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Aurobindo Pharma Ltd.

BSE: 524804 Sector: Health care
NSE: AUROPHARMA ISIN Code: INE406A01037
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VOLUME 26006
52-Week high 742.25
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P/E 19.66
Mkt Cap.(Rs cr) 27,537
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OPEN 471.00
CLOSE 468.85
VOLUME 26006
52-Week high 742.25
52-Week low 455.05
P/E 19.66
Mkt Cap.(Rs cr) 27,537
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Aurobindo Pharma Ltd. (AUROPHARMA) - Auditors Report

Company auditors report

To the Members of Aurobindo Pharma Limited

Report on the Audit of the Standalone Financial Statements

OPINION

We have audited the standalone financial statements of Aurobindo PharmaLimited (the "Company") which comprise the standalone balance sheet as at March312022 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of significant accounting policies and other explanatory information.

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 ("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 March 31 2022and its profit and other comprehensive income changes in equity and its cash flows forthe 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 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 professionaljudgement were of most significance in our audit of the standalone financial statementsof the current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.

DESCRIPTION OF KEY AUDIT MATTER
Key audit matters How the matter was addressed in our audit
Valuation of Investments in subsidiaries and joint venture Our audit procedures included the following:
[Refer note 2.1(d)(v) of the summary of significant accounting Policies and note 4 to the standalone financial statements] • Evaluating design implementation and testing operating effectiveness of key controls over the impairment assessment process including forecasts made and valuation models used by the Company.
The carrying value of investments in the Company's subsidiaries and joint venture entities as at March 312022 is '65584.5 million.
• Assessing the valuation methodology used by the Company and testing the mathematical accuracy of the models.
The Company performs annual assessment of investments to identify any indicators of impairment. Based on internal and external factors considered where such evidence exists impairment loss is determined and recognised in accordance with note 2.1(d)(v) of accounting policies to the standalone financial statements. The impairment models use several key assumptions including estimates of future sales volumes prices operational costs terminal value growth rates; probability of regulatory and commercial success; expected cost to complete products under development and the weighted average cost of capital (discount rate). We identified the assessment of impairment indicators and resultant impairment losses in respect of investment in subsidiaries/joint venture as a key audit matter because of:
• Interviewing key research and development personnel and commercial personnel to assess reasonableness of the assumptions used such as expected market share revenue growth expected margins probability of success of products under development.
• Challenging the Company's key assumptions such as the discount rate and other business assumptions used by Company such as sales growth cost based on past performances where relevant.
• Involving our internal valuation specialists to assist us in evaluating the key assumptions and cash flow forecasts.
• Performing sensitivity analysis of key assumptions such as future revenue growth rates costs and the discount rates used in the valuation models.
• The significance of the amount of these investments in the Standalone Balance Sheet; and
• The degree of inherent uncertainty complexity and management judgement involved in determining whether there was objective evidence of impairment of investments.
• Evaluating the adequacy of disclosures made in the standalone financial statements.
Litigations claims and contingencies Refer note 2.2(m) of the summary of significant accounting policies and note 30(C) to the standalone financial statements. Our audit procedures included the following:
• Evaluating the design and testing the operating effectiveness of controls relating to identification and evaluation of litigation and claims and measurement of provisions contingent liabilities and disclosures thereof.
The Company is involved in disputes lawsuits claims governmental and/or regulatory inquiries investigations and proceedings including patent infringement cases tax and commercial disputes arising from time to time in the ordinary course of business. • Obtained a list of ongoing litigations from the Company's legal head. We selected a sample of significant litigations and evaluated the Company's assessment thereof by:
Most of the claims involve complex legal and regulatory issues. The Company assisted by their external legal counsel assesses the need to make provision or disclose a contingency on a case-to-case basis considering the underlying facts of each litigation. The Company's conclusions may result in an incorrect disclosure or provision in the books of account considering the aforesaid assessment involves significant judgement to be exercised by the Company based on current developments. Further unexpected adverse outcomes could also significantly impact the Company's reported results. i. making inquiries with the in-house legal counsel of the Company;
ii. obtaining and inspecting board minutes verifying correspondence orders and appeals in respect of open litigation; and
iii. obtained independent confirmations from external legal counsels where relevant and/ or. evaluated legal opinions obtained by the Company. Also assessed the competence and independence of the external legal counsels.
This area is significant to our audit since the accounting and disclosure for litigations claims and contingencies is complex and judgemental. iv. evaluated uncertain tax positions with assistance of our tax specialists.
• Evaluating the adequacy of provision and disclosures to Standalone financial statements
Revenue Recognition Refer to Note 2.2(c) of the summary of significant accounting policies to the standalone financial statements. Our audit procedures included the following:
• Assessing the Company's revenue recognition policies for compliance with the applicable Ind AS.
Revenue from sale of goods is recognised when a promise in a customer contract (performance obligation) has been satisfied by transferring control over the promised goods to the customer. Control is usually transferred upon shipment delivery to upon receipt of goods by the customer in accordance with the delivery and acceptance terms agreed with the customers. The amount of revenue to be recognised is based on the consideration expected to be received in exchange for goods excluding trade discounts volume discounts sales returns and taxes. • Evaluating the design and implementation and testing the operating effectiveness of the relevant key internal controls over recognition of revenue in accordance with delivery and acceptance terms of the underlying customer contracts.
• Performing testing of selected statistical samples of revenue transactions recorded during the year by verifying the underlying documents such as sales invoices/ contracts and dispatch/ acknowledged delivery receipts/shipping documents.
• Testing revenue transactions recorded before and after the financial year end date selected on a sample basis using random sampling to assess revenue is recognised in the period in which control is transferred.
We identified the recognition of revenue from sale of products as a key audit matter because:
Revenue is one of the key performance indicators for the Company and there could be a risk of revenue being recognised before the control has been transferred to the customer. • Assessing manual journals sample selected based on specified risk-based criteria posted to revenue to identify unusual items.
Inventory Valuation Our audit procedures included the following:
Refer to Note 2.2(g) of the summary of significant accounting policies and note 11 to the standalone financial statements. • Evaluating the Company's inventory valuation policies and assessing compliance with the relevant accounting standards.
The carrying value of inventories comprising of raw materials packing materials work-in-progress finished goods stores spares and consumables as at March 312022 is '33561.8 million. • Evaluating the design and testing the implementation and operating effectiveness of the Company's internal controls over valuation of inventories.
Inventories are valued at lower of cost determined on weighted average basis and net realisable value. • Evaluating the data inputs by testing samples selected using statistical sampling by verifying the underlying records such as purchase invoices cost sheets batch records overhead allocation workings and capacity utilisation certificates.
Raw material costs include cost of purchase and other costs incurred in bringing the inventories to their present location and condition.
• Testing the mathematical accuracy of the valuation models.
Finished goods and work-in-progress costs include direct material labour and a proportion of manufacturing overheads based on the normal operating capacity.
• Performing analytical procedures on gross margin analysis (including price and volume changes) to identify unusual variances.
We identified inventory valuation as a key audit matter because of:
• the significance of the amount of inventories to the Standalone Balance Sheet; and
• non-automated environment likelihood of material misstatement in inventory valuation arising from incorrect alterations to the inventory valuation records on account of high volume of transactions and stock keeping units.

