Auditor Report of Alkem Laboratories Ltd.

Mar 31, 2025

We have audited the accompanying standalone financial
statements of Alkem Laboratories Limited (the “Company”),
which comprise the Balance Sheet as at 31 March, 2025,
and the Statement of Profit and Loss (including Other
Comprehensive Income), the Statement of Cash Flows and
the Statement of Changes in Equity for the year ended on
that date, and notes to the financial statements, including
a summary of material accounting policies and other
explanatory information in which are incorporated the
financial information for the year ended on that date of the
Company''s one branch located at Nepal.

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 (“SA”s)
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 matter described
below to be the key audit matter to be communicated in
our report.

Sr '' Key Audit Matter No. 9	Auditor''s Response
Overstatement of revenue cut-off	Principal audit procedures performed included the following:
(Refer Note 3.19)	• Evaluated the Company''s revenue recognition policy and assessed
The Company recognises revenue from	compliance with the Indian Accounting Standard (Ind AS).
sale of products based on shipping	• Performed a walkthrough of the revenue business cycle to obtain an
terms which defines the timing of the	understanding of the relevant risks and controls around the timing of
transfer of control to the customer.	revenue recognition. Tested the design, implementation and operating
The terms and conditions for sale vary with different customers. For revenue	effectiveness of the relevant controls.
recognized during the period near to	• Assessed the IT environment in which the business system operates and
the reporting date, it is essential to ensure that the control of goods has	tested the General information technology controls.
been transferred to the customers.	• Basis the sales recorded during the year and near to the period end, reviewed
Dispatch of goods to customers happens	the lead time analysis to arrive at the average time taken for transfer of
from multiple locations including factories, warehouses, depots and third-	control to the customers from the date of dispatch.
party locations. Revenue recognition	• On statistically selected samples of transactions, tested the underlying
being subject to the manual exercise	documents, which included vouching of sale invoices, shipping documents
of tracking delivery for determining	and lead time/ proof of delivery to test evidence for transfer of control both
transfer of control, we consider cut-off of revenue as a key audit matter.	during the period and at period end.

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 Management Discussion &
Analysis, Directors'' Report, Corporate Governance and
Business Responsibility and Sustainability Report, but does
not include the standalone financial statements and our
auditor''s report 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 Management and 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, cash flows and changes in equity of
the Company in accordance with the accounting principles
generally accepted in India, including Ind AS/ Accounting
Standards 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 is 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.

Reporting on comparatives in case
the previous year was audited by the
predecessor auditor

The standalone financial statements of the Company for
the year ended 31 March, 2024, were audited by another
auditor who expressed an unmodified opinion on those
statements on 29 May, 2024. These previously issued
financial statements have been adjusted to comply with Ind
AS 105 “Non-current Assets Held for Sale and Discontinued
Operations” and included in this Statement as comparative
financial statements. The adjustments made to the previously
issued financial statements to comply with Ind AS have been
reviewed and audited by us, as applicable.

Our opinion on the standalone financial statements is not
modified in respect of this matter.

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.

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) 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.

g) 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.

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,
as amended in our opinion and to the best of our
information and according to the explanations
given to us:

(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.

i. The Company has disclosed the impact of
pending litigations on its financial position in its
standalone financial statements - Refer Note
3.26 to the 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 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, 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.

v. The final dividend proposed in the previous
year, declared and paid by the Company
during the year and the interim dividend
declared and paid by the Company during the
year is in accordance with section 123 of the
Act, as applicable.

As stated in note 3.33 to the standalone
financial statements, the Board of Directors
of the Company has proposed final dividend
for the year which is subject to the approval
of the members at the ensuing Annual
General Meeting. Such dividend proposed
is in accordance with section 123 of the Act,
as applicable.

vi. Based on our examination, which included test
checks, the Company has used accounting
software systems for maintaining its books of
account for the financial year ended 31 March,
2025 which have the feature of recording
audit trail (edit log) facility and the same has
operated throughout the year for all relevant
transactions recorded in the software
systems. Further, during the course of our
audit we did not come across any instance
of the audit trail feature being tampered with
and the audit trail has been preserved by the
Company as per the statutory requirements
for record retention.

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 LLP

Chartered Accountants
(Firm''s Registration No. 117366W/W-100018)

Rupen K. Bhatt

(Partner)

Place: Mumbai (Membership No. 046930)

Date: 29 May, 2025 (UDIN: 25046930BMODRT7323)

---

Mar 31, 2024

We have audited the standalone financial statements of Alkem Laboratories Limited (the "Company"), which comprise the standalone balance sheet as at 31 March 2024, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and 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 which included the financial information from one Branch located in Nepal.

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 ("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 31 March 2024, and its profit and other comprehensive loss, 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 SAs 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 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 Matter

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.

Revenue from operations

See Note 2.9 and 3.19 to standalone financial statements

The key audit matter	How the matter was addressed in our audit
Revenue is recognized when the control of the products being	Our audit procedures included the following:
sold has been transferred to the customer. There is a risk of	• Obtained an understanding of the systems, processes
revenue being overstated as management, to achieve its	and controls implemented by the Company for recording
performance targets, may recognize revenue on sale of products though control may not have transferred to the customer. This	revenue from sale of goods.
was an area of focus for us.	• Evaluated Company''s revenue recognition policies by assessing compliance with applicable accounting standards.
Refer Note 2.9 of the standalone financial statements for details	• Assessed the IT environment in which the business system
on accounting policy on revenue recognition.	operates and tested automated controls involved in revenue recognition. • Testing the design, implementation and operating effectiveness of the Company''s manual and automated controls designed to ensure recognition of valid revenue transactions in the correct period. • On selected statistical samples of transactions, we tested the underlying documents, which include testing sale invoices, shipping documents and lead time/ proof of delivery to test evidence for transfer of control both during the period and at period end. • Performed procedures to identify and test exceptional transactions such as one off sales to customers to identify any unusual transactions. • Tested high risk manual journal entries posted to revenue to identify unusual transactions.

Other Information

The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the financial statements and 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 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 this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s and Board of Directors'' Responsibilities for the Standalone Financial Statements

The Company''s Management and 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 state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (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 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, the 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 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 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 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 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 and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements 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 Section 143(11) 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 A. 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 except for the matter stated in the paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

c. The standalone balance sheet, 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 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 01 April 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 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 are as stated in the paragraph 2A(b) above on reporting under Section 143(3)(b) and paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

g. With respect to the 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".

B. 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:

a. The Company has disclosed the impact of pending litigations as at 31 March 2024 on its financial position in its standalone financial statements - Refer Note 3.26 (a) to the standalone financial statements.

b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

d. (i) The management has represented that, to the

best of its knowledge and belief, as disclosed in the Note 3.41 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.

(ii) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 3.41 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 Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(iii) 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 (i) and (ii) above, contain any material misstatement.

e. The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with Section 123 of the Act.

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.

As stated in Note 3.33 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.

f. Based on our examination which included test checks, the Company has used an accounting software for maintaining its books of account which has a feature of audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that the audit trail was not enabled (i) at the database level to log any direct data changes; and (ii) at the application level for changes made by privileged users for the period from 22 July 2023 to 11 January 2024. Further, for the periods where audit trail (edit log) facility was enabled and operated, we did not come across any instance of audit trail feature being tampered with.

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

I n our opinion and according to the information and explanations given to us, the remuneration paid/payable 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 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 B S R & Co. LLP

Chartered Accountants Firm''s Registration No.:101248W/W-100022

Sreeja Marar

Partner

Place: Mumbai Membership No.: 111410

Date: 29 May 2024 ICAI UDIN:24111410BKGQON3512

---

Mar 31, 2023

Alkem Laboratories Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Alkem Laboratories Limited (the "Company") which comprise the standalone balance sheet as at 31 March 2023, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information in which are included financial information from one branch.

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 ("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 31 March 2023, and its profit and other comprehensive loss, 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 SAs 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 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 standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue from operations

See Note 2.9 and 3.19 to standalone financial statements

The key audit matter	How the matter was addressed in our audit
Revenue is recognized when the control of the products being sold has been transferred to the customer. There is a risk of revenue being overstated as management, to achieve its performance targets, may recognize revenue on sale of products though control may not have transferred to the customer. This was an area of focus for us. Refer Note 2.9 of the standalone financial statements for details on accounting policy on revenue recognition.	Our audit procedures included the following: •    Obtained an understanding of the systems, processes and controls implemented by the Company for recording revenue from sale of goods. •    Evaluated Company's revenue recognition policies by assessing compliance with applicable accounting standards. •    Assessed the IT environment in which the business system operates and tested system controls involved in revenue recognition.
Â	• Tested design, implementation and operating effectiveness of the Company's controls on generating sales order, recording of revenue, creation of new customers and process of revenue cut off.
Â	• On selected statistical samples of transactions, we tested the underlying documents, which include testing contractual terms of sale contracts/ invoices, shipping documents and lag time/ proof of delivery to test evidence for transfer of control.
Â	• Performed procedures to identify and test exceptional transactions such as one off sales to customers to identify any unusual transactions.
Â	• Tested manual journal entry posted to revenue to identify unusual transactions.

