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Alembic Pharmaceuticals Ltd.

BSE: 533573 Sector: Health care
NSE: APLLTD ISIN Code: INE901L01018
BSE 00:00 | 02 Dec 598.80 5.15
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OPEN 591.25
PREVIOUS CLOSE 593.65
VOLUME 1205
52-Week high 847.95
52-Week low 541.10
P/E 21.72
Mkt Cap.(Rs cr) 11,769
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 591.25
CLOSE 593.65
VOLUME 1205
52-Week high 847.95
52-Week low 541.10
P/E 21.72
Mkt Cap.(Rs cr) 11,769
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Alembic Pharmaceuticals Ltd. (APLLTD) - Auditors Report

Company auditors report

To the Members of Alembic Pharmaceuticals Limited

Report on the Audit of the Standalone Financial Statements postapproval of the Scheme of Arrangement

Opinion

We have audited the accompanying standalone financial statements ofAlembic Pharmaceuticals Limited ("the Company") which comprise the BalanceSheet as at March 31 2022 the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "the standalone financial statements"). These standalone financial statementsare prepared and presented after incorporating the effect of the Scheme of Arrangementapproved by National Company Law Tribunal (NCLT).

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsspecified under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022and total comprehensive income (comprising of 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 of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in theAuditors' Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion.

Emphasis of Matter

We refer to note 28.27 of these standalone financial statementsdetailing the Scheme of Arrangement and it's effect in these financial statements.The Standalone financial statements for the year ended on March 312022subjecttoapprovaloftheschemeofarrangement were earlier approved by Board of Directorson May 2 2022. We had issued our audit report with modified opinion on May 2 2022. TheBoard of Directors of the Company had at their meeting held on 29th March 2022inter alia approved the Scheme of Arrangement in nature of Amalgamation of AleorDermaceuticals Ltd. (‘the Transferor Company') with Alembic Pharmaceuticals Ltd.(‘the Transferee Company') and their respective shareholders (‘theScheme') with effect from the appointed date i.e. 1st April 2021 has beensanctioned by the Hon'ble National Company Law Tribunal Ahmedabad Bench(‘NCLT') vide its order dated August 29 2022. The Scheme has become effectiveupon filing of the certified copy of order of the NCLT sanctioning the Scheme withRegistrar of Companies Gujarat at Ahmedabad by way of filing required e-forms withMinistry of Corporate Affairs' portal on September 5 2022. Basis the Order of NCLTapproving the Scheme these standalone financial statements for the year ended March 312022 are prepared and presented after giving effect to the Scheme.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of these standalone financial statements of thecurrent year. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No. Key Audit Matters How our audit addressed the key audit matters
1 Provision for return of non-saleable goods (Expiry Breakage and Spoilage) in the market in India: Our audit procedures consisted of following:
The Company under the prevailing trade practice has an obligation to accept returns of expiry breakage and spoilage (EBS) products from the customers in India. This results in deductions to gross amounts invoiced. The methodology and assumptions used to estimate the accruals of EBS are monitored and adjusted regularly by the management in the light of the obligations historical trends past experience and prevailing market conditions. 1. Assessed the appropriateness of the accounting policy in respect of recognition of provision of EBS estimated in future out of the sales effected during the current period;
2. Tested the operating effectiveness of controls over Company's review of recognition of provision for EBS;
This is considered as key audit matter in view of significant estimates and judgements made by the management for recognition and measurement for the same. 3. Obtained management‘s calculations for accruals and assessed management analysis of the historical pattern of accruals to validate management's assumption for creation of such provisions;
4. Examined the historical trend of the Company's estimates to assess the assumptions and judgements used by the Company in accrual of provisions.
Conclusion:
We found that the calculation and estimates used to assess the assumptions and judgements made by the company are appropriate.

