Tothe Members of Panacea Biotec Limited
Report on the Audit of the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Panacea BiotecLimited (the Company') which comprise the Balance Sheet as at 31 March 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
2. 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 and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (Ind AS') specified under Section 133 of the Act of thestate of affairs (financial position) of the Company as at 31 March 2019 its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.
Basis for Opinion
3.WeconductedourauditinaccordancewiththeStandardsonAuditingspecifiedundersection143(10)oftheAct.Ourresponsibilitiesunder those standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI') together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Act and the rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Emphasis of Matters
4. We draw attention to the following notes to the standalone financial statements: a.Note 57 to the standalone financial statements regarding capital advances amounting toRs.176.80 million given to real estate developer for acquiring certain immovableproperties in Dubai where the Company has initiated legal recourse. b. Note 53 to thestandalone financial statements regarding payment of managerial remuneration for thefinancial years ended 31 March 2019 2018 2017 2016 2014 and 2013 which is in excessof the limits specified by the relevant provisions of the Companies Act 2013 / theCompanies Act 1956 by Rs.154 million for the said years. The Company's applications tothe Central Government seeking approval for payment of such excess remuneration have notbeen approved and consequently the Company is required to recover the excess amount thuspaid for the said years. The Company has recorded an amount of Rs.154 million asrecoverable from the directors towards such excess remuneration paid. The Company hassubmitted applications to the Central Government for waiver of recovery of excessremuneration paid. Further as discussed in aforementioned note pursuant to thenotification of the effective date of Section 67 of the Companies (Amendment) Act 2017amending Section 197 - overall maximum managerial remuneration and managerial remunerationin case of absence or inadequacy of profits of the Companies Act 2013 the aforesaidapplications pending with the Central Government stand abated and the Company is in theprocess of seeking requisite approvals required in accordance with the provisions ofSection 197(10) of the Companies Act 2013.
Pending the ultimate outcome of the aforesaid matters which is presentlyunascertainable no adjustments have been made in the books of accounts. Our opinion isnot modified in respect of these matters.
Key Audit Matters
5. 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 financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
6. We have determined the matters described below to be the key audit matters to becommunicated in our report.
|Key audit matter ||How the matter was addressed in the audit |
|One-time settlement (OTS') pursuant to Corporate Debt Restructuring (CDR') || |
|Refer note 18A to the accompanying standalone financial statements. As fully described in note 18A during the last quarter of the year ended 31 March 2019 94% of the lenders under the CDR communicated their consent for the Company's proposal for one-time settlement of debt. This proposal also received an in-principle approval from all the lenders on 29 March 2019. Pursuant to the CDR the Company has repaid the borrowings as agreed in the CDR subsequent to the year-end. Accordingly during the year ended 31 March 2019 the Company has written back the outstanding debt and interest which has been waived off under the CDR and disclosed it as an exceptional item' in the Standalone Statement of Profit and Loss. We identified this as key audit matter for current year audit owing to the materiality of the amounts involved in this matter significant efforts involved in accounting assessment by the management for recording the above transaction and also being a matter on which we had various discussions with those charged with governance during the year then ended. ||Our audit procedures included but were not limited to the following in relation to one-time settlement of debt: a) Obtained an understanding of the management process for ensuring completeness appropriateness of recognition and measurement including disclosure of the OTS transaction as at the year end. b) Reviewed the minutes of the joint lender forum meetings held during the year ended 31 March 2019 OTS sanction letters and no dues certificates issued by the respective lenders banks pursuant to CDR. Further reviewed the minutes of the relevant meetings of the Board of Directors of the Company approving the OTS transaction. c) Traced the bullet repayment made by the Company to various lenders pursuant to the CDR to the underlying bank statements and remittance documents. d) Reviewed the assessment performed by the management for accounting this transaction in accordance with Ind AS 109 Financial Instruments and Ind AS 10 Events after the Reporting Date. e) Re-computed the amounts to be written back pursuant to one-time settlement of debt for the year ended 31 March 2019 and agreed it with the management's computation. f) Evaluated the appropriateness of the disclosures made in the standalone financial statements of the Company with respect to this matter. |
|Discontinued operations || |