 

Investment in subsidiaries See Note 2.4 and 3.2 to standalone financial statements	Â
The key audit matter	How the matter was addressed in our audit
As at 31 March 2023, the carrying amount of investment in	In view of significance of the matter we applied following audit
subsidiaries is ' 25,502.6 million. The carrying value of investment	procedures in this area, among others to obtain sufficient and
in subsidiaries will be recovered through future cash flows	appropriate audit evidence:
and accordingly there is inherent risk that these assets may	• Tested the operating effectiveness of controls over Company's
be impaired if these cash flows do not meet the Company's expectations. Refer Note 2.4 and 3.2 to the standalone financial	review of impairment analysis.
statements for details of accounting policies on impairment of	• Compared the inputs with historical growth trends evaluating
investment in subsidiaries and related disclosures.	the forecast used in prior year models to its actual performance of the business.
Annual impairment testing of investments is considered to be a	• Compared current forecasts to the business plan approved by
key audit matter due to the significance of the carrying value of	the Board of Directors. Using our knowledge of the Company and
these investments in the standalone financial statements, inherent	industry, challenged significant assumptions and judgements
complexity in auditing the forward-looking assumptions applied	used by the Company in its impairment assessment, specifically
to determine recoverable value given the significant judgements	in relation to forecasted revenue, margins, terminal growth rate,
involved. The key assumptions in the cash flow models include the forecast revenue, margins, terminal growth, weighted average	and discount rates with the assistance of valuation specialists.
cost of capital (discount rate).	•    Performed sensitivity analysis of the key assumptions, including revenue growth rates, projected gross margins, and the discount rate applied in determining the recoverable value and considering the resulting impact on the impairment testing and whether there were any indicators of management bias in the selection of these key assumptions. •    Evaluated adequacy of disclosures, including disclosures of key assumptions, judgements and sensitivities and impairment adjustment recorded during the year under audit.

Other Information

The Company's Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company's annual report, but does not include the financial statements and 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 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 this other information, we are required to report that fact. We have nothing to report in this regard.

Management's and Board of Directors Responsibilities for the Standalone Financial Statements

The Company's Management and 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 state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (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 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, the 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 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 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 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 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 and Board of Directors.

•    Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements 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 Section 143(11) 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 A. 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), the standalone statement of changes in equity and the standalone 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 31 March 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 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 financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

B. 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

a.    The Company has disclosed the impact of pending litigations as at 31 March 2023 on its financial position in its standalone financial statements - Refer Note 3.26 to the standalone financial statements.

b.    The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c.    There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

d (i) The management has represented that, to the best of it's knowledge and belief, as disclosed in the Note 3.42 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.

(ii) The management has represented that, to the best of it's knowledge and belief, as disclosed in the Note 3.42 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 Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(iii) 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 (i) and (ii) above, contain any material misstatement.

e.    The interim dividend declared and paid by the Company during the year and until the date of this audit report is in compliance accordance with Section 123 of the Act.

As stated in Note 3.33 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.

f.    As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from 1 April 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.

C. 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 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 B S R & Co. LLP

Chartered Accountants Firm's Registration No.:101248W/W-100022

Sreeja Marar

Partner

Place: Mumbai    Membership No.: 111410

Date: 19 May 2023    ICAI UDIN: 23111410BGYAUO8104

---

Mar 31, 2022

Alkem Laboratories Limited

Report on the Audit of the Standalone FinancialStatements

Opinion

We have audited the standalone financial statements of Alkem Laboratories Limited (the "Company"), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of 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 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 accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its profit and other comprehensive loss, 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 SAs 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 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 obtained by us 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 standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matter Revenue from operations
The key audit matter	How the matter was addressed in our audit
• Revenue is recognized when the control of the products being sold has been transferred to the	Our audit procedures included the following: • Obtained an understanding of the systems, processes and
customer. There is a risk of revenue being overstated	controls implemented by the company for recording revenue
as management, to achieve its performance targets, may recognize as revenue on sale of products though	from sale of goods.
control may not have transferred to the customer.	• Evaluated Company''s revenue recognition policies by assessing
This was an area of focus for us.	compliance with applicable accounting standards.
• Refer Note 2.9 of the standalone financial statements for	• Assessed the IT environment in which the business
details on accounting policy on revenue recognition.	system operates and tested system controls involved in revenue recognition. • Tested design, implementation and operating effectiveness of the company''s controls on generating sales order, recording of revenue, creation of new customers and performance of revenue cut off. • On selected statistical samples of transactions, we tested the underlying documents, which include testing contractual terms of sale contracts/ invoices, shipping documents and lag time/ proof of delivery to test evidence for transfer of control. • Performed procedures to identify and test exceptional transactions such as unusual sales trend, one off sales to customers, to identify any unusual transactions. • Tested manual journal entry posted to revenue to identify unusual transactions.

Other Information

The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s 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 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 this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s and Board of Directors'' Responsibilities for the Standalone Financial Statements

The Company''s Management and 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 state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (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 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, the 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 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 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 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 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 and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements 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 Section 143 (11) 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. (A) 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), the standalone statement of changes in equity and the standalone 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 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 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 standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B"

(B) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditor''s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 3.26 to the standalone financial statements.

b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

d) (i) The management has represented that, to the

best of its knowledge and belief, 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 persons or entities, 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 ("Ultimate Beneficiaries") by or on behalf of the Company or

• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, 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 ("Ultimate Beneficiaries") by or on behalf of the Funding Party or

• provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

(iii) Based on such audit procedures 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 (d) (i) and (d) (ii) contain any material misstatement.

e) The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Act.

(C) 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 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 B S R & Co. LLP

Chartered Accountants Firm''s Registration No.101248W/W-100022

Balajirao Pothana

Partner

Place: Mumbai Membership No. 122632

Date: 13 May 2022 UDIN: 22122632AIXALU6482

---

Mar 31, 2021

To the Members of

Alkem Laboratories Limited

Report on the Audit of the Standalone Financial

Statements

Opinion

We have audited the standalone financial statements of Alkem Laboratories Limited ("the Company"), which comprise the standalone balance sheet as at 31 March 2021, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including 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 aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("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 31 March 2021, and 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 in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs 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 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 standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue from operations
The key audit matter description	How the matter was addressed in our audit
• Revenue is recognized when the control of the	In view of significance of the matter we applied following audit
products being sold has been transferred to	procedures in this area, among others to obtain sufficient and
the customer. There is a risk of revenue being	appropriate audit evidence:
overstated at period end as management, to achieve its performance targets, may recognise certain transactions as revenue though control may not have	• Evaluated the Company''s revenue recognition policies by assessing compliance with applicable accounting standards.
transferred to the customer as of the period end.	• Tested design, implementation and operating effectiveness of
This was an area of focus for us.	the Company''s general IT controls and key IT application/ manual
• Refer Note 2.9 of the standalone financial statements for details on accounting policy on revenue recognition.	controls over the Company''s systems which governs recording of revenue, creation of new customers and key controls over revenue cut-off in the general ledger accounting system.
	• Performed substantive testing (including period end cut off
	testing) by selecting samples of revenue transactions recorded during the year-end, by verifying the underlying documents, which include testing contractual terms of sale contracts / invoices, shipping documents and lag time to test evidence for transfer of control.
	• Performed analysis such as sales trend, one-off sales to customers
	during the year to identify any unusual fluctuations.
	• Tested significant manual journals posted to revenue to
	identify unusual items.

The key audit matter description	How the matter was addressed in our audit
• As at 31 March 2021, the carrying amount of	In view of significance of the matter we applied following audit
investment in subsidiaries is '' 18,770 million.	procedures in this area, among others to obtain sufficient and
The carrying value of investment in subsidiaries	appropriate audit evidence:
will be recovered through future cash flows and accordingly there is inherent risk that these assets may be impaired if these cash flows do not meet the	• Tested operating effectiveness of controls over Company''s review of impairment analysis.
Company''s expectations. Refer Note 2.4, 3.2 and 3.45	• Compared the inputs with historical growth trends evaluating
to the standalone financial statements for details of	the forecast used in prior year models to its actual performance
accounting policies on impairment of investment in	of the business.
subsidiaries and related disclosures.	• Compared current forecasts to the business plan approved by
• Annual impairment testing of investments is	the Board of Directors. Using our knowledge of the Company and
considered to be a key audit matter due to	industry, challenged significant assumptions and judgements
the significance of the carrying value of these	used by the Company in its impairment assessment, specifically
investments in the standalone financial statements,	in relation to forecast revenue, margins, terminal growth rate,
inherent complexity in auditing the forward-looking	consideration of impact of economic slowdown caused by
assumptions applied to determine recoverable	Covid 19 pandemic and discount rates with the assistance of our
value given the significant judgements involved.	valuation specialists.
The key assumptions in the cash flow models include the forecast revenue, margins, terminal growth, weighted average cost of capital (discount rate) and uncertainty in business across geographies arising from the impact of Covid-19 pandemic.	• Performed sensitivity analysis of the key assumptions, including revenue growth rates, projected gross margins, and the discount rate applied in determining the recoverable value and considering the resulting impact on the impairment testing and whether there were any indicators of management bias in the selection of these
	key assumptions;
	• Evaluated adequacy of disclosures, including disclosures of key
	assumptions, judgements and sensitivities and impairment adjustment recorded during the year under audit.

