Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
We have audited the accompanying standalone Ind AS financial statements of SHILPA MEDICARE LIMITED,
(“the Company”), which comprise the Balance Sheet as at March 31,2018, the Statement of Profit
and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in
Equity for the year then ended, and a summary of the significant accounting policies and other explanatory
information
Management’s Responsibility for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the
Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS
financial statements that give a true and fair view of the financial position, financial performance
(including other comprehensive income), cash flows and changes in equity of the Company in accordance with
the accounting principles generally accepted in India, including the Indian Accounting Standards specified in
the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This
responsibility also includes maintenance of adequate accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making judgments and estimates
that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give
a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our
audit. We have taken into account the provisions of the Act and the Rules made thereunder including the
accounting and auditing standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on
Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in
the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the standalone Ind AS financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal financial
control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a
true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit
also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the
accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of
the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the accounting principles generally accepted in
India, of the state of affairs of the Company as at March 31, 2018, and its total comprehensive income
(comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year
ended on that date.
Other Matter
The standalone financial statements of the Company as at and for the year ended March 31, 2017 were
audited by the Company’s predecessor auditor who had expressed an unmodified opinion on those
standalone financial statements vide their report dated May 29, 2017. The balances as at March 31, 2017 as
per the audited standalone financial statements, duly read in conjunction with note 48 and 50 of the
financial statements, have been considered as opening balances for the purpose of these standalone financial
statements.
Our opinion is not qualified in respect of above matter.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued
by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the
Annexure A, a statement on the matters specified in paragraphs 3 and 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 best of 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 the Company so far as
it appears from our examination of those books
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the
Statement of Cash Flow and the Statement of Changes in Equity dealt with by this Report are in agreement with
the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian
Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31, 2018 taken
on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being
appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect of adequacy of the internal financial controls with reference to financial statements
of the Company and the operating effectiveness of such controls, refer to our separate report in
‘Annexure B”.
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with
Rule llof the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its
standalone financial statements.
ii. The Company has made provision, as required under the applicable law or accounting standards, for
material foreseeable losses, if any, on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company.
iv The disclosures in the standalone Ind AS financial statements regarding holdings as well as dealings
in specified bank notes during the period from 8th November, 2016 to 30st December,
2016 have not been made since they do not pertain to the financial year ended March 31, 2018. However,
amounts as appearing in the audited financial statements for the year ended March 31, 2017 have been
disclosed in note no. 42.
Annexure - A to the Auditor’s Report
The Annexure referred to in Para 1 under the heading of “Report on Other Legal and Regulatory
Requirements” of our report of even date, to the members of SHILPA MEDICARE LIMITED(“the
Company”), for the year ended March 31, 2018.,
1. a. The Company has maintained proper records showing full particulars, including quantitative
details and situation of fixed assets.
b. As explained to us, the management has physically verified the fixed assets during the year and
there is a regular programme of physical verification which, in our opinion, is reasonable having regard to
the size of the Company and the nature of the assets. No discrepancies were noticed on such verification.
c. According to the information and explanation given to us and on the basis of our examination of the
records of the Company, the title deeds of immovable properties are held in the names of the Company.
2. As explained to us, the inventories have been physically verified by the management at reasonable
intervals during the year. In our opinion, the frequency of verification is reasonable. The discrepancies
noticed on physical verification between the physical stocks and book records were not material.
3. According to the information and explanation given to us, the Company has granted unsecured loans
to Companies covered in the register maintained under section 189 of the Companies Act, 2013 (''the
Act'').
a. The terms and conditions of such loans granted are not prejudicial to the interest of the
Company.
b. The schedule of repayment of principal and payment of interest has been stipulated in the agreement
and repayments or receipts of principal amounts and interest have been made as per stipulations.
c. As there were no overdue amounts in respect of the loan granted to a Company covered in the
register maintained under section 189 of the Act.
4. In our opinion and according to the information and explanations given to us, the Company has
complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments
made.
5. The Company has not accepted any deposits from the public. Hence the provisions of Sections 73 to
76 or any other relevant provisions of the Companies Act, 2013, and the rules framed thereunder, do not apply
to the Company.
