We have audited the accompanying standalone financial
statements of OneSource Specialty Pharma Limited (formerly
known as Stelis Biopharma Limited) (the "Company"), which
comprise the Standalone Balance Sheet as at 31 March
2025, and the Standalone Statement of Profit and Loss
(including Other Comprehensive Income), the Standalone
Statement of Cash Flows and the Standalone Statement
of Changes in Equity for the year ended on that date, and
notes to the standalone financial statements, including
a summary of 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 prescribed under Section 133 of the
Act, ("Ind AS") and other accounting principles generally
accepted in India, of the state of affairs of the Company
as at 31 March 2025, and its profit, total comprehensive
income, its cash flows and the changes in equity 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 Responsibility 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
made thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and
the ICAI's Code of Ethics. We believe that the audit evidence
obtained by us 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.
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Key Audit Matters
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Auditor’s responses
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1
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Business Combination
(Refer note 39 of the standalone financial statements)
The Company has acquired the identified business
of Strides Pharma Science Limited ('Strides')
and Steriscience Specialities Private Limited
('Steriscience'). The aggregate purchase consideration
was allocated to identifiable net tangible and intangible
assets based upon their fair values which led to the
recognition of goodwill of ' 19,761.42 million. The
Company's accounting for the acquisition included
determining the fair value of the assets acquired,
which primarily included product related intangibles.
Given the significance of amounts involved and
significant estimates and judgements involved, we
determined this to be an area of focus for our audit.
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Principal audit procedures performed included the following:
• Read the approved scheme of arrangement and other related
documents to obtain an understanding of the acquisition and
the key terms and conditions;
• Evaluated the design, implementation and tested the
operating effectiveness of relevant internal controls over
accounting for business combination.
• Evaluated the objectivity and competence of the specialist
engaged by the Company and reviewed the purchase price
allocation report issued by such specialist.
• With the assistance of our valuation specialists, we have
assessed overall reasonableness of the methodology and
assumptions used.
• Verified the accounting treatment required as per Ind AS
103 Business Combinations as assessed by the Company
for the said scheme of arrangement and also assessed the
compliance of the disclosures made in standalone financial
statements.
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Key Audit Matters Auditor’s responses
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2
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Impairment of Goodwill and related Cash Generating Principal audit procedures performed included the following:
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Unit
•
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We obtained an understanding of the Management's
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(Refer note 4D and 4G of the standalone financial
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process for allocation of goodwill to a CGU and impairment
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statements)
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assessment of CGU.
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The Management of the Company has assessed the y
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Evaluated the design and implementation of the relevant
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annual impairment of Goodwill recognised pursuant to
the scheme of arrangement and related assets of Cash
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controls and carried out testing of the Management's
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Generating Unit (CGU) which requires a comparison of
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control around the impairment assessment.
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estimated recoverable value of the CGU to the carrying •
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We inquired with Management to understand the factors
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value of the assets in the CGU.
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considered when performing the impairment assessment
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The Management has arrived at recoverable value
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including the rationale for the events and circumstances
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based on value in use derived from discounted forecast
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considered based on strategic plans of the entity (business
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cash flow models involving external specialist.
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revenue projections), consideration of economic and
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We have considered this to be a key audit matter
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industry matters and the factors considered regarding the
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considering the significance of the balance and
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overall value in use conclusion.
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the value in use model uses several assumptions, •
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Evaluated the competence of the Management's expert
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including estimates of future sales growth, operating
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and the key assumptions considered in the management's
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costs, terminal growth rates and weighted average
cost of capital.
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estimates of future cash flows.
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•
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Evaluated the methodologies, terminal growth rate, the
discount rate applied, which included benchmarking the
weighted average cost of capital with sector averages
for the relevant markets in which the CGU operates and
considering Company specific factors and other key
assumptions considered in the calculations.
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•
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Performed sensitivity analysis on the key assumptions
within the forecast cash flows and focused our attention
on those assumptions we considered most sensitive to
the changes; such as revenue growth during the forecast
period, the terminal growth rate and the discount rate
applied to the future cash flows.
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•
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We ascertained the extent to which a change in these
assumptions, both individually or in aggregate, would
result in impairment, and considered the likelihood of such
events occurring.
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•
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We tested the arithmetical accuracy of the computations.
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•
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We assessed the accounting principles applied by the
Company and adequacy of disclosures in accordance with
the Indian Accounting Standards, applicable regulatory
financial reporting framework and other accounting
principles generally accepted in India.
