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Orchid Pharma Ltd.

BSE: 524372 Sector: Health care
NSE: ORCHPHARMA ISIN Code: INE191A01027
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VOLUME 2072
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OPEN 398.00
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VOLUME 2072
52-Week high 463.05
52-Week low 260.20
P/E
Mkt Cap.(Rs cr) 1,652
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Orchid Pharma Ltd. (ORCHPHARMA) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS' REPORT

To the Members of Orchid Pharma Limited

Report on the audit of the Standalone financial statements Opinion

We have audited the standalone financial statements of Orchid Pharma Limited ("theCompany”) which comprise the balance sheet as at March 31 2022 and the statementof profit and loss (including other comprehensive income) the statement of changes inequity and the statement of cash flows for the year then ended and notes to thestandalone financial statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements subject to our comments in theBasis for Opinion paragraph give the information required by the Companies Act 2013("the Act”) in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended ("IndAS”) and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2022 and its loss total comprehensive income thechanges in equity and its cash flows for the year ended as on that date.

Basis for Opinion

We conducted our audit in accordance with the standards on auditing (SAs) specifiedunder section 143 (10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's responsibilities for the audit of the standalone financialstatements section of our report. We are independent of the Company in accordance with thecode of ethics issued by the Institute of Chartered Accountants of India("ICAI”) together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's code of ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

In our opinion and based on the information and explanations given to us we havedetermined the matters described below to be the key audit matters to be communicated inour report:

Presentation and disclosure of additional information pursuant to the amendments toSchedule III to the Companies Act 2013

With a view to facilitate enhanced disclosures and transparency in operations bycompanies in India the Ministry of Corporate Affairs (MCA) has issued a batch ofamendments to the Schedule III to the Companies Act 2013 relating to presentation anddisclosures in the financial statements. The Company has evaluated the requirements andmade the relevant disclosures including restatement of the disclosures made in thecomparative period.

Principal Audit Procedures

• We assessed the Company's process to identify assess and respond to risks ofmaterial misstatement in the disclosure requirements pursuant to the aforesaid amendmentsto Schedule III to the Companies Act 2013.

• As part of the evaluation of whether sufficient appropriate audit evidence hasbeen obtained we have evaluated the appropriateness of our initial risk assessments andrevised previous risk assessments in for certain financial statement areas like claims andfinal settlement of financial and operating creditors carrying amount of property plantand equipment capital work in progress intangible assets comprising of includingrelated disclosure requirements under the Act and respective Indian Accounting Standards.

• We have designed performed additional procedures including verification of thesource and completeness of data used by the management for making proper disclosures asrequired by the Act.

• We have considered the basis of management judgment

in making the disclosures taking into consideration the date of the financialstatements the facts and circumstances pertaining to the entity and the conditions thatexisted at or arose after that date. We have considered all subsequent events andtransactions to substantiate our conclusions on the appropriateness of management'sdisclosures in accordance with the requirements of the amendments.

• We have audited the management's estimates required in the standalone financialstatements including but not limited to estimates related to expected credit loss fairvalue of various assets taken over and liabilities assumed inventory obsolescenceimpairment of non-financial assets etc. by checking the reasonableness of underlyingassumptions in making those key estimates.

• We have carried out a detailed analysis of data and performed additionalanalytical procedures for validating the management's disclosures.

Emphasis of Matters

Without qualifying our opinion we draw attention to the following matters

(a) Note 44 to the financial statements relating to relating to the fact that theCompany has taken certain lands on lease for its operations in respect of which the leaseagreement expired before the date of commencement of the Corporate Insolvency ResolutionProcess. We were informed that as part of the right to review the existing agreements theCompany has made a detailed assessment of the market rent for the property and the marketvalue of the property for outright purchase. We were also informed that since the presentrent as per erstwhile lease agreements is significantly high considering the market valueof the property itself the Company is in talks with the lessor for renewal of the leasewith lower rent or for outright purchase of the property as part of the implementation ofthe resolution plan. However no finality is reached on this matter as of date.

Pending completion of the negotiation and the uncertainties involved the Companydisputed the portion of the lease rent considered to be excessive than the market rate asassessed by an independent valuer amounting to INR 2051.33 Lakhs upto March 31 2022 inrespect of the aforesaid lease. The same has been treated as contingent liabilities in thestandalone financial statements of the Company.