The key audit matter description	How the matter was addressed in our audit
• The Company pays minimum alternate tax (MAT) under section 115JB of the Income Tax Act, 1961, and has recognised deferred tax asset (DTA) aggregating '' 10,174 million as at 31 March 2021, in relation to unutilized MAT credit.	In view of significance of the matter we applied following audit procedures in this area, among others to obtain sufficient and appropriate audit evidence: • Evaluated the Company''s accounting policy in respect of DTA by comparing compliance with applicable accounting standards • Evaluated Company''s controls over the assumptions and judgments used in the projections of taxable future income.
• The MAT paid is 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 taxes under the normal provision of Income Tax Act, 1961. Refer note 2.12 for accounting policies and note 3.7 for disclosures related to DTA on Mat credit asset in the standalone financial statements.
	• Assessed Company''s ability to estimate future taxable income by comparing the prior year forecasts to actual results. • Performed a sensitivity analysis over the key assumptions to assess their impact on the reasonability in Company''s determination that MAT credit asset were realizable. • In respect of DTA on account of MAT credit asset, we evaluated the
Period-end assessment of recoverability of DTA in relation to MAT credit asset is considered to be a
key audit matter due to the significance of carrying value of MAT credit asset in the standalone financial	Company''s assessment and conclusion in relation to its utilization within the period allowed for carry forward and set off against
statements. The assessment of recoverability of DTA on account of MAT credit asset requires significant	forecasted taxable income streams.
judgment regarding the Company''s estimation of	• Evaluated adequacy of disclosures in relation to DTA on account
future profitability and taxable income which will result in utilization of the MAT credit within the time limits available under the applicable Income tax laws.	of MAT credit asset made in the standalone financial statements.

Other Information

The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the financial statements and our auditors'' 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 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 this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s and Board of Directors'' Responsibility for the Standalone Financial Statements

The Company''s Management and 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 state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (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 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 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, the 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 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 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 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 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 in the standalone financial statements made by the 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 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 auditors'' 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 (Auditors'' Report) Order, 2016 ("the Order") issued by the Central Government in terms of section 143 (11) 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. (A) As required by Section 143(3) ofthe 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), the standalone statement of changes in equity and the standalone 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 31 March 2021 taken

on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 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 financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors'' 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 as at 31 March 2021 on its financial position in its standalone financial statements - Refer Note 3.26 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 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 financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these financial statements since they do not pertain to the financial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors'' Report under section 197(16):

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 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) which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants Firm''s Registration No.101248W/W-100022

Sadashiv Shetty

Partner

Mumbai Membership No. 048648

25 May 2021 UDIN: 21048648AAAABB4812

---

Mar 31, 2018

REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS financial statements of Alkem Laboratories Limited (“the Company”), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and summary of the significant accounting policies and other explanatory information (herein after 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 state of affairs, profit and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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 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 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 are also responsible to 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 entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report. However, future events or conditions may cause an entity to cease to continue as a going concern.

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 31 March 2018, its profit including other comprehensive income, changes in equity 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 give in “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, the 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 Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 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 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 Ind AS financial statements - Refer Note 3.26 to the standalone Ind AS 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 during the year ended 31 March 2018;

iv. The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 have not been made since the requirement does not pertain to financial year ended 31 March 2018.

Annexure – A to the Independent Auditor’s Report - 31 March 2018

(Referred to in our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, a portion of the fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations 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 name of the Company

(ii) The inventory, except goods-in-transit and stocks lying with third parties, has been physically verified by the management during the year. In respect of inventory lying with third parties at the year-end, written confirmations have been obtained. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs 3 (iii) (a), (b) and (c) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 of the Act during the year. The Company has complied with the provisions of Section 186 of the Act, with respect to the investments made, loans, guarantees given to subsidiaries and securities given in respect of loan taken by the subsidiaries.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public during the year in terms of the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under subsection 1 of section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of 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 other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of 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 other material statutory dues were in arrears as at 31 March 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of income-tax, sales tax, service tax, Goods and Services Tax, duty of customs, duty of excise and value added tax as at 31 March 2018 which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in Enclosure I to this report.

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company does not have any loans or borrowings from financial institutions or Government, nor has it issued any debentures during the year.

(ix) 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, paragraph 3 (ix) of the Order is not applicable.

(x) 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 nor have we been informed of such case by the management.

(xi) 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.

(xii) 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 to the Company.

(xiii) 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 the provisions of Sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required under Indian Accounting Standard (AS) 24, Related Party Disclosures specified under Section 133 of the Act.

(xiv) 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. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) 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 any noncash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

Enclosure I to Annexure A to the Independent Auditor’s Report -31 March 2018

Name of the Statute	Nature of dues	Amount under dispute (Rs. in Millions)	Amount paid under protest (Rs. in Millions)	Financial year / year (s) Forum where dispute is pending
Central Excise Act, 1944	Excise Duty and Penalty	172.6	18.6	2003-2014 CESTAT
Central Excise Act, 1944	Excise Duty and Penalty	5.4	2.2	2012-2017 Commissioner of Central Excise (Appeals)
Maharashtra VAT Act, 2002	Value Added Tax	6.4	3.5	2003-2005 Appellate Tribunal
Maharashtra VAT Act, 2002	Value Added Tax	95.9	10.3	2006-2014 Joint Dy. Commissioner of Sales Tax (Appeals)
West Bengal VAT Act, 2003	Value Added Tax	13.4	2	2012-2015 Senior Joint Commissioner, Corporate Division (Appellate Authority)
West Bengal VAT Act, 2003	Value Added Tax	0.3	-	2010-2011 Sr. Joint Commissioner of Commercial Tax
Bihar VAT Act, 2005	Value Added Tax	13.4	3.2	2010-2012 Joint commissioner Commercial Taxes (Appeals)
Uttar Pradesh VAT Act, 2008 Value Added Tax		3.6	1.8	2012-2013 Joint commissioner of Commercial taxes -Circle -I
Odisha VAT Act, 2004	Value Added Tax	1.5	0.1	2012-2016 Commissioner of Commercial Taxes
Gujarat VAT Act, 2003	Value Added Tax	0.1	-	2006-2007 Commissioner of Commercial Taxes Gujarat
Odisha Entry Tax Act, 1999	Entry Tax	0.2	0.1	2012-2014 Commissioner of Commercial Taxes
Central Sales Tax Act, 1956	Central Sales Tax	32.0	4.8	2013-2015 Joint Commissioner, Corporate Division (Appellate Authority)
Central Sales Tax Act, 1956	Central Sales Tax	0.2	0.1	2010-2011 Joint Dy. Commissioner Of Sales Tax(Appeals)
Central Sales Tax Act, 1956	Central Sales Tax	0.2	0.1	2009-2011 Joint Commissioner of Sales Tax (Appeals)
Central Sales Tax Act, 1956	Central Sales Tax	0.6	0.1	2010-2011 & Commissioner of Commercial Taxes 2014-2017
Income Tax Act, 1961	Income Tax	25.2	23.6	2001-2012 Commissioner of Income Tax (Appeal)

For B S R & Co. LLP

Chartered Accountants

Firm’s Registration No: 101248W/W-100022

Sadashiv Shetty

Place: Mumbai Partner

Date: 30^th May, 2018 Membership No: 048648

---

Mar 31, 2017

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Alkem Laboratories Limited (“the Company”), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after 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 the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with relevant rules issued thereunder.

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 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 thereunder.

We conducted our audit 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 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 including the Ind AS, of the financial position of the Company as at 31 March 2017, and its financial performance including other 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, 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, 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 Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement 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 Accounting Standards specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015.

(e) On the basis of the written representations received from the directors as on 31 March 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2017 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 over financial reporting 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 Ind AS 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 during the year ended 31 March 2017;

iv. The Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 3.43 to the standalone Ind AS financial statements.

ANNEXURE- A

to the Independent Auditors’ Report - 31 March 2017

(Referred to in our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, a portion of the fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties, as disclosed in Note 3.1 to the standalone Ind AS financial statements, are held in the name of the Company

(ii) The inventory, except goods-in-transit and stocks lying with third parties, has been physically verified by the management during the year. In respect of inventory lying with third parties at the year-end, written confirmations have been obtained. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs 3 (iii) (a), (b) and (c) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 of the Act during the year. The Company has complied with the provisions of Section 186 of the Act, with respect to the investments made, loans, guarantees given to subsidiaries and securities given in respect of loan taken by the subsidiaries.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public during the year in terms of the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under subsection 1 of section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities.

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

(b) According to the information and explanations given to us, there are no dues of income-tax, sales tax, service tax, duty of customs, duty of excise and value added tax as at 31 March 2017 which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in Enclosure I to this report.

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company does not have any loans or borrowings from financial institutions or Government, nor has it issued any debentures during the year.

(ix) 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, paragraph 3 (ix) of the Order is not applicable.

(x) 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.

(xi) 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.

(xii) 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 to the Company.

(xiii) 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 the provisions of Sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015.

