To the Members of Sun Pharma Advanced Research Company Limited
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Sun Pharma AdvancedResearch Company Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2018 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information.
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 accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act. read with the Companies (Indian Accounting Standards) Rules2015 as amended. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of 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 the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
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 andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder. We conducted our audit of the Ind
AS financial statements in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct. Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the Ind ASfinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of theInd AS financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances . An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the Ind AS financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the Ind ASfinancial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the Ind AS financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2018 its loss including other comprehensive income its cash flows and the changes inequity for the year ended on that date.
The comparative financial information of the Company for the year ended March 31 2017and the transition date opening balance sheet as at April 01 2016 included in these IndAS financial statements are based on the previously issued statutory financial statementsprepared in accordance with the accounting principles generally accepted in Indiaincluding the Companies (Accounting Standards) Rules 2006 (as amended) specified undersection 133 of the Act read with the Companies (Accounts) Rules 2014 audited by thepredecessor auditor whose report for the year ended March 31 2017 and March 31 2016dated May 05 2017 and May 04 2016 respectively expressed an unmodified opinion on thosefinancial statements as adjusted for the differences in the accounting principles adoptedby the Company on transition to the Ind AS which have been audited by us.
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 terms of sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 4 of the 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 purpose of our audit;
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
(c) The Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
(e) On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of section 164 (2) ofthe Act;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements Refer Note 41 to the Ind AS financialstatements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For S R B C & CO LLP
ICAI Firm Registration Number: 324982E/E300003
per Ravi Bansal
Membership Number: 49365
Place of Signature: Mumbai
Date: May 08 2018
Annexure 1 to the
Independent Auditor's Report
Referred to in paragraph 1 under the heading "Report on Other Legal and RegulatoryRequirements" of our report of even date on the financial statements of Sun PharmaAdvanced Research Company Limited
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.
(c) According to the information and explanations given by the management with respectto the title deeds of immovable property included in property plant and equipment andbased on the examination of the High Court Order for demerger dated March 28 2007provided to us we report the following:
|Particulars of building ||Gross Block (as at March 31 2018) Rs in Lakhs ||Net Block Remarks (as at March 31 2018) Rs in Lakhs |
|R&D building (4th and 5th Floor) located at 17-B Mahal Industrial Estate Off. Mahakali Caves Road Andheri (West) Mumbai -400 093 admeasuring 1041.29 square meters. ||285.99 ||219.29 The building was transferred (pending registration) to the Company pursuant to a scheme of arrangement in the nature of demerger and transfer of Innovative Research and Development business of Sun Pharmaceutical Industries Limited under Section 391 to 394 of the Companies Act 1956 in terms of the approval of the Honorable High court of Gujarat. The agreement is in the name of Sun Pharmaceutical Industries Limited. |
(ii) According to the information and explanation given to us and having regard to thenature of the Company's business the Company does not have any inventories during theyear since procurements are issued directly for consumption to the user department andtherefore the question of reporting on whether physical verification has been carriedout at reasonable intervals and discrepancies noticed on physical verification werematerial does not arise.
(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. Accordingly the provisions of clause 3(iii) (a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities granted in respect of whichprovisions of section 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained the Company is not in the businessof sale of any goods. Therefore in our opinion the provisions of clause 3(vi) of theOrder are not applicable to the Company.
(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom value added tax goods andservice tax cess and other statutory dues have generally been regularly deposited withthe appropriate authorities though there has been a slight delay in a few cases. Theprovisions relating to duty of excise are not applicable to the Company.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom value added tax goods and service tax cess and otherstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable. The provisions relating to duty of excise are notapplicable to the Company.
(b) According to the records of the Company the dues of income-tax sales-tax servicetax duty of custom value added tax goods and service tax and cess which have not beendeposited on account of any dispute are as follows-
|Name of the statute ||Nature of the dues ||Amount Involved ||Amount paid under protest ||Amount unpaid ||Period to which the amount relates ||Forum where the dispute is pending |
| || ||( Rs in lakhs) ||( Rs in lakhs) ||( Rs in lakhs) || || |
|The Income Tax Act1961 ||Income Tax and Interest ||8617.63 ||3903.22 ||4714.41 ||A.Y. 2011-12; 2013-14 and 2014-15 ||Commissioner of Income Tax (Appeals) |
|The Central Excise Act1944 ||Service Tax ||23.53 ||- ||23.53 ||October 2008 to March 2012 ||Commissioner (Appeals) |
|The Central Excise Act1944 ||Service Tax ||49.20 ||- ||49.20 ||July 2012 to March 2016 ||Commissioner (Appeals) |
(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to banks orgovernment. The Company did not have any outstanding dues in respect of financialinstitution or debentures during the year.
(ix) According to the information and explanations given by the management the Companyhas not raised any money way of initial public offer / further public offer / debtinstruments and term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no fraud on the companyby the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management the Companyhas not paid managerial remuneration and accordingly the provisions of section 197 readwith Schedule V of the Act are not applicable to the Company and hence reporting underclause 3(xi) is not applicable and hence not commented upon.
(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given by the management theCompany has complied with provisions of section 42 of the Companies Act 2013 in respectof the preferential allotment of shares. According to the information and explanationsgiven by the management we report that the amounts raised have been used for thepurposes for which the funds were raised. The Company has not made any private placementof shares / fully or partly convertible debentures during the year.
(xv) According to the information and explanations given by the management the Companyhas not entered into any non- cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.
(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
For S R B C & CO LLP
ICAI Firm Registration Number: 324982E/E300003
per Ravi Bansal
Membership Number: 49365
Place of Signature: Mumbai
Date: May 08 2018