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Auditor Report of Shilpa Medicare Ltd.

Mar 31, 2023

Independent Auditor''s Report

To the Members of SHILPA MEDICARE LIMITED

Report on the Audit of the Standalone Financial
Statements

Opinion

We have audited the accompanying standalone financial
statements of
Shilpa Medicare Limited ("the company"),
which comprise the standalone Balance Sheet as at March 31,
2023, the standalone Statement of Profit and Loss (including
other comprehensive income), the standalone Statement
of Changes in Equity and the standalone Statement of Cash
Flows for the year ended on that date, and a summary of
the significant accounting policies and other explanatory
information.

In our opinion and to the best of our information and according
to the explanations given to us, the accompanying standalone
financial statements give the information required by the
Companies Act, 2013 ("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, 2023, and its profits and other
comprehensive income, 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) specified under Section 143(10) of the
Act. Our responsibilities under those standards are further
described in the Auditors responsibility for the Audit of
Standalone Financial Statements section of our report. We are
independent of the company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India
(ICAI) together with the ethical requirements that are relevant
to our audit of the standalone financial statements under the
provisions of the Act and the Rules made thereunder, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the
standalone financial statements.

Key Audit Matters

Key Audit matters are those matters that in our professional
judgment, were of most significance 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 financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters. We have determined the matters described
below to be the key audit matters to be communicated in our
report.

Information Other than the Financial Statements and
Auditor''s Report Thereon

The Company''s Management and Board of Directors are
responsible for the other information. The other information
comprises the information included in the Management
Discussion and Analysis, Board''s Report including Annexures
to Board''s Report, Business Responsibility and Sustainability
Report, Corporate Governance and Shareholder''s Information
but does not include the standalone financial statements and
our auditor''s report thereon.

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

In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information
is materially inconsistent with the standalone financial
statements or our knowledge obtained during the course of
our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in
this regard.

When we read the other sections of the Annual Report
(other than those mentioned above), if we conclude that
there is a material misstatement therein, we are required to
communicate the matter to those charged with governance
and take necessary actions, as applicable under the applicable
laws and regulations.

Responsibilities of Management and Those Charged with
Governance for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the
matters stated in Section 134(5) of the Act with respect to
the preparation of these standalone 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 Indian Accounting Standards (Ind AS)
prescribed under Section 133 of the Act read with relevant
rules issued there under and other accounting principles
generally accepted in India. 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 the 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 standalone financial
statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Board of
Directors is responsible for assessing the company''s ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis
of accounting unless the Board of Directors either intends
to liquidate the company or to cease operations, or has no

realistic alternative but to do so.

The Board of Directors are responsible for overseeing the
Company''s financial reporting process of each Company.

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

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

As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement
of the standalone financial statements, whether due to
fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.

• Obtain an understanding of internal financial controls
relevant to the audit in order to design 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 has adequate
internal financial controls in place and the operating
effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management and Board of
Directors.

• Conclude on the appropriateness of the Management
and Board of Directors use of the going concern basis of
accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the
Company''s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we
are required to draw attention in our auditor''s report
to the related disclosures in the standalone 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 auditor''s
report. However, future events or conditions may cause
the Company to cease to continue as a going concern.

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

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

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

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

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''s Report)
Order,2020 ("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 the paragraph 3
and 4 of the Order, to the extent applicable.

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 standalone balance sheet, the standalone
statement of profit and loss including other

comprehensive income, standalone statement of
changes in equity and the standalone cash flow
statement dealt with by this Report are in agreement
with the books of account.

d) In our opinion, the aforesaid financial statements
comply with the Indian Accounting Standards (Ind
AS) prescribed under Section 133 of the Act.

e) On the basis of written representations received
from the directors as on March 31, 2023 taken
on record by the Board of Directors, none of the
directors is disqualified as on March 31, 2023 from
being appointed as a director in terms of Section
164(2) of the Act.

f) With respect to the adequacy of internal financial
controls with reference to standalone 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 11 of
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. (a) The Management has represented that, to
the best of its knowledge and belief, no funds
(which are material either individually or in the
aggregate) have been advanced or loaned or
invested (either from borrowed funds or share
premium or any other sources or kind of funds)
by the Company to or in any other person or
entity, including foreign entity ("Intermediaries"),
with the understanding, whether recorded
in writing or otherwise, that the Intermediary
shall, whether, directly or indirectly lend or
invest in other persons or entities identified in
any manner whatsoever by or on behalf of the
Company ("Ultimate Beneficiaries") or provide

any guarantee, security or the like on behalf of
the Ultimate Beneficiaries;

(b) The Management has represented, that, to
the best of its knowledge and belief, no funds
(which are material either individually or in
the aggregate) have been received by the
Company from any person or entity, including
foreign entity ("Funding Parties"), with the
understanding, whether recorded in writing or
otherwise, that the Company shall, whether,
directly or indirectly, lend or invest in other
persons or entities identified in any manner
whatsoever by or on behalf of the Funding
Party ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the
Ultimate Beneficiaries;

(c) Based on the audit procedures that have been
considered reasonable and appropriate in
the circumstances, nothing has come to our
notice that has caused us to believe that the
representations under sub-clause (a) and (b)
above, contain any material misstatement.

h) The final dividend paid by the Company during the
year, in respect of the same declared for the previous
year, is in accordance with section 123 of the Act to
the extent it applies to payment of dividend.

i) The Board of Directors of the Company have
proposed not to declare any final dividend for the
year.

3) With respect to the matter to be included in the Auditor''s
Report under Section 197(16) of the Act:

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

for Bohara Bhandari Bung and Associates LLP.

