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Granules India Ltd.

BSE: 532482 Sector: Health care
NSE: GRANULES ISIN Code: INE101D01020
BSE 00:00 | 25 Jan 301.05 -3.85
(-1.26%)
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300.00

HIGH

308.55

LOW

296.50

NSE 00:00 | 25 Jan 301.15 -3.60
(-1.18%)
OPEN

304.00

HIGH

308.45

LOW

296.30

OPEN 300.00
PREVIOUS CLOSE 304.90
VOLUME 136103
52-Week high 404.50
52-Week low 285.80
P/E 18.25
Mkt Cap.(Rs cr) 7,466
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 300.00
CLOSE 304.90
VOLUME 136103
52-Week high 404.50
52-Week low 285.80
P/E 18.25
Mkt Cap.(Rs cr) 7,466
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Granules India Ltd. (GRANULES) - Auditors Report

Company auditors report

To the Members of Granules India Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Granules India Limited("the Company") which comprise the standalone balance sheet as at 31 March2021 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements")

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 Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the Standalone financial statements.

Key Audit Matter

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

1. Recoverability of carrying value of intangible assets and intangible assets under development
The key audit matter How the matter was addressed in our audit
These intangible assets have been determined to have a finite life and therefore these are amortised over their useful life. With regard to intangible assets we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
• Assessed the appropriateness of accounting policy relating to intangible assets as per the relevant accounting standard.
Additionally an impairment assessment is performed whenever there is an indication of impairment. • Evaluated the design and implementation of certain key internal financial controls with respect to the impairment assessment of intangible assets including intangibles under development.
Carrying values are considered to be impaired if they are below the recoverable value. • Evaluated qualitative analysis of the impairment indicators to assess existence of triggering events.
The assessment process of impairment of intangible assets (including those under development) is complex as it involves significant judgement and assumptions e.g. • Evaluated the impairment model which is based on discounted cash flows. This included
– discounted cashflow forecasts; o Evaluating the appropriateness of the assumptions used for key inputs such as those relating to forecast revenue and gross margin based on our knowledge of the Company and the industry.
– future growth rate;
– discount rate (generally based on weighted average cost of capital) o Evaluating appropriateness of the discount rate used with reference to external market data such as risk-free rate share prices and country risk premium and weighted average cost of capital.
– probability of regulatory and commercial success; and
– estimating the expected cost to complete the development for intangibles under development. o Tested the budgeting procedures upon which the cash flow forecasts were based. We also compared the actual past performances with the budgeted figures in order to assess the robustness of the overall budgeting process.
Given the significant level of judgement involved in making the above estimates determining the recoverable value and consequent impairment of intangibles including those under development has been determined to be a key audit matter. • Assessed sensitivity of the outcome of impairment assessment to changes in key assumptions such as discount rates and future growth rates.
• Interviewing key research and development personnel and commercial personnel to assess reasonableness of the assumptions used such as expected market share revenue growth expected margins probability of success of products under development.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the companyhas adequate internal financial controls with reference to financial statements in placeand the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) 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 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' 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. TheCompany has disclosed the impact of pending litigations as at 31 March 2021 on itsfinancial position in its standalone financial statements - Refer Note 26 to thestandalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

for B S R & Associates LLP
Chartered Accountants
ICAI Firm Registration number: 116231W/W-100024
Sriram Mahalingam
Partner
Place: Palakkad Membership No.: 049642
Date : 11 May 2021 UDIN: 21049642AAAABH8500

Annexure A to the Independent Auditors' report

Annexure A to the Independent Auditor's Report on the Standalone Financial Statements

The Annexure A referred to in our Independent Auditor's Report of even date to theMembers of Granules India Limited ("the Company") on the Standalone Ind ASfinancial statements for the year ended 31 March 2021 we report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all the fixed assets are verified in a phased manner over a period of three years.In our opinion the periodicity of physical verification is reasonable having regard tothe size of the Company and the nature of its assets. Pursuant to the program a portion offixed assets has been physically verified by the management during the year and nomaterial discrepancies have been noticed on such verification.

(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in Note 3A to these Standalone financials statements are held in the name ofthe Company.

ii. The inventories except goods in transit have been physically verified by themanagement during the year. The discrepancies noticed on physical verification ofinventory by management as compared to book records were not material.

iii. The Company has granted unsecured loans to one party covered in the registermaintained under Section 189 of the Companies Act 2013 ("Act"). There are nofirms limited liability partnerships or other parties covered in the register maintainedunder Section 189 of the Act.