(xiv) 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. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) 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 any noncash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

Enclosure I to Annexure A to the Independent Auditors’ Report - 31 March 2017

Name of the Statute	Nature of dues	Amount under dispute (Rs. in millions)	Amount paid under protest (Rs. in millions)	Financial year / year (s)	Forum where dispute is pending
Central Excise Act, 1944	Excise Duty and Penalty	173.2	14.3	2003-2014	CESTAT
Central Excise Act, 1944	Excise Duty and Penalty	3.5	2.2	2012-2017	Commissioner of Central Excise (Appeals)
Maharashtra VAT Act, 2002	Value Added Tax	6.4	3.5	2003-2005	Appeallate Tribunal
Maharashtra VAT Act, 2002	Value Added Tax	296.8	8.3	2008-2011	Joint Commissioner of Sales Tax (Appeals)
West Bengal VAT Act, 2003	Value Added Tax	9.0	1.3	2010-2013	Senior Joint Commissioner of Commercial Tax
Bihar VAT Act, 2005	Value Added Tax	13.4	3.2	2010-2012	Joint commissioner Commercial Taxes (Appeals)
Bihar VAT Act, 2005	Value Added Tax	66.5	13.3	2009-13	Deputy Commissioner, Special Circle
Uttar Pradesh VAT Act, 2008	Value Added Tax	3.6	1.8	2012-2013	Joint commissioner of Commercial taxes -Circle -I
Odisha VAT Act, 2004	Value Added Tax	0.5	0.0*	2012-2014	Commissioner of Commercial Taxes
Gujarat VAT Act, 2003	Value Added Tax	0.1	-	2006-2007	Commissioner of Commercial Taxes Gujarat
Odisha Entry Tax Act, 1999	Entry Tax @	0.2	0.0**	2012-2014	Commissioner of Commercial Taxes
Central Sales Tax Act, 1956	Central Sales Tax	349.7	0.1	2009-2011	Joint Commissioner of Sales Tax (Appeals)
Central Sales Tax Act, 1956	Central Sales Tax #	0.4	0.0***	2012-2014	Commissioner of Commercial Taxes
Income Tax Act, 1961	Income Tax	6.1	-	2001-2012	Commissioner of Income Tax (Appeal)

* Rs.34,961

** Rs.10,130

*** Rs.25,254

For B S R & Co. LLP

Chartered Accountants

Firm’s Registration No: 101248W/W-100022

Sadashiv Shetty

Mumbai Partner

26 May 2017 Membership No: 048648

---

Mar 31, 2016

We have audited the accompanying standalone financial statements of Alkem Laboratories Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, 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 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 the 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 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.

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 thereunder.

We conducted our audit 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 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 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 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 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 31 March, 2016, and its profit and 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 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 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, and the 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 31 March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2016 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 over financial reporting 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 financial statements - Refer Note 2.27(a) (1) 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 during the year ended 31 March 2016.

Annexure-A

To the Independent Auditors'' Report- 31 March 2016 (Referred to in our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties, as disclosed in Note 2.10 to the financial statements, are held in the name of the Company, except for the following:

Particulars Freehold Building Land

Number of cases 2 5

Gross block 22.2 705.9 as at 31 March 2016 (Rs. In million)

Net block 22.2 604.7 as at 31 March 2016 (Rs. In million)

(ii) The inventory, except goods-in-transit, has been physically verified by the management during the year. For inventory lying with third parties at the year- end, written confirmations have been obtained. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs 3 (iii) (a), (b) and (c) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 of the Act during the year. The Company has complied with the provisions of Section 186 of the Act, with respect to the investments made and securities given in respect of loan taken by the subsidiaries.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub-section 1 of section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income- tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of income-tax, sales tax, service tax, duty of customs, duty of excise and value added tax as at 31 March 2016 which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in Enclosure I to this report.

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company does not have any loans or borrowings from financial institutions or Government, nor has it issued any debentures during the year.

(ix) The Company has completed the Initial Public Offering (IPO) through an offer for sale of equity share by the existing shareholders during the year. Accordingly the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. And therefore paragraph 3(ix) of the Order is not applicable to the Company.

(x) 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.

(xi) 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.

(xii) 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 to the Company.

(xiii) 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 the provisions of Sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(xiv) 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. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) 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 any non- cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

Enclosure I to Annexure A to the Independent Auditors'' Report - 31 March 2016

Name of the Statute Nature of dues Amount Amount under paid under dispute (Rs. protest (Rs. in in millions) millions)

Central Excise Act, 1944 Excise Duty 60.2 14.5 and Penalty

Central Excise Act, 1944 Excise Duty 2.2 0.2 and Penalty

Maharashtra VAT Act, 2002 Value Added 6.4 3.5 Tax

Maharashtra VAT Act, 2002 Value Added 283.2 4.1 Tax

West Bengal VAT Act, 2003 Value Added 9.0 1.3 Tax

Bihar VAT Act, 2005 Value Added 71.0 14.8 Tax

Uttar Pradesh VAT Act, 2008 Value Added 1.7 0.4 Tax

Odisha VAT Act, 2004 Value Added 0.5 0.0* Tax

Gujarat VAT Act, 2003 Value Added 0.1 - Tax

Odisha Entry Tax Act, 1999 Entry Tax 0.2 0.0**

Central Sales Tax Act, 1956 Central Sales 349.7 0.1 Tax

Central Sales Tax Act, 1956 Central Sales 372.5 55.9 Tax

Central Sales Tax Act, 1956 Central Sales 0.4 0.0*** Tax

Income Tax Act, 1961 Income Tax 6.1 -

Name of the Statute Financial year Forum where dispute is /year(s) pending

Central Excise Act, 1944 2003-2014 CESTAT

Central Excise Act, 1944 2010-2016 Commissioner of Central Excise (Appeals)

Maharashtra VAT Act, 2002 2003-2005 Appellate Tribunal

Maharashtra VAT Act, 2002 2005-2011 Joint Commissioner of Sales Tax (Appeals)

West Bengal VAT Act, 2003 2010-2013 Senior Joint Commissioner of Commercial Tax

Bihar VAT Act, 2005 2010-2012 Joint commissioner Commercial Taxes (Appeals)

Uttar Pradesh VAT Act, 2008 2012-2013 Commercial Tax Tribunal, Lucknow

Odisha VAT Act, 2004 2012-2014 Commissioner of Commercial Taxes

Gujarat VAT Act, 2003 2006-2007 Deputy Commissioner of Commercial Tax (Appeal)

Odisha Entry Tax Act, 1999 2012-2014 Commissioner of Commercial Taxes

Central Sales Tax Act, 1956 2009-2011 Joint Commissioner of Sales Tax (Appeals)

Central Sales Tax Act, 1956 2012-2013 Senior Joint Commissioner of Commercial Tax

Central Sales Tax Act, 1956 2012-2014 Commissioner of Commercial Taxes

Income Tax Act, 1961 2001-2012 Commissioner of Income Tax (Appeal)

*Rs. 34,961

**Rs. 10,130

*** Rs. 25,254



For BSR & Co.LLP

Chartered Accountants

Firm''s Registration No: 101248WAA/-100022

Sadashiv Shetty

Mumbai Partner

27 May 2016 Membership No: 048648

---

Mar 31, 2015

We have audited the accompanying standalone financial statements of Alkem Laboratories Limited ("the Company"), which comprise of the Balance Sheet as at 31 March 2015, 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 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 the 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 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.

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 thereunder.

We conducted our audit 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 financial statements are free from material misstatement.

Independent Auditors'' Report (Continued)

Alkem Laboratories Limited

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 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. 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 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 31 March, 2015, and its profits and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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 Companies Act, 2015, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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, and the 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 31 March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) 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 – Refer Note 2.27(a) to the 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 outstanding as on balance sheet date which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditors'' Report - 31 March 2015

(Referred to in our report of even date)

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

(b) The Company has a regular program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In accordance with the program, certain fixed assets were verified during this year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) (a) The inventory, except goods-in-transit, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained.

(b) The procedures for the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchase of certain item of inventories are for the Company''s specialized requirements, and similarly certain goods sold and services rendered are for specialized requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) The Company has not accepted any deposits during the year from the public in accordance with the provisions of sections 73 to 76 of the Act and the rules framed there under.

(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub-section 1 of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and any other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income tax, sales- tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and any other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of income tax, sales tax, duty of customs, duty of excise and value added tax which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in Annexure II to this report.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no amounts which are required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

(viii) The Company does not have any accumulated losses at the end of the year and has not incurred cash losses during the current financial year and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its banks. The Company did not have any outstanding dues to any financial institution or debenture holders during the year.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) In our opinion and according to the information and explanations given to us, the Company has not taken any term loan during the year.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit

For B S R & Co. LLP

Chartered Accountants

Firm''s Registration No: 101248W/W - 100022



Sadashiv Shetty

Mumbai Partner

29 June 2015 Membership No: 048648

---

Mar 31, 2014

We have audited the accompanying financial statements of Alkem Laboratories 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 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 and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 (''the Act'') read with General Circular 15/2013 dated 13th September,2013 of the ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. 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.

Auditor''s 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 of 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 principles 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 base for our audit opinion.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditors'' Report) Order, 2003 (''the Order''), as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the order.