|Refer note 1 and 36 to the accompanying standalone financial statements for the accounting policy and related financial disclosures respectively. During the current year ended 31 March 2019 the management of the Company has identified two business segments as discontinued operations' and thereby classified the related assets and liabilities as held for sale. A) Divestment of pharmaceutical formulation segment ("Pharma segment") As further explained in note 36 the management's plan of divestment of Pharma segment to its wholly owned subsidiary Panacea Biotec Pharma Limited ("PBPL") has been approved by the shareholders of the Company in an extra-ordinary general meeting held on 25 March 2019 and management intends to bring synergies in the existing segments and reprioritize its product portfolios. Consequently the Company has executed a Business Transfer Agreement (BTA') on 7 April 2019 to transfer by way of a slump sale the entire identified assets and related liabilities pertaining to Pharma segment to PBPL at their respective book values. B) Demerger of real estate segment: As further explained in note 36 the Company has decided to demerge its real estate undertaking comprising certain immoveable properties of the Company and its investment in a wholly owned subsidiary which was intended to deal in real estate. The Board of Directors of the Company have approved the demerger proposal and the demerger scheme at their board meetings held on 26 February 2019 and 30 May 2019 respectively. Pursuant to the above restructuring by the Company_ _ the management has assessed the Pharma segment and the real estate segment as disposal group and presented as "discontinued operations" in the standalone financial statements of the Company in accordance with the provisions of Indian Accounting Standard 105 Non-current Assets Held for Sale and Discontinued Operations'. Accordingly net profit/(loss) from the respective Pharma segment and the real estate segment amounting to Rs.95.8 million and Rs.(49.5) million for the year ended 31 March 2019 has been presented as profit/ (loss) from discontinued operations in the Standalone Statement of Profit and Loss and the related assets /(liabilities) of the Pharma segment and the real estate business are classified as assets / (liabilities) classified as held for sale' in the Standalone Balance Sheet as at 31 March 2019. We identified this as a key audit matter for current year audit in view of the significance of the impact of these restructuring transactions have on the standalone financial statements including the amounts involved exercise of management judgments with respect to identification and segregation of assets and liabilities and allocation of corporate income/ expenses to Pharma and real estate segments. ||Our audit procedures included but were not limited to the following in relation to the discontinued operations: a) Obtained an understanding of the management process for ensuring classification measurement disclosure and allocations for the identified disposal groups. b) Reviewed the minutes of the respective meetings of the Board of Directors and the shareholders of the Company approving the respective_ transactions. c) Assessed management's conclusions regarding the allocations of the asset liabilities income and expenses that are assigned to the discontinued operations for the respective segments. d) Assessed the appropriateness of the carrying values of assets and liabilities classified as held for sale in accordance with the requirements of Ind AS 105. e) With respect to matter (a) read the BTA signed between the Company and PBPL for divestment of the Pharma segment._ f) With respect to matter (b) read the draft demerger scheme to be filed with the National Company Law Tribunal for implementing the demerger. g) Assessed reasonableness of management's judgement with respect to the likelihood and expected timing of the implementation of the restructuring. h) Assessed the appropriateness and adequacy of the related disclosures in the standalone financial statements of the Company in accordance with the applicable accounting standards. |
|Going concern basis of accounting: || |
|Refer note 54 to the accompanying standalone financial statements. The Company has incurred loss before tax amounting to Rs.2808.0 million for the year ended 31 March 2019 and its current liabilities exceed its current assets by Rs.5926.1 million. While the above indicates doubts about the Company's ability to continue as a going concern as mentioned in aforesaid Note 54 the Company has taken the following mitigating factors in its assessment of going concern basis of accounting: Execution of investment agreements dated 6 April 2019 with a new lender to obtain long-term funds upto Rs.9920 million by way of non-convertible debentures and share warrants to be allotted on preferential basis; Settlement of debt and other restructuring activities; and Increased operational measures towards vaccine and pharmaceutical formulation business segment. Management has prepared a cash flow forecast for next year taking into cognizance the above developments including the revised repayment schedule on the new debt and performed a sensitivity analysis of the key assumptions used therein to assess whether the Company would have sufficient working capital to finance its operations and to meet its financial obligations as and when they fall due for at least next twelve months from the end of the current reporting date and concluded that the going concern basis of accounting used for the preparation of accompanying standalone financial statements is appropriate with no material uncertainty. We have considered the assessment of management's evaluation of going concern basis of accounting as a key audit matter for the current year audit due to the pervasive impact thereof on the standalone financial statements and the significant judgments and assumptions that are inherently subjective and dependent on future events involved in the preparation of cash flow forecasts and the overall conclusion. ||Our audit procedures included but were not limited to the following in relation to the assessment of appropriateness of going concern basis of accounting: a) Obtained an understanding of the management's process for identifying all the events or conditions that could