Information Other than the Standalone Financial Statements andAuditors' Report Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Board's Report including Annexures to Board's Report andManagement Discussion and Analysis but does not include the standalone financialstatements and our auditors' report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above and in doing soconsider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditors' Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditors' report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

Obtainanunderstandingofinternalcontrolrelevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with reference to standalone financialstatements in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditors'report to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditors' report. However future events orconditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludespublic disclosure about the matters or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 sub-section(11) of section 143 of the Act we give in "Annexure A" a statement on thematters 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b. in our opinion proper books of account as required by law have beenkept 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 othercomprehensive income the Statement of Changes in Equity and the Statement of Cash Flowsdealt with by this Report are in agreement with the books of account;

d. in our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act;

e. on the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2022 from being appointed as a director interms of Section 164(2) of the Act; f. with respect to the adequacy of the internalfinancial controls with reference to standalone financial statements of the Company andthe operating effectiveness of such controls refer to our separate report in"Annexure B";

g. with respect to the other matters to be included in theAuditors' Report in accordance with the requirements of section 197(16) of the Actas amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act; and

h. with respect to the other matters to be included in theAuditors' 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 accordingto the explanations given to us:

i. the Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements – Refer Note 28.2 to thestandalone financial statements;

ii. the Company has made provision as required under the applicablelaw or Indian accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts;

iii. there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company;

iv. (a) The management has represented that to the best of itsknowledge and belief no funds (which are material either individually or in theaggregate) have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Company to or in any other person orentity including foreign entities ("Intermediaries") with the understandingwhether recorded in writing or otherwise that the Intermediary shall whether directlyor indirectly lend or invest in other persons or entities identified in any mannerwhatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provideany guarantee security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that to the best of its knowledgeand belief no funds (which are material either individually or in the aggregate) havebeen received by the Company from any person or entity including foreign entity("Funding Parties") with the understanding whether recorded in writing orotherwise that the company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (a) and (b) above contain any material misstatement.

v. As stated in Note 28.9 to the standalone financial statements

(a) The final dividend proposed for the Financial Year 2020-2021 wasdeclared and paid by the Company during the year is in accordance with Section 123 of theAct as applicable.

(b) The Board of Directors have approved interim dividend for FinancialYear 2021-2022 is in accordance with section 123 of the Act as applicable.

For K C Mehta & Co LLP

Chartered Accountants

Firm's Registration No. 106237W/W100829
Vishal P. Doshi

Partner

Place: Vadodara Membership No. 101533
Date: 13th September 2022 UDIN: 22101533ARZOIU9171

Annexure A to the Independent Auditors' Report

(referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date to the members of AlembicPharmaceuticals Limited)

i. In respect of the Company's Property Plant and Equipment:

(a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.

(B) The Company has maintained proper records showing full particularsof intangible assets.

(b) The Company has a regular programme of physical verification of itsProperty Plant and Equipment by which Property Plant and Equipment are verified in aphased manner over a period of three years. In accordance with this programme certainProperty Plant and Equipment were verified during the year and no material discrepancieswere noticed on such verification. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets.

(c) According to the information and explanations given to us and onthe basis of our examination of the registered sale deed/ conveyance deed provided to usthe title deeds of immovable properties are held in the name of the Company. In respect ofimmovable properties of land that have been taken on lease and disclosed as propertyplant and equipments in the financial statements the lease agreements are in the name ofthe Company where the Company is the lessee in the agreement.

(d) The Company has not revalued any of its Property Plant andEquipment during the year and hence reporting under clause 3(i)(d) of the Order is notapplicable to the Company. .

(e) According to the information and explanations given to us noproceedings have been initiated during the year or are pending against the Company as atMarch 31 2022 for holding any benami property under the Benami Transactions (Prohibition)Act 1988 and rules made thereunder.

ii. (a) According to the information and explanation given to us theInventories except for goods-in- transit have been physically verified by the managementduring the year and in our opinion the coverage and procedure for such verification isreasonable. As explained to us there were no discrepancies of 10% or more in theaggregate for each class of inventory on physical verification of inventory as compared tothe book records.

(b) According to the information and explanations given to us thecompany has been sanctioned working capital limits in excess of five crore rupees inaggregate from banks on the basis of security of current assets and the quarterly returnsor statements filed by the company with such banks are in agreement with the books ofaccounts of the Company.

iii. The Company has made investments in Companies and LimitedLiability Partnership during the year in respect of which:

(a) The Company has not provided any loans or advances in the nature ofloans or stood guarantee or provided security to any other entity during the year andhence reporting under clause 3(iii)(a) (c) (d) (e) and (f) of the Order is notapplicable to the Company.

