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Auditor Report of AstraZeneca Pharma India Ltd.

Mar 31, 2016

We have audited the accompanying financial statements of AstraZeneca Pharma India Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,

2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

(i) As required by the Companies (Auditor''s Report) Order, 2016 (''the Order'') issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.

(ii) As required by Section 143(3) of the Act, we report that:

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

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

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the directors as on 31 March 2016, and taken on record by the Board of Directors, none of the directors are disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure B; and

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 2.6 and note 2.23 to the financial statements;

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

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

Annexure referred to in the Independent Auditor''s Report to the Members of AstraZeneca Pharma India Limited ("the Company") for the year ended 31 March 2016. We report that:

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

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

(c) According to the information and explanations give to us, the title deeds of immovable properties are held in the name of the Company.

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

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

(iv) According to the information and explanations given to us, the Company has not given any loan or made any investments or given any guarantees under provisions of Section 185 and 186 of the Act.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public.

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

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

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

(b) According to the information and explanations given to us, there are no dues of wealth-tax, sales-tax, excise duty or cess which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of income-tax, customs duty and service tax have not been deposited by the Company on account of disputes:

Name of the Nature of Amount (Rs.) Period to which Forum where

Statute the dues the amount relates dispute is pending

Income tax Act, Income tax demand 42,373,443 1996-1997 Honourable High 1961 in relation to sale Court, Karnataka and lease back arrangement Customs Act, Customs duty 21,248,482 2005-2006 Deputy Commissioner

1962 Customs, Mumbai

Finance Act, Disallo wance ofinput 518,8201 April 2005 to Central Excise 1994 input service March 2010 and Service Tax credit Appellate Tribunal, Bangalore

Finance Act, Service tax on 25,648,1742 April 2006 to Central Excise and 1994 import of services March 2012 Service Tax Appellate Tribunal, Bangalore

Finance Act, Service tax on 3,421,72 73 April 2012 to Central Excise 1994 import of services March 2013 and Service Tax Appellate Tribunal, Bangalore Income tax Act, Income tax demand 84,299,5334 2008-2009 Income tax 1961 in relation to various Appellate Tribunal, disall owances Bangalore

Income-tax Act, Income tax demand 5,077,4605 April 2009 to Income tax 1961 in relation to various March 2010 Appellate Tribunal, disallowances Bangalore

Income-tax Act, Income tax demand 10,397,300 April 2010 to Income tax 1961 in relation to various March 2011 Appellate Tribunal, disallowances Bangalore

Punjab VAT VAT Assess ment 1,771,199 2006-2007 Punjab High Court and Deputy Excise and Taxation Commissioner, Patiala Divi sion, Patiala

Delhi VAT VAT Asses sment 887,0176 2010-2011 Commissioner, Delhi VAT

1 an amount of Rs. 26,000 has been paid under protest by utilizing credit

2 an amount of Rs. 1,764,842 has been paid under protest by cash

3 an amount of Rs. 243,700 has been paid under protest by utilizing credit

4 an amount of Rs. 42,149,717 has been paid under protest by cash and adjustment of income tax refund

5 an amount of Rs. 5,077,460 has been under protest.

6 an amount of Rs. 88,701 has been paid under protest

(viii) According to the information and explanations given to us, the Company did not have any outstanding dues to any financial institution, banks or debentureholders during the year.

(ix) The Company has not raised any money by public issues / further public offer during the year. The Company did not have any term loans outstanding during the year.

(x) According to the information and explanations given to us, no fraud by the Company or any fraud on the Company by its employees / officers has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us and on the basis of our examination of the records of the Company, managerial remuneration has been paid and provided as per provisions of Section 197 read with Schedule V of the Act.

(xii)In our opinion and according to the information and explanation given to us, the Company is not a nidhi company.

(xiii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, all the transactions entered with the related parties are in compliance with Section 177 and 188 of the Act, where applicable and the details disclosed in the financial statements are as required by the accounting standards.

(xiv) According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv)According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them.

(xvi) In our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

for B S R & Co. LLP

Chartered Accountants

Firm registration number: 101248W / W-100022

Supreet Sachdev

Partner

Membership number: 205385

Place: Bangalore Date: May 25, 2016


Mar 31, 2015

We have audited the accompanying financial statements of AstraZeneca Pharma India Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015,and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

(i) As required by the Companies (Auditor's Report) Order, 2015 ('the Order') issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.

(ii) As required by Section 143(3) of the Act, we report that:

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

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

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) On the basis of the written representations received from the directors as on 31 March 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164(2) of the Act; and

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 2.6(c), and note 2.24(a) and 2.24(c ) to the financial statements.

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

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

AstraZeneca Pharma India Limited Annexure to the Independent Auditor's Report

Annexure referred to in the Auditor's Report to the Members of AstraZeneca Pharma India Limited ("the Company") for the year ended 31 March 2015. We report that:

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

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

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

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

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

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

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

(v) The Company has not accepted any deposits from the public.

