We have audited the accompanying standalone financial statements of Panacea Biotec Limited ("the Company"), which comprise
the standalone balance sheet as at March 31, 2025, the standalone statement of profit and loss (including the statement of other
comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows for the year then
ended, and notes to the standalone financial statements, including material 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 aforesaid 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 Indian Accounting Standards ('Ind AS') specified under section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the
Company as at 31 March 2025, its loss (including 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 standalone 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 "Auditor's Responsibilities for the
Audit of the 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 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 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 financial statements as a
whole, and in forming our opinion thereon, 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.
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Key audit matter
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How our audit addressed the key audit matter
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A. Revenue recognition
Refer note 1.3(j) and note 26 of notes to the standalone
financial statements and other explanatory information
of the Company for the year ended 31 March 2025.
The Company recognises revenue from the sales of
products when control over goods is transferred to a
customer. The actual point in time when revenue is
recognised varies depending on the specific terms
and conditions of the sales contracts entered with
customers. The Company has a large number of
customers operating in various geographies and the
sales contracts / arrangements with various customers
have distinct commercial terms, including Incoterms
that determine the timing of transfer of control and it
requires significant judgment in determining timing
of revenue recognition as per Ind AS 115 - Revenue
from Contracts with Customers. We have identified the
recognition of revenue from sale of products as a key
audit matter because revenue is a key performance
indicator for the Company and there is risk of revenue
being overstated due to the pressure to achieve targets
or earning expectations.
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Our audit procedures to address this key audit matter included, but were
not limited to the following:
a) Obtained an understanding of the Company's process of revenue
recognition and read customer contracts on sample basis;
b) Evaluated the design, tested the operating effectiveness of the
Company's internal controls over recognition and measurement
of revenue in accordance with underlying customer contracts and
accounting policies;
c) Performed substantive testing (including year-end cut off testing) by
selecting samples of revenue transactions recorded during and after
the year and verified the underlying documents, which included
sales invoices / contracts and dispatch / shipping documents;
d) Performed substantive analytical procedures during the audit
period to identify any unusual trends warranting additional audit
e) procedures;
Obtained direct balance confirmations from customers on a sample
basis as at the year-end or performed alternate audit procedures
f) where such confirmations could not be obtained; and
Assessed the appropriateness and adequacy of the related
disclosures in the standalone financial statements of the Company
in accordance with Ind AS 115.
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Key audit matter
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How our audit addressed the key audit matter
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B. Assessment of impairment of Property, plant and
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Our audit procedures to address this key audit matter included, but were
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equipment
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not limited to the following:
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The Company considers its property, plant and
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a) Obtained an understanding of the management's process for
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equipment (PPE) as a single cash generating unit (CGU).
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identification of impairment indicators for Property, plant and equipment
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As at 31 March 2025, the carrying value of Company's PPE
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and process for identification of CGU and impairment testing of such
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aggregates to Rs. 4,157.25 million. These balances have
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assets;
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been subject to a test of impairment by the management
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b) Evaluated the Company's accounting policy in respect of impairment
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in accordance with Ind AS 36 "Impairment of Assets"
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assessment, and the methods and models used to determine the
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(Ind AS 36) in the current year as the management
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recoverable amounts of property, plant and equipment in accordance
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have identified impairment indicators as explained in
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with the requirements of Ind AS 36,
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note 2.1 (iv) to the accompanying standalone financial
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c) Tested the design and operating effectiveness of internal controls over
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statements.
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such identification and impairment measurement of identified assets;
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Refer note 1.3(f) and 2.1 (iv) to the accompanying
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d) Evaluated management's identification of CGU and obtained the
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standalone financial statements. The Company has
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impairment assessment workings prepared by the management and its
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engaged independent third-party valuer to arrive at
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experts for such CGU;
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the value in use of the CGU as per discounted cash flow
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e) Involved auditor's experts to assess the appropriateness of the valuation
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method and to arrive at the fair value based on market
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methodologies used by the management and its expert to determine
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approach method.
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the recoverable values;
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Based on the report issued by such valuer, the recoverable
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f) Evaluated the objectivity, competence and independence of the experts
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value of the CGU being higher than its carrying value, the
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engaged by the Company, wherever applicable, and examined the
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Company has concluded that no impairment provision
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valuation reports issued by such experts;
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needs to be recorded in the standalone financial
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g) Reconciled the cash flows to the business plans approved by the Board
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statements as at 31 March 2025.
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of Directors of the Company which constitute identified CGU;
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In addition to significance of the amounts, management's
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h) Evaluated and challenged the reasonableness of key inputs and
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assessment process is complex as it involves significant
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assumptions such as implied budgeted revenue, operating margins,
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judgement in determining the assumptions to be used to
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growth rates and discount rates for their appropriateness based on our
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estimate the recoverable amounts involved in forecasting
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understanding of the business of the respective CGU, past results and
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cash flows for the CGU, principally relating to budgeted
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external factors such as industry trends and forecasts.
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revenue, operating margins, short-term and long term
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i) Obtained and evaluated sensitivity analysis performed by the
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growth rates and the discount rates used.
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management on the key assumptions and performed independent
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Considering the materiality of the amounts involved,
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sensitivity analysis of the key assumptions to assess the effect of
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significant judgment and high estimation uncertainty in
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reasonably possible variations on the estimated recoverable amounts
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determining the recoverable value of such PPE and such
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for the CGU to evaluate sufficiency of headroom between recoverable
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estimates and judgements being inherently subjective,
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values and carrying amounts.
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this matter is determined as a key audit matter for the
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j) Compared the carrying value of the net assets with the estimated
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current year audit.