OTHER INFORMATION

The Company's Management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements andour auditor's report thereon. The Company's annual report is expected to be madeavailable to us after the date of this auditor's report.

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.

When we read the annual report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.

MANAGEMENT'S AND BOARD OF DIRECTORS' RESPONSIBILITIES FOR THESTANDALONE FINANCIAL STATEMENTS

The Company's Management and Board of Directors are responsiblefor the matters stated in Section 134(5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs profit/loss and other comprehensive income changes in equity and cash flows ofthe Company 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 judgements 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 asa going 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 theCompany's financial reporting process.

AUDITOR'S 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 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 professionaljudgement and maintain professional scepticism 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 conditionsmay 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 auditor's report unless law or regulation precludespublic disclosure about the matter 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 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 March 312022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 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 financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

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

a) The Company has disclosed the impact of pending litigations as atMarch 31 2022 on its financial position in its standalone financial statements - ReferNote 30 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 as disclosed in the note 52(v) to the accounts no funds have beenadvanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other persons or entities includingforeign entities ("Intermediaries") with the understanding whether recorded inwriting or otherwise 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 as disclosed in the note 52(v) to the accounts no funds have been received bythe Company from any persons or entities including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany 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 any material misstatement.

e) The interim dividend declared and paid by the Company during theyear and until the date of this audit report is in accordance with Section 123 of theCompanies Act 2013.

As stated in note 14 to the standalone financial statements the Boardof Directors of the Company has proposed final dividend for the year which is subject tothe approval of the members at the ensuing Annual General Meeting. The dividend declaredis in accordance with Section 123 of the Act to the extent it applies to declaration ofdividend.