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

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

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

(b) According to the information and explanations given to us, there are no dues of wealth-tax, value added tax or cess which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of income-tax, customs duty and service tax have not been deposited by the Company on account of disputes:

Name of the Nature of Amount (Rs.) Statute the dues

Income tax Act, Income tax demand 42,373,443 1961 in relation to sale and lease back arrangement

Customs Act, Customs duty 21,248,482 1962

Finance Act, Disallowance of 518,820* 1994 input service tax credit

Finance Act, Service tax on 25,648,174** 1994 import of services



Finance Act, Service tax on 3,421,727*** 1994 import of services



Income tax Act, Income tax demand 84,299,533**** 1961 in relation to various disallowances

Income-tax Act, Income tax demand 5,077,460***** 1961 in relation to various disallowances

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

Income tax Act, 1996-97 Honourable High 1961 Court , Karnataka

Customs Act, 2005-06 Deputy Commissioner 1962 Customs, Mumbai

Finance Act, April 2005 to Central Excise 1994 March 2010 and Service Tax Appellate Tribunal,

Bangalore Finance Act, April 2006 to Central Excise 1994 March 2012 and Service Tax

Appellate Tribunal, Bangalore Finance Act, April 2012 to Central Excise 1994 March 2013 and Service Tax

Appellate Tribunal, Bangalore Income tax Act, 2008-09 Income tax 1961 Appellate Tribunal, Bangalore

Income-tax Act, April 2009 to Income tax 1961 March 2010 Appellate Tribunal, Bangalore

* an amount of Rs. 26,000 has been paid under protest by utilizing credit

** an amount of Rs. 1,764,842 has been paid under protest by cash

*** an amount of Rs. 243,700 has been paid under protest by utilizing credit

**** an amount of Rs. 42,149,717 has been paid under protest by cash and adjustment of income tax refund

***** an amount of Rs. 5,077,460 has been under protest.

(c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, amount required to be transferred in respect of investor education and protection fund in accordance with the relevant provisions of Companies Act, 1956 (1 of 1956) and rules made thereunder has been accordingly transferred to such fund within time.

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

(ix) The Company did not have any outstanding dues to any financial institution, banks or debentureholders during the year.

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

(xi) The Company did not have any term loan outstanding during the year.

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

for B S R & Co. LLP Chartered Accountants Firm registration number: 101248W/W-100022

Sunil Gaggar Partner Membership number: 104315 Place: Bangalore Date: May 27, 2015


Mar 31, 2014

We have audited the accompanying financial statements of AstraZeneca Pharma India Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss, the Cash Flow Statement of the Company for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/ 2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 2.23 to the financial statements which states that the Company has entered into a subvention agreement ("the Agreement") dated May 7, 2013 with AstraZeneca Pharmaceuticals AB Sweden ("Promoter Company") wherein to assist the Company in its efforts to establish/grow its presence in the Indian market, the Promoter Company has voluntarily decided to provide a non refundable financial grant. Accordingly, the Company received an amount of USD 14 million (Indian rupee equivalent 862,400,000) representing financial grant for the year ended March 31, 2014. The Promoter Company vide its letter dated March 1, 2014 informed the Board of Directors of the Company regarding the revision to the agreement, whereby restricting the payment under the agreement to USD 14 million (Indian rupee equivalent 862,400,000) and period covered under the agreement to financial year 2013-14. Accordingly, the Promoter Company vide letter dated April 25, 2014 has terminated the agreement effective March 2014 on the ground that the Company''s business and financial performance has been inline with more recent expectations, and that the Company shall not require any further grant for the financial years 2014-15 and 2015-16. Out of the total receipt of ? 862,400,000; Rs. 138,889,547 representing loss incurred by the Company during the current year has been credited to statement of profit and loss and balance Rs. 723,510,453 has been transferred to capital reserve.

Report on other legal and regulatory requirements

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

2. As required by Section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act read with the General Circular 15/ 2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

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

Annexure referred to in the Auditors'' Report to the Members of AstraZeneca Pharma India Limited ("the Company") for the year ended March 31, 2014. We report that:

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

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

(c) Fixed assets disposed during the year were not substantial, and therefore, do not affect the going concern assumption.

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

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

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

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, and having regard

to the explanation that purchases of certain items of inventory are for the Company''s specialised requirements and also sale of goods and services are for the specialised requirements of the buyer and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh with each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time, except for purchases of certain services which are for the Company''s specialised requirements and for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1)

(d) of the Companies Act, 1956 in respect of bulk drugs and formulations and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanation given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Investor Education and Protection Fund, Income-tax, Wealth tax, Sales tax, Service tax, Customs Duty, Excise duty and other material statutory dues have generally been regularly deposited during the year with the appropriate authorities though there has been a slight delay in a few cases.