(b) In our opinion and according to the information and explanationsgiven to us the investments made during the year are prima facie not prejudicial to theCompany's interest.

iv. The Company has not granted any loans or provided any guarantees orsecurity to the parties covered under section 185 of the Act. In our opinion and accordingto the information and explanation given to us the Company has complied with theprovisions of section 186 of the Act in respect of the Investments made.

v. In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits during the year from the publicwithin the meaning of provisions of section 73 to 76 of the Act and the rules framedthereunder or under the directives issued by the Reserve Bank of India and thereforereporting under clause (v) of the Order is not applicable to the Company.

vi. We have broadly reviewed the books of account maintained by theCompany pursuant to the order of the Central Government for maintenance of cost recordsunder section 148(1) of the Companies Act 2013 and are of the opinion that prima faciethe prescribed records have been made and maintained. We have however not made adetailed examination of the records with a view to determining whether they are accurateor complete.

vii. (a) In our opinion and according to the information andexplanations given to us the Company has been regular in depositing with appropriateauthorities undisputed statutory dues including provident fund income-tax duty ofcustoms cess goods and service tax and any other statutory dues applicable to it.Further no undisputed amounts payable in respect of income tax duty of customs duty ofexcise goods and service tax cess and other statutory dues were in arrears as at March31 2022 for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us thereare no disputed dues in respect of value added tax income tax goods and service tax andduty of customs which have not been deposited. The following are the particulars of salestax central sales tax entry tax professional tax and excise duty as at March 31 2022which have not been deposited on account of dispute:

Name of the statute Nature of disputed dues Amount (Rs. in Crores) Period to which the amount relates Forum where pending
Sales Tax Sales Tax 0.08 2006-07 Joint Commissioner Appeals
Sales Tax 0.08 2009-10 Maharashtra Tribunal
Sales Tax 0.02 1st April 2006 to 30th November 2008 Additional Commissioner
Sales Tax 0.16 2015-16 Revisional Authority
Central Sales Tax Central Sales Tax 0.02 1st April 2006 to 30th November 2008 Additional Commissioner Sales tax
Central Sales Tax 0.01 2006-07 Joint Commissioner Appeals
Central Sales Tax 0.11 2006-07 Deputy Commissioner
Entry Tax Entry Tax 0.03 2013-14 Revisional Authority
Entry Tax 2.34 April 2016 to June 2017 West Bengal Taxation Tribunal
Professional tax Professional tax 0.05 2014-15 Joint Commissioner
Central Excise Act 1944 Excise duty 0.24 2013-14 Commissioner appeals

viii. According to the information and explanations given to us therewere no transactions relating to previously unrecorded income that have been surrenderedor disclosed as income during the year in the assessments under the Income Tax Act 1961(43 of 1961).

ix. (a) In our opinion and according to the information andexplanations given to us the Company has not defaulted in repayment of loans or otherborrowings or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us theCompany has not been declared wilful defaulter by any bank or financial institution orgovernment or any government authority.

(c) According to the information and explanations given to us theCompany has not taken any term loan during the year and there are no outstanding termloans at the beginning of the year and hence reporting under clause 3(ix)(c) of the Orderis not applicable to the Company.

(d) According to the information and explanations given to us and on anoverall examination of the financial statements of the Company funds raised on short-termbasis have prima facie not been used during the year for long-term purposes by theCompany.

(e) According to the information and explanations given to us and on anoverall examination of the financial statements of the Company the Company has not takenany funds from any entity or person on account of or to meet the obligations of itssubsidiaries associates or joint ventures.

(f) According to the information and explanations given to us theCompany has not raised any loans during the year and hence reporting under clause 3(ix)(f)of the Order is not applicable to the Company.

x. (a) According to information and explanation given to us theCompany has not raised any money by way of initial public offer or further public offer(including debt instruments) during the year and hence reporting under clause 3(x)(a) ofthe Order is not applicable to the Company.

(b) During the year the Company has not made any preferentialallotment or private placement of shares or convertible debentures (fully or partly oroptionally) and hence reporting under clause 3(x)(b) of the Order is not applicable to theCompany.

xi. (a) To the best of our knowledge and according to information andexplanations given to us and as represented by the Management and based on our examinationof books and records of the Company and in accordance with generally accepted auditingpractices in India no material fraud by the Company or on the Company has been noticed orreported during the year.