Based on legal opinion obtained the management is of the opinion that no liabilitywill arise on completion of the negotiation; and

(b) Note 2 to the financial statements relating to "Estimation of uncertaintiesrelating to the global health pandemic from COVID-19” which describes theuncertainties and the impact of Covid-19 pandemic on the Company's operations and resultsas assessed by the management.

Information other than the standalone financial statements and auditors' report thereon

The Company's board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's responsibility for the standalone financial statements

The Company's board of directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act readwith the Companies (Indian Accounting Standards) Rules 2015 as amended from time totime and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the

Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The board of directors are also responsible for overseeing the Company's financialreporting process.

Auditor's responsibilities for the audit of the standalone financial statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order 2020 ("the Order”)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in Annexure "A” a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The balance sheet the statement of profit and loss including other comprehensiveincome statement of changes in equity and the statement of cash flow dealt with by thisreport are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act;

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B”. Our report

expresses an unmodified opinion on the adequacy and operating effectiveness of theCompany's internal financial controls over financial reporting;

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197 (16) of the Act as amended in ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act; and

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

a. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 44 to the standalonefinancial statements;

b. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts; and

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

d. The management has represented that to the best of its knowledge and belief otherthan as disclosed in the notes to the accounts

I. no funds have been advanced or loaned or invested (either from borrowed funds orshare premium or any other sources or kind of funds) by the company to or in any otherperson(s) or entity(ies) including foreign entities 'Intermediaries' with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the company 'Ultimate Beneficiaries' or provideany guarantee security or the like on behalf of the Ultimate Beneficiaries; and

ii. no funds have been received by the company from any person(s) or entity(ies)including

foreign entities 'Funding Parties' with the understanding whether recorded in writingor otherwise 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 or the like onbehalf of the Ultimate Beneficiaries.

iii. Based on audit procedures carried out by us that we have considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused usbelieve that the representations under sub-clause (i) and (ii) contain any materialmisstatement.

The Company has not declared or paid any dividends during the year and accordinglyreporting on the compliance with section 123 of the Companies Act 2013 is not applicablefor the year under consideration.

For CNGSN & ASSOCIATES LLP

Chartered Accountants

Firm's Registration No. 004915S/ S200036

(CHINNSAMY GANESAN)

Partner

Membership No. 027501 UDIN: 22027501AIVWAR7832

Place: Chennai Date: May 12 2022

1. (a) In our opinion and according to the information and explanations given to usthe Company is maintaining proper records showing full particulars including quantitativedetails and situation of property plant and equipment and intangible assets.

(b) The Company has a program of verification to cover all the items of property plantand equipment in a phased manner over a period of three years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets.

Pursuant to the program certain property plant and equipment were physically verifiedby the management during the year. According to the information and explanations given tous no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date.

In respect of immovable properties pledged as security for borrowings the Company isin the process of obtaining confirmation of title deeds deposited with the lenders.Accordingly we are

unable to express our comment on those items of immovable properties.

(d) The Company has not revalued its property plant and equipment or intangible assetsduring the financial year ended March 31 2022. Accordingly paragraph 3(i) (d) of theOrder is not applicable.

(e) In our opinion and according to the information and explanations given to us thereare no proceedings initiated or are pending against the Company for holding any benamiproperty under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) and rules madethereunder. Accordingly paragraph 3 (i) (e) of the Order is not applicable.

2. (a) The inventory has been physically verified by themanagement during the year. Inour opinion the coverage and procedure of such verification by the management isappropriate and no discrepancies of 10% or more in the aggregate for each class ofinventory were noticed on such verification

(b) The Company has been sanctioned working capital limits in excess of five crorerupees in aggregate from banks or financial institutions on the basis of security ofcurrent assets. The quarterly returns or statements filed by the Company with the banks orfinancial institutions are in agreement with the books of account except in the followingcases:

Quarter ended As per financials (Rs. Lakhs) As per returns filed with banks (Rs. Lakhs) Difference (Rs. Lakhs) Reasons
June 30 2021