Chartered Accountants
Firm''s Regn No. 0008127S/S200013

CA.Yogesh R Bung

Partner

Place: Raichur Membership No. 143932

Date: 25.05.2023 UDIN: : 23143932BGVPPY1794


Mar 31, 2022

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of SHILPA MEDICARE LIMITED ("the company"), which comprise the standalone Balance Sheet as at March 31, 2022, the standalone Statement of Profit and Loss (including other comprehensive income), the standalone Statement of Changes in Equity and the standalone Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (herein after referred to as "the financial statements")

In our opinion and to the best of our information and according to the explanations given to us, the accompanying standalone financial statements give the information required by the Companies Act, 2013 ("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, 2022, the profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditors responsibility for the Audit of Standalone Financial Statements section of our report. We are independent of the company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key Audit matters are those matters that in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters

Auditor''s Response

Group restructuring and discontinued operations:

During the current year, the Company has approved the transfer of Active Pharmaceutical Ingredient (API) business through a Business Transfer Agreement (BTA) to its wholly owned subsidiary, Shilpa Pharma Lifesciences as a going concern by way of slump sale. The Company is in the process of completing the transfer.

Accordingly, the API Business is presented as Held for Sale and discontinued operations from the standalone financial statements perspective in accordance with Ind AS 105: Non-current Assets Held for Sale and Discontinued Operations.

Considering the significance of amounts and complexities involved in carving out the results of the respective businesses, we determined this to be a Key Audit Matter.

Principal audit procedures

Our procedures in relation to Asset held for sale and Discontinued

operations include the following:

• We read the minutes of meetings of Board of directors and Shareholders Extraordinary General Meeting and evaluation of the terms and conditions with respect to sale of API business and related agreements.

• We have verified that the assets and liabilities pertaining to the API business as of 31 March 2022 which have been disclosed separately in the standalone financial statements, in line with the afore mentioned accounting standard and analysed if there is any impairment loss.

• We verified the analysis prepared by the Company for the amounts to be disclosed as discontinued operations in the statement of profit and loss for the current and previous years. We focused on the allocation of costs between continuing and discontinuing operations to verify the presentation in results.

• We assessed the adequacy of the disclosures in note 12 of standalone financial statements in accordance with the requirements of Ind AS 105: Non- Current Assets Held for sale and Discontinued Operations.

Impairment of Investment in and Loans to

Principal audit procedures

Subsidiaries, Associates and Joint Ventures

Our

audit procedures include the following substantive procedures:

The Company has investments of Rs. 23592.13 Lakhs in

•

Obtained an understanding of management''s process and

equity and preference shares in subsidiaries, associates

evaluated design and tested operating effectiveness of controls

and joint ventures as at March 31, 2022. Further the

around identification of indicators of impairment under Ind AS,

Company has granted loans having a carrying value of

and around valuation of the business to determine recoverable

Rs. 57798.73 lakhs as at March 31,2022

value of the said investment.

The carrying value of investments in and loans to

•

Assessed the appropriateness of methodology and valuation

subsidiaries, associates and joint ventures will be

model used by the management to estimate the recoverable

recovered through future cash flows and there is

value of investments.

inherent risk that these assets will be impaired if these

•

Assessed cash flow forecasts to ensure consistency with current

cash flows do not meet the Company''s expectations.

operations of the Company and performed sensitivity analysis on

Refer to note 1.1 q in the Standalone Financial

key assumptions used in management''s calculated recoverable

Statements for details of accounting policies on

value

impairment of assets and related disclosures.

Valuation of investment in and loans to subsidiaries, associates and joint ventures is a key audit matter due to:

•

Assessed the reasonableness of assumptions relating to revenue growth rate, gross margins, discount rates etc. based on historical results, current developments and future plans of the business estimated by management using expertise of our valuation specialist on required parameters.

• The inherent complexity in auditing the forward-

•

Performed sensitivity analysis of the key assumptions, including

looking assumptions applied to recoverable value

future revenue growth rates, future gross margins, and the

given the significant judgements involved. The key

discount rate applied in the recoverable value and considering

assumptions in the cash flow models include the

the resulting impact on the impairment testing and whether

forecast revenue, margins, terminal growth and discount rates.

selection of these key assumptions is appropriate.

•

Based on our procedures, we also considered the adequacy of disclosures in respect of investment in and loans to the said subsidiaries, associates and joint venture in the notes to the standalone financial statements.

Minimum Alternate Tax (MAT) Credit

Principal audit procedures

Entitlement - Deferred tax assets

In respect of such deferred tax assets, we assessed recoverability

The Company pays minimum alternate tax (MAT) under section 115JB of the Income Tax Act, 1961. The MAT paid would be available as an offset over a period of 15 years. The MAT credit is recognized as a deferred tax asset to be available for offset when the Company pays

from a tax perspective by performing the following procedures:

• Evaluating the design, implementation and operating effectiveness of the relevant internal controls over recognition and measurement of MAT credit assets.

taxes under the provision of Income Tax Act, 1961. The

• Understanding why the MAT credit entitlement arose and

balance of MAT credit receivable as at March 31, 2022

whether the MAT credit entitlement can be utilized.

is Rs. 6248.89 Lakhs (refer note 41 to the standalone financial statements).

The recognition and recoverability of deferred tax

• Assessed the sensitivity analysis applied by the Company and evaluated if any change in the assumptions will lead to any material change in carrying amount.

asset on account of MAT credit requires significant judgement regarding the Company''s future profitability

• assessing any restriction in use of the MAT credit entitlement

and taxable income which will result in utilization of the

and

MAT credit within the time limits available under the applicable Income tax laws.

Further, we assessed the applicability of Ind AS 12 Income Taxes by assessing management''s assessment of recoverability of MAT credit entitlement against forecast income streams, including reliability of future income projections.

We validated the appropriateness of the related disclosures in the standalone financial statements.

