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Strides Shasun Ltd.

BSE: 532531 Sector: Health care
NSE: STAR ISIN Code: INE939A01011
BSE LIVE 15:49 | 17 Nov 787.70 21.00
(2.74%)
OPEN

767.05

HIGH

792.50

LOW

767.05

NSE 15:59 | 17 Nov 787.05 19.60
(2.55%)
OPEN

772.15

HIGH

792.50

LOW

769.15

OPEN 767.05
PREVIOUS CLOSE 766.70
VOLUME 58245
52-Week high 1259.00
52-Week low 754.00
P/E 78.22
Mkt Cap.(Rs cr) 7,050
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 767.05
CLOSE 766.70
VOLUME 58245
52-Week high 1259.00
52-Week low 754.00
P/E 78.22
Mkt Cap.(Rs cr) 7,050
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Strides Shasun Ltd. (STAR) - Auditors Report

Company auditors report

To the Members of Strides Shasun Limited (Formerly Strides Arcolab Limited)

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

1. We have audited the accompanying standalone financial statements of STRIDES SHASUNLIMITED (the "Company") which comprise the Balance Sheet as at March 31 2016the Statement of Profit and Loss and the Cash Flow Statement for the year then ended anda summary 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 inSection 134(5) of the Companies Act 2013 (the "Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsprescribed under section 133 of the Act as applicable.

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

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder and the Order under section143 (11) of the Act.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

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 ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements.

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

OPINION

4. 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 of the state of affairs of the Companyas at March 31 2016 and its profit and its cash flows for the year ended on that date.

EMPHASIS OF MATTER

5. a) We draw attention to Note 40 (A) to the standalone financial statements regardingthe notification of claims received from Mylan under the terms of the Share PurchaseAgreements (SPAs) for sale of investments in entities in the Specialities productsbusiness in an earlier year which the Company has disputed. As stated in the Note theCompany has provided a guarantee in favour of Mylan and certain amounts have been setaside in escrows under the terms of the SPAs. As explained in the Note given the natureof the claims included in the notification and the information provided by Mylan so farthe Company has not been able to make a reliable estimate of obligations if any arisingfrom these claims and has made the disclosures under Accounting Standard 29"Provisions Contingent Liabilities and Contingent Assets" in this regard.

5. b) We draw attention to the Note 51 to the standalone financial statements regardingthe early adopted Accounting Standard (AS) 30 ‘Financial Instruments: Recognition andMeasurement’ AS 31 ‘Financial Instruments: Presentation’ and AS 32‘Financial Instruments: Disclosure’ by the Company to the extent such standardsdo not conflict with the Accounting Standards prescribed under Section 133 of the Act.

Our opinion is not modified in respect of the above matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

6. As required by Section 143 (3) of the Act we report that:

(a) We have sought and read with our comments in paragraph 5(a) under the Emphasis ofMatter paragraph above have obtained all the information and explanations which to thebest 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 theCompany 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 Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards prescribed under section 133 of the Act as applicable.

(e) In our opinion any unfavourable outcome with regard to the matter referred to inNote 40(A) to the financial statements resulting in a outflow of resources significantlyin excess of amounts set aside in escrows stated in the said Note may have an adverseeffect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on March31 2016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164 (2) of theAct.

(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting.

(h) 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 in our opinionand to the best of our information and according to the explanations given to us:

i. Taking into the consideration the matter referred in Note 40(A) the Company hasdisclosed the impact of pending litigations on its financial position in its 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.

7. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm’s Registration No. 008072S)

V. Srikumar

Partner

Bengaluru May 16 2016

(Membership No. 84494)

Annexure "A" to the Independent Auditor’s Report

(Referred to in paragraph 6(g) 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) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of STRIDESSHASUN LIMITED (the "Company") as of March 31 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal financial control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company’spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

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 Institute of Chartered Accountants of India and theStandards on Auditing prescribed under Section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

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 controlssystem over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 March 31 2016 based on the internal financialcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by theInstitute of Chartered Accountants of India.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Firm’s Registration No. 008072S)

V. Srikumar

Partner

Bengaluru May 16 2016

(Membership No. 84494)

Annexure B to the Independent Auditor’s Report

(Referred to in paragraph 7 under ‘Report on Other Legal and RegulatoryRequirements’ section 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 programme of verification of fixed assets to cover all items in aphased manner over a period of 2 years which in our opinion is reasonable having regardto the size of the Company and nature of its assets. In accordance with the programmefixed assets were physically verified by the Management. According to the information andexplanation given to us no material discrepancies were noted on such verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed /conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date except the following:

Particulars of the land and building Gross Block (Rs. in Million as at 31-Mar-16) Net Block (Rs. in Million as at 31-Mar-16) Remarks
Freehold land admeasuring 7.20 Acres 257.67 257.67 The title deeds are under dispute. In respect of such dispute the Company has been legally advised that it has the title deed in its name for the aforesaid immovable properties and that it will be able to defend any counter claims to such property.
Freehold land and building admeasuring 57.82 Acres 2191.62 1534.50 The title deeds are in the name of erstwhile Companies that were merged with the Company under Section 391 to 394 of the Companies Act 1956 in terms of the approval of the Honorable High Courts of judicature
Building admeasuring 1470 sq. ft. 4.05 1.59 The title deeds are not in the name of the Company.

Immovable properties of land and buildings whose title deeds have been pledged assecurity for loans guarantees etc. are held in the name of the Company based on theconfirmations directly received by us from lenders / parties. In respect of immovableproperties of land and buildings that have been taken on lease and disclosed as fixedasset in the financial statements the lease agreements are in the name of the Companywhere the Company is the lessee in the agreement.

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

(iii) According to the information and explanations given to us the Company hasgranted loans secured or unsecured to companies covered in the register maintained undersection 189 of the Companies Act 2013 in respect of which:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company’s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

(c) There is no overdue amount remaining outstanding as at the year-end.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year and there were no unclaimed deposits.

vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained. We have however not made a detailed examinationof the cost records with a view to determine whether they are accurate or complete.

(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 ServiceTax Customs Duty Excise Duty Value Added Tax cess and other material statutory duesapplicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident FundEmployees’ State Insurance Income-tax Sales Tax Service Tax Customs Duty ExciseDuty Value Added Tax cess and other material statutory dues in arrears as at March 312016 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Excise Dutyand Value Added Tax which have not been deposited as on March 31 2016 on account ofdisputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount (' in Million)
The Income Tax Act 1961 Income Tax Supreme Court 1999-00 & 2001-02 3.15
The Income-Tax Act1961 Income Tax Income Tax Appellate Tribunal AY 2008-09 202.09 (net of tax paid under protest of 211.30)
The Income-Tax Act1961 Income Tax Income Tax Appellate Tribunal AY 2009-10 285.49 (net of tax paid under protest of 140.47)
The Income-Tax Act1961 Income Tax Income Tax Appellate Tribunal AY 2011-12 94.02 (net of tax paid under protest of 15)
Central Excise Act 1944 Central Excise Customs Excise and Service Tax Appellate Tribunal Various dates 3.96 (net of tax paid under protest of 0.78)
Central Excise Act 1944 Central Excise CIT (Appeals) FY 2012-13 0.21 (net of tax paid under protest of 0.01)
Central Excise Act 1944 Central Excise High Court July 2002 3.05 (net of tax paid under protest of 0.34)
Central Excise Act 1944 Central

Excise

CCE(Appeals) Various dates 3.59
The Finance Act 1994 Service Tax Customs Excise and Service Tax Appellate Tribunal Various dates 16.86 (net of tax paid under protest of 0.40)
The Finance Act 1994 Service Tax Customs Excise and Service Tax Appellate Tribunal Various dates 54.72 (net of tax paid under protest of 0.35)
The Finance Act 1994 Service Tax CIT (Appeals) Various dates 2.06 (net of tax paid under protest of 0.14)
The Finance Act 1994 Service Tax High Court FY 2006-07 0.05
Andhra Pradesh Value Andhra Appellate Deputy FY 2011-12 2.29
Added Tax Act 2005 Pradesh VAT Commissioner of Commercial taxes

(viii) I n our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions and banks. The Company has not issued any debentures and did not have anyborrowings from government.

(ix) In our opinion and according to the information and explanations given to us termloans have been applied by the Company during the year for the purposes for which theywere raised other than temporary deployment pending application of proceeds from termloans.

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

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

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

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us the Company has madeprivate placement of shares during the year under review.

In respect of the above issue we further report that

a) the requirement of Section 42 of the Companies Act 2013 as applicable have beencomplied with; and

b) the amounts raised have been applied by the Company during the year for the purposesfor which the funds were raised other than temporary deployment pending application.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any noncash transactions with itsdirectors or directors of subsidiary or associate company or persons connected with themand hence provisions of section 192 of the Companies Act 2013 are not applicable.

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm’s Registration No. 008072S)

V. Srikumar

Partner

Bengaluru May 16 2016

(Membership No. 84494)