To the Members of Biocon Limited
Report on the Audit of the Standalone Indian Accounting Standards (Ind AS')Financial Statements
We have audited the accompanying standalone Ind AS financial statements of BioconLimited (the Company') which comprise the Balance Sheet as at 31 March 2018 theStatement of Profit and Loss the Statement of Changes in Equity and the Statement of CashFlows for the year then ended and summary of the significant accounting policies andother explanatory information (herein after referred to as "standalone Ind ASfinancial statements").
Management's Responsibility for the Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of the stateof Affairs profit (including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements Management is also responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless Managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.
We are also responsible to conclude on the appropriateness of Management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor's report. However future events or conditions maycause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of Affairs of theCompany as at 31 March 2018 its profit (including other comprehensive income) changes inequity and its cash flows for the year ended on that date.
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 Section 143(11) of the Act we givein "Annexure A" a statement on the matters specified in the paragraph 3 and 4 ofthe Order.
2. As required by Section 143(3) of the Act we report that:
(a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
(b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
(c) the Balance Sheet the Statement of Profit and Loss Statement of Changes in Equityand the Statement of Cash Flows dealt with by this Report are in agreement with the booksof account;
(d) in our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act;
(e) on the basis of the written representations received from the directors as on 31March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 from being appointed as a director in terms of Section164(2) of the Act;
(f) with respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B"; and
(g) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements Refer Note 34 to thestandalone Ind AS financial statements;
ii. the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts. Refer Note 36 to the standalone Ind AS financial statements;
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;
iv. the disclosures in the standalone Ind AS financial statements regarding holdings aswell as dealings in specified bank notes during the period from 8 November 2016 to 30December 2016 have not been made since they do not pertain to the financial year ended 31March 2018. However amounts as appearing in the audited Standalone Ind AS financialstatements for the period ended 31 March 2017 have been disclosed.
for B S R & Co. LLP
Firm Registration Number: 101248W/W-100022
Membership number: 203491
Date: 26 April 2018
Annexure - A to the Independent Auditor's Report
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone Ind AS financial statements of Biocon
Limited for the year ended 31 March 2018. We report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) The Company has a regular programme of physical verification of its property plantand equipment by which all property plant and equipment are verified in a phased mannerover a period of three years. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Inaccordance with this programme certain property plant and equipment were verified duringthe year and no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and basis our examinationof the records of the Company the title deeds of immovable properties are held in thename of the Company except for one immovable property amounting to Rs 35 million as at 31March 2018 for which the Company is in the process of obtaining registration.
(ii) Inventories apart from goods in transit and inventories lying with outside partieshave been physically verified by the Management during the year and the discrepanciesnoticed on such verification between the physical stock and book records were notmaterial. In our opinion the frequency of such verification is reasonable. Inventorieslying with outside parties have been substantially confirmed by them as at the year-endand no material discrepancies were noticed in respect of such confirmations.
(iii) The Company has granted loans to Companies covered in the register maintainedunder Section 189 of the Companies Act 2013 (the Act').
(a) In our opinion the rate of interest and other terms and conditions on which theloans have been granted to the companies listed in the register maintained under Section189 of the Act are not prima facie prejudicial to the interest of the Company.
(b) In the case of the loans granted covered in the register maintained under Section189 of the Act the borrower has been regular in the payment of the principal and interestas stipulated.
(c) There are no overdue amounts in respect of the loans granted to companies coveredin the register maintained under Section 189 of the Act.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the loans given investments made and guarantees and securities given.
(v) According to information and explanations given to us the Company has not acceptedany deposits. Accordingly paragraph 3(v) of the Order is not applicable to the Company.
(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 as amended prescribed by theCentral Government under Section 148 of the Act and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. However we have notmade a detailed examination of such records.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income-tax sales tax value added tax duty of customs excise duty servicetax goods and service tax cess and other material statutory dues have been generallyregularly deposited during the year with the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxvalue added tax duty of customs excise duty service tax goods and service tax cessand other material statutory dues were in arrears as at 31 March 2018 for a period of morethan six months from the date they became payable.
(b) According to the information and explanations given to us there are no dues ofincome tax sales tax value added tax service tax duty of customs duty of excise whichhave not been deposited with the appropriate authorities on account of any disputes otherthan those set out in Appendix I.
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to banks financial institutions orgovernment. The Company did not have any borrowings during the year by way of debentures.
(ix) According to the information and explanations given to us the Company has notraised any money by way of public issue or further public offer (including debtinstruments) during the year. The term loans raised by the Company have been applied forthe purpose for which they were raised.
(x) According to the information and explanations given to us no material fraud on theCompany by its officers and employees or fraud by the Company has been noticed or reportedduring the course of our audit.
(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/ provided for managerialremuneration in accordance with the requisite approvals as per provisions of Section 197read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone Ind AS financial statements asrequired by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly para 3 (xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him.
(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
for B S R & Co. LLP
Firm Registration Number: 101248W/W-100022
Membership number: 203491
Date: 26 April 2018