2. 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 appears from our examination of those books;

c. The Balance Sheet, the 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, the 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 read with General Circular 15/2013 dated 13th September,2013 of the ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013;

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

Re: Alkem Laboratories Limited (Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date)

1. In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets on the basis of available information.

(b) As explained to us, certain items of fixed assets have been physically verified by the management during the year, and there is a regular program of verification in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of its fixed assets. According to the information and explanations given to us, no material discrepancies have been noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

2. In respect of its inventories:

(a) As explained to us, the inventories (excluding goods-in-transit) have been physically verified by the management at reasonable regular intervals during the year. In respect of inventories which are not physically verified being goods in transit, they are not material. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate considering the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories. As explained to us, there was no material discrepancy noticed on physical verification of inventories as compared to the book records.

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

(a) The Company has granted loans to its eight subsidiaries covered in the register maintained under Section 301 of the Act. The maximum amount outstanding at any time during the year was Rs. 12444.72 lakhs and the year end balances of such loan amounted to Rs. 8580.26 lakhs. Other than above, the Company has not granted any loan, secured or unsecured, to Companies, Firms or parties covered in the register maintained under Section 301 of Act.

(b) In our opinion, the rate of interest and other terms and conditions on which these loans have been granted to the subsidiaries covered in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) The Company is regular in receipt of interest and principal amount of unsecured loans wherever applicable and there is no default.

(d) There are no overdue amounts of more than Rupees One Lakh in respect of the loans granted to the subsidiaries listed in the register maintained under Section 301 of the Act.

(e) The Company has taken unsecured loans from 31 parties covered in the register maintained under Section 301 of the Companies Act, 1956 being directors, their relatives and subsidiary company. The aggregate of the year end balances of such loans is Rs. 7042.48 Lakhs and the maximum amount involved during the year was Rs. 7414.07 Lakhs from these parties.

(f) The rate of interest, wherever applicable and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the Company.

(g) The Company is regular in repayment of interest and principal amount of unsecured loans wherever applicable and there is no default.

4. In our opinion, and according to the information and explanations given to us and having regard to the explanation that purchases of certain items of inventories are for the Company''s specialized requirements and similarly certain goods sold are for the specialized requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and also for sale of goods and services. Further, on the basis of our examination of the books and records of the Company, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

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

(a) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into a register in pursuance of Section 301 of the Companies Act, 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements referred to in point (a) above and exceeding the value of Rs. 5 lakhs with any party during the year, have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, except that reasonableness could not be ascertained where comparable quotations are not available having regards to the specialized nature of some of the transactions of the Company as mentioned in paragraph 4 hereinabove. However, on the basis of the information and explanation provided the same appears to be reasonable.

6. The Company has not invited any deposit from public as such but has accepted unsecured loans from its directors, shareholders and their relatives and also trade deposits from stockiest and agents which are in the nature of deposits defined under the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. In our opinion, and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India, the provisions of Section 58A and Section 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits so accepted, to the extent applicable. We are informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, relevant to sections 58A, 58AA or other relevant provisions of the Act upon the Company.

7. In our opinion, the Company has an internal audit system being carried out by the firms of Chartered Accountants and also by its own internal audit department during the year, which in our opinion is commensurate with its size and the nature of its business.

8. We have broadly reviewed, the books of accounts and records maintained by the Company in respect of the products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service-tax, wealth tax, custom duty, excise duty, cess and other material statutory dues during the year as applicable with the appropriate authorities in India. According to the information and explanations given to us and the records of the Company examined by us, no undisputed amount is payable in respect of provident fund, employees'' state insurance, income-tax, sales-tax, service-tax, wealth tax, custom duty, excise duty, cess which were outstanding as on 31st March, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues on account of customs duty, wealth-tax, service-tax and cess which have not been deposited on account of any dispute. The particulars of dues of sales tax, excise duty and income tax as at 31st March, 2014 which have not been deposited on account of dispute, are as under:

Name of the Nature of Amount Period to Forum where dispute Statute Dues Rupees which the is pending (In Lakhs) amount relates

Central Excise Duty 37.24 2002 to 2005 Additional Commissioner of Excise Act, 1944 Central Excise

Excise Duty 44.73 2007 to 2012 Additional Commissioner of Central Excise

Excise Duty 63.10 2006 to 2011 Commissioner of Central Penalty 2.13 2010 to 2011 Excise (Appeals)

Excise Duty 149.25 Central Excise & Service Tax

Penalty 234.45 2003 to 2011 Appellate Tribunal

Excise Duty 12.12 2005 to 2012 Deputy Commissioner of Central Excise

Mahara shtra Value Added 50.78 2003-04 Deputy Commis- sioner of Sales VAT Act, Tax Tax (Appeals) 2002

Mahara shtra Value Added 56.54 2004-05 Joint Commis sioner of Sales VAT Act, Tax Tax (Appeals) 2002

West Bengal Value Added 8.75 2006-2007 Additional Commissioner of VAT Act, Tax 3.37 2007-2008 Commercial Taxes 2003 (Appeal)

Uttar Value Added 31.38 2012-2013 Additional Commissioner of Pradesh VAT Tax Commercial Taxes Act 2008 (Appeal)

Bihar VAT Value Added 38.49 2010-2011 Joint Commis- sioner of Act, 2005 Tax 62.99 2011-2012 Commercial Taxes (Appeals)

Income Tax Income Tax 8.89 2008-09 Commissioner of Income Tax Act, 1961 45.01 2009-10 (Appeal)

10. In our opinion and according to the information and explanations given to us, the Company does not have any accumulated losses as at the end of the financial year and has not incurred any cash loss in the financial year ended on that date or in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to any bank or any debenture holder during the year. The Company has not taken any financial assistance from any financial institution and does not have any debenture outstanding as on the balance sheet date.

12. In our opinion and according to the explanations given to us and based on the information available, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to a chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company and therefore the requirements of clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the current year.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in shares, securities, debentures and other investments as such. However, the Company has made certain investments in shares, securities, debentures, bonds and/or mutual funds for which proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All investments are held by the Company in its own name.

15. The Company has given guarantee for loan taken by one of its subsidiary company from the banks. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the external commercial borrowing (ECB) loan taken be the Company, which is in the nature of term loan, has been applied for the purpose for which it was raised.

17. According to the cash-flow statement and other records examined by us and the information and explanations given to us on an overall basis, we are of the opinion that there is no direct utilization of the funds raised on a short term basis during the year for long term investments.

18. 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 during the year and therefore the requirements of clause (xviii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the current year.

19. The Company has not issued any secured debentures and therefore the requirements of clause (xix) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the current year.

20. The Company has not raised any money by public issues during the year and therefore the requirements of clause (xx) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the current year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have been informed of such case by the management.

For R.S.SANGHAI & ASSOCIATES

Chartered Accountants

Registration No. 109094W

SD/-

R.S.SANGHAI

Partner

Membership No.: 036931

Mumbai: 7th July, 2014

---

Mar 31, 2013

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

Management''s Responsibility for the financial statements :

Managements 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 principles generally accepted in India including 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 statement 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 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 of 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. An audit also includes evaluating the appropriateness of accounting principles 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 base for our audit opinion.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 31s1 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.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditors'' Report) Order, 2003 {''the Order''), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the order.

2. 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 appears from our examination of those books;

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

e. On the basis of written representations received from the directors, as on 31sl March, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31s1 March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

Re: Alkem Laboratories Limited (Referred to in Paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of Dur Report of even date)

1 In respect of its fixed assets;

(a) The company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets on the basis at available information.

(b) As explained to us, certain items of fixed assets have been physically verified by the management during the year, and there is a regular program of verification, in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of its fixed assets According to the information and explanations given to us, no material discrepancies have been noticed on such verification

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company

2 In respect of its inventories:

(a) As explained to us, the inventories (excluding goods-in-transit) have been physically verified by the management at reasonable regular intervals during the year In respect of inventories which are not physically verified being goods in transit, they are not material In our opinion, the frequency of verification is reasonable,

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate considering the size of the Company and the nature of its business

(c) The Company has maintained proper records of inventories As explained to us, there was no material discrepancy noticed on physical verification of inventories as compared to the book records.

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

(a) The Company has granted loans to its eight subsidiaries covered in the register maintained under Section 301 of the Act, The maximum amount outstanding at any time during the year was Rs 7500 00 lakhs and the yearend year end balances of such loan amounted to Rs 4775.24 lakhs Other than above, the Company has not granted any loan, secured or unsecured, to Companies, Firms or parties covered in the register maintained under Section 301 of Act

(b) In our opinion, the rate of interest and other terms and conditions on which these loans have been granted to the subsidiaries covered in the register maintained under Section 301 of the Act are not, prima fancies, prejudicial to the interest of the Company.

(c) The Company is regular in receipt of interest and principal amount of unsecured loans wherever applicable and there is no default..

(d) There are no overdue amounts of more than Rupees One Lakh in respect of the loans granted to the subsidiaries listed in the register maintained under Section 301 of the Act.

(e) The Company has taken unsecured loans from 33 parties covered in the register maintained under Section 301 of the Companies Act, 1956 being directors and their relatives, The aggregate of the year end balances of such loans is Rs 4610.99 Lakhs and the maximum amount involved during the year was Rs 4855 04 Lakhs from these parties.

