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Sterling Biotech Ltd.

BSE: 512299 Sector: Industrials
NSE: STERLINBIO ISIN Code: INE324C01038
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HIGH

3.30

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VOLUME 25643
52-Week high 6.77
52-Week low 3.15
P/E
Mkt Cap.(Rs cr) 88
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3.25
CLOSE 3.28
VOLUME 25643
52-Week high 6.77
52-Week low 3.15
P/E
Mkt Cap.(Rs cr) 88
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sterling Biotech Ltd. (STERLINBIO) - Auditors Report

Company auditors report

To

The Member(s)

Sterling Biotech Limited

Report on the Ind AS Financial Statements

I have audited the accompanying Ind AS Financial Statements of Sterling BiotechLimited (the "Company") which comprise the Balance Sheet as at March 312017 the Statement of Profit & Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended on that dateand a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Ind AS Financial Statements

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 Ind AS Financial Statements that give a true and fair view of the state of affairs(financial position) profit or loss (financial performance including other comprehensiveincome) cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)prescribed under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these Ind AS Financial Statements basedon my audit.

I 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 there under.

I conducted my audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that I comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Ind AS Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Ind AS Financial Statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS Financial Statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS Financial Statements that give true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by Company's Directors as well as evaluating the overallpresentation of the Ind AS Financial Statements. I believe that the audit evidence I haveobtained is sufficient and appropriate to provide a basis for my audit opinion on the IndAS Financial Statements.

Opinion

In my opinion and to the best of my information and according to the explanations givento me the aforesaid Ind AS Financial Statements give the information required by theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of thecompany as at 31st March 2017 and its loss (financial performance including othercomprehensive income) its cash flows and the changes in equity for the for the periodended on that date.

Other matter

The comparative financial information of the Company for the period ended 31 March 2016and the transition date opening balance sheet as at 1 January 2015 included in these IndAS financial statements are based on the previously issued statutory financial statementsprepared in accordance with the accounting principles generally accepted in Indiaincluding the Accounting standards specified under Section 133 of the Act read with rule 7of Companies (Accounts) Rules 2014 which were audited by me on which I expressed anopinion dated May 30 2016 and February 28 2015 respectively. The adjustments to thosefinancial statements for the differences in accounting principles adopted by the Companyon transition to the Ind AS have been audited by me.

My opinion is not qualified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

1 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 ofthe Companies Act 2013 I give in the Annexure 'A' a statement on the matters specifiedin paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act I report that:

a) I have sought and obtained all the information and explanations which to the bestof my knowledge and belief were necessary for the purposes of my Audit;

b) In my opinion proper books of account as required by law have been kept by thecompany so far as it appears from my examination of those books;

c) The Balance Sheet Statement of Profit & Loss (including other comprehensiveincome) Cash Flow Statement and Statement of Changes in Equity dealt with by this reportare in agreement with the books of account;

d) In my opinion the aforesaid Ind AS Financial Statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with relevant Rulesissued there under.

e) On the basis of written representations received from the directors as on 31stMarch 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director;

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to myseparate Report in Annexure 'B'; and

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the companies (Audit & Auditors) Rules 2014 in my opinionand to the best of my information and according to the explanations given to me:

i. The Company has disclosed the impact of pending litigations on its financialposition in its I nd AS Financial Statements.

ii. The company did not have any material foreseeable losses on long term contractsincluding derivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its Ind AS financial statementsas to holdings as well as dealings in Specified Bank Notes during the period from 8November 2016 to 30 December 2016 and these are in accordance with the books of accountmaintained by the Company. Refer note no. 9 to the Ind AS financial statements.

For H. S. HATHI & CO.
Chartered Accountants
(Firm Registration No. 103596W)
HEMANT S. HATHI
Place : Mumbai Proprietor
Date : May 30 2017 Membership No. 037109

Annexure 'A' to the Independent Auditor's Report

Report on Companies (Auditor's Report) Order 2016 ('the Order') issued by the CentralGovernment in terms of Section 143(11) of the Companies Act 2013 ('the Act') of SterlingBiotech Limited ('the Company').

