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Alkem Laboratories Ltd.

BSE: 539523 Sector: Health care
NSE: ALKEM ISIN Code: INE540L01014
BSE 00:00 | 06 Feb 3069.25 16.65
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OPEN 3020.05
PREVIOUS CLOSE 3052.60
VOLUME 1338
52-Week high 3720.00
52-Week low 2835.00
P/E 36.53
Mkt Cap.(Rs cr) 36,693
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3020.05
CLOSE 3052.60
VOLUME 1338
52-Week high 3720.00
52-Week low 2835.00
P/E 36.53
Mkt Cap.(Rs cr) 36,693
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Alkem Laboratories Ltd. (ALKEM) - Auditors Report

Company auditors report

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 AlkemLaboratories Limited (the "Company") which comprise the standalone balancesheet as at 31 March 2022 and the standalone statement of profit and loss (includingother comprehensive income) standalone statement of changes in equity and standalonestatement of cash flows for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation.

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 accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2022and its profit and other comprehensive loss changes in equity and its cash flows for theyear 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 arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our opinion on the standalone financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. 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.

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 customer. There is a risk of revenue being overstated as management to achieve its performance targets may recognize as revenue on sale of products though control may not have transferred to the customer. This was an area of focus for us. 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.

• Refer Note 2.9 of the standalone financial statements for details on accounting policy on revenue recognition. • 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.
• 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 theother information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements and ourauditor's 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 and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's and Board of Directors' Responsibilities for theStandalone Financial Statements

The Company's Management and Board of Directors are responsible for thematters stated in Section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairsprofit/loss and other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements the Management andBoard of Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.

The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

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 auditor's 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.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to 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 the Management andBoard of Directors.

• Conclude on the appropriateness of the Management and Board ofDirectors use of the going concern basis of accounting in preparation of standalonefinancial statements and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause 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 auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso 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 Section 143(11) of the Act we give in the "Annexure A" a statement on the mattersspecified 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 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 standalone balance sheet the standalone statement of profit andloss (including other comprehensive income) the standalone statement of changes in equityand the standalone statement of cash flows dealt with by this Report are in agreement withthe 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 31 March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2022 from being appointed as a director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls withreference to standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B"

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

a) The Company has disclosed the impact of pending litigations as at 31March 2022 on its financial position in its standalone financial statements - Refer Note3.26 to the standalone financial statements.

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

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

d) (i) The management has represented that to the best of itsknowledge and belief no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other persons or entities including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall:

• directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever ("Ultimate Beneficiaries") by or onbehalf of the Company or

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

(ii) The management has represented that to the best of its knowledgeand belief no funds have been received by the Company from any persons or entitiesincluding foreign entities ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the Company shall:

• directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever ("Ultimate Beneficiaries") by or onbehalf of the Funding Party or

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

(iii) Based on such audit procedures as considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (d) (i) and (d) (ii) contain anymaterial misstatement.

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

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

In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) ofthe 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

Membership No. 122632

UDIN: 22122632AIXALU6482

Place: Mumbai

Date: 13 May 2022

Annexure A to the Independent Auditor's Report

(Referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

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

(a) (B)The Company has maintained proper records showing fullparticulars of intangible assets.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has a regularprogramme of physical verification of its Property Plant and Equipment by which allproperty plant and equipment are verified in a phased manner over a period of threeyears. In accordance with this programme certain property plant and equipment wereverified during the year. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Nodiscrepancies were noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties (other than immovable properties where the Company is the lessee and the leasesagreements are duly executed in favour of the lessee) disclosed in the financialstatements are held in the name of the Company.

(d) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not revaluedits Property Plant and Equipment (including Right of Use assets) or intangible assets orboth during the year.

(e) According to information and explanations given to us and on thebasis of our examination of the records of the Company there are no proceedings initiatedor pending against the Company for holding any benami property under the Prohibition ofBenami Property Transactions Act 1988 and rules made thereunder.