(f) The rate of interest, wherever applicable and other terms and conditions of such loan are, in our opinion, prima facie not prejudicial to the interest of the Company.

(g) The company is regular in repayment of interest and principal amount of unsecured loans and there is no default.

4. In our opinion, and according to the information and explanations given to us and having regard to the explanation that purchases of certain item of inventories are for the Company''s specialized requirements and similarly certain goods sold are for the specialized requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and also for sale of goods and services Further, on the basis of our examination of the books and records of the Company, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

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

(a) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into a register in pursuance of Section 301 of the Companies Act, 1956, have been so entered

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements referred to in point (a) above and exceeding the value of Rs 5 lakhs with any party during the year, have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, except that reasonableness could not be ascertained where comparable quotations are not available having regards to the specialized nature of some of the transactions of the Company as mentioned in paragraph 4 hereinabove However, on the basis of the information and explanation provided the same appears to be reasonable

6. The company has not invited any deposit from public as such but has accepted unsecured loans From its directors, shareholders and their relatives and also trade deposits from stockiest and agents which are in the nature of deposits defined under the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. In our opinion, and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India, the provisions of section 5BAand 58AAof the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits so accepted, to the extent applicable We are informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, relevant to sections 58A, 58AA or other relevant provisions of the Act upon the Company.

7. In our opinion, the company has an internal audit system being carried out by firms of Chartered Accountants and also by its own internal audit department during the year, which in our opinion is commensurate with its size and the nature of its business.

B. We have broadly reviewed, the books of accounts and records maintained by the company in respect of the products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub- section (1) of Section 209 of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

(a) According to the information and explanations given to us and the records of the company examined by us. in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, employees'' state insurance, income-tax. sales-tax, service-tax, wealth tax, custom duty, excise duty, cess and other material statutory dues during the year as applicable with the appropriate authorities in India. According to the information and explanations given to us and the records of the Company examined by us, no undisputed amount is payable in respect of provident fund, employees'' state insurance, income-tax, sales-tax. service-tax, wealth tax. custom duty, excise duty, cess which were outstanding as on 31st March, 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues on account of customs duty, wealth-tax, service-tax and cess which have not been deposited on account of any dispute The particulars of dues of sales-tax, excise duty and income-tax, as at 31s1 March, 2013 which have not been deposited on account of dispute, are as under:

Name of the Nature of Dues Amount Rupees Period to which the where the Statute (In Lakhs) amount relates

Central Excise Duty 37.24 2002 to 2005 Excise Act 1944 Excise Duty 44.73 2007 to 2012

Excise Duty 63.10 2006 to 2011

Penalty 2.13 2010 to 2011

Excise Duty 149.25 2003 to 2011

Penalty 234.45

Excise Duty 12.12 2005 to 2012

Maharastra Sales Tax 50.78 2003 - 2004 VAT Act, 2002

Maharastra Sales Tax 56.54 2004 - 2005 Act,2002

West Bengal Value Added 8.75 2006 - 2007 VAT Act, 2003 Tax 3.37 2007 - 2008

Uttar Pradesh Value-added 31.38 2012-2013 VAT Act, 2008 Tax

Bihar VAT Value-added 38.49 2010 - 2011 Act, 2005 Tax 62.99 2011-2012

Income Tax Income Tax 8.89 FY 2008-2009 Act, 1961 AY 2009-2010

Name of the Forum where the Statute dispute is pending

Central Additional Commissioner of Excise Act Central Excise 1944 Additional Commissioner of Central Excise

Commissioner of Central Excise (Appeals)

Central Excise & Service Tax Appellate Tribunal

Deputy Commissioner of

Maharastra Deputy Commissioner of Sales VAT Act, 2002 Tax (Appeals)

Maharastra Joint Commissioner of Sales Act,2002 Tax (Appeals)

West Bengal Additional Commissioner of VAT Act, 2003 Commercial Taxes (Appeals)

Uttar Pradesh Additional Commissioner of VAT Act, 2008 Commercial Taxes (Appeals)

BiharVAT Joint Commissioned Act, 2005 Commercial Taxes (Appeals)

Income Tax Commercial of Income Tax Act, 1961 (Appeals

10 In our opinion and according to the information and explanations given to us, the Company does not have any accumulated losses as at the end of the financial year and has not incurred any cash loss in the financial year ended on that date or in the immediately preceding financial year

11 In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to any bank or any debenture holder during the year. The Company has not taken any financial assistance from any financial institution and does not have any debenture outstanding as on the balance sheet data*

12 In our opinion and according to the explanations given to us and based on the information available, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to a chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company and therefore the requirements of clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the current year.

14. In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments as such However, the Company has made certain investments in shares, securities, debentures, bonds and / or mutual funds for which proper records are maintained in respect of transactions and contracts and timely entries have been made therein All investments are held by the Company in its own name.

15 The Company has given guarantee for loan taken by its subsidiary Company from the banks. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the external commercial borrowing (ECB) loan taken by the Company, which is in the nature of term loan, has been applied for the purpose for which it was raised.

17 According to the cash-flow statement and other records examined by us and the information and explanations given to us on an overall basis, we are of the opinion that there is no direct utilization of the funds raised on a short term basis during the year for long term investments.

18.. 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 during the year and therefore the requirements of clause (xviii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

19 The company has not issued any secured debentures and therefore the requirements of clause (xix) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the current year

20 The Company has not raised any money by public issues during the year and therefore the requirements of clause (xx) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

21 During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For R.S.SANGHAI & ASSOCIATES

Chartered Accountants

Registration No. 109094W



R.S.SANGHAI

Partner

Membership No : 36931

Mumbai, 12th June, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of ALKEM LABORATORIES LIMITED (''the Company'') as at 31st March, 2012, the Statement of Profit and Loss Account and the Cash Flow Statement (together known as ''financial statements'') of the Company for the year ended or that date all annexed thereto, which we have signed under reference to this report. 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

2 We conducted our audit in accordance with 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 evidence supporting the amounts and disclosures in the financial statements An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditors'' Report) Order, 2003 (''the CARO Order1) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (''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 during the course of our audit, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable

4. Further to our comments in the Annexure referred to in paragraph 3 above, 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 appears from our examination of those books;

c. The Balance Sheet, the 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, the Statement of Profit and Loss and the 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 read with Companies (Accounting Standard) Rules, 2006, to the extent applicable;

e. 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; and

f. 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 Notes there on 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:

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

(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

Re: Alkem Laboratories Limited (Referred to in Paragraph 3 of our Report of even date on the financial statements of the Company for the year ended 31st March, 2012)

1 In respect of its fixed assets:

(a) The company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets

(b) As examined to us certain items of fixed assets has been physically verified by the management during the year, and there is a regular program of verification, in a phased periodical manner, which in our opinion is responsible, having regard to the size of the Company and the nature of its fixed assets. According to the on and explanations given to us. no material discrepant have been noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

2 In respect of its inventories:

(a) As explained to us, the inventories (excluding goods-in-transit) have been physically verified by the management at reasonable regular intervals during the year. In respect of inventories which are not physically verified being goods in transit, they are not material. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management were reasonable and adequate considering the size of the company and the nature of its business.

(c) On the basis of examination of the inventory record, in our opinion and according to the information and explanation given to us, the company is maintaining proper records of inventory. discrepancies noticed on physical verification of inventory as compared to book records which have been properly dealt with in the books of account were not material .

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

(a) The company has not granted any loan, secured or unsecured to companies. firm or other parties listed in the register maintained under section 301 of the companies Ac, 1956 and accordingly, the requirements of sub- clauses (a) to (d) of clause (iii) of perhaps 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the current year.

(b) The company has take unsecured loans from 23 parties covered in the register maintained under section 301 of the companies Act, 1956 being directors and their relatives. The aggregate of the year end balances of such loans is Rs. 3471,89 Lakhs and the maximum amount involved during the year was Rs 3827 8 Lakhs from these parties.

(c) The rate of interest, wherever applicable and other terms and conditions of such loans are, in our opinion, prima face not prejudicial to the interest of the Company.

(d) The company is regular in repayment of interest and principal amount of unsecured loans and there is no default.

4. In our opinion, and according to the information and explanation given to us, and having regard to the explanation that purchases of certain items of inventories are for the company'' specialized requirements and generally certain goods sold are for the specialized requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and also for sales of goods and services Future, on the basis of our examination of the book and records of the company. We have not observed any continuing future to correct major weakness in the aforesaid internal control procedures.

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

(a) In our opinion, and according to the information and explanations given " arrangements, that needed to be entered into a register in pursuance of Section 301 of the Company

(b) In our opinion and according to the information and explanations given to us, that transaction made in pursuance of the contracts arrangements referred to in point (a) above and exceeding the value of Rs. 5 Lakhs with any party during the year have been made at prices which are puma tape reasonable having regard to the prevailing market prices at the relevant time. Except that reasonableness could not be ascertained where comparable quotations are not available having regards to the specialised nature of some of the transactions of the Company as mentioned in paragraph 4 here in above. However on the basis of the information and explanation provided the same appears to be reasonable.