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

I n 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 & Associates LLP
Chartered Accountants
ICAI Firm Registration No. 116231 W/W-100024
Amit Kumar Bajaj
Partner
Place: Hyderabad Membership No. 218685
Date: May 30 2022 ICAI UDIN: 22218685AJWCDF6328

Annexure A

Annexure A to the Independent Auditor's Report on StandaloneFinancial Statements of Aurobindo Pharma Limited for the year ended March 31 2022

(Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

With reference to the Annexure A referred to in Paragraph 1 in Reporton Other Legal and Regulatory Requirements of the Independent Auditors' Report ofeven date to the Members of Aurobindo Pharma Limited ("the Company") on thestandalone financial statements for the year ended March 31 2022 we report that:

(i) (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) 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 standalonefinancial statements are held in the name of the Company except for the following whichare not held in the name of the Company:

Amounts in Rs. millions
Description of property Gross carrying value Held in the name of Whether promoter director or their relative or employee Period held - Since Reason for not being held in the name of the Company.
Freehold land located in Telangana admeasuring 15 Acres 2.9 Sri Chakra Remedies Limited No Since 2001 The title deeds are in the name of the erstwhile Company that was amalgamated with the Company pursuant to the Scheme of Amalgamation sanctioned by the Hon'ble High Court of Andhra Pradesh dated April 03 2001.
Building located in Telangana 35.3 Sri Chakra Remedies Limited No Since 2001
Freehold land located in Telangana admeasuring 24.75 Acres 4.4 Ranit Phama Limited No Since 2003 The title deeds are in the name of the erstwhile Company that was amalgamated with the Company pursuant to the Scheme of Amalgamation sanctioned by the Hon'ble High Court of Andhra Pradesh dated April 09 2003.
Freehold land located in Andhra Pradesh admeasuring 16 Acres 103.7 Ramky Pharma city (India) Limited and Andhra Pradesh Industrial Infrastructure corporation Limited No Since 2005 Agreement of Sale to the Company is completed and fulfilment of conditions to transfer the title deeds is in progress
Freehold land located in Telangana admeasuring 2 Acres 0.3 Senor Organics Private Limited No Since 2007 The title deeds are in the name of the erstwhile Company that was amalgamated with the Company pursuant to the Scheme of Amalgamation sanctioned by the Hon'ble High Court of Andhra Pradesh dated June 212007.
Freehold land located in Andhra Pradesh admeasuring 1 Acre 97.6 Hyacinths Phrama Private Limited No Since 2019
Freehold land located in Andhra Pradesh admeasuring 438 Acres 114.5 APL Research Center Limited No Since 2019 The title deeds are in the name of the erstwhile Company that was amalgamated with the Company pursuant to the Scheme of Amalgamation sanctioned by the National Company Law Tribunal Hyderabad dated March 30 2021
Freehold land located in Andhra Pradesh admeasuring 4.36 Acres 19.3 Silicon Life Sciences Private Limited No Since 2019
Building located in Andhra Pradesh 213.7
Total 591.8

(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.

(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 not providedany security or advances in the nature of loans secured or unsecured to companies firmslimited liability partnership or any other parties during the year. The Company has madeinvestments in provided guarantee and granted loans secured or unsecured to companiesin respect of which the requisite information is as below. The Company has not made anyinvestments in provided guarantee and granted loans secured or unsecured to firms orlimited liability partnership.

(a) Based on the audit procedures carried on by us and as per theinformation and explanations given to us the Company has provided loans or stoodguarantee to subsidiaries and others. The Company has not provided loans or stoodguarantee or provided security to joint ventures and associates;

Amounts in Rs. millions
Particulars Guarantees Loans
Aggregate amount during the year
- Subsidiaries* 897.7 7500.0
- Others - 96.7
Balance outstanding as at balance sheet date
- Subsidiaries* 957.4 7930.0
- Others 990.0 144.6

*As per Companies Act 2013

(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 guaranteesprovided during the year are prima facie not prejudicial to the interest of theCompany.

(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 therepayments or receipts have been regular. Further the Company has not given any advancein the 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) In our opinion and according to the information and explanationsgiven to us the Company has not advanced loans to directors / to a Company in which thedirector is interested to which the provisions of Section 185 of the Act apply and hencenot commented upon. However in respect of loans given investments made and guaranteesgiven the Company is in compliance with the provisions of Section 186 of the Act.

(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 account maintained by theCompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under Section 148(1) of the Act related to the manufacture of ActivePharmaceutical Ingredients and Formulations and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. However we have notcarried out a detailed examination of the records with a view to determine whether theseare accurate or complete.

(vii) (a) The Company does not have liability in respect of Servicetax Duty of excise Sales tax and Value added tax during the year since effective July012017 these statutory dues has been subsumed into GST.

According to the information and explanations given to us and on thebasis of our examination of the records of the Company in our opinion amounts deducted /accrued in the books of account in respect of undisputed statutory dues including Goodsand Services Tax (‘GST') Provident fund Employees' State InsuranceIncome-Tax Duty of Customs Entry tax Cess and other statutory dues have generally beenregularly deposited by the Company with the appropriate authorities

According to the information and explanations given to us and on thebasis of our examination of the records of the Company no undisputed amounts payable inrespect of Goods and Services Tax (‘GST') Provident fund Employees' StateInsurance Income-tax Duty of Customs Entry tax Cess and other statutory dues were inarrears as at March 312022 for a period of more than six months from the date they becamepayable.

