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Syngene International Ltd.

BSE: 539268 Sector: Health care
NSE: SYNGENE ISIN Code: INE398R01022
BSE LIVE 13:18 | 22 Nov 524.00 7.15
(1.38%)
OPEN

522.00

HIGH

536.15

LOW

517.80

NSE 13:01 | 22 Nov 524.00 7.70
(1.49%)
OPEN

520.00

HIGH

537.90

LOW

515.00

OPEN 522.00
PREVIOUS CLOSE 516.85
VOLUME 19508
52-Week high 663.30
52-Week low 430.00
P/E 35.92
Mkt Cap.(Rs cr) 10,480
Buy Price 524.00
Buy Qty 3.00
Sell Price 524.80
Sell Qty 1.00
OPEN 522.00
CLOSE 516.85
VOLUME 19508
52-Week high 663.30
52-Week low 430.00
P/E 35.92
Mkt Cap.(Rs cr) 10,480
Buy Price 524.00
Buy Qty 3.00
Sell Price 524.80
Sell Qty 1.00

Syngene International Ltd. (SYNGENE) - Auditors Report

Company auditors report

Independent Auditor's Report

To The Members of Syngene International Limited

Report on the Indian Accounting Standards (‘Ind AS') Financial Statements

We have audited the accompanying Ind AS financial statements of Syngene InternationalLimited (‘the Company') which comprise the Balance Sheet as at 31 March 2017 theStatement of Profit and Loss (including other comprehensive Statement of Changes in Equityfor the year then ended and a summary of the significantaccounting policies and otherexplanatory information (herein after referred to as “Ind AS financialstatements”).

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 financialposition financial performance (including other comprehensive income) cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including Ind AS prescribed under Section 133 of the Act read withrelevant rules issued thereunder.

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 Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.

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. We conducted our audit of the Ind ASfinancial statements in accordance with the Standards on Auditing specified under Section143(10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the Ind ASfinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures 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 a true and fair view in order toin the circumstances. An audit also includes evaluating the appropriateness of theaccounting policies used and the reasonableness of the accounting estimates made by theCompany's Directors as well as evaluating the overall presentation of the Ind ASfinancial statements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Ind AS financialstatements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the financialposition of the Company as at 31 March 2017 other comprehensive income its cash flowsand the changes in equity for the year ended on that date.

Other Matters

The comparative financial information of the Company for the year ended 31 March 2016and the transition date opening balance sheet as at 1 April 2015 included in these Ind ASfinancial statements are based on the previously issued statutory financial statementsprepared in accordance with the Companies (Accounting Standards) Rules 2006 audited bythe predecessor auditor whose report for the year ended 31 March 2016 and 31 March 2015dated 26 April 2016 and 28 April 2015 respectively expressed an unmodified opinion onthose financial statements as adjusted for the differences in the accounting principlesadopted by the Company on transition to the Ind AS which have been audited by us.

Our opinion is not modified in respect of this 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 Section 143(11) of the Act we give in“Annexure A” a statement on the matters specified in the paragraphs 3 and 4 ofthe order.

2. As required by Section 143 (3) of the Act we report 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 ouropinion proper books of account as required by law have been kept by the Company so far asit appears from our examination of those books; (c) the balance sheet the statement ofprofit and loss the statement of cash flows and the statement of changes in equity dealtwith by this report are in agreement with the books of account; (d) in our opinion theaforesaid Ind AS financial statements comply with the Indian Accounting Standardsspecified under Section 133 of the Act read with relevant rules issued thereunder; (e) onthe basis of the written representations received from the directors as on 31 March 2017taken on record by the Board of Directors none of the directors is disqualified as on 31March 2017 from being appointed as a director in terms of Section 164 (2) of the Act; (f)with respect to the adequacy of the internal financial controls over financial reportingof the Company and the operating effectiveness of such controls refer to our separatereport in “Annexure B”; and (g) with respect to the other matters to be includedin the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us: i. the Company has disclosed the impact of pending litigationson its financial position in its Ind AS financial statements Refer Note 32(i)(a) to theInd AS financial statements; ii. provision has been made in the financial statements asrequired under the applicable law or accounting standards for material foreseeablelosses if any on long-term contracts including derivative contracts - Refer Note 28 tothe financial statements; iii. there were no amounts during the year which were requiredto be transferred to the Investor Education and Protection Fund by the Company; and iv.the Company has provided requisite disclosures in its Ind AS financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December 2016. Based on the audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with the books of accountmaintained by the Company and as produced by the management. Refer Note 33 to the Ind ASfinancial statements.

for B S R & Co. LLP

Chartered Accountants

Firm's registration number: 101248W/W-100022

S Sethuraman

Partner

Membership number: 203491

Place: Bengaluru

Date: 27 April 2017

Annexure - A to the Independent Auditor's Report

The Annexure referred to in paragraph 1 in ‘Report on Other Legal and RegulatoryRequirements' of the Independent Auditor's Report to the members of Syngene InternationalLimited (“the Company”) on the Ind AS financial statements of the 2017. Wereport that: (i) (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant & equipment. (b) TheCompany has a regular programme of physical verification of its property plant &equipment by which all property plant & equipment are verified in a phased mannerover a period of three years. In our opinion this periodicity of physical verificationreasonable having regard to the size of the Company and the nature of its assets. Inaccordance with this programme certain property plant & equipment were verifiedduring the year and no material discrepancies were noticed on such verification.