6. We have broadly reviewed the cost records maintained by the Company pursuant to sub-section (1) of
section 148 of the Companies Act, 2013 and are the opinion that prime facie the prescribed accounts and
records have been made and maintained. We have however not made a detailed examination of the cost records
with a view to determine whether they are accurate or complete.
7. a. According to the records, the Company is generally regular in depositing undisputed statutory
dues including Provident Fund, Employees State Insurance, Income-Tax, Sales-Tax, Service Tax, Goods and
Services Tax, Duty of Customs, Duty of Excise, Value Added Tax , Cess and all other statutory dues with the
appropriate authorities and there are no arrears of outstanding statutory dues as at March 31, 2018 for a
period more than six months from the date they became payable.
b. According to the records of the Company and the information and explanations given to us, there were
no dues of Income-Tax or Sales-Tax or Service Tax or Duty of Customs or Duty of Excise or Value Added Tax
have not been deposited on account of any dispute.
8. In our opinion and according to the information and explanations given to us, the Company has not
defaulted in repayment of dues to any financial institutions and Banks during the year. The Company did not
have any debentures outstanding as at the year end.
9. The Company did not raise any money by way of initial public offer or further public offer
(including debt instruments) and term loans during the year. Accordingly, the provisions of paragraph 3 (ix)
of the Companies (Auditor’s Report) Order 2016 are not applicable.
10. According to the information and explanations given to us, no material fraud by the Company or on
the Company by its officers or employees has been noticed or reported during the course of our audit.
11. According to the information and explanations given to us and based on our examination of the
records of the Company, the Company has paid/provided for managerial remuneration in accordance with the
requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
12. In our opinion and according to the information and explanations given to us, the Company is not a
Nidhi Company. Accordingly, paragraph 3(xii) of the Companies (Auditor’s Report) Order 2016 is not
applicable.
13. According to the information and explanations given to us and based on our examination of the
records of the Company transactions with related parties are in compliance with sections 177 and 188 of the
Act where applicable and details of such transactions have been disclosed in the financial statements as
required by the applicable accounting standards.
14. During the year the Company has notmade any preferential allotment or private placement of shares
or fully or partly convertible debentures. Company has made allotment of 13,99,994 Equity shares during the
year as per the Scheme of Amalgamation of Navya Biologicals Private Limited with Shilpa Medicare Limited.
15. According to the information and explanations given to us and based on our examination of the
records of the Company, the Company has not entered into non-cash transactions with directors or persons
connected with him. Accordingly, paragraph 3(xv) of the Companies (Auditor’s Report) Order 2016 is not
applicable.
16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act
1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the
Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of SHILPA MEDICARE LIMITED
(“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS
financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial
controls based on the internal control over financial reporting criteria established by the Company
considering the essential components of internal control stated in the Guidance Note on Audit of Internal
Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India
(‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate
internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of
its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial
reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of
Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on
Auditing, to the extent applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether adequate internal financial controls over financial
reporting was established and maintained and if such controls operated effectively in all material
aspects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal
financial controls system over financial reporting and their operating effectiveness. Our audit of internal
financial controls over financial reporting included obtaining an understanding of internal financial
controls over financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud and error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. A
Company’s internal financial control over financial reporting includes those policies and procedures
that:
1. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company;
2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditure of the Company are being made only in accordance with authorisations of management and directors
of the Company; and
3. Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition,
use, or disposition of the Company’s assets that could have a material effect on the financial
statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including
the possibility of collusion or improper management override of controls, material misstatements due to error
or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls
over financial reporting to future periods are subject to the risk that the internal financial control over
financial reporting may become inadequate because of changes in conditions, or that the degree of compliance
with policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system
over financial reporting and such internal financial controls over financial reporting were operating
effectively as at March 31, 2018, based on the internal control over financial reporting criteria established
by the Company considering the essential components of internal control stated in the Guidance Note on Audit
of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of
India (''ICAI'').
for Brahmayya & Co.
Chartered Accountants
Firm’s Regn No. 000513S
Sd/-
K. Shravan
Place: Hyderabad
Partner
Date : 28th May, 2018
Membership No. 215798
5.05 (1.75%)