To The Members of
Syngene International Limited
Report on the Audit of Standalone Indian Accounting Standards (Ind AS)Financial Statements
We have audited the accompanying Standalone Ind AS Financial Statements of SyngeneInternational Limited (the Company) which comprise the Balance Sheet as at 31March 2018 the Statement of Profit and Loss the Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "StandaloneInd AS Financial Statements").
Managements Responsibility for the Standalone Ind AS Financial Statements
The Companys 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 Standalone Ind AS Financial Statements that give a true and fair view of the stateof affairs profit/loss and other comprehensive income changes in equity and cash fiowsof the Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards ("Ind AS") prescribed under Section133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalone IndAS Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is also responsible for assessing theCompanys 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.
Our responsibility is to express an opinion on these Standalone Ind AS FinancialStatements based on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit of the Standalone Ind AS Financial Statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Standalone Ind AS Financial Statements are freefrom material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Ind AS Financial Statements. The procedures selecteddepend on the auditors judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS Financial Statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Companys preparation of the Standalone Ind AS Financial Statementsthat give a true and fair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompanys Directors as well as evaluating the overall presentation of the StandaloneInd AS Financial Statements.
We are also responsible to conclude on the appropriateness of managements 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 entitys ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditorsreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditors report. However future events or conditionsmay cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS Financial Statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31 March 2018 its profit and other comprehensive income changes in equityand its cash fiows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure A" a statement on the matters specified in paragraphs 3 and 4of 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 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 Balance Sheet the Statement of Profit and Loss the Statement of Cash Flowsand the Statement of Changes in Equity dealt with by this report are in agreement with thebooks of account;
(d) in our opinion the aforesaid Standalone Ind AS Financial Statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act;
(e) on the basis of the written representations received from the directors as on 31March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on
31 March 2018 from being appointed as a director in terms of Section 164 (2) of theAct;
(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";
(g) 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) the Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS Financial Statements Refer Note 31(i)(a) to theStandalone Ind AS Financial Statements;
(ii) provision has been made in the Standalone Ind AS Financial Statements as requiredunder the applicable law or accounting standards for material foreseeable losses if anyon long-term contracts including derivative contracts Refer Note 28 to theStandalone Ind AS Financial Statements;
(iii) there were no amounts during the year which were required to be transferred tothe Investor Education and Protection Fund by the Company; and
(iv) the disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made since they do not pertain to the financial year ended 31 March 2018. Howeveramounts as appearing in the audited Standalone Ind AS financial statements for the periodended 31 March 2017 have been disclosed. Refer Note 32 to the Standalone Ind ASFinancial Statements.
forB S R & Co. LLP
Firms registration number: 101248W/W-100022
Membership number: 203491
Date: 25 April 2018
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in paragraph 1 in Report on Other Legal and RegulatoryRequirements of the Independent Auditors Report to the members of SyngeneInternational Limited ("the Company") on the Standalone Ind AS FinancialStatements of the Company for the year ended 31 March 2018. We report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) The Company has a regular programme of physical verification of its property plantand equipment by which all property plant and equipment are verified in a phased mannerover a period of three years. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Inaccordance with this programme certain property plant and equipment were verified duringthe year and no material discrepancies were noticed on such verification.
(c) According to the information and explanations give to us and basis our examinationof the records of the Company the Company is in the process of registering the titledeeds of immovable properties comprising of land and building acquired during the yearended March 31 2015 from merger of Clinigene International Limited (an erstwhile whollyowned subsidiary of the Company) amounting to INR 177 million. Also refer Note 3 to theStandalone Ind AS Financial Statements pertaining to buildings constructed on leaseholdland.
(ii) Inventories apart from goods in transit have been physically verified by theManagement at reasonable intervals during the year and the discrepancies noticed on suchverification between the physical stock and book records were not material.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 ("the Act). Accordingly the provisions of clause 3(iii)(a) (b) and (c) of the Companies (Auditors Report) Order 2016 ("theOrder") are not applicable to the Company and hence not commented upon.
(iv) According to the information and explanations given to us there are no loansguarantees and securities granted in respect of which provisions of section 185 and 186of the
Act are applicable. However the investment made by the Company during the year is incompliance with Section 186 of the Act.
(v) According to information and explanations given to us the Company has not acceptedany deposits. Accordingly paragraph 3(v) of the Order is not applicable to the Company.
(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 as amended prescribed by theCentral Government under Section 148 of the Act and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. However we have notmade a detailed examination of such records.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including employees state insuranceincome-tax sales tax value added tax duty of customs duty of excise service taxgoods and service tax and other material statutory dues have been regularly depositedduring the year with the appropriate authorities. However regarding the deposit ofprovident fund dues there have been delays due to the timely availability of theUniversal Account Number / Aadhar Number in respect of certain employees.
According to the information and explanations given to us no undisputed amountspayable in respect of employees state insurance income tax sales tax value addedtax duty of customs duty of excise service tax cess goods and service tax and othermaterial statutory dues were in arrears as at 31 March 2018 for a period of more than sixmonths from the date they became payable. However provident fund dues aggregating to INR3 million for the period from July 2017 to September 2017 were outstanding for a period ofmore than six month as at 31 March 2018 due to the delays in the availability of UniversalAccount Number/Aadhar Number in respect of certain employees. Such dues have since beendeposited on 15 April 2018.
(b) According to the information and explanations given to us there are no dues ofincome tax sales tax value added tax service tax duty of customs duty of excisegoods and service tax which have not been deposited with the appropriate authorities onaccount of any dispute other than those mentioned below:
|Name of the statute ||Nature of dues ||Amount disputed (INR in million) ||Amount paid under protest (INR in million) ||Period to which the amount relates ||Forum where dispute is pending |
|Income-tax Act 1961 ||Income tax ||706 ||11 ||2002-03 to 2008-09 ||High Court of Karnataka |
|Income-tax Act 1961 ||Income tax ||1173 ||443 ||2009-10 to 2014-15 ||Commissioner of Income tax (Appeals) |
|Finance Act 1994 ||Service tax (including interest) ||6 ||1 ||March 2005 to February 2007 ||Customs Excise and Service Tax Appellate Tribunal |
(viii) In our opinion and according to the information and explanations give to us theCompany does not have defaults existing as at the balance sheet date in repayment ofborrowings to banks. The Company did not have any borrowings during the year by way ofdebentures loans from financial institutions or loan from the Government.
(ix) According to the information and explanations give to us and based on ourexamination of the records of the Company we report that monies raised by the Company byway of term loans were applied for the purpose for which the loans were obtained. Nomonies were raised during the year by the Company by way of initial public offer orfurther public offer (including debt instruments).
(x) According to the information and explanations given to us no material fraud by theCompany or any fraud on the Company by its officers or employees has been noticed orreported during the year.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the
Company transactions with the related parties are in compliance with sections 177 and188 of the Act where applicable and details of such transactions have been disclosed inthe Standalone Ind AS Financial Statements as required by the applicable accountingstandards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company 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.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3 (xv)of the Order is not applicable.
(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
forB S R & Co. LLP
Firms registration number: 101248W/W-100022
Membership number: 203491
Date: 25 April 2018