(c) According to the information and explanations give to us and on the basis of ourexamination of the records of the Company the Company is in the process of registeringthe title deeds of immovable properties comprising of land and building acquired duringthe year ended March 31 2015 from merger of Clinigene International Limited (anerstwhile wholly owned subsidiary of the Company) amounting to INR 177 million. Also refernote 3 to the Ind AS financial statements pertaining to buildings constructed on leaseholdland.

(ii) The management has conducted physical verification of inventory at reasonableintervals were noticed on such physical verification.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 (“the Act'). Accordingly the provisions of clause 3(iii) (a)(b) and (c) of the Companies (Auditor's Report) Order 2016 (“the Order”) arenot applicable to the Company and hence not commented upon.

(iv) According to the information and explanations given to us there are no loansinvestments guarantees and securities granted in respect of which provisions of section185 and 186 of the Act are applicable and hence not commented upon.

(v) According to information and explanations given to us the Company has not acceptedany deposits from the public. Accordingly paragraph 3(v) of the Order is not applicableto the Company.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 as amended prescribed by theCentral Government under Section 148 of the Act and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. However we have notmade a detailed examination of such records. (vii) (a) According to the information andexplanations given to us and on the basis of our examination of the records of theCompany amounts deducted/ accrued in the books of account in respect of undisputedstatutory dues including provident fund employees' state insurance income-tax salestax value added tax duty of customs duty of excise service tax cess and othermaterial statutory dues have generally been regularly deposited during the year with theappropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxvalue added tax duty of customs duty of excise service tax cess and other materialstatutory dues were in arrears as at 31 March 2017 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax value added tax service tax duty of customs duty of excise whichhave not been deposited with the appropriate authorities on account of any dispute otherthan those mentioned below:

Name of the statute Nature of dues Amount disputed (INR in million) Amount paid under protest (INR in million) Period to which the amount relates Forum where dispute is pending
Income-tax Act 1961 Income tax 706 9 PY 2002-03 to PY 2008-09 High Court of Karnataka
Income-tax Act 1961 Income tax 785 361 PY 2009-10 to PY 2013-14 Commissioner of Income tax (Appeals)
Finance Act 1994 Service tax (including interest) 6 1 March 2005 to February 2007 Customs Excise and Service Tax Appellate Tribunal
Karnataka Value Added Non-deduction of tax at source 2 - FY 2009-10 Joint Commissioner Commercial Taxes
Tax Act 2003

(viii) In our opinion and according to the information and explanations give to us theCompany does not have defaults existing as at the balance sheet date in repayment ofborrowings to banks. The Company did not have any borrowings during the year by way ofdebentures loans from financial institutions or loan from the Government.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the Company we report that monies raised by the Company byway of term loans were applied for the purpose for which the loans were obtained thoughidle/surplus funds amounting to INR 2740 million as at March 31 2017 which were notrequired for immediate utilization have been invested in fixed deposits. No monies wereraised during the year by the Company by way of initial public offer or further publicoffer (including debt instruments).

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Ind AS financial statements as required by theapplicable accounting standards. (xiv) According to the information and explanations giveto us and based on our examination of the records of the Company the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3 (xv)of the Order is not applicable.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

for B S R & Co. LLP

Chartered Accountants

Firm's registration number: 101248W/W-100022

S Sethuraman

Partner

Membership number: 203491

Place: Bengaluru

Date: 27 April 2017

Annexure - B to the Independent Auditor's Report of even date on the Ind AS financialstatement of Syngene International Limited

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

We have audited the internal financial controls over financial reporting of SyngeneInternational Limited (“the Company”) as of 31 March 2017 in conjunction withour audit of the Ind AS 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 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 Reporting(‘Guidance Note') issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding 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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial 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 judgment including the assessment of the risks ofmaterial misstatement of the Ind AS 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 Ind 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 our 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 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

f or B S R & Co. LLP

Chartered Accountants

Firm's Registration Number: 101248W/W-100022

S Sethuraman

Partner

Membership number: 203491

Place: Bengaluru

Date: 27 April 2017