Information Other than the Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor''s report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone 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 Indian Accounting Standards (Ind AS)

prescribed under Section 133 of the Act read with relevant rules issued there under and other accounting principles generally accepted in India. 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 the 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Board of Directors is responsible for assessing the company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company''s financial reporting process.

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

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud

or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design 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 has adequate internal financial controls in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone 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 auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''s Report) Order,2020 ("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 the paragraph 3 and 4 of the Order, to the extent applicable.

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 standalone balance sheet, the standalone statement of profit and loss including other comprehensive income, standalone statement of changes in equity and the standalone cash flow statement dealt with by this Report are in agreement with the books of account,

d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

e) On the basis of written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from

being appointed as a director in terms of Section 164(2) of the Act,

f) With respect to the adequacy of internal financial controls with reference to standalone 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 Managerial remuneration to be included in the auditor''s report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions of Section 197 of the Act.

h) With respect to the other matters to be included in the Auditor''s report in accordance with Rule 11 of 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. a. The Management has represented that, to

the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the

Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b. The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

c. Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) above, contain any material misstatement.

v a. The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.

b. As stated in note 40 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

for BRAHMAYYA & CO.

Chartered Accountants Firm''s Regn No. 000513S

(K.SHRAVAN)

Partner

Place: Raichur Membership No. 215798

Date: 23.05.2022 UDIN: 22215798AJLAHC2110



Mar 31, 2018

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


Mar 31, 2017

To the Members Shilpa Medicare Limited

Report on the Standalone Indian Accounting Standards (''Ind AS'') Financial Statements

We have audited the accompanying standalone financial statements of Shilpa Medicare Limited ("the Company"), which comprise the balance sheet as at March 31, 2017, the statement of profit and loss (including Other Comprehensive Income), the Statement of cash flows and the Statement of changes in Equity in for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Ind AS financial Statements").

Management''s Responsibility for the Standalone Ind-AS 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, with relevant rules there under.

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 the design, implementation and maintenance of adequate internal financial control 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, 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 there under.

We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 accounting policies used and the reasonableness of the accounting estimates made by the Company''s Board of 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, 2017, its profit, total Comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 ("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, to the extent applicable.

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 purpose 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, Statement of Profit and Loss including other comprehensive income, the Statement of Cash Flows and Statement of changes in Equity dealt with by this Report are in agreement with the relevant books of account;

d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued there under;

e. On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act; and

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure-B"; and

g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of 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 Ind-AS 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 to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the standalone Ind-AS financial statements with regards to its holding and dealings in Specified Bank Notes (SBN) as defined in the Notification S.O. 3407(E) dated the November

8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the management, we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management. Refer note No. 42 of Standalone Ind AS financial statements.

The Annexure referred to in our report to the members of Shilpa Medicare Limited (''the Company'') for the year ended March 31, 2017. We report that:

1) In respect of Fixed Assets

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) As explained to us, having regards to the size of the Company and the nature of its assets Fixed Assets have been physically verified wherever feasible by the management and no material discrepancy with respect to book records was noticed on such verification.

c) In our opinion and according to the information and explanations given to us, all the title deeds of immovable properties are held in the name of the Company.

2) In respect of Inventories

a) According to the information and explanations given to us, the Inventories in its possession has been physically verified by the management at reasonable intervals. The Stocks lying with third parties have been confirmed by them as at year end. No material discrepancies were noticed on physical verification of inventories.

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) According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 73 and 76 or any other relevant provisions of the Act and the rules framed there under.

6) We have broadly reviewed the books of accounts and records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 as amended, prescribed by the Central Government under section 148 of the Act in respect of the production and processing activities of the Company and are of the opinion that prima-facie cost records and accounts prescribed have been generally maintained. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

7) In respect of Statutory dues

a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it.

b) According to the information and explanations no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess were in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us there are no dues of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess which have not been deposited on account of any dispute

8) According to the information and explanations given to us by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to banks, government and financial institutions. The Company did not have any debentures outstanding as at the year end.

9) Based on the information and explanations given to us by the management of the Company, the Company has not raised any money by way of public offer. The term loans raised by the Company have been applied for the purpose for which they were raised.

10) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the standalone Ind-AS financial statements and as per the information and explanations given by the management, we report that no material fraud by the Company or on the Company by its officers or employees, has been noticed or reported during the year.

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 Order 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 the 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 standalone Ind-AS financial statements as required by the applicable accounting standards.

14) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has made preferential allotment of 30,25,000 Equity shares at premium during the year.

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 Order 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 31st March 2017 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. 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") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 respects.

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 judgment, including the assessment of the risks 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 to provide a basis for our unqualified audit opinion on the Company''s internal financial controls system over financial reporting.

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 expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the Ind-AS 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 the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls systems over financial reporting and such internal financial controls over financial reporting were generally operating effectively as at 31st March, 2017 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.

For Bohara Bhandari Bung And Associates LLP

Chartered Accountants

Firm Registration Number: 008127S/S200013

per CA Yogesh.

R. Bung Partner

Membership Number: 143932

Place : Raichur

Date : 29th May, 2017


Mar 31, 2016

We have audited the accompanying standalone financial statements of Shilpa Medicare Limited ("the Company"), which comprise the balance sheet as at March 31, 2016, the statement of profit and loss and cash flow statement for the year then ended, and a summary of 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 financial statements based on our audit. We have taken into account the provisions of the Act, 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 there under.

We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. 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 or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the 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 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 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, 2016, its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 49 to the Standalone financial statements. The Company has filed a lawsuit for recovering its amount paid as capital advance to its vendor for supply of Capital Assets, along with punitive damages. The Preliminary hearings of the case are in progress. As the ultimate outcome of the case cannot be determined presently, hence no provision for the outstanding balance receivable from the party has been made in the financial statements. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 ("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, to the extent applicable.