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

(b) The Company has regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. In myopinion this periodicity of physical verification is reasonable having regard to the sizeof the company and the nature of its assets. In accordance with this programme certainfixed assets were verified during the period and no material discrepancies were noticed onsuch verification.

(c) According to the information and explanations given to me and on the basis of myexamination of the records of the Company title deeds of immovable properties are held inthe name of the Company.

(ii) As explained to me the inventories were physically verified during the period bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(iii) According to the information and explanations given to me the Company hasgranted loans secured or unsecured to companies firms Limited Liability Partnership orother parties covered in the register maintained under section 189 of the companies Act2013 in respect of which:

(a) In my opinion terms and conditions on which loans had been granted to companieslisted in the register maintained under section 189 of the Act were not prima facieprejudicial to the interest of the company.

(b) The parties have repaid the principal amount as stipulated.

(c) There are no overdue amounts of Loans granted to companies listed in the registermaintained under section 189 of the Act.

(iv) In my opinion and according to the information and explanations given to me theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

(v) According to the information and explanations given to me the Company has notaccepted any deposit from the public.

(vi) I have broadly reviewed the books of accounts maintained by the company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the companies Act 2013 and I am of the opinion that prima facie theprescribed accounts and records have been made and maintained. I have not however made adetailed examination of the same.

(vii) According to the information and explanations given to me 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 TaxValue Added Tax duty of Customs duty of Excise Cess and other material statutory duesapplicable to it with the appropriate authorities.

There were no undisputed amounts payable in respect of Provident Fund Employees' StateInsurance Income Tax Sales Tax Service Tax Value Added Tax duty of Customs duty ofExcise Cess and other material statutory dues in arrears as at March 31 2017 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to me the following dues ofIncome Tax Sales Tax Service Tax and Value Added Tax have not been deposited by theCompany on account of disputes.

Name of the Statute

Nature of the dues

Amount unpaid Period to which the amount relates Forum where dispute is pending
State Sales Tax/Vat and CST

Sales Tax

13894892 2001-2002 Supreme Court
State Sales Tax/Vat and CST

Sales Tax

14358662 2002-2003 Supreme Court
State Sales Tax/Vat and CST

Sales Tax

1417651 2003-2004 Supreme Court
The Central Excise Act 1944

Excise Duty

43093913 2008-2009 Commissioner of Central Excise
The Central Excise Act 1944

Excise Duty

15362946 2009-2010 Commissioner of Central Excise
The Central Excise Act 1944

Excise Duty

11636753 2009-2010 Commissioner of Central Excise
The Central Excise Act 1944

Excise Duty

21773984 2010-2011 Commissioner of Central Excise
The Central Excise Act 1944

Excise Duty

19835655 2011-2012 Commissioner of Central Excise
The Central Excise Act 1944

Excise Duty

14293983 2011- 2012 to 2012- 2013 Commissioner of Central Excise
The Central Excise Act 1944

Excise Duty

11647766 2012- 2013 to 2013- 2014 Commissioner of Central Excise
The Central Excise Act 1944

Excise Duty

19822934 2013-2014 Commissioner of Central Excise
The Central Excise Act 1944

Excise Duty

20967416 2014-2015 Commissioner of Central Excise
The Central Excise Act 1944

Excise Duty

20154465 2005-2006 to 2008-2009 Commissioner of Central Excise
The Central Excise Act 1944

Service Tax and Penalty

583644 2005-2006 to 2008-2009 Assistant Commissioner of Central Excise
The Central Excise Act 1944

Service Tax and Penalty

168442 2008- 2009 to 2009- 2010 Assistant Commissioner of Central Excise
Name of the Statute Nature of the dues

Amount unpaid

Period to which the amount relates Forum where dispute is pending
The Central Excise Act 1944 Service Tax and Penalty

26074

2010- 2011 to 2011- 2012 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Show Cause for GTA

392926

2008-2009 to 2011-2012 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Service Tax and Penalty

103522

2011- 2012 to 2012- 2013 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Service Tax and Penalty

101030

2012- 2013 to 2013- 2014 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Service Tax and Penalty

288966

2013- 2014 to 2014- 2015 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Service Tax and Penalty

221124

2014- 2015 to 2015- 2016 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Service Tax and Penalty