impact the Company's ability to continue as a going concern and the process followed to assess the mitigating factors for such events or conditions. Also obtained an understanding around the methodology adopted by the Company to assess their future business performance prepare a robust cash flow forecast. b) Evaluatedthedesignandtestedtheoperatinge_ectiveness of key controls around aforesaid identification of events or conditions and mitigating factors and controls around cash flow forecast prepared by the management. c) Reconciled the cash flow forecast to the future business plan of the Company as approved by the Board of Directors d) In order to corroborate management's future business plans and to identify potential contradictory information we read the minutes of the Board of Directors and discussed the same with the management and Audit Committee. e) Tested the appropriateness of key assumptions adopted by the management in preparation of the cash flow forecasts such as growth rates expenditure on new products and tested the reasonableness of these assumptions used based on our knowledge and understanding of the business actual historical results and external data as the case maybe. f) Obtained the sensitivity analysis prepared by management and also performed independent sensitivity analysis to test the impact of variation on the cash flows due to change in key assumptions. g) Reviewed the historical accuracy of the cash flow projections prepared by the management in prior periods. h) Traced receipt of money through issue of non-convertible debentures subsequent to the year-end to the Company's bank statements and other supporting documents. i) Evaluated the appropriateness and adequacy of the going concern disclosures in the standalone financial statements of the Company. |
Information other than the Financial Statements and Auditor's Report thereon
7. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditors' report thereon. The Annual Report is expectedto be made available to us after the date of this auditors' report.
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
8. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the state of affairs (financial position) profit orloss (financial performance including other comprehensive income) changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Ind AS specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the 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 wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
9. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
10. The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
11. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
12. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control;
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 Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls;
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management;
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditors'report. However future events or conditions may cause the Company to cease to continue asa going concern; and
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
13. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant defficiencies in internal control that we identify during our audit. 14. Wealso provide those charged with governance with a statement that we have complied withrelevant ethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
15. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditors' report unless law or regulation precludes public disclosure about the matteror 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
16. As required by Section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year which is in excess of the limits laid downunder Section 197 read with Schedule V to the Act.
17. As required by the Companies (Auditor's Report) Order 2016 (the Order')issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.18. Further to our comments in Annexure A as required by Section 143(3) of the Act wereport that: a) we have sought and obtained all the information and explanations which tothe best of our knowledge and belief were necessary for the purpose of our audit; b) inour opinion proper books of account as required by law have been kept by the Company sofar as it appears from our examination of those books; c) the standalone financialstatements dealt with by this report are in agreement with the books of account; d) in ouropinion the aforesaid standalone financial statements comply with Ind AS specified underSection 133 of the Act; e) on the basis of the written representations received from thedirectors and taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(2) of the Act; f) we have also audited the internal financial controls over financialreporting (IFCoFR) of the Company as on 31 March 2019 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 30 May 2019 as per Annexure B expressed unmodified opinion; and g) withrespect to the other matters to be included in the Auditors' Report in accordance withrule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) in our opinion andto the best of our information and according to the explanations given to us: i. theCompany as detailed in note 39(A) to the standalone financial statements has disclosedthe impact of pending litigation(s) on its financial position as at 31 March 2019; ii. theCompany did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses as at 31 March 2019; iii. there were no amountswhich were required to be transferred to the Investor Education and Protection Fund by theCompany during the year ended 31 March 2019; and iv. the disclosure requirements relatingto holdings as well as dealings in specified bank notes were applicable for the periodfrom 8 November 2016 to 30 December 2016 which are not relevant to these standalonefinancial statements. Hence reporting under this clause is not applicable.
