Sun Pharmaceutical Limited is a leading pharmaceutical company of India engaged in research and manufacturing of drugs. It has over over 40 state­of­the­art manufacturing sites spanning 6 continents. These manufacturing units are located in 2 India, the US, Brazil, Canada, Egypt, Hungary, Israel, Bangladesh, Mexico, Romania, Ireland, Morocco, Nigeria, South Africa and Malaysia. The company has around 2000 research scientists working in multiple R&D centres equipped with cutting­edge enabling technologies for research. 

The company presents its financials both on standalone basis and on a consolidated basis. The consolidated financial statements for the year ended 31st March 2017 have been prepared taking into account the financials of the parent company and 134 subsidiary companies, partnership firms, joint venture and associate companies. The summarized financial statements of the company for the year ended 31st March 2017 are given below, both on standalone basis and on consolidated basis. 

1. Balance Sheet as on 31st March 2017: 

2. Statement of Profit and Loss for the Year Ended 31st March 2017

3. Cash Flow Statement for the year ended 31st March 2017

Questions for Discussion

1. To understand the financial performance and status of the Sun Pharmaceutical Limited, which of financial statements would you prefer? 

2. The company has reported a loss on standalone basis and profit on consolidated basis. What does it indicate?

3. The expression ‘non­controlling interest’ is appearing in the profit and loss statement as well as in the balance sheet. What does it indicate?

4. Why is goodwill appearing in the consolidated balance sheet but not in standalone balance sheet?

5. ‘Investment in the nature of equity in subsidiaries’ is appearing the standalone balance sheet but not in the consolidated balance sheet. Why? 

6. Comment upon the cash flow under various activities on standalone basis as compared to consolidated basis.

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Particulars ASSETS Non-current assets Property, plant and equipment Capital work-in-progress Goodwill Other Intangible assets Intangible assets under development Investments in the nature of equity in subsidiaries. Investment in associates Investment in joint ventures Financial assets (i) Investments (ii) Loans (iii) Other financial assets Income tax assets Deferred tax assets (net) Other non-current assets Total non-current assets Current assets Inventories Financial assets (i) Investments (ii) Trade receivables (iii) Cash and cash equivalents (iv) Bank balances other than (iii) above (v) Loans (vi) Others (to be specified) Other current assets Total current assets Assets classified as held for sale Total assets EQUITY AND LIABILITIES Equity Equity share capital Other equity Non-controlling interest LIABILITIES Non-current liabilities Financial liabilities (i) Borrowings (ii) Other financial liabilities Provisions Deferred tax liabilities (Net) Other non-current liabilities Total non-current liabilities Current liabilities Financial liabilities (i) Borrowings (ii) Trade payables (iii) Other financial liabilities Other current liabilities Provisions Current tax liabilities (Net) Total current liabilities. Total equity and liabilities Standalone Consolidated 38,319 10,533 (in Million) 485 454 192,442 1,068 49 990 17,826 7,517 4,101 273,784 22,866 400 27,257 1,508 130 138 672 10,728 63,699 337,482 2,399 206,316 208,715 7,606 7 11,328 18,942 40,540 20,942 28,135 1,738 18,470 109,826 337,482 84,953 15,648 55,362 36,437 12,366 4,605 430 4,575 698 6,452 31,250 24,928 6,862 284,566 68,328 2,309 72,026 86,628 64,780 10,191 2,259 22,950 329,471 66 614,102 2,399 363,997 37,909 404,305 14,361 1,048 12,111 3,148 259 30,927 66,549 43,954 22,116 4,621 40,159 1,471 178,870 614,102