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 purpose 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act; and

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure-B"; and

g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of 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 financial statements.

ii. There has been no delay in transferring amounts to the Investor Education and Protection Fund by the Company.

Annexure-A - referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements section of our report of even date.

The Annexure referred to in our report to the members of Shilpa Medicare Limited (''the Company'') for the year ended March 31, 2016. We report that:

1) In respect of Fixed Assets

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) As explained to us, having regards to the size of the Company and the nature of its assets Fixed Assets have been physically verified wherever feasible by the management and no material discrepancy with respect to book records was noticed on such verification.

c) In our opinion and according to the information and explanations given to us, all the title deeds of immovable properties are held in the name of the Company.

2) In respect of Inventories

a) According to the information and explanations given to us, the Inventories in its possession has been physically verified by the management. In our opinion the frequency of the verification is reasonable. The Stocks lying with third parties have been confirmed by them as at year end. No material discrepancies were noticed on physical verification of inventories.

3) According to the information and explanation given to us, the Company has granted unsecured loans amounting to Rs. 265.64 lakhs (Including Interest net of TDS) to 4 parties covered in the register maintained under section 189 of 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 re-payment or receipts of principles amount and interest have being made as per stipulators.

c. As there were no amounts over due for more than 90 days position of Clause 3(iii)(c) is not applicable.

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) According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 73 and 76 or any other relevant provisions of the Act and the rules framed there under.

6) We have broadly reviewed the books of accounts and records maintained by the Company pursuant to the rules made by the Central Government of India for the maintenance of cost records prescribed under sub-section (1) of section 148 of the Act in respect of the production and processing activities of the Company and are of the opinion that prima-facie cost records and accounts prescribed have been generally maintained. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

7) In respect of Statutory dues

a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us there are no dues of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax and cess which have not been deposited on account of any dispute,

8) According to the information and explanations given to us by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to banks, government and financial institutions. The Company did not have any debentures outstanding as at the year end.

9) Based on the information and explanations given to us by the management of the Company, the Company has not raised any money by way of public offer. No term loans were taken during the year by the Company.

10) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no material fraud by the Company or on the Company by its officers or employees, has been noticed or reported during the year.

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 Order 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 the 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) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

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 Order is not applicable.

16) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For Bohara Bhandari Bung And Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 008127S/S200013



per CA Pankaj Kumar Bohara

Partner

Membership Number: 215471

Place/Camp : Hyderabad

Date : 30th May, 2016


Mar 31, 2014

We have audited the accompanying financial statements of Shilpa Medicare Limited("the Company"), which comprise the Balance Sheet as at 31st March , 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("theAct") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Sec.133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company''s Internal Control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

ii. in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date, and

iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Emphasis of Matter

We draw attention to Note 50 to the Standalone financial statements. The Company has filed a lawsuit for recovering its amount paid as capital advance to its vendor for supply of Capital Assets, along with punitive damages. The Preliminary hearings of the case are in progress. As the ultimate outcome of the case cannot be determined presently, hence no provision for the outstanding balance receivable from the party has been made in the financial statements. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2003("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

As required by Section 227(3) of the Act, we report that:

a. We have 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, Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash flow statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Sec.133 of the Companies Act, 2013;

e. On the basis of the written representations received from the directors as on 31st March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE

On the basis of such checks as we considered appropriate and in terms of information and explanation given to us, we further state that:

1. In respect of Fixed Assets:

a) The Company has maintained proper records, showing full particulars including Quantitative details and situation of Fixed Assets.

b) As explained to us, Fixed Assets have been physically verified wherever feasible by the Management and no material discrepancy with respect to book records was noticed on such verification.

c) During the year the company has not disposed off a substantial part of the Fixed Assets.

2. In respect of Inventories:

a) The Inventory in its possession has been physically verified by the management. In our opinion the frequency of the verification is reasonable. The Stocks lying with third parties have been verified with reference to Statements of Accounts or Subsequent return of goods.

b) The procedure as explained to us and followed by the Management for physical verification of Inven- tories is reasonable and adequate in relation to the size of the company and the nature of its business.

c) According to the information and explanations given to us, no material discrepancies were noticed on physical verification as compared to book records.

3. In respect of the loans, secured or unsecured, granted or taken by the company to/from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956:

a) The Company has not taken any secured / unsecured loan from any company or parties covered in the register maintained under section 301 of the Act.

During the year the Company has given unsecured loans of Rs.1,459.46Lakhs (Incl.Interest) to 03 subsidiaries and Rs.16.76 (Incl.Interest)Lakhs was given to 01 associate company during the year. Rs.84.48 Lakhs was repaid by 02 subsidiaries and Rs.2.50 Lakhs was repaid by 01 associates during the year. The total outstanding balance receivable from 02 of the Subsidiaries as on 31.03.2014 is Rs.2,380.48 Lakhs and Rs.185.00 Lakhs from 01 of its Associate Company respectively, covered in the register maintained under section 301 of the Act.

b) The rates of interest and the terms and conditions of the above said transactions where ever applicable, are prima-facie not prejudicial to the interest of the company.

c) The payment of Principal amount and interest thereon, where ever applicable are regular. There were no overdue amounts of the aforesaid transactions.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed Assets and also for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems,

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act,1956:

a) According to information and explanations given to us, the transactions made in pursuance of contracts or arrangements that needs to be entered in the Register maintained under sections 301 of the Companies Act, 1956, have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Sec.301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the company has not accepted any deposits from the Public.

