To the Members of
Ajanta Pharma Limited
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statementsof Ajanta Pharma Limited ("the Company") which comprise the Balance Sheet as at31st March 2018 the Statement of Profit and Loss including other comprehensiveincome the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended and summary of the significant accounting policies and other explanatoryinformation (herein after referred to as "standalone Ind AS financialstatements").
Management's Responsibility for the Standalone Ind AS FinancialStatements
The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone Ind AS financial statements that give a true and fairview of the state of affairs profit and other comprehensive income changes in Equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards ("Ind AS") prescribed underSection 133 of the Act.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the ASSETS of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Our responsibility is to express an opinion on these standalone Ind ASfinancial statements based 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.
We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the standalone Ind AS financialstatements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the standalone Ind AS financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the standalone Ind ASfinancial 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 overallpresentation of the standalone Ind AS financial statements.
We are also responsible to conclude on the appropriateness ofmanagement's use of the going concern basis of accounting and based on the auditevidence obtained whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on the entity's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in the auditor's report to the related disclosures in the financialstatements or if such disclosures are inadequate to modify the opinion. Our conclusionsare based on the audit evidence obtained up to the date of the auditor's report.However future events or conditions may cause an entity to cease to continue as a goingconcern.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2018 its profit and other comprehensive incomechanges in Equity and its cash flows for the year ended on that date.
The comparative financial information of the company for the year ended31st March 2017 included in these standalone Ind AS financial statements have been auditedby the predecessor auditor. The report of the predecessor auditor on the comparativefinancial information dated 3rd May 2017 expressed an unmodified opinion.
Our opinion is not modified 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 in terms of section 143(11) ofthe Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act we report that: a) We havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss (including other comprehensive income) the Cash Flows Statement and Statement ofChanges in Equity dealt with by this Report are in agreement with the books of account. d)In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act. e) On the basis ofthe written representations received from the directors as on 31st March 2018 taken onrecord by the Board of Directors none of the directors is disqualified as on 31st March2018 from being appointed as a director in terms of Section 164(2) of the Act. f) Withrespect to the adequacy of the internal financial controls with reference to financialstatements of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". g) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Auditand Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us:
1. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements
Refer Note 47 to the standalone Ind AS financial statements;
2. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
3. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
4. The disclosures in the financial statements regarding holdings aswell as dealings in specified bank notes during the period from 8th November 2016 to 30thDecember 2016 have not been made since they do not pertain to the financial year ended 31stMarch 2018. However amounts as appearing in the audited Standalone Ind AS financialstatements for the period ended 31st March 2017 have been disclosed.
For B S R & Co. LLP
Chartered Accountants Firm's Registration No: 101248W/ W - 100022
Partner Membership No: 111410
Mumbai 2nd May 2018
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in our report of even date)
(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed ASSETS.
(b) The Company has a regular programme of physical verification of itsfixed ASSETS by which all fixed ASSETS are verified in a phased manner over a period ofthree years. In accordance with this programme a portion of the fixed ASSETS has beenphysically verified by the management during the year and no material discrepancies havebeen noticed on such verification. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsASSETS.
(c) According to the information and explanations given to us and basedon the examination of the registered sale deed / transfer deed / conveyance deed / sharecertificate / other documents evidencing title and provided to us we report that thetitle deeds of immovable properties of land and building which are freehold as disclosedin Note 8 to the standalone Ind AS financial statements are held in the name of theCompany. In respect of immovable properties of land and buildings that have been taken onlease and disclosed as fixed asset in Note 8 to the standalone Ind AS financialstatements the lease agreements are in the name of the Company where the Company is thelessee in the agreement.
(ii) The inventory except goods-in-transit and goods lying with thirdparties has been physically verified by the management at reasonable intervals during theyear. In our opinion the frequency of such verification is reasonable. In respect ofinventory lying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on verification between the physical stocks and the book recordswere not material.
(iii) In our opinion and according to information and explanationsgiven to us the Company has not granted any loans secured or unsecured to companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Act. Accordingly paragraph 3(iii) of the Order is not applicableto the Company.
(iv) In our opinion and according to the information and explanationgiven to us the Company has complied with the provisions of Section 185 and 186 of theAct in respect of making investments as applicable. The Company has not granted any loansto or provided any guarantees or security on behalf of the parties covered under Section185 and 186 of the Act.
(v) According to the information and explanations given to us theCompany has not accepted any deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of Sections 73 to 76 or any other relevant provisions of theAct and the rules framed there under. Accordingly paragraph 3(v) of the Order is notapplicable to the Company.
(vi) We have broadly reviewed the records maintained by the Companypursuant to the rules prescribed by Central Government for maintenance of cost recordsunder Section 148 (1) of the Act for drugs and pharmaceutical product 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 records.
(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted/ accruedin the books of account in respect of undisputed statutory dues including provident fundemployees' state insurance income-tax sales-tax goods and service tax servicetax duty of customs duty of excise value added tax cess and other material statutorydues have been regularly deposited during the year by the Company with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of provident fund employees' state insurance income-taxgoods and service tax sales-tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues were in arrears as at 31st March 2018for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us thereare no dues of Income tax Sales Tax Value added tax Service tax duty of Customs dutyof Excise Goods and Service tax and Cess which have not been deposited with theappropriate authorities on account of any dispute other than those mentioned in Annexure Ito this report.
(viii) The Company does not have any loans or borrowings from anyfinancial institution bank or Government nor has it issued any debentures as at thebalance sheet date. Accordingly the paragraph 3(viii) of the Order is not applicable tothe Company.
(ix) The Company has not raised any money by way of initial publicoffer further public offer (including debt instruments) and term loans during the year.
Accordingly the paragraph 3(ix) of the Order are not applicable to theCompany. (x) During the course of our examination of the books and records of the companycarried out in accordance with generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnotice or reported during the year nor have we been informed of any such cases by theManagement.
(xi) According to the information and explanations give to us and basedon our examination of the records 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) According to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3(xii) of the Order is not applicable to the Company. (xiii)According to the information and explanations given to us and based on our examination ofthe records of the Company transactions with related parties are in compliance with theprovisions of Sections 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the standalone Ind AS financialstatements as required under Indian Accounting Standard (Ind AS) 24 Related PartyDisclosures specified under Section 133 of the Act read with the relevant rules issuedthereunder.
(xiv) According to the information and explanations give to us andbased on our examination of the records the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.(xv) According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into any non-cash transactionswith directors or persons connected with him. Accordingly paragraph 3(xv) of the Order isnot applicable. (xvi) In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is notapplicable to the Company. For B S R & Co. LLP
Chartered Accountants Firm's Registration No: 101248W/ W 100022
Partner Membership No: 111410
Mumbai 2nd May 2018