(a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the Company's interest.

(b) In respect of the aforesaid loans the schedule for repayment of principal andpayment of interest has been stipulated by the company and the borrower has been regularin the payment of the principal and interest as stipulated.

(c) In respect of the aforesaid loans there is no amount which is overdue for morethan ninety days.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto loans given investments made and guarantees given to the extent applicable.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under. Accordinglyparagraph 3(v) of the Order are not applicable to the Company.

vi. Pursuant to the rules made by the Central Government of India the company isrequired to maintain cost records as specified under section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts have been made and maintained. However we have not made adetailed examination of the records with a view to determine whether they are complete andaccurate.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccounts in respect of undisputed statutory dues including provident fund employees'state insurance income-tax duty of customs goods and service tax and other materialstatutory dues have been regularly deposited during the year with the appropriateauthorities. As explained to us the Company did not have any dues on account of Salestax Service tax Duty of excise Value added tax and Cess.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax duty ofcustoms goods and service tax and other material statutory dues were in arrears as at 31March 2021 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no dues of sales tax Service taxGoods and service tax and Value added tax which have not been deposited with appropriateauthorities on account any dispute. However the Company has the following disputed dueswith respect to Income tax duty of customs duty of excise:

Name of the Statute Nature of the Dues Amount (Rs. In lakhs)* Amount paid # (H in lakhs) Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income tax 6.42 - AY 2008-09 Honorable High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh
The Central Excise Act 1944 Customs Duty 10.90 5 FY 1993-94 Principal Commissioner of Customs
The Central Excise Act 1944 Excise Duty 29.89 - FY 2008-09 to 2010-11 The Customs Excise and Service Tax Appellate Tribunal (CESTAT)
The Goods and Service Tax Act2017 GST 52.09 - FY 2017-18 Commissioner of Central Tax Rangareddy -GST

* Excluding interest as applicable

# The Company has paid this amount under protest

viii. According to the information and explanation given to us and the records of theCompany examined by us the Company has not defaulted in repayment of loans or borrowingsto any financial institutions or bank. The Company did not have any loans or borrowing toGovernment nor has it issued any debentures as at the balance sheet date.

ix. The Company has not raised any monies by way of initial public offer or furtherpublic offer (including debt instruments). In our opinion and according to theinformation and explanations given to us monies raised by way of term loans have beenapplied for the purposes for which they were obtained.

x. During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India and accordingto the information and explanation given to us we have neither come across any instanceof material fraud by the company or on the company by its officers or employees notices orreported during the year nor have we been informed of any such case by the management.

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 themanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicable toit. Accordingly the provisions of Clause 3(xii) of the Order are not applicable to theCompany.

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 Note 31 of the Standalone Ind AS financial statementsas required by the applicable accounting standards

xiv. The Company has not made any preferential allotment of shares or fully or partlyconvertible debentures during the year.

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 any non-cashtransaction with the directors or persons connected with them as contemplated under theprovisions of Section 192 of the Act. Accordingly paragraph 3(xv) of the Order are notapplicable to the Company.

xvi. In our opinion and according to the information and explanation given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xvi) of the Order are not applicable to the Company.

for B S R & Associates LLP
Chartered Accountants
ICAI Firm Registration number: 116231W/W-100024
Sriram Mahalingam
Partner
Place: Palakkad Membership No.: 049642
Date : 11 May 2021 UDIN: 21049642AAAABH8500

Annexure B to the Independent Auditors' report

Annexure B to the Independent Auditors' report on the standalone financial statementsof Granules India Limited for the period ended 31 March 2021.

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

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

Opinion

We have audited the internal financial controls with reference to the financialstatements of Granules India Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to the financial statements and such internal financial controlswere operating effectively as at 31 March 2021 based on the internal financial controlswith reference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 Companies Act 2013 (hereinafter referred to as"the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to the financial statements based on our audit. We conducted ouraudit in accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to the financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tothe financial statements were established and maintained and whether such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to the financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference to thefinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material 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 withreference to the financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial 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 standalonefinancial statements.

Inherent Limitations of Internal Financial controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to standalone financial statements to future periods are subject to the riskthat the internal financial controls with reference to standalone financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

for B S R & Associates LLP
Chartered Accountants
ICAI Firm Registration number: 116231W/W-100024
Sriram Mahalingam
Partner
Place: Palakkad Membership No.: 049642
Date : 11 May 2021 UDIN: 21049642AAAABH8500

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