7. In our opinion, the company has an internal Audit System commensurate with the size and nature of its business.

8. On the basis of records produced, we are of the opinion that prima-facie cost records and accounts prescribed by the central government under section 209(1) d of the Companies Act, 1956 in respect of the products of the company under the rules under said section are generally maintained / are under preparation. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

9. In respect of statutory dues:

a) According to the records of the company, undisputed statutory dues including Provident Fund, Investors Education Fund, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs duty, Excise duty, Cess and any other statutory dues has generally been regularly deposited with the appropriate authorities. According, to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2014 for a period of more than Six months from the date they became payable.

b) Details of dues under Income-tax Act and Workmen compensation Act which have not been deposited as on 31st March, 2014 on account of disputes are given below:

Forum where Period to which. Statute Nature of dues the dispute is the amount pending relates

Income-tax Act Income-tax Commissioner AY: 2010-11 & of Income tax A.Y.2011-12 (Appeals)

Workmen Accident Claim Commissioner FY: 2007-08 & Compensation Act of Workmen 2008-09 Compensation &Labour Office

Amount involved Statute (Rs in Lakhs)

Income-tax Act *1,372.51

Workmen 7.00 Compensation Act



10. The company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, the company has not defaulted in repayment of dues to financial institutions or banks.

12. According to the information and explanation given to us and based on the information available, no loans and advances have been granted by the Company on the basis of Security by way of pledge of shares, debentures and other Securities.

13. In our opinion the company is not a chit fund or a nidhi fund/mutual Benefit fund/society. Therefore, provisions of clause4 (xiii) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

14. The Company did not either deal or trade in shares, securities, debentures and other Investment and hence clause 4(xiv) is not applicable

15. According to the information provided to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to information and explanation given to us, on an overall examination of the Balance Sheet of the Company,we are of the opinion that the term loans are being applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment and vice versa.

18. During the year, the company has not made any preferential Allotment of shares to parties and Companies covered in the Register maintained under Section.301 of the Companies Act, 1956.

19. The Company has not raised funds by way of issue of Debentures. Hence, Clause 4(xix) of Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

20. The Company has not raised any funds through Public Issue during the year and hence Clause 4(xx) of Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

21. Based upon the Audit procedures performed and information and Explanations given to us, we report that no material fraud on or by the Company has been noticed or reported during the course of our Audit.

For Bohara Bhandari Bung And Associates Chartered Accountants (Firm Regn No:008127S)

CA. Pankajkumar Bohara Partner M.No.215471

Place :Hyderabd Dated: 29th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Shilpa Medicare Limited ("the Company"), which comprise the Balance Sheet as at 31st March , 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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:

i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

ii. in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date, and

iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Emphasis of Matter

We draw attention to Note 48 to the Standalone financial statements. The Company has filed a lawsuit for recovering its amount paid as capital advance to its vendor for supply of Capital Assets, along with punitive damages. The Preliminary hearings of the case are in progress. As the ultimate outcome of the case cannot be determined presently, hence no provision for the outstanding balance receivable from the party has been made in the financial statements. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2003("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

As required by Section 227(3) of the Act, we report that:

We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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.

The Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

In our opinion, the Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

On the basis of the written representations received from the directors as on 31st March, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Annexure Referred to in our Report of even date

On the basis of such checks as we considered appropriate and in terms of information and explanation given to us, we further state that:

1. In respect of Fixed Assets:

a) The Company has maintained proper records, showing full particulars including Quantitative details and situation of Fixed Assets.

b) As explained to us, Fixed Assets have been physically verified wherever feasible by the Management and no material discrepancy with respect to book records was noticed on such verification.

c) During the year the company has not disposed off a substantial part of the Fixed Assets.

2. In respect of Inventories:

a) The Inventory in its possession has been physically verified by the management. In our opinion the frequency of the verification is reasonable. The Stocks lying with third parties have been verified with reference to Statements of Ac- counts or Subsequent return of goods.

b) The procedure as explained to us and followed by the Management for physical verification of Inventories is reasonable and adequate in relation to the size of the company and the nature of its business.

c) According to the information and explanations given to us, no material discrepancies were noticed on physical verifica- tion as compared to book records.

3. In respect of the loans, secured or unsecured, granted or taken by the company to/from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956:

a) The Company has not taken any secured / unsecured loan from any company or parties covered in the register main- tained under section 301 of the Act. However, it had outstanding opening balance of unsecured Loan receivable (Dr) amounting Rs. 351.27 Lakhs to two of its subsidiaries and Rs.152.44 Lakhs (Dr) to one of its Associates respectively. During the year Rs.713.29 Lakhs (Incl. Interest) was given to its three subsidiaries and Rs.18.30 (Incl.Interest) Lakhs was given to one of its associate Company during the year. Of which Rs.59.05 Lakhs was repaid by two of its subsidiaries during the year. The total outstanding balance receivable from three of the Subsidiaries as on 31.03.2013 is Rs.1005.50 Lakhs and Rs.170.74 Lakhs from its Associate Company respectively, covered in the register maintained under section 301 of the Act.

b) The rates of interest and the terms and conditions of the above said transactions where ever applicable, are prima-facie not prejudicial to the interest of the company.

c) The payment of Principal amount and interest thereon, where ever applicable are regular. There were no overdue amounts of the aforesaid transactions.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed Assets and also for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems,

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act,1956:

a) According to information and explanations given to us, the transactions made in pursuance of contracts or arrange- ments that needs to be entered in the Register maintained under sections 301 of the Companies Act, 1956, have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrange- ments entered in the register maintained under Sec.301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the company has not accepted any deposits from the Public.