(b) No report under sub-section (12) of section 143 of the CompaniesAct has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government during the year and upto the date ofthis report.

(c) According to the information and explanations given to us thereare no whistle blower complaints received by the Company during the year.

xii. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company and therefore reporting under clause(xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanationsgiven to us transactions with the related parties were approved by the Audit Committeeand are in compliance with sections 177 and 188 of the Act where applicable and thedetails of such transactions have been disclosed in the financial statements as requiredby the applicable Indian accounting standards.

xiv. (a) In our opinion and based on our examination the Company hasan adequate internal audit system commensurate with the size and the nature of itsbusiness.

(b) We have considered the internal audit reports of the Companyissued till date for the period under audit.

xv. In our opinion and according to the information and explanationsgiven to us the Company has not entered into non-cash transactions with directors orpersons connected with him. Accordingly reporting under clause (xv) of the Order are notapplicable to the Company.

xvi. (a) In our opinion and according to the information andexplanations given to us the Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Hence reporting under clause 3(xvi)(a) (b) and(c) of the Order is not applicable to the Company.

(d) In our opinion and according to the information and explanationsgiven to us there is no core investment company within the Group (as defined in the CoreInvestment Companies (Reserve Bank) Directions 2016) and accordingly reporting underclause 3(xvi)(d) of the Order is not applicable to the Company.

xvii. The Company has not incurred cash losses during the financialyear covered by our audit and the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors of theCompany during the year and accordingly this clause is not applicable.

xix. In our opinion and according to the information and explanationsgiven to us on the basis of the financial ratios ageing and expected dates ofrealization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company. We further state thatour reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of oneyear from the balance sheet date will get discharged by the Company as and when they falldue.

xx. (a) In our opinion and according to the information andexplanations given to us there are no unspent amounts towards Corporate SocialResponsibility (CSR) on other than ongoing projects requiring a transfer to a Fundspecified in Schedule VII to the Companies Act in compliance with second proviso tosub-section (5) of Section 135 of the said Act. Accordingly reporting under clause(3)(xx)(a) of the Order is not applicable for the year.

(b) In our opinion and according to the information and explanationsgiven to us the Company does not have any ongoing project for Corporate SocialResponsibility (CSR) and accordingly reporting under clause (3)(xx)(b) of the Order is notapplicable for the year.

xxi. According to the information and explanations given to us thereare no qualifications or adverse remarks by the respective auditors in the Companies(Auditor's Report) Order 2020 (CARO 2020) reports of the companies included in theconsolidated financial statements.

For K C Mehta & Co LLP

Chartered Accountants

Firm's Registration No. 106237W/W100829
Vishal P. Doshi

Partner

Place: Vadodara Membership No. 101533
Date: 13th September 2022 UDIN: 22101533ARZOIU9171

Annexure B to the Independent Auditors' Report

(referred to in paragraph 2(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date to the members of AlembicPharmaceuticals Limited on the standalone financial statements for the year ended March31 2022)

Report on the Internal Financial Controls under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 ("the Act").

We have audited the internal financial controls with reference tostandalone financial statements of ALEMBIC PHARMACEUTICALS LIMITED ("theCompany") as of March 31 2022 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting (the "Guidance Note") and theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls with reference tostandalone financial statement and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls with reference to standalone financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone financial statements included obtaining anunderstanding of internal financial controls with reference to standalone financialstatements assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to financialstatements

A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A company'sinternal financial control with reference to standalone financial statements includesthose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference tostandalone financial statements

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respect an adequateinternal financial control system with reference to standalone financial statements andsuch internal financial control with reference to standalone financial statements wereoperating effectively as at March 31 2022 based on the internal control over financialreporting criteria established by the Company considering the essential components ofInternal control stated in the Guidance Note on audit of Internal Financial Control overFinancial Reporting issued by the Institute of Chartered Accountants of India.

For K C Mehta & Co LLP

Chartered Accountants

Firm's Registration No. 106237W/W100829
Vishal P. Doshi

Partner

Place: Vadodara Membership No. 101533
Date: 13th September 2022 UDIN: 22101533ARZOIU9171

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