(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 Entry tax or Cess or other statutory dues which have not been deposited onaccount of any dispute are as follows:

Amounts in Rs. millions
Nature of the Statue Nature of Dues Disputed Amount (Rs. in million) Paid under Protest (Rs. in million) Period (FY) to which the amount relates Forum where dispute is pending
Andhra Pradesh Tax on Entry of Goods in Local Areas Act 2001 Entry Tax 13.5 3.4 2014-2017 The Hon'ble High Court - Andhra Pradesh
Central Excise Act 1994 and Customs Act 1962 Central Excise 31.5 6.4 2002-2018 CESTAT Hyderabad
56.5 - 2004-2018 The Hon'ble High Court - Telangana
2.3 2.3 2007-2010 Revision Authority Mumbai
5.7 5.3 2012-2014 Revision Authority New Delhi
Customs Act 12.7 0.7 2002-2018 CESTAT Chennai
1261.0 8.0 2002-2018 CESTAT Hyderabad
5.8 0.4 2002-2018 CESTAT Mumbai
4.7 3.7 2008-2012 Deputy Commissioner Visakhapatnam
64.8 - 2012-2017 CESTAT Hyderabad
Central Goods & Service Tax Act 2017 Finance Act 1994 Goods and Service Tax 5.0

-

2019-2020 Appellate Authority Vizag
Service Tax 52.1 3.7 2002-2018 CESTAT Hyderabad
18.0 1.3 2014-2017 CESTAT Hyderabad
9.0 - 2021-2022 Commissioner Appeals (Hyd)
12.4

-

2021-2022 Deputy Commissioner Ameerpet Division
73.5 - 2017-2018 Commissioner Appeals (Hyd)
Telangana Tax on Entry of Goods in Local Areas Act 2001 Entry Tax 15.9 5.6 2004-2018 The Hon'ble High Court - Telangana
Income Tax Act 1961 Income-tax 91.9

-

2008-2009 Income Tax Appellate Tribunal Hyderabad
488.2

-

2010-2014 The Hon'ble High Court - Telangana
181.9

-

2014-2015 Income Tax Appellate Tribunal Hyderabad
312.5

-

2015-2016 Commissioner (Appeals) Hyderabad
1483.6

-

2016-2017 Assistant Commissioner Hyderabad

(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 financial statements of the Company we report that the Companyhas not taken any funds from any entity or person on account of or to meet the obligationsof 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 Companies Act 2013).

(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 Companies Act 2013 has been filed bythe auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors)Rules 2014 with the Central Government.

(c) As represented to us by the management there are no whistle blowercomplaints received by the Company during the year.

(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 theCompanies Act 2013 are not 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) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realisation of financialassets and payment of financial liabilities other information accompanying the Standalonefinancial statements our knowledge of the Board of Directors and management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report that Company is not capable of meeting its liabilities existingat the date of balance sheet as and when they fall due within a period of one year fromthe balance sheet date. We however state that this is not an assurance as to the futureviability of the Company. We further state that our reporting is based on the facts up tothe date of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged 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 except in respect of thefollowing which have been transferred to Aurobindo Pharma Foundation (Section 8 Company):

Financial Year Amount unspent on corporate social responsibility activities for "On-going Projects" Amount transferred to Special Account within 30 days from the end of the Financial Year Amount transferred after the due date (specify the date of transfer)
(a) (b) (c) (d)
2021-22 272.4 272.4 -
2020-21 154.3 154.3 -
For B S R & Associates LLP
Chartered Accountants
ICAI Firm Registration No. 116231 W/W-100024
Amit Kumar Bajaj
Partner
Place: Hyderabad Membership No. 218685
Date: May 30 2022 ICAI UDIN: 22218685AJWCDF6328

Annexure B

Annexure B to the Independent Auditors' report on the StandaloneFinancial Statements of Aurobindo Pharma Limited for the year ended March 31 2022

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 clause (f) of paragraph 2 under ‘Report on OtherLegal and Regulatory Requirements' section of our report of even date)

OPINION

We have audited the internal financial controls with reference tostandalone financial statements of Aurobindo Pharma Limited ("the Company") asof March 31 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 March 31 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 areresponsible for establishing and maintaining internal financial controls 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. 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(hereinafter referred 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. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in 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 judgementincluding the 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 internalfinancial controls 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 that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;

(2) provide reasonable assurance that transactions are recorded asnecessary 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 & Associates LLP
Chartered Accountants
ICAI Firm Registration No. 116231 W/W-100024
Amit Kumar Bajaj
Partner
Place: Hyderabad Membership No. 218685
Date: May 30 2022 ICAI UDIN: 22218685AJWCDF6328

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