7. In our opinion, the company has an internal Audit System commensurate with the size and nature of its business.

8. On the basis of records produced, we are of the opinion that prima-facie cost records and accounts prescribed by the central government under section 209(1) d of the Companies Act, 1956 in respect of the products of the company under the rules under said section are generally maintained / are under preparation. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

9. In respect of statutory dues:

a) According to the records of the company, undisputed statutory dues including Provident Fund, Investors Education Fund, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs duty, Excise duty, Cess and any other statutory dues has generally been regularly deposited with the appropriate authorities. According, to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2013 for a period of more than Six months from the date they became payable.

b) Details of dues under Income-tax Act and Workmen compensation Act which have not been deposited as on 31st March, 2013 on account of disputes are given below:

Nature of Forum where the dispute is Statute dues pending

Income-tax Act Income-tax Commissioner of Income tax (Appeals)

Workmen Accident Claim Commissioner of Workmen Compensation Act Compensation & Labour Office

Statute Period to which Amount involved the amount relates (Rs in Lakhs)

Income Tax Act AY: 2004-05 to *469.74 A.Y.2010-11

Workmen Compensation Act FY: 2007-08 & 7.00 2008-09

*Out of the said periods, cases have been disposed off in favour of the Company for the period starting from AY: 2004-05 to AY: 2007-08. However, the appeal effect is yet to be given by the department.

10. The company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, the company has not defaulted in repayment of dues to financial institutions or banks.

12. According to the information and explanation given to us and based on the information available, no loans and advances have been granted by the Company on the basis of Security by way of pledge of shares, debentures and other Securities.

13. In our opinion the company is not a chit fund or a nidhi fund/mutual Benefit fund/society. Therefore, provisions of clause4 (xiii) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

14. The Company did not either deal or trade in shares, securities, debentures and other Investment and hence clause 4(xiv) is not applicable

15. According to the information provided to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to information and explanation given to us, on an overall examination of the Balance Sheet of the Company, we are of the opinion that the term loans are being applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Com- pany, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment and vice versa.

18. During the year, the company has not made any preferential Allotment of shares to parties and Companies covered in the Register maintained under Section.301 of the Companies Act, 1956.

19. The Company has not raised funds by way of issue of Debentures. Hence, Clause 4(xix) of Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

20. The Company has not raised any funds through Public Issue during the year and hence Clause 4(xx) of Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

21. Based upon the Audit procedures performed and information and Explanations given to us, we report that no material fraud on or by the Company has been noticed or reported during the course of our Audit.

For Bohara Bhandari Bung And Associates

Chartered Accountants

(Firm Regn No: 008127S)

CA. Pankajkumar Bohara

Place : Raichur Partner

Dated: 29th May, 2013 M.No.215471


Mar 31, 2012

We have audited the attached Balance Sheet of Shilpa Medicare Limited ("the Company") as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company''s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidences supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor''s Report) Order, 2003 (as amended) ("the order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that :

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

2. In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

3. The Balance Sheet, Statement of Profit and Loss and Cash flow statement, dealt with by this report are in agreement with the books of account;

4. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956;

5. On the basis of written representations received from the Directors, as on 31st March,2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1 ) of section 274 of the Companies Act,1956;

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and other notes thereon, give the information required by the Companies Act,1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

(a) in the case of the Balance Sheet, of the state of Affairs of the Company as at 31st March, 2012;

(b) in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the Cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE

On the basis of such checks as we considered appropriate and in terms of information and explanation given to us, we further state that:

1. In respect of Fixed Assets:

a) The Company has maintained proper records, showing full particulars including Quantitative details and situation of Fixed Assets.

b) As explained to us, Fixed Assets have been physically verified wherever feasible by the Management and no material discrepancy with respect to book records was noticed on such verification.

c) During the year the Company has not disposed off a substantial part of the Fixed Assets.

2. In respect of Inventories:

a) The Inventory in its possession has been physically verified by the management. In our opinion the frequency of the verification is reasonable. The Stocks lying with third parties have been verified with reference to Statements of Accounts or Subsequent return of goods.

b) The procedure as explained to us and followed by the Management for physical verification of Inventories is reasonable and adequate in relation to the size of the Company and the nature of its business.

c) According to the information and explanations given to us, no material discrepancies were noticed on physical verification as compared to book records.

3. In respect of the loans, secured or unsecured, granted or taken by the Company to/from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956:

a) The Company has not taken any secured / unsecured loan from any Company covered in the register maintained under section 301 of the Act. However, it had outstanding opening balance of unsecured Loan (Dr) amounting Rs. 938.58 Lakhs to two of its subsidiaries and Rs.79.60 Lakhs (Dr) to one of its Associates respectively. Rs.4,842.85 Lakhs (Incl. Interest) was given to its four subsidiaries and Rs.72.84 Lakhs was given to one of its associate Company during the year. Of which Rs.36.02 Lakhs was repaid by three of its subsidiaries during the year. The total outstanding balance receivable from the Subsidiaries as on 31.03.2012 is Rs.5,729.17 Lakhs and Rs. 152.44 Lakhs from its Associate companies respectively, covered in the register maintained under section 301 of the Act.

b) The rates of interest and the terms and conditions of the above said transactions wherever applicable, are prima-facie not prejudicial to the interest of the company.

c) The payment of Principal amount and interest thereon, where ever applicable are regular.

d) There were no overdue amounts of the aforesaid transactions.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and Fixed Assets and also for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems.

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a) According to information and explanations given to us, the transactions made in pursuance of contracts or arrangements that needs to be entered in the Register maintained under sections 301 of the Companies Act, 1956, have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under sec.301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the Company has not accepted any deposits from the Public.