For Walker Chandiok & Co LLP
Chartered Accountants Firm's Registration No.: 001076N/N500013
Place : New Delhi Partner Date : May 30 2019 Membership No.: 501531
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that: i) a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment. b) TheCompany has a regular program of physical verification of its property plant andequipment under which property plant and equipment are verified in a phased manner over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. In accordance with this program certainproperty plant and equipment were verified during the year and no material discrepancieswere noticed on such verification; and c) The title deeds of all the immovable properties(which are included under the head Property plant and equipment') are held in thename of the Company. ii) In our opinion the management has conducted physicalverification of inventory at reasonable intervals during the year except forgoods-in-transit and stocks lying with third parties. For stocks lying with third partiesat the year-end written confirmations have been obtained by the management. No materialdiscrepancies were noticed on the aforesaid verification. iii) The Company has not grantedany loan secured or unsecured to companies firms Limited Liability Partnerships (LLPs)or other parties covered in the register maintained under Section 189 of the Act.Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b) and 3(iii)(c) of the Order arenot applicable. iv) In our opinion the Company has complied with the provisions ofSections 185 and 186 of the Act in respect of loans investments guarantees and security.v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable. vi)We have broadly reviewed the books of account maintained by the Company pursuant to theRules made by the Central Government for the maintenance of cost records under sub-section(1) of Section 148 of the Act in respect of Company's products and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.However we have not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete. vii) a) Undisputed statutory duesincluding provident fund employees' state insurance income-tax sales tax service taxduty of customs duty of excise value added tax cess and other material statutory duesas applicable have generally been regularly deposited to the appropriate authorities.Undisputed amounts payable in respect thereof which were outstanding at the year-end fora period of more than six months from the date they became payable are as follows:
Statement of arrears of statutory dues outstanding for more than six months:
|Name of the statute ||Nature of the dues ||Amount (Rs. in ||Period to which the amount relates ||Due Date ||Date of Payment ||Remarks if any |
|Income-tax Act 1961 ||Demand u/s 154/250/153A/ 143(3) of Income-tax Act 1961 ||14.5 ||Assessment Year 2011-12 ||April 21 2016 ||Not yet paid ||The Company intends to settle the demand with refund of other years. |
b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:Statement of disputed dues:
|Name of the statute || ||Amount ||Amount paid under ||Period to which the ||Forum where dispute is |
| ||Nature of dues ||(Rs. in million) ||Protest (Rs. in million) ||amount relates ||pending |
|Income-tax Act 1961 ||Disallowance in respect of certain purchases and expense items ||162.2 ||- ||Assessment Year 2005-06 ||Income Tax Appellate Tribunal (ITAT) |
|Income-tax Act 1961 ||Disallowance in respect of certain purchases and expense items ||3300.7 ||- ||Assessment Year 2006-07 to 2009-10 ||Income Tax Appellate Tribunal (ITAT) |
|Customs Act 1962 ||Duty levied on exempted goods ||4.0 ||4.0 ||Financial Year 2001-02 ||Custom Excise & Service Tax Appellate Tribunal |
viii) There are no dues payable to debenture-holders. The Company has defaulted inrepayment of loans/borrowings to the following banks financial institutions andgovernments including interest thereon:
|Name of the Bank/ institution ||Amount of default as on ||Period of default |
| ||31 March 2019 (in million) || |
|Bank of India Foreign Currency Loan ||576.25 ||192 days |
|Bank of India Foreign Currency Loan ||576.25 ||557 days |
|Bank of India ||11.36 ||ranging from 10 to 192 days |
|Canara Bank ||2.66 ||ranging from 10 to 192 days |
|Edelweiss Asset Reconstruction Company ||43.23 ||ranging from 10 to 192 days |
|IDBI Bank ||0.18 ||10 days |
|Indian Overseas Bank ||88.26 ||ranging from 10 to 192 days |
|State Bank of India ||168.24 ||ranging from 10 to 192 days |
|Union Bank of India ||3.38 ||ranging from 10 to 192 days |
|Biotechnology Industrial Research Assistance Council ||14.00 ||ranging from 10 to 192 days |
Refer note 47 to the standalone financial statements.
ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments) and did not have any term loans outstanding during theyear. Accordingly the provisions of clause 3(ix) of the Order are not applicable. x) Nofraud by the Company or on the Company by its officers or employees has been noticed orreported during the period covered by our audit. xi) The Company has provided and paidmanagerial remuneration which is not in accordance with the requisite approval mandated bythe provisions of Section 197 of the Act read with Schedule V to the Act.
Further as mentioned in Note 53 to the standalone financial statements the Company haspaid managerial remuneration which is not in accordance with the requisite thresholdmandated by the provisions of Companies Act 2013/erstwhile 1956 for the relevant yearsended March 31 2019 2018 2017 2016 2014 and 2013: The details are as follows:
|Payment made to ||Amount Paid/provided in excess of limits prescribed ||Amount due for recovery as at 31 March 2019 ||Steps taken to secure the recovery of the amount ||Remarks (if any) |
| ||(Rs. in million) ||(Rs. in million) ||(See note a below) || |
|1. Managing/Joint Managing and Whole Time Director ||14.3 ||14.3 || ||Remuneration pertains to year ended March 31 2013 |
|2. Managing/Joint Managing and Whole Time Director ||14.8 ||14.8 || ||Remuneration pertains to year ended March 31 2014 |
|3. Whole Time Director ||2.6 ||2.6 ||The Company is in the process of seeking necessary approval for waiver of recovery of ||Remuneration pertains to year ended March 31 2016 |
|4. Managing/Joint Managing and Whole Time Director ||43.0 ||43.0 ||excess remuneration paid ||Remuneration pertains to year ended March 31 2017 |
|5. Managing/Joint Managing and Whole Time Director ||41.6 ||41.6 || ||Remuneration pertains to year ended March 31 2018 |
|6. Managing/Joint Managing and Whole Time Director ||37.6 ||37.6 || ||Remuneration pertains to year ended March 31 2019 |
a) Pending receipt of necessary approvals the Company has recorded a receivableamounting to Rs.154.0 million as recoverable from the relevant directors.
xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable. xiii) In our opinion all transactions withthe related parties are in compliance with Sections 177 and 188 of Act where applicableand the requisite details have been disclosed in the financial statements etc. asrequired by the applicable Ind AS. xiv) During the year the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures. xv) In our opinion the Company has not entered into any non-cash transactionswith the directors or persons connected with them covered under Section 192 of the Act;and xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For Walker Chandiok & Co LLP
Chartered Accountants Firm's Registration No.: 001076N/N500013
Place : New Delhi Partner Date : May 30 2019 Membership No.: 501531
Independent Auditors' Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act')
1. In conjunction with our audit of the standalone financial statements of PanaceaBiotec Limited (the Company') as at and for the year ended 31 March 2019 we haveaudited the internal financial controls over financial reporting (IFCoFR') of theCompany as at that date. Management's Responsibility for Internal Financial Controls
2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the the Guidance Note on Audit of Internal Financial Controls overfinancial reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of the Company's businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by ICAIand deemed to be prescribed under Section 143(10) of the Act to the extent applicable toan audit of IFCoFR and the Guidance Note issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate IFCoFR were established andmaintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditors' judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR include those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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
7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that the IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such controls were operating effectivelyas at 31 March 2019 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by ICAI.
For Walker Chandiok & Co LLP
Chartered Accountants Firm's Registration No.: 001076N/N500013 Anupam Kumar
Place : New Delhi Partner Date : May 30 2019 Membership No.: 501531