(ii) (a) The inventory except goods-in-transit and stocks lying withthird parties has been physically verified by the management during the year. For stockslying with third parties at the year-end written confirmations have been obtained and forgoods-in-transit subsequent evidence of receipts has been linked with inventory records.In our opinion the frequency of such verification is reasonable and procedures andcoverage as followed by management were appropriate. No discrepancies were noticed onverification between the physical stocks and the book records that were more than 10% inthe aggregate of each class of inventory.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has beensanctioned working capital limits in excess of five crore rupees in aggregate from banksor financial institutions on the basis of security of current assets. In our opinion thequarterly returns or statements filed by the Company with such banks or financialinstitutions are in agreement with the books of account of the Company except as follows:-

Quarter Name of bank Particulars Amount as per books of account (' in lakhs) Amount as reported in the quarterly return/ statement (' in lakhs) Amount of difference (' in lakhs) Whether return/ statement subsequently rectified
Q1 Kotak Bank Creditor 88157 85428 2729 No
Q2 Kotak Bank Debtors 223095 223754 (659) No

(iii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has madeinvestments provided guarantee or security granted loans and advances in the nature ofloans secured or unsecured to companies limited liability partnership and other partiesin respect of which the requisite information is as below:

(a) A. Based on the audit procedures carried on by us and as per theinformation and explanations given to us the Company has granted following unsecuredloans to and stood guarantees with subsidiaries:

Particulars Loan Amount Guarantee Amount
(Rs. in Million) (Rs. in Million)
Aggregate amount during the year - Subsidiaries 1.13 500
Balance outstanding as at balance sheet date - Subsidiaries 1.2 500

(a) B. Based on the audit procedures carried on by us and as per theinformation and explanations given to us the Company has not provided loans and advancesand guarantees or security to parties other than subsidiaries.

(b) According to the information and explanations given to us and basedon the audit procedures conducted by us in our opinion the investments made guaranteesprovided during the year and the terms and conditions of the grant of loans and advancesin the nature of loans and guarantees provided during the year are prima facie notprejudicial to the interest of the Company. The Company has not provided any securitiesduring the year accordingly the provisions of this clause is not applicable.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company in the case of loans given inour opinion the repayment of principal and payment of interest has been stipulated and theno repayments were due during the year. Further the Company has not given any advance inthe nature of loan to any party during the year.

(d) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is no overdue amount formore than ninety days in respect of loans given. Further the Company has not given anyadvances in the nature of loans to any party during the year.

(e) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is no loan or advance inthe nature of loan granted falling due during the year which has been renewed or extendedor fresh loans granted to settle the overdues of existing loans given to same parties.

(f) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not grantedany loans or advances in the nature of loans either repayable on demand or withoutspecifying any terms or period of repayment.

(iv) According to the information and explanations given to us and onthe basis of our examination of records of the Company the Company has not given anyloans or provided guarantees or securities as specified under section 185 of theCompanies Act 2013 ("the Act").

Further the Company has complied with the provisions of Section 186 ofthe Act in relation to loans given investments made and guarantees given. The Company hasnot provided any securities during the year.

(v) The Company has not accepted any deposits or amounts which aredeemed to be deposits from the public. Accordingly clause 3(v) of the Order is notapplicable.

(vi) We have broadly reviewed the books of accounts maintained by theCompany pursuant to the rules prescribed by the Central Government for maintenance of costrecords under Section 148(1) of the Act in respect of its manufactured goods (and/orservices provided by it) and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. However we have not carried out a detailedexamination of the records with a view to determine whether these are accurate orcomplete.

(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company in our opinion amountsdeducted / accrued in the books of account in respect of undisputed statutory duesincluding Goods and Services Tax ('GST') Provident fund Employees' State InsuranceIncome-Tax Duty of Customs Cess and other statutory dues have been generally regularlydeposited by the company with the appropriate authorities;

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company statutory dues relating toGoods and Service Tax Provident Fund Employees State Insurance Income-Tax Duty ofCustoms or Cess or other statutory dues which have not been deposited on account of anydispute are mentioned in Enclosure 1 to this report.

(viii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has notsurrendered or disclosed any transactions previously unrecorded as income in the books ofaccount in the tax assessments under the Income Tax Act 1961 as income during the year.

(ix) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has notdefaulted in repayment of loans and borrowing or in the payment of interest thereon to anylender.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not beendeclared a wilful defaulter by any bank or financial institution or government orgovernment authority.

(c) According to the information and explanations given to us by themanagement the Company has not obtained any term loans during the year. Accordinglyclause 3(ix)(c) of the Order is not applicable.

(d) According to the information and explanations given to us and on anoverall examination of the balance sheet of the Company we report that no funds raised onshort-term basis have been used for long-term purposes by the Company.

(e) According to the information and explanations given to us and on anoverall examination of the standalone financial statements of the Company we report thatthe Company has not taken any funds from any entity or person on account of or to meet theobligations of its subsidiaries associates or joint ventures as defined under the Act.

(f) According to the information and explanations given to us andprocedures performed by us we report that the Company has not raised loans during theyear on the pledge of securities held in its subsidiaries joint ventures or associatecompanies (as defined under the Act).