Not submitted to Bank as there is no working capital limit during Q1

Quarter ended As per financials (Rs. Lakhs) As per returns filed with banks (Rs. Lakhs) Difference (Rs. Lakhs) Reasons
Sep 30 2021
Inventories 18644.90 18848.69 (203.79) The difference is mainly due to estimate of overhead rate considered while valuing WIP and FG in October 2021 for bank purposes and the actual overhead rate determined after proper closure of accounts in November. Further the R&D Stock of INR 1.29 Cr is not considered for submission to the bank.
Dec 312021
Inventories 17665.14 17452.51 212.63 The difference is mainly due to estimate of overhead rate considered while valuing WIP and FG in January 2022 for bank purposes and the actual overhead rate determined after proper closure of accounts in February 2022. Further the R&D stock of INR 1.18 Cr is not considered for submission to the bank.
March 31 2022
Inventories 17265.63 16409.97 855.66 The difference is mainly due to estimate of overhead rate considered while valuing WIP and FG in April 2022 for bank purposes and the actual overhead rate determined after proper closure of accounts in May 2022. Further the R&D stock of INR 1.18 Cr and the provision made for non-moving stock amounting to INR 0.54 Cr are not considered for submission to the bank.

3. In our opinion and according to information and explanation given to us the companyhas made investments in the equity shares of an associate company aggregating I NR 4550Lakhs during the year.

In our opinion and according to information and explanation given to us the companyhas not provided any guarantee or security/ granted any loans or advances in the nature ofloans secured or unsecured to companies firms Limited Liability Partnerships or otherparties. The loans given to subsidiaries and other parties during the pre-CIRP period havebeen fully provided for. Accordingly the other clauses of paragraph 3 (iii) of the Orderare not applicable.

4. In our opinion and according to information and explanation given to us the companyhas not granted any loans or provided any guarantees or given any security to which theprovision of section 185 of the Companies Act are applicable. The loans given tosubsidiaries and other parties during the pre-CIRP period have been fully provided for.

In respect of investments made by the Company and loans given to parties other thanthose covered in Section 185 of the Act the Company had complied with the provisions ofsection 186 of the Companies Act 2013.

5. In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits during the year and does not have any

unclaimed deposits as at March 312022 and accordingly paragraph 3 (v) of the Order isnot applicable.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148 of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. However we have not carried out a detailedexamination of the same.

7. According to the information and explanations given to us and based on ourexamination of the relevant records:

(a) Amounts deducted/ accrued in the books of account in respect of undisputedstatutory dues including goods and services tax provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues have been generally regularly depositedby the Company with the appropriate authorities.

(b) No undisputed amounts payable in respect of goods and services tax provident fundemployees' state insurance income-tax sales-tax service tax duty of customs duty ofexcise value added tax cess and other material statutory dues were in arrears as atMarch 31 2022 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and as confirmed by theResolution Professional (RP) and the Successful Resolution Applicant in view of theimplementation of the resolution plan as approved by the Hon'ble National Company LawTribunal (based on the order of the Hon'ble Supreme Court of India) except to the extentof payment to the stakeholders as per the approved Resolution Plan the Company shall haveno liability with respect to any claims relating in any manner to the period prior to"the effective date" i.e. preCorporate Insolvency Resolution Process period(pre-CIRP period). We were informed that to the extent of claims raised (pertaining to thepre-CIRP period) by various statutory authorities and approved by the RP have been fullypaid as part of the approved resolution plan. Accordingly all other pending litigationsrelating to pre-CIRP period are deemed to be extinguished as at March 31 2020 i.e. thedate of implementation of the approved resolution plan. Accordingly there are no dues ofincome tax sales tax service tax excise duty value added tax and goods and service taxwhich have not been deposited as at March 31 2022 on account of dispute.

8. In our opinion and according to the information and explanations given to us thereare no transactions not recorded in the books of account have been surrendered ordisclosed as income during the year in the tax assessments under the Income Tax Act 1961and accordingly paragraph 3 (viii) of the Order is not applicable.

9. (a) In our opinion and according to the information

and explanations given to us the company has not defaulted in repayment of loans orother borrowings or in the payment of interest thereon to any lender during the year.

(b) In our opinion and according to the information and explanations given to us theCompany is not declared as a wilful defaulter by any bank or financial institution orother lender.

(c) In our opinion and according to the information and explanations given to us theterm loans obtained during the year were applied for the purpose for which they wereavailed.

(d) In our opinion and according to the information and explanations given to us fundsraised on short term basis have not been utilised for long term purposes.

(e) In our opinion and according to the information and explanations given to us thereare no loans or advances and guarantees or security to subsidiaries joint ventures andassociates have been given during the year. The loans given to subsidiaries and otherparties during the pre- CIRP period have been fully provided for.

10. (a) In our opinion and according to the information

and explanations given to us the Company has not raised any money by way of initialpublic offer or further public offer (including debt instruments) during the year.Accordingly paragraph 3 (x) (a) of the Order is not applicable.