6 The company has not invited any deposit from public as such but has accepted unsecured loans from its directors, shareholders and their relatives and also trade deposits from stockiest and agents which are in the nature of deposits defined under the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 In out on'' 3rd according to the information and explanations given to us, the company has complied with the director issued by the Resent Bank of India the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975 with regard to the deposits accepted, to the extent applicable We are informed by the management that no order has bee passed by the Company Law Board or National Company Law Tribunal or Resent Bank of India or any Court or any other Tribunal, relevant to sections 58A, 58AA or other relevant provisions of the Act upon the Company

7. In our opinion, the company has an internal audit system being carried out by firms of Chartered Accountants and also by its own internal audit department during the year, which in our opinion is commensurate with its size and the nature of its business.

8. We have broadly reviewed, the books of accounts and records maintained by true company to the Rules made by the Central Government of India. the maintenance of cost records has Been company by under clause section (1) of Section 209 of the Companies Act. 1956. and are of the opinion that puma facie, the prescribed accounts and records have been made and maintained. We have, however, not trade a detailed examination of the records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues

(a) According to ''he information and explanations given to us and the records of the company examined by . in out opinion. the ESS up to in depositing the statutory dues Mud* prudent fund, employees'' state insurance. income tax sales-tax. service tax. wealth tax custom duty, excise duty cess and other material statutory dues during the year with the appropriate authorised India. According to the information and explanations given to us and the records of the Company examined by us no undisputed amount a payable in respect of provident land. employees state insurance tax sale tax, service tax, wealth tax custom duty, excise duty, cess which were outstanding as on 31- March. 2012 for a period of more than six months thorn the date they became payable Since the Central Government has till date net prescribed the 31 cost payable under Section of the Companies Act 1956 we are not in a position to comment upon the require or otherwise of the Company m depositing the same.

(b) According to the information and explanations given to us and the records of the company examined dues on account of customs duty, income-tax. wealth-tax, service-tax and cess which have not been deposited on account of any dispute. The particulars of dues sales-tax and excise duty as at 31- March. 2012 which have not been deposited on account of are as under

Name of the Nature of Dues Amount Rupees Statute (In Lakhs)

Central Excise Duty 17.93 Excise Act 1944 Excise Duty 57.99 Penalty 45.60

Excise Duty 19.30

Penalty on 19.88 Excise Duty

Excise Duty 89.07

Penalty 23.90

Excise Duty 61.47

Excise Duty 94.62 Penalty 142.51

Maharashtra Sales Tax 50.78 VAT Act, 2002

Punjab VAT Sales Tax 21.98 Act, 2005 Penalty 7.80

Bihar VAT Sales Tax 9.03 Act 2005 10.87

Name of the Period to which the Forum where the Statute amount relates dispute is pending

Central Excise 2004 to 2005 Additional Commissioner of Act, 1944 Central Excise

2003 to 2005 Central Excise & Service tax Appellate Tribunal

2002 to 2004 Additional Commissioner of Central Excise

2009 Central Excise & Service Tax Appellate Tribunal

2005 to 2012 Deputy Commissioner of Central Excise

2008 to 2010 Commissioner of Central Excise (Appeals)

2006 to 2010 Commissioner of Central Excise (Appeals)

2007 to 2012 Central Excise & Service Tax Appellate Tribunal

Maharashtra VAT 2003-2004 Deputy Commissioner of Sales Act, 2002 2004-2005 Tax (Appeals)

Panjab VAT 2010-2011 Joint Director (Enforcement) Act,2005

Bihar VAT 2002-2003 Commercial Taxes Tribunal 2003-2004

10 In our opinion and according to the information and explanations given to us, the Company does not have any accumulated fosses as at the end of the financial year and has not incurred any cash loss in the financial year ended on that date or in the immediately preceding financial year

11 In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to any bank or any debenture holder during the year. The Company has not taken any financial assistance from any financial institution and does not have any debenture outstanding as on the balance sheet date

12 In our opinion and according to the explanations given to us and based on the information available, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to a chit fund / nidhi / mutual benefit fund /societies are not applicable to the Company and therefore the requirements of clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the current year.

14 In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments as such However, the Company has carried on transactions on account of investment and trading in shares, securities, debentures, bonds and mutual funds for which proper records are maintained in respect of transactions and contracts and timely entries have been made therein All the investments are held by the Company in its own name

15 The Company has given guarantee for loan taken by it''s subsidiary Company from the bank. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima fade prejudicial to interest of the Company.

16 In our opinion and according to the information and explanations given to us, the external commercial borrowing (ECB) loan taken by the Company, which is in the nature of term loan, has been applied for the purpose for which it was raised.

17 According to the cash-flow statement and other records examined by us and the information and explanations given to us on an overall basis, we are of the opinion that there is no direct utilization of the funds raised on a short term basis during the year for long term investments

18 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 during the year and therefore the requirements of clause (xviii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

19 The company has not issued any secured debentures and therefore the requirements of clause (xix) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the current year.

20 The Company has not raised any money by public issues during the year and therefore the requirements of clause (xx) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

21 During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For R.S.SANGHAI & ASSOCIATES

Chartered Accountants

Registration No. 109094W

R.S.SANGHAI

Proprietor

Membership No.: 36931

Mumbai, 25th May. 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of ALKEM LABORATORIES LIMITED ("the Company'') as at 32st March 2011,and the related Profit and Loss Account and the Cash Flow Statement (together knows as "financial statements'') of the company for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements based on our audit.

2.We conducted our audit in accordance with 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, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting puritanical statement. We believe that our audit provides a reasonable basis for our opinion.

3.As required by the Companies(Auditors'' Report)Order,2003("the CARO Order'')Issued by the Central Movement of India in terms of sub-section(4A)of Section 227 of the Companies Act,1956("the Act'')and on the basis of such checks of the books and record of the company as we considered and according to the information and explanations given to us during the course of our audit, we enclose in the annexure hereto a statement on the matters specified in paragraphs 4nad 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph 3 above, 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 appears from our examination of those books;

c. The Balance Sheet, the Profit and Loss Account 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, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in sub-Section(3C)of Section 211 of the Companies Act1956 read with Companies (Accounting Standard) Rules, 2006, to the extent applicable,

e. On the basis of written representations received from the directors as on 30st 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 Compan.es Act, 1956, and

f. 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, Other Notes and Schedules annexed thereto, view in conformity with the accounting principles generally accepted in Indian:

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

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

Re: Alkem Laboratories Limited (Referred to in Paragraph 3of even date on the financial statement of the Company of the Company for the year ended 31st March,2011

1 (a) The Company has maintained proper records Showing full Particulars. including quantitative details and situation of its assets.

(b) As explained to us, certain items of fixed assets have been physically verified by the management during the year, and there is a regular program of verification, which in our opinion is reasonable, having regard to the size of the company and the nature of its fixed assets. According to the ,information and explanations given to us, no material discrepancies have been noticed on such verification

(c) No Substantial part of the fixed assets has been disposed of by the company during the year and therefore in our opinion and according to the information and explanations given to us the going concern concept is not affected.

2 (a) As Explained to us, the inventories(excluding goods-in transit)have been physically verified by the management at reasonable regular intervals during the year. In respect on inventories which are not physically verified being goods in transit, they are not material in our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management were reasonable and adequate considering the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records. in our opinion and according to the information and explanations given to us, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records which have been properly dealt with in the books of account and were not material.

3 (a) The company has not granted any loan in the nature of loan as such (other than advances in the normal course of its business),secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act,1956.Therefore,the requirements of clauses(iii-a), (iii-c) and (iii-d) of paragraph 4 of the companies(Auditor''s Report) Order,2003 are not applicable to the company for the current year.

(b) The Company has not granted any loan in the nature of loan from 24 parties covered in the register maintained under Section 301 of the Companies Act,1956 being director and their relatives. The aggregate of the year end balances of such loans is Rs.2925.26 Lakhs and the maximum amount involved during the year was Rs.4211.12Lakhs from these parties.

(c) The rate of interest ,wherever applicable and other terms and conditions are ,in our opinion, prima facie not prejudicial to the interest of the company.

(d) The company is regular in repayment of interest and principal amount of unsecured loans and there is no default.

4, In our opinion, and according to the information and explanations given to us and having regard to the explanation that purchases of certain items of inventories are for the company''s Specialized requirements and similarly certain goods sold are for the Specialized requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of inventory and fixed assets and also for sale of goods and services. further, on the basis of our examinations of the books and records of the company, and according to the information and explanations given to us, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5 (a) In Our opinion, and according to the information and explanations to us, the transactions made in pursuance contracts or arrangements, that needed to be entered in to a register in pursuance of Sectarian 301 of the Companies Act,1956,have been so entered,

(b) In our opinion and according to the information and explanations given to us, these contracts or arrangements have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, except that reasonable could not be ascertained where comparable quotations are not available having regards to the specialized nature of some of the transactions of the company as mentioned in Para 4 hereinabove. However, On the basis of the information and explanation provided the same appears to be reasonable.

6. The company has not invited any deposit from public as such but has accepted unsecured loans from its directors, shareholders and their relatives and also trade deposits from stockiest and agents which are in the nature of deposits defined under the provisions of section 58Aand 58AAof the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. In our opinion, and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India, the provisions of section 58Aand 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted, to the extent applicable. We are informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, relevant to sections 58A, 58AA or other relevant provisions of the Act upon the Company.