(x) (a) The Company has not raised any moneys by way of initial publicoffer or further public offer (including debt instruments) Accordingly clause 3(x)(a) ofthe Order is not applicable

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly clause 3(x)(b) of the Order is not applicable.

(xi) (a) Based on examination of the books and records of the Companyand according to the information and explanations given to us no fraud by the Company oron the Company has been noticed or reported during the course of the audit.

(b) According to the information and explanations given to us noreport under sub-section (12) of Section 143 of the Act has been filed by the auditors inForm ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules 2014with the Central Government.

(c) We have taken into consideration the whistle blower complaintsreceived by the Company during the year while determining the nature timing and extent ofour audit procedures.

(xii) According to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly clause 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanationsgiven to us the transactions with related parties are in compliance with Section 177 and188 of the Act where applicable and the details of the related party transactions havebeen disclosed in the standalone financial statements as required by the applicableaccounting standards.

(xiv) (a) Based on information and explanations provided to us and ouraudit procedures in our opinion the Company has an internal audit system commensuratewith the size and nature of its business.

(b) We have considered the internal audit reports of the Company issuedtill 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 any non-cash transactions with its directorsor persons connected to its directors and hence provisions of Section 192 of the Act arenot applicable to the Company.

(xvi) (a) The Company is not required to be registered under Section45-IA of the Reserve Bank of India Act 1934. Accordingly clause 3(xvi)(a) of the Orderis not applicable.

(b) The Company is not required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934. Accordingly clause 3(xvi)(b) of the Order is notapplicable.

(c) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by the Reserve Bank of India. Accordingly clause 3(xvi)(c) of theOrder is not applicable.

(d) The Company is not part of any group (as per the provisions of theCore Investment Companies (Reserve Bank) Directions 2016 as amended). Accordingly therequirements of clause 3(xvi)(d) are not applicable.

(xvii) The Company has not incurred cash losses in the current and inthe immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors duringthe year. Accordingly clause 3(xviii) of the Order is not applicable.

(xix) (a) According to the information and explanations given to us andon the basis of the financial ratios ageing and expected dates of realisation offinancial assets and payment of financial liabilities other information accompanying thestandalone financial statements our knowledge of the Board of Directors and managementplans and based on our examination of the evidence supporting the assumptions nothing hascome to our attention which causes us to believe that any material uncertainty exists ason the date of the audit report that the Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.

(xx) (a) In our opinion and according to the information andexplanations given to us there is no unspent amount under sub-section (5) of Section 135of the Act pursuant to any project other than ongoing projects. Accordingly clause3(xx)(a) of the Order is not applicable.

(b) In respect of ongoing projects the Company has transferred theunspent amount to a Special Account within a period of 30 days from the end of thefinancial year in compliance with Section 135(6) of the said Act.

For B S R & Co. LLP

Chartered Accountants

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

Balajirao Pothana

Partner

Membership No. 122632

UDIN: 22122632AIXALU6482

Place: Mumbai

Date: 13 May 2022

Enclosure 1 to Annexure A to the Independent Auditor's Report - 31March 2022

Sr No. Name of the statute Nature of the dues Amount under dispute (' in Millions) Amount paid under protest (' in Millions)

Period to which the amount relates

Forum where dispute is pending
01 Central Excise Act 1944 Excise Duty and Penalty 128.6 8.6

2006-2014

CESTAT
02 Central Excise Act 1944 Excise Duty and Penalty 53.1 4.0

2015

Joint Secretary
03 Maharashtra VAT Act 2002 Value Added Tax 147.3 11.2

2006-2007 2009-2010 2012-2013 2013-2014 2014-2015 & 2015- 16

Joint Commissioner of Sales tax (Appeals)
04 Maharashtra VAT Act 2002 Value Added Tax 20.3 5.5

2010-11 & 2011-12

Sales Tax Tribunal
05 Maharashtra VAT Act 2002 Value Added Tax 46.8 2.39

2016-17

Jt. Deputy Commissioner of Maharashtra Sales tax
06 Jharkhand-VAT Act 2005 Value Added Tax 6.2 4.2

2014-16

Deputy Commissioner of Sales tax (Appeal)
07 Central Sales Tax Act 1956 Central Sales Tax 0.5 0

2014-15

Dy. Commissioner Of Sales Tax(Appeals)
08 West Bengal VAT Act 2005 Value Added Tax 3.2 0.3

2015-16

Senior Joint Commissioner Corporate Division (Appellate Authority)
09 Central Sales Tax Act 1956 Central Sales Tax 0.1 0.01