7. In our opinion, the Company has an internal Audit System commensurate with the size and nature of its business.

8. On the basis of records produced, we are of the opinion that prima-facie cost records and accounts prescribed by the central government under section 209(1) d of the Companies Act, 1956 in respect of the products of the company under the rules under said section are generally maintained / are under preparation. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

9. In respect of statutory dues:

a) According to the records of the company, undisputed statutory dues including Provident Fund, Investors Education Fund, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs duty, Excise Duty, Cess and any other statutory dues has generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2012 for a period of more than Six months from the date they became payable.

b) Details of dues of Income-Tax and Karnataka Value Added Tax which have not been deposited as on 31st March, 2012 on account of disputes are given below;

Forum where the Statute Nature of Dues dispute is pending

Income-Tax Act Income-Tax Commissioner of Income tax (Appeals)

Karnataka Value VAT Karnataka Added Taxes Act,2003 Appellate Tribunal



Statue Period to which Amount the amount involved relates (Rs. in Lacs)

Income-Tax Act A Y : 2004-05 to 120.50 A Y : 2009-10

Karnataka Value Added Taxes Act,2003 FY : 2006-07 0.87

10. The company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

12. According to the information and explanation given to us and based on the information available, no loans and advances have been granted by the Company on the basis of Security by way of pledge of shares, debentures and other Securities.

13. In our opinion the company is not a chit fund or a nidhi fund/mutual benefit fund/society. Therefore, provisions of clause4 (xiii) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

14. The Company did not either deal or trade in shares, securities, debentures and other Investment and hence clause 4(xiv) is not applicable

15. According to the information provided to us, the company has issued a letter of comfort amounting to Rs.6.83 Crores (Euro 10.00 Lakhs) and Corporate Guarantee of Rs.25.00 Crores for loans taken by its subsidiary Companies from banks or financial institutions.

16. In our opinion and according to information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment and vice versa.

18. During the year, the company has made preferential Allotment of 500,000 Equity shares to parties covered in the Register maintained under Section.301 of the Companies Act, 1956 on conversion of share warrants.

19. The Company has not raised funds by way of issue of Debentures. Hence, Clause 4(xix) of Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

20. The Company has not raised any funds through Public Issue during the year and hence Clause 4(xx) of Companies (Auditor''s Report) Order, 2003 is not applicable to the company.

21. Based upon the Audit procedures performed and information and Explanations given to us, we report that no material fraud on or by the Company has been noticed or reported during the course of our Audit.

For Bohara Bhandari Bung And Associates

Chartered Accountants (Firm Regn No:008127S)

CA. Pankajkumar Bohara

Place / Camp: Hyderabad Partner

Dated : 10th August, 2012 M.No.215471


Mar 31, 2011

We have audited the attached Balance Sheet of Shilpa Medicare Limited ("the Company") as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidences supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003 (as amended) ("the order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order to the extent applicable.

Further to our comments in the Annexure referred to above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

2. In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement, dealt with by this report are in agreement with the books of account;

4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956;

5. On the basis of written representations received from the Directors, as on 31st March, 2011, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director in terms of Clause (g) of sub-section (1 ) of Section 274 of the Companies Act,1956;

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and other notes thereon, give the information required by the Companies Act,1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of Affairs of the Company as at 31st March, 2011;

(b) in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the Cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE

On the basis of such checks as we considered appropriate and in terms of information and explanation given to us, we further state that:

1. In respect of Fixed Assets:

a) The Company has maintained proper records, showing full particulars including Quantitative details and situation of Fixed Assets.

b) As explained to us, Fixed Assets have been physically verified wherever feasible by the Management and no material discrepancy with respect to book records was noticed on such verification.

c) During the year the Company has not disposed off a substantial part of the Fixed Assets.

2. In respect of Inventories:

a) The Inventory in its possession has been physically verified by the Management. In our opinion the frequency of the verification is reasonable. The Stocks lying with third parties have been verified with reference to Statements of Accounts or Subsequent return of goods.

b) The procedure as explained to us and followed by the Management for physical verification of Inventories is reasonable and adequate in relation to the size of the Company and the nature of its business.

c) According to the information and explanations given to us, no material discrepancies were noticed on physical verification as compared to book records.

3. In respect of the loans, secured or unsecured, granted or taken by the Company to/from companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has not taken any secured / unsecured loan from any Company covered in the register maintained under Section 301 of the Act. However, it had outstanding opening balance of unsecured loan (Dr) amounting to Rs. 2479.52 Lakhs to two of its subsidiaries and Rs. 645.65 Lakhs (including interest) was given during the year and Rs. 79.60 Lakhs during the year was given to one of its associate Company. Of which Rs. 922.33 Lakhs and Rs. 79.60 Lakhs are outstanding as on 31.03.2011 from the subsidiary and associate companies respectively, covered in the register maintained under Section 301 of the Act.

b) The rates of interest and the terms and conditions of the above said transactions where-ever applicable, are prima- facie not prejudicial to the interest of the Company.

c) The payment of Principal amount and interest thereon, where-ever applicable are regular.

d) There were no overdue amounts of the aforesaid transactions.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed Assets and also for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems.

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act,1956:

a) According to information and explanations given to us, the transactions made in pursuance of contracts or arrangements that needs to be entered in the Register maintained under Section 301 of the Companies Act, 1956, have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the Company has not accepted any deposits from the Public.

7. In our opinion, the Company has an internal Audit System commensurate with the size and nature of its business.

8. On the basis of records produced, we are of the opinion that prima-facie cost records and accounts prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 in respect of the products of the Company under the rules under said section are generally maintained / are under preparation. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

9. In respect of statutory dues:

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investors Education Fund, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs duty, Excise duty, Cess and any other statutory dues has generally been regularly deposited with the appropriate authorities. According, to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2011 for a period of more than six months from the date they became payable.

b) Details of dues of Income-tax which have not been deposited as on 31st March, 2011 on account of disputes are given below :

Forum where the Period to which the Amount involved Statute Nature of dues dispute is pending amount relates (Rs. in Lakhs)

Commissioner of Income- tax Act Income-tax AY: 2008-09 *53.43 Income tax (Appeals)

* Out of this sum of Rs. 23.28 lacs is paid under protest against the disputed Tax demand.