7. In our opinion, the company has an internal audit system being carried out by firms of Chartered Accountants and also by its own internal audit department during the year, which in our opinion is commensurate with its size and the nature of its business.

8. We have broadly reviewed, the books of accounts and records maintained by the company in respect of the products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub- section (1) of Section 209 of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is regular in depositing the undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service-tax, wealth tax, custom duty, excise duty, cess and other material statutory dues during the year as applicable with the appropriate authorities in India. According to the information and explanations given to us and the records of the company examined by us, no undisputed amount is payable in respect of provident fund, employees'' state insurance, income-tax, sales-tax, service-tax, wealth tax, custom duty, excise duty, cess which were outstanding as on 31s1 March, 2011 for a period of more than six months from the date they became payable. Since the Central Government has till date not prescribed the amount of cess payable under Section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of customs duty, income-tax, wealth-tax, service-tax and cess which have not been deposited on account of any dispute. The particulars of dues of sales-tax and excise duty as at 31st March, 2011 which have not been deposited on account of dispute, are as follows-

Name of the Nature of Dues Amount Period to which the Statute Rs. (In Lakhs) amount relates

Central Excise Excise Duty 17.93 2004 to 2005

Act and 309.88 2003''to 2009 Penalty thereon 16.12 2007 to 2009

Various States Sales-Tax & 50.78 2003 - 2004

Sales Tax/VAT Penalty 56.54 2004 - 2005

Acts thereon 21.21 2008 - 2009

3.83 2009 - 2010

29.78 2010 - 2011

19.90 2002 - 2004 Name of the Forum where the Statute dispute is pending

Central Supreme Court of India Act Central Excise & Service tax Appellate Tribunal Commissioner of Central Excise (Appeals)

Various States Joint Sales Commissioner/Deputy Commissioner / Commissioner of Sales Tax (Appeals) of the respective states Sales Tax Appellate Tribunal

10 In our opinion and according to the information and explanations given to us, the company does not have any accumulated losses as at the end of the financial year and has not incurred any cash loss in the financial year ended on that date or in the immediately preceding financial year.

11 In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of any dues to any bank or any debenture holder during the year. The company has not taken any financial assistance from any financial institution and does not have any debenture outstanding as on the balance sheet date.

12. In our opinion and according to the explanations given to us and based on the information available, the company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to a chit fund / nidhi / mutual benefit fund / societies are not applicable to the company and therefore the requirements of clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

14 In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments as such. However, the company has carried on transactions on account of investment and trading in shares, securities, debentures, bonds and mutual funds for which proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All the investments are held by the company in its own name.

15. The Company has given guarantee for loan taken by others from the bank. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to interest of the Company.

16. The company has not taken any term loan and therefore the requirements of clause (xvi) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

17 According to the cash-flow statement and other records examined by us and the information and explanations given to us on an overall basis, we are of the opinion that there is no direct utilization of the funds raised on a short term basis during the year for long term investments.

18 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 during the year and therefore the requirements of clause (xviii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

19. The company has not issued any secured debentures and therefore the requirements of clause (xix) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

20. The company has not raised any money by public issues during the year and therefore the requirements of clause (xx) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

21 During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For R.S.SANGHAI & ASSOCIATES

Chartered Accountants

Registration No.109094W



SD/-

R.S.SANGHAI

Proprietor

Membership No.: 36931

Mumbai, 14th June, 2011

---

Mar 31, 2009

1. We have audited the attached Balance Sheet of ALKEM LABORATORIES LIMITED (''the Company'') as at 31st March, 2009, and the related Profit and Loss Account and the Cash Flow Statement of the company for the year ended on that date annexed thereto, which we have signed under reference to this report. 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.

2. We conducted our audit in accordance with 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, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors'' Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 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 during the course of our audit, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph 3 above, 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 appears from our examination of those books;

c. The Balance Sheet, the Profit and Loss Account 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, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 read with Companies (Accounting Standard) Rules, 2006, to the extent applicable;

e. On the basis of the written representations received from the directors, as on 31st March, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

f. 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, Other Notes and Schedules annexed thereto, 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009;

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

Annexure to the Auditors'' Report

Re: Alkem Laboratories Limited (Referred to in Paragraph 3 of our Report of even date on the financial statements of the company for the year ended 31st March, 2009)

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

(b) As explained to us, certain items of fixed assets have been physically verified by the management during the year, and there is a regular program of verification, which in our opinion is reasonable, having regard to the size of the company and the nature of fixed assets. According to the information and explanations given to us, no material discrepancies have been noticed on such verification.

(c) No substantial part of the fixed assets has been disposed off by the company during the year and therefore in our opinion and according to the information and explanations given to us the going concern concept is not affected.

2. (a) As explained to us, the inventories (excluding stocks with some of the third parties) have been physically verified by the management at reasonable regular intervals during the year. In respect of inventories which are not physically verified and are lying with third parties are not substantial. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion and according to the information and explanations given to us, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records which have been properly dealt with in the books of account were not material.

3. (a) The Company has not granted any loan in the nature of loan as such (other than advances in the normal course of its business), secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the requirements of clauses (iii-a), (iii-

b), (iii-c) and (iii-d) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

(b) The Company has taken unsecured loans from 35 parties covered in the register maintained under Section 301 of the Companies Act, 1956 being directors and their relatives. The aggregate of the year end balances of such loans is Rs. 1769.15 Lakhs and the maximum amount involved during the year was Rs. 1897.20 Lakhs from these parties. .

(c) The rate of interest, wherever applicable and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the company.

(d) The company is regular in repayment of interest and principal amount of unsecured loans and there is no default.

4. In our opinion, and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for purchase of inventory and fixed assets and also for sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into a register in pursuance of Section 301 of the Companies Act, 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, these contracts or arrangements have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, except that reasonableness could not be ascertained where comparable quotations are not available having regards to the specialized nature of some of the transactions of the company.

6. The company has not invited any deposit from public as such but has accepted unsecured loans and deposits from its directors, shareholders and their relatives and also trade deposits from stockiest and agents which are in the nature of deposits specified under the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. In our opinion, and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India, the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted, to the extent applicable. We are informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, relevant to sections 58A, 58AA or other relevant provisions of the Act upon the Company.

7. In our opinion, the company has an internal audit system being carried out by a firm of Chartered Accountants and also by its own internal audit department during the year which in our opinion is commensurate with its size and the nature of its business.

8. We have broadly reviewed, the books of accounts and records maintained by the company in respect of the products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been, made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is regular in depositing the undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service-tax, wealth tax, custom duty, excise duty, cess and other material statutory dues during the year as applicable with the appropriate authorities in India. According to the information and explanations given to us and the records of the company examined by us, no undisputed amount is payable in respect of provident fund, employees'' state insurance, income-tax, sales-tax, service-tax, wealth tax, custom duty, excise duty, cess which were outstanding at the year end for a period of more than six months for the date they became payable.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of customs duty, income-tax, wealth- tax, service-tax and cess which have not been deposited on account of any dispute. The particulars of dues of sales-tax and excise duty as at 31st March, 2009 which have not been deposited on account of dispute, are as follows-

Nameofthe Nature of Amount Period to Forum where the Statute Dues Rupees which the dispute is (In Lakhs) amount Pending relates

Central Excise Duty 174 1997- Central Excise Tribunal Excise Act &Penalty 2008 Commissioner of . Thereo 192 Central Excise (Appeal) 119 Dy./Jt./Addl. Commissioner of Central Excise_

Local Sales Sales-Tax& 2 2002-03 Sales Tax Tribunal Tax AAT Acts Penalty 109 2003-07 Commissioner of Sales thereon Tax (Appeal)



10. In our opinion and according to the information and explanations given to us, the company does not have any accumulated losses as at the end of the financial year and has not incurred any cash loss in the financial year ended on that date or in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of any dues to any bank as on the balance sheet date. The company has not taken any financial assistance from any financial institution and has not issued any debenture as at the balance sheet date.

12. In our opinion and according to the explanations given to us and based on the information available, the company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to a chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company and therefore the requirements of clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

14. In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments as such. However, the company has carried on transactions on account of investment and trading in shares, securities, debentures, bonds and mutual funds for which proper records are maintained in respect of transactions and contracts and timely entries have been made therein. Ail the investments are held by the company in its own name.

15. In our opinion and according to the information and explanations given to us, and the representations made by the management, the company has not given any guarantee for loans taken by others from any bank or financial institution.

16. The company has not taken any term loan and therefore the requirements of clause (xvi) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

17. According to the cash-flow statement and other records examined by us and the information and explanations given to us on an overall basis, we are of the opinion that there is no direct utilization of the funds raised on a short term basis during the year for long term investments.

18. 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 during the year and therefore the requirements of clause (xviii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

19. The company has not issued any secured debentures and therefore the requirements of clause (xix) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

20. The company has not raised any money by public issues during the year and therefore the requirements of clause (xx) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company for the current year.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, . nor have been informed of such case by the management.

For R.S.SANGHAL & ASSOCIATES

Chartered Accountants

R.S.SANGHA!

Proprietor

Membership No.: 36931

Mumbai: 27th July, 2009