(b) In our opinion and according to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares orconvertible debentures (fully partially or optionally convertible) during the year.Accordingly paragraph 3 (x) (b) of the Order is not applicable.

11. (a) To the best of our knowledge and according to

the information and explanations given to us no fraud by the Company or no materialfraud on the Company by any person has been noticed or reported during the year.Accordingly paragraphs 3 (xi) (a) and (b) of the Order are not applicable.

(b) To the best of our knowledge and according to the information and explanationsgiven to us no whistle-blower complaints have been received by the Company during theyear.

12. The Company is not a Nidhi Company and

accordingly Paragraphs 3 (xii) of the Order is not applicable.

13. In our opinion and according to the information and explanations given to us thetransactions with the related parties are in compliance with section 177 and 188 of theAct. Where applicable the details of such transactions have been disclosed in thefinancial statements as required by the applicable accounting standards.

14. (a) In our opinion and according to the information

and explanations given to us the Company has an internal audit system commensuratewith the size and nature of its business.

(b) The reports of the internal auditors for the year under audit were considered byus as part of our audit procedures.

15. In our opinion and according to the information and explanations given to us theCompany has not entered into non-cash transactions with directors or persons connectedwith them. Accordingly paragraph 3 (xv) of the Order is not applicable.

16. (a) In our opinion and according to the information

and explanations given to us the Company is not required to be registered undersection 45-IA of the Reserve Bank of India Act 1934.

(b) In our opinion and according to the information and explanations given to us theCompany has not conducted any Non-Banking Financial or Housing Finance activities withouta valid Certificate of Registration (COR) from the Reserve Bank of India as per theReserve Bank of India Act 1934.

(c) In our opinion and according to the information and explanations given to us theCompany is not a Core Investment Company (CIC) as defined in the regulations made by theReserve Bank of India. Accordingly paragraph 3 (xvi) (c) of the Order is not applicable.

(d) In our opinion and according to the information and explanations given to us theCompany is not a Core Investment Company (CIC) and it does not have any other companies inthe Group. Accordingly paragraph 3 (xvi) (d) of the Order is not applicable.

17. The Company has not incurred cash losses in the financial year and incurred cashlosses of INR 825.46 Lakhs in the immediately preceding financial year.

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

19. In our opinion and according to the information and explanations given to us and onthe basis of the financial ratios disclosed in note 51 (i) to the standalone financialstatements ageing and expected dates of realisation of financial assets and payment offinancial liabilities other information accompanying the financial statements ourknowledge of the board of directors and management plans there are no materialuncertainty exists as on the date of the audit report that Company is capable of meetingits liabilitiesexisting at the date of balance sheet as and when they fall due within aperiod of one year from the balance sheet date.

20. In our opinion and according to the information and explanations given to us theprovisions of section 135 of the Act are not applicable to the Company during the year.Accordingly paragraph 3 (xx) of the Order is not applicable.

21. In our opinion and according to the information and explanations given to us thefinancial statements of the subsidiaries and associates included in the consolidatedfinancial statements are unaudited and as prepared by the management. Accordinglyparagraph 3 (xxi) of the Order is not applicable.

For CNGSN & ASSOCIATES LLP

Chartered Accountants

Firm Registration No.004915S/ S200036

(CHINNSAMY GANESAN)

Partner

Membership No. 027501

UDIN: 22027501AIVWAR7832

Place: Chennai

Date: May 12 2022

We have audited the internal financial controls over financial reporting of OrchidPharma Limited ("the Company”) as at March 312022 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's responsibility for internal financial controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note”) issued by the Institute of Chartered Accountantsof India. 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 the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note and the standards on auditing prescribed under Section143 (10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. 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 over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and

evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement in the standalone financial statementswhether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial control systemover financial reporting.

Meaning of internal financial controls over financial reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (i) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (iii) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial statements.

Inherent limitations of internal financial controls over financial reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management of override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion and according to the information and explanations given to us theCompany has in all material respects an adequate internal financial control system overfinancial reporting and such internal financial controls over financial reporting 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 Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

For CNGSN & ASSOCIATES LLP

Chartered Accountants

Firm Registration No.004915S/ S200036

(CHINNSAMY GANESAN)

Partner

Membership No. 027501 UDIN: 22027501AIVWAR7832

Place: Chennai Date: May 12 2022

.