98297

2015-2016 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Service Tax and Penalty

2075866

2008-2009 to 2013-2014 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Service Tax and Penalty

14017

2012- 2013 to 2013- 2014 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Service Tax and Penalty

38556

2013- 2014 to 2014- 2015 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Service Tax and Penalty

36434

2014- 2015 to 2015- 2016 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Service Tax and Penalty

8112

2015-2016 Assistant Commissioner of Central Excise
The Finance Act 1944 - Service Tax Service Tax and Penalty

7416000

2013-2014 Joint Commissioner of Central Excise
The Finance Act 1944 - Service Tax Service Tax and Penalty

148863

2015-2016 Deputy Commissioner of Central Excise

(viii) According to the information and explanations given to me by the management andon the basis of records examined by me the company has defaulted in the repayment of thedues to financial institutions or banks or debenture holders as under:

(Rs. in crores)
Bank Total Overdue 31.03.2017 Overdue for more than 90 days Overdue for less than 90 days
Allahabad Bank 60.50 55.18 5.32
Andhra Bank 51.60 43.01 8.58
Bank of Baroda 100.27 92.50 7.76
Bank of India 81.72 74.40 7.32
Bank of Maharashtra 28.36 25.75 2.61
Catholyic Syrian Bank 0.88 - 0.88
HDFC Bank Ltd 1.60 - 1.60
IDBI Bank Ltd 55.10 52.95 2.15
Indian Overseas Bank 102.97 88.43 14.55
JM Financial ARC co pvt Ltd 10.02 6.23 3.79
Laxmi Vilas Bank 10.15 8.64 1.51
LIC of India 639.03 617.71 21.32
Oriental Bank of Commerce 11.86 11.01 0.85
Punjab National Bank 110.68 97.63 13.05
State Bank of India 281.08 275.55 5.53
Syndicate Bank 232.89 224.63 8.26
UCO Bank 393.94 378.06 15.88
Vijaya Bank 7.07 5.79 1.28
TOTAL 2179.70 2057.45 122.25

(ix) The Company did not raise any moneys by way of initial public offer or furtherpublic offer (including Debt Instruments) during the period. In my opinion and accordingto the information and explanations given to me the term loans taken during the year bythe Company have been applied for the purposes for which they were raised.

(x) According to the information and explanations given to me no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of my audit.

(xi) According to the information and explanations given to me and based on myexamination of the records the Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act.

(xii) In my opinion and according to the information and explanations given to me theCompany is not a Nidhi Company.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe Ind AS Financial Statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to me the Company has madeprivate placement of Redeemable cumulative non participating non convertible preferenceshares during the year and complied with the requirements of section 42 of the Act and theamount raised have been used for the purposes for which the funds were raised.

(xv) According to the information and explanations given to me and based on myexamination of the records the Company has not entered into non-cash transactions withdirectors or persons connected with him.

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

For H. S. HATHI & CO.
Chartered Accountants
(Firm Registration No. 103596W)
HEMANT S. HATHI
Place : Mumbai Proprietor
Date : May 30 2017 Membership No. 037109

Annexure 'B' to the Independent Auditor's Report

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

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

I have audited the internal financial controls over financial reporting of STERLINGBIOTECH LIMITED ("the Company") as of March 31 2017 in conjunction with myaudit of the standalone I nd AS Financial Statements of the Company for the 12 monthsended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (' 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 company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditor's Responsibility

My responsibility is to express an opinion on the Company's internal financial controlsover financial reporting based on my audit. I conducted my audit in accordance with theGuidance Note on Audit of Internal Financial Controls over Financial Reporting (the"Guidance Note") and the Standards on Auditing deemed to be prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe ICAI. Those Standards and the Guidance Note require that I comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

My audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. My 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 judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS Financial Statements whether due to fraudor error.

I believe that the audit evidence I have obtained is sufficient and appropriate toprovide a basis for my 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 I nd AS Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the Ind ASFinancial 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 my opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 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 issued by the ICAI.

For H.S. HATHI & CO.
Chartered Accountants
(Firm Registration No. 103596W)
HEMANT S. HATHI
Proprietor
Place : Mumbai Membership No. 037109
Dated : May 30 2017