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recoverable value to calculate the impairment loss to be recognised, if
any; and
k) Evaluated the adequacy of disclosures given in the standalone financial
statements with respect to Property, plant, and equipment, including
disclosure of significant assumptions, judgements and sensitivity
analysis performed, in accordance with applicable accounting standards.
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C. Contingencies, including litigations
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Our audit procedures to address this key audit matter included, but were
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Refer note 1.3(s) and note 37 to the standalone financial
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not limited to the following:
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statements. The Company is involved in disputes, lawsuits,
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a) We evaluated the design and tested the operating effectiveness of
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claims, Governmental and / or regulatory inspections,
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controls in respect of the identification and evaluation of litigations,
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inquiries, investigations and proceedings, including
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the recording / reassessment of the related liabilities, provisions and
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patent and commercial matters that arise from time to
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disclosures.
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time in the ordinary course of business.
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b) Obtained a list of litigations from the Company's in-house legal
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The Company assesses the need to make provision or
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counsel; identified material litigations from the aforementioned list
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to disclose contingent liability on a case-to-case basis
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and performed inquiries with the said counsel; obtained and read the
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considering the underlying facts of each litigation.
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underlying documents to assess the assumptions used by management
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The eventual outcome of the litigations is uncertain
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in arriving at the conclusions.
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and estimation at balance sheet date involves extensive
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c) We also evaluated the Company's analysis of its assessment of the
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judgement of management including input from legal
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probability of outcome for each material contingency through inspection
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counsel due to complexity of each litigation. Adverse
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of responses to inquiry letters sent to external legal counsel, discussions
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outcomes could significantly impact on the Company's
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with internal counsel, as well as external legal counsel, as deemed
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reported results and balance sheet position.
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necessary, to confirm our understanding of the allegations and potential
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Considering the significant judgement involved in
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outcomes and obtaining written representations from executives of the
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determining the need to make a provision or disclose as
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Company.
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contingent liability, the matter is considered as key audit
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d) Verified the disclosures related to provisions and contingent liabilities
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matter.
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in the standalone financial statements to assess consistency with
underlying documents.
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Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors are responsible for the other information. The other information comprises the information included
in the Board's report but does not include the standalone financial statements and our auditor's report thereon, which is expected to
be made available to us after the date of this audit report.
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 such other information is materially inconsistent with the standalone financial statements, or our knowledge
obtained in the 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 the other information, we are required to report that fact.
We have nothing to report in this regard as other information as stated above is expected to be made available to us after the date of
this Auditor's Report.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The accompanying standalone financial statements have been approved by the Company's Board of Directors. The Company's Board
of Directors are 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, standalone changes in equity and standalone cash flows of the Company in accordance with the Ind AS specified under
section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, 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 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 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, management and Board of Directors are 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 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 is also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities 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 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 skepticism 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 control 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 with reference to standalone financial statements 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 and Board of Director 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 auditors'
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 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.
Other Matter
Corresponding figures for the year ended March 31, 2024 of the Company, have been audited by M/s Walker Chandiok & Co LLP,
independent Chartered Accountants, who vide their audit report dated 30 May 2024, have expressed an unmodified opinion, whose
report has been furnished to us by the management and which has been relied upon by us. We have not carried out any additional
procedures thereon.
Our opinion on the Standalone Financial Statements is not modified in respect of the above matter.
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
Section 143(11) of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate
and according to the information and explanations given to us, 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. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent
applicable, 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 of the accompanying standalone financial statements.
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, except for the matter stated in Paragraph (i)(vi) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014 (as amended).
c. The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including the statement of Other Comprehensive
Income), the Standalone Statement of Changes in Equity and the Statement of Cash Flows 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 Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on March 31,2025 and taken on record by the Board
of Directors, none of the directors is disqualified as on March 31,2025, from being appointed as a director in terms of Section
164(2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to these standalone financial statements of the
Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B" to this report wherein
we have expressed an unmodified opinion.
g. In our opinion, the managerial remuneration for the year ended March 31,2025 has been paid/ provided by the Company to
its directors in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act;
h. The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph
2(b) above on reporting under Section 143(3)(b) and paragraph 2(i)(vi) below on reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014.
i. 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 as amended, 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
- Refer note 37 to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses as at March 31,2025.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the
Company during the year ended March 31,2025.
iv. (a) The Management has represented that, to the best of its knowledge and belief as disclosed in note 52 (v) to the
standalone financial statements, no funds 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 as disclosed in note 52 (vi) to the
standalone financial statements, no funds 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;
Based on such audit procedures performed by us, as 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 (i) and (ii) of Rule 11(e), as
provided under (a) and (b) above, contain any material misstatement.
v. The Company has not declared or paid any dividend during the year.
vi. As stated in note 54 to the standalone financial statements and based on our examination which included test checks,
except for instance mentioned below, the Company has used an accounting software for maintaining its books of account
which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all
relevant transactions recorded in the software.
Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with,
other than the consequential impact of the exception given below.
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Nature of exception noted
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Details of exception
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Instances of accounting software for maintaining books of
accounts for which the feature of recording audit trail (edit
log) facility was not operated throughout the year for all
relevant transactions recorded in the software.
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The audit trail feature was not enabled at the database
level for accounting software to log any direct data
changes, used for maintenance of all accounting records
by the Company.
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Further, the audit trail, to the extent maintained in the prior year, has been preserved by the Company as per the statutory
requirements for the record retention.
For Suresh Surana & Associates LLP
Chartered Accountants
Firm's Registration No. 121750W/W100010
Sd/-
Kapil Kedar
Partner
Place: New Delhi Membership No. 094902
Date : May 30, 2025 UDIN: 25094902BMOJVZ8285
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