10. The Company does not have accumulated losses at the end of the fi nancial year. The Company has not incurred cash losses during the fi nancial year covered by the audit and in the immediately preceding fi nancial year.

11. Based on our audit procedures and according to the information and explanation given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

12. According to the information and explanation given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion the Company is not a chit fund or a nidhi fund/mutual benefit fund/society Therefore, provisions of Clause4 (xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

14. The Company did not either deal or trade in shares, securities, debentures and other investment and hence Clause 4(xiv) is not applicable.

15. According to the information provided to us, the Company has issued a letter of comfort amounting to Euro 20.00 Lakhs for loans taken by step down subsidiary from banks or financial institutions.

16. In our opinion and according to information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment and vice versa.

18. During the year, the Company has not made preferential allotment of Equity shares to parties and companies covered in the Register maintained under Section.301 of the Companies Act, 1956.

19. The Company has not raised funds by way of issue of Debentures; hence, Clause 4(xix) of Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

20. The Company has not raised any funds through Public Issue during the year and hence Clause 4(xx) of Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

21. Based upon the Audit procedures performed and information and explanations given to us, we report that no material fraud on or by the Company has been noticed or reported during the course of our Audit.

For Bohara Bhandari Bung And Associates

Chartered Accountants

Firm Regn No:008127S

CA. P.M.Bhandari

Place : Hyderabad Partner

Date : 11th August, 2011 M.No.036241


Mar 31, 2010

We have audited the attached Balance Sheet of Shilpa Medicare Limited ("the Company") as at 31st March, 2010, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidences supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 (as amended) ("the order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order to the extent applicable.

Further to our comments in the Annexure referred to above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

2. In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

3. The Balance Sheet, Profit and Loss Account and Cash flow statement, dealt with by this report are in agreement with the books of account;

4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956;

5. On the basis of written representations received from the Directors, as on 31st March, 2010, and taken on record by the Board of Directors, we Report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1 ) of section 274 of the Companies Act,1956;

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and other notes thereon, give the information required by the Companies Act,1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of Affairs of the Company as at 31st March, 2010;

(b) in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the Cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE On the basis of such checks as we considered appropriate and in terms of information and explanation given to us, we further state that:

1. In respect of Fixed Assets:

a) The Company has maintained proper records, showing full particulars including Quantitative details and situation of Fixed Assets.

b) As explained to us, Fixed Assets have been physically verified wherever feasible by the Management and no material discrepancy with respect to book records was noticed on such verification.

c) During the year the company has not disposed off a substantial part of the Fixed Assets.

2. In respect of Inventories:

a) The Inventory in its possession has been physically verified by the management. In our opinion the frequency of the verification is reasonable. The Stocks lying with third parties have been verified with reference to Statements of Accounts or Subsequent return of goods.

b) The procedure as explained to us and followed by the Management for physical verification of Inventories is reasonable and adequate in relation to the size of the company and the nature of its business.

c) According to the information and explanations given to us, no material discrepancies were noticed on physical verification as compared to book records.

3. In respect of the loans, secured or unsecured, granted or taken by the company to/from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956:

a) The Company has advanced interest free Unsecured Loan of Rs.867.14 Lakhs to its subsidiary Companies, of which Rs.2479.51 are outstanding as on 31.03.2010, from the companies covered in the register maintained under section 301 of the Act.

b) The rates of interest and the terms and conditions of the above said transactions where ever applicable, are prima-facie not prejudicial to the interest of the company.

c) The payment of Principal amount and interest thereon, where ever applicable are regular.

d) There were no overdue amounts of the aforesaid transactions.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed Assets and also for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems.

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a) According to information and explanations given to us, the transactions made in pursuance of contracts or arrangements that needs to be entered in the Register maintained under sections 301 of the Companies Act, 1956, have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under sec.301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the company has not accepted any deposits from the Public.

7. In our opinion, the company has an internal Audit System commensurate with the size and nature of its business.

8. On the basis of records produced, we are of the opinion that prima-facie cost records and accounts prescribed by the central government under section 209(1) d of the Companies Act, 1956 in respect of the products of the company under the rules under said section are generally maintained / are under preparation. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

9. In respect of statutory dues:

a) According to the records of the company, undisputed statutory dues including Provident Fund, Investors Education Fund, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs duty, Excise duty, Cess and any other statutory dues have been regularly deposited with the appropriate authorities. According, to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2010 for a period of more than Six months from the date they became payable.

10. The company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

12. According to the information and explanation given to us and based on the information available, no loans and advances have been granted by the Company on the basis of Security by way of pledge of shares, debentures and other Securities.

13. In our opinion the company is not a chit fund or a nidhi fund/mutual Benefit fund/society. Therefore, provisions of clause4 (xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the company.

14. The Company did not either deal or trade in shares, securities, debentures and other Investment and hence clause 4(xiv) is not applicable.

15. According to the information provided to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment and vice versa.

18. During the year, the company has not made preferential Allotment of Equity shares to parties and companies covered in the Register maintained under Section.301 of the Companies Act, 1956.

19. The Company has not raised funds by way of issue of Debentures; Hence, Clause 4(xix) of Companies (Auditors Report) Order, 2003 is not applicable to the company.

20. The Company has not raised any funds through Public Issue during the year and hence Clause 4(xx) of Companies (Auditors Report) Order, 2003 is not applicable to the company.

21. Based upon the Audit procedures performed and information and explanations given to us, we report that no material fraud on or by the Company has been noticed or reported during the course of our Audit.

For Bohara Bhandari Bung And Associates

Chartered Accountants

(Firm Reg No: 008127S)

Sd/-

CA.P.M.Bhandari

Partner

M.No.036241

Place : Raichur

Dated : 01st September,2010

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