Management. Refer Note 27 to the financial statements.

2. As required by the Companies (Auditor's Report) Order 2016 ("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 theOrder.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Rajesh K. Hiranandani
Partner
Membership No. 36920
Mumbai 5th May 2017

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SUN PHARMAADVANCED RESEARCH COMPANY LIMITED ("the Company") as of 31st March 2017 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls The Company's management isresponsible for establishing and maintaining internal financial controls based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting ("the Guidance Note")issued by the Institute of Chartered Accountants of India ("the ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note issued by the ICAI and the Standards on Auditing prescribed underSection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2017 based on the internal controlover financial reporting criteria established by the respective Company considering theessential components of internal control stated in the Guidance Note issued by the ICAI.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Rajesh K. Hiranandani
Partner
(Membership No. 36920)
Place: Mumbai
Date: 5th May 2017

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the Management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to us and the records examinedby us in respect of title deeds of immovable property based on the examination of the HighCourt Order for Demerger dated 28th March 2007 provided to us we report the following:

Particulars of building Gross Block (as at 31st March 2017) Rs. in Lakhs Net Block (as at 31st March 2017) Rs. in Lakhs Remarks
R&D buildings located at Tandalja Vadodara (Gujrat) admeasuring 14615.50m2 1838.21 1504.77 The buildings were transferred (pending registration) to the Company pursuant to a scheme of arrangement in the nature of demerger and transfer of Innovative Research and Development business of Sun Pharmaceutical Industries Limited under Section 391 to 394 of the Companies Act 1956 in terms of the approval of the Honourable High Court of Gujarat. The agreements are in the name of Sun Pharmaceutical Industries Limited.
R&D building located at Mahakali Caves Road Andheri Mumbai admeasuring 1041.29m2 285.99 224.08

(ii) According to the information and explanation given to us and having regard to thenature of the Company's business the Company does not have any inventories during theyear since procurements are issued directly for consumption to the user department andtherefore the question of reporting on whether; physical verification has been carriedout at reasonable intervals and discrepancies noticed on physical verification werematerial does not arise.

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013 ("the Act").

(iv) The Company has not granted any loans made investments or provided guarantees andhence reporting under clause 3(iv) of the Companies (Auditor's Report) Order 2016("the CARO 2016") is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit and the provisions of sections 73 to 76 of the Act are not applicableand hence reporting under clause 3(v) of the CARO 2016 is also not applicable.

(vi) In respect of maintenance of Cost records under section 148(1) of the Act havingregard to the nature of the Company's business / activities reporting under clause 3(vi)of the CARO 2016 is not applicable.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax cess and other material statutory duesapplicable to it to the appropriate authorities. Having regard to the nature of theCompany's business / activities statutory dues in respect of Excise duty are notapplicable to the Company.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Sales Tax Service Tax Customs Duty Excise Duty ValueAdded Taxcess and other material statutory dues in arrears as at 31st March 2017 for aperiod of more than six months from the date they became payable.

(c) Details of dues of Income-tax which have not been deposited as on 31st March 2017on account of disputes are given below:

Name of Statute Nature of Dues Forum Where Dispute is Pending Period to which the Amount Relates Amount Involved (Rs. in Lakhs) Amount Paid under protest (Rs. in Lakhs) Amount Unpaid (Rs. in Lakhs)
The Income Tax Act 1961 Income Tax and Interest Commissioner of Income Tax (Appeals) Assessment Year 2011-12 1812.00 1812.00
The Income Tax Act 1961 Income Tax and Interest Commissioner of Income Tax (Appeals) Assessment Year 2013-14 3287.06 650.00 2637.06

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans to banks and government. TheCompany has not taken any borrowings from financial institutions and has not issued anydebentures.

(ix) In our opinion and according to the information and explanations given to us theCompany has utilised the term loans for the purposes for which they were obtained. TheCompany has not raised moneys by way of initial public offer/ further public offer(including debt instruments).

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us the Company has notpaid managerial remuneration and the provisions of section 197 read with Schedule V to theAct are not applicable and hence reporting under clause 3(xi) of the CARO 2016 is notapplicable.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theCARO 2016 is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with sections 188 and 177 of the Act where applicable forall transactions with the related parties and the details of related party transactionshave been disclosed in the financial statements etc. as required by the applicableaccounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause 3(xiv) of the CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of the Act arenot applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and hence reporting under clause 3(xvi) of the CARO 2016 is notapplicable.

For Deloitte Haskins & Sells LLP

Chartered Accountants

(Firm's Registration No. 117366W/W-100018

Rajesh K. Hiranandani

Partner

(Membership No. 36920)

Place : Mumbai

Date : 5th May 2017