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3
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Revenue recognition Principal audit procedures performed included the following:
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(Refer note 2.3 and note 20 of the standalone financial •
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1 We evaluated the design of internal controls over
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statements)
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recognition of revenue upon completion of performance
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The Company's revenue mainly arose from contract
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obligations and in the appropriate period in accordance
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development and manufacturing services and sale of
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with the Company's accounting policy.
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pharmaceutical products. The Company recognises •
revenue based on the terms and conditions of
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1 On a sample basis, we tested the operating effectiveness of
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transactions, which vary with different customers.
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the internal control relating to the determination of point of
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The Company recognises revenues upon completion
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time at which the performance obligations are completed
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of performance obligations.
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and transfer of control of the goods occurs.
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Sl
Key Audit Matters
No.
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Auditor’s responses
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For revenue recognised around balance sheet date, it
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• We tested the relevant information technology systems
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is essential to ensure whether the transfer of control
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used in recording the revenue including company's system
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of the goods or completion of performance obligations
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generated reports, based on which selection of samples
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for services rendered by the Company to the customer
occurs before the balance sheet date.
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was undertaken.
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Considering that there are significant volume of
revenue recognised close to the year end, involving
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• On sample basis, we performed test of details of revenues
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recognised through following procedures:
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material amounts and such revenue recognition is
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- Analysed the terms and conditions of the underlying
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subject to transfer of control to customers before the
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contract with the customers and
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balance sheet date, we consider the risk of revenue
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- Verified the evidence for the transfer of control of the
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from operations being recognised prior to transfer of
control to customer to be a key audit matter.
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goods/services prior to the balance sheet date, from
relevant supporting documents.
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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 Board's report, Management
Discussion and Analysis, Corporate Governance
Report and Business Responsibility and Sustainability
Report, but does not include the consolidated financial
statements, 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 Board of
Directors 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 accounting principles generally accepted in India,
including Ind AS specified 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 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 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 the Board of Directors either intend to liquidate
the Company or to cease operations, or has no realistic
alternative but to do so.
The Company's Board of Directors are also 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 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 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 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 the 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.
Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of
a reasonably knowledgeable user of the standalone financial
statements may be influenced. We consider quantitative
materiality and qualitative factors in (i) planning the scope
of our audit work and in evaluating the results of our work;
and (ii) to evaluate the effect of any identified misstatements
in the standalone financial statements.
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 financial controls 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 Section 143(3) of the Act, based on our
audit 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
except for not complying with the requirement of
audit trail as stated in (i)(vi) below.
c) The Balance Sheet, the 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 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 31 March 2025
taken on record by the Board of Directors, none of
the directors is disqualified as on 31 March 2025
from being appointed as a director in terms of
Section 164(2) of the Act.
f) The modification relating to the maintenance of
accounts and other matters connected therewith,
is as stated in paragraph (b) above.
g) With respect to the adequacy of the 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 A”. Our report
expresses an unmodified opinion on the adequacy
and operating effectiveness of the Company's
internal financial controls with reference to
standalone financial statements.
h) With respect to the other matters 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.
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 29 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.
iii. There were no amounts which were 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, as disclosed in the note 37(h) 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(s) or entity(ies), including
foreign entities ("Intermediaries"), with
the understanding, whether recorded
in writing or otherwise, that the
Intermediary shall, 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 the note 37(i) to
the standalone financial statements,
no funds have been received by
the Company from any person(s)
or entity(ies), including foreign
entities ("Funding Parties"), with the
understanding, whether recorded in
writing or otherwise, that the Company
shall, 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
performed 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 (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 and has not
proposed final dividend for the year.
vi. Based on our examination, which included
test checks and that performed by other
auditor in relation to accounting software
used for maintaining financial information
of identified business of Strides Pharma
Science Limited (i.e. Strides Softgel) merged
with the Company, the Company has used
accounting softwares for maintaining its
books of account for the year ended 31
March 2025 which has a feature of recording
audit trail (edit log) facility and the same has
operated throughout the year for all relevant
transactions recorded in the softwares except
that in respect of one accounting software,
audit trail was not enabled for certain critical
tables (refer note 41 to the standalone
financial statements). Accordingly, we are
unable to comment on whether there was
any instance of the audit trail feature being
tampered with.
Additionally, the audit trail that was enabled
and operated for the year ended 31 March
2024 has been preserved by the Company
as per the statutory requirements for
record retention, as stated in Note 41 to the
standalone financial statements.
2. As required by the Companies (Auditor's Report) Order,
2020 ("the Order") issued by the Central Government
in terms of Section 143(11) of the Act, we give in
“Annexure B” a statement on the matters specified in
paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
Sandeep Kukreja
(Partner)
Place: Bengaluru Membership Number: 220411
Date: 5 May 2025 (UDIN: 25220411BMOQCQ2747)
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