2014-15

Joint Commissioner of Commercial Taxes Goa
10 Gujarat VAT Act 2003 Value Added Tax 0.07 0

2006-2007

Commissioner of Commercial Taxes Gujarat
11 Odisha Entry Tax Act 1999 Entry Tax 0.2 0.1

2012-2014

Odisha Sales Tax Tribunal Cuttack
12 Odisha VAT Act 2004 Value Added Tax 1.3 0.1

2012-2014 2015-2016 2016-2017 & 2017-2018

Odisha Sales Tax Tribunal Cuttack
13 Odisha VAT Act 2004 Value Added Tax 1.0 0.0

2014-2016

Joint Commissioner of Commercial Tax
14 Bihar VAT Act 2005 Value Added Tax 0.7 0.2

1999-2001

Sales Tax Special circle for Re assessment
15 Bihar VAT Act 2005 Value Added Tax 13.4 3.2

2010-2012

Joint commissioner of Commercial taxes Appeals
16 Central Sales Tax Act 1956 Central Sales Tax 12 0.6

2016-17

Joint Dy. Commissioner Of Sales Tax(Appeals).
17 Central Sales Tax Act 1956 Central Sales Tax 0.05 0

2015-16

Joint Commisioner Corporate Division (Appealate Authority)
18 Central Sales Tax Act 1956 Central Sales Tax 0.2 0

2014-2017

Joint commissioner of Commercial Tax
19 Central Sales Tax Act 1956 Central Sales Tax 3.1 0.3

2009-2010 2013-14 & 2014-15

Joint Commissioner of Sales Tax (Appeals)
20 Central Sales Tax Act 1956 Central Sales Tax 0.2 0.07

2010-11

Sales Tax Tribunal - Mazgaon
21 Central Sales Tax Act 1956 Central Sales Tax 4.2 1.7

2002-2005

Sales Tax Special Circle
22 Central Sales Tax Act 1956 Central Sales Tax 3.3 0.3

2015-2016

Joint commissioner of Commercial Tax
23 Central Sales Tax Act 1956 Central Sales Tax 0.4 0

2012-14

Odisha Sales Tax Tribunal Cuttack
24 Income Tax Act 1961 Income Tax 600.1 123.7

2010-11 to 2013-2014 2015-2016 & 2017-18

Commissioner of Income Tax (Appeals)
Sr No. Name of the statute Nature of the dues Amount under dispute (' in Millions)

Amount paid under protest (' in Millions)

Period to which the amount relates Forum where dispute is pending
25 Customs Act 1962 Customs Duty 52.8

5.2

2013-15 The Customs Excise & Service Tax Appellate Tribunal
26 Bihar VAT Act 2005 Value Added Tax 172.6

13.5

2015-16 & 2016-17 Jt. Commissioner Commercial Tax-Central Division Patna & Asst. Commissioner of State Tax
27 Central Sales Tax Act 1956 Central Sales Tax 57.3

6.5

2016-17 Asst. Commissioner of State Tax
28 Maharashtra VAT Act 2002 Value Added Tax 4.0

0

2017-18 Dy. Commissioner of State Tax
29 Central Sales Tax Act 1956 Central Sales Tax 0.07

0

2017 Dy. Commissioner of State Tax
30 GST Act 2017 Goods and Service Tax 56.28

2.25

2017-18 Deputy Commissioner of GST

Annexure B to the Independent Auditors' report

Report on the internal financial controls with reference to theaforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013.

(Referred to in paragraph 2A(f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date).

Opinion

We have audited the internal financial controls with reference tostandalone financial statements of Alkem Laboratories Limited ("the Company") asof 31 March 2022 in conjunction with our audit of the standalone financial statements ofthe Company for the year ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at 31 March 2022 based on theinternal financial controls with reference to standalone financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to standalone financial statements based on our audit.We conducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements.

Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to standalone financialstatements were established and maintained and whether such controls operated effectivelyin all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofsuch internal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud 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 internal financialcontrols with reference to standalone financial statements.

Meaning of Internal Financial controls with Reference to StandaloneFinancial Statements

A company's internal financial controls with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of standalone financial statementsfor external purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to standalone financial statementsinclude those policies and procedures that (1) pertain to the maintenance of records thatin reasonable detail accurately and fairly reflect the transactions and dispositions ofthe assets of the company; (2) provide reasonable assurance that transactions are recordedas necessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the Standalone 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 controls 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.

For B S R & Co. LLP

Chartered Accountants

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

Balajirao Pothana

Partner

Membership No. 122632

UDIN: 22122632AIXALU6482

Place: Mumbai

Date: 13 May 2022

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