According to the information and explanations given to us no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Investor Education and Protection Fund, Income-tax, Wealth tax, Service tax, Customs duty, Sales tax, Excise duty and other material statutory dues were in arrears as at March 31, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax and sales tax which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income-tax, Sales tax, Customs duty, Excise duty and Service tax have not been deposited by the Company on account of disputes:

Name of the Nature of Amount (Rs.) Statute the dues

Central Excise Excise duty on clearance of 968,801 Act,1944 Industrial waste and Spent Solvents Finance Act, 1994 Service tax on Nuclear Magnetic 47,712 Resonance services

Finance Act, 1994 Service tax on the services received 543,460 from the Goods transport agency

Central Excise Excise duty 406,677 Act,1944

Finance Act, 1994 Service tax on import of service 12,819,094*

Customs Act, 1962 Customs Duty 21,248,482

Income-Tax Act, 1961 Income-tax demand in relation 42,373,443 to Sale and Lease back arrangement (excluding interest)

Income-Tax Act, 1961 Income-tax demand in relation 84,299,533** to various disallowances



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

Central Excise July 2005 to Chief Commissioner, Act,1944 September 2010 Central Excise (LTU) Finance Act, 1994 July 1, 2001 to Deputy Commissioner, August 15, 2002 Service tax, Bangalore

Finance Act, 1994 November 16, 1997 Commissioner-Service Tax, to June 2, 1998 Bangalore

Central Excise August 1998 to July Customs Excise and Act,1944 Service Tax Appellate Tribunal, Bangalore

Finance Act, 1994 April 2006 to March Commission of Excise and Service tax, LTU

Customs Act, 1962 2005-06 Deputy Commissioner, Customs, Mumbai

Income-Tax Act, 1961 1996-97 Honorable High Court, Karnataka Income-Tax Act, 1961 2008-09 Income tax Appellate Tribunal, Bangalore

* an amount of Rs. 1,764,842 has been paid under protest

** an amount of Rs. 42,149,717 has been paid under protest

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

(xi) The Company did not have any outstanding dues to any financial institution, banks or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanation given to us, the Company is not a chit fund/ nidhi / mutual benefit fund / society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that funds raised on short-term basis have not been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to companies/ firms/ parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

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

for B S R & Co. LLP Chartered Accountants Firm Registration number: 101248W

Sunil Gaggar Partner Membership number: 104315

Place: Bangalore Date : May 30, 2014


Mar 31, 2013

Report on the financial statements

We have audited the accompanying financial statements of AstraZeneca Pharma India Limited ("the Company"), which comprise the balance sheet as at 31 March 2013, the statement of profit and loss, the cash flow statements of the Company for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2013;

(ii) in the case of the statement of profit and loss, of the loss for the year ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion, we draw attention to:

a. Note 2.44 of the notes to the financial statements wherein it is stated that Mr Robert Ian Haxton, a foreign national, was appointed as whole time director during the year. The appointment of the director is subject to the approval of the Central Government. Subsequent to the balance sheet date, the Company has filed an application with the Central Government for the approval of the aforesaid appointment. Further, approval of the shareholders in general meeting by a special resolution pursuant to the applicable provisions of Schedule XIII to the Companies Act, 1956 for his appointment as Wholetime Director and for the payment of remuneration to him will be sought at the ensuing Annual General Meeting; and

b. Note 2.45 of the notes to the financial statements wherein it is stated that in the absence of profits for the year ended 31 March 2013, the remuneration committee has, pursuant to the applicable provisions of Schedule XIII to the Companies Act, 1956, approved the remuneration of Rs. 23 million paid to Mr Anandh Balasundaram, the former Managing Director for the period from 1 April 2012 to 31 August 2012 (date of his resignation) and Ms Ruby Lau, the former Whole Time Director for the period from 1 April 2012 to 27 February 2013 being the date of resignation. The expense has been charged to the statement of profit and loss for the year ended 31 March 2013. The remuneration is subject to the requisite approval of the shareholders.

Report on other legal and regulatory requirements

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

2. As required by Section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account;

d. in our opinion, the balance sheet, the statement of profit and loss and the cash flow statement comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act; and

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

Annexure referred to in the Auditors'' Report to the Members of AstraZeneca Pharma India Limited ("the Company") for the year ended 31 March 2013.

We report that:

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

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

(c) Fixed assets disposed during the year were not substantial, and therefore, do not affect the going concern assumption.

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

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

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

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

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

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time, except for purchases of certain services which are for the Company''s specialised requirements and for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of bulk drugs and formulations and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanation given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Investor Education and Protection Fund, Income-tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and other material statutory dues have generally been regularly deposited during the year with the appropriate authorities though there has been a slight delay in a few cases.

According to the information and explanations given to us no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Investor Education and Protection Fund, Income-tax, Wealth Tax, Service Tax, Customs Duty, Sales Tax, Excise Duty and other material statutory dues were in arrears as at 31 March 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Incometax, Sales Tax, Customs Duty, Excise Duty and Service Tax have not been deposited by the Company on account of disputes:

Name of the Nature of Amount (Rs.) Statute the dues

Central Excise Excise Duty 968,801 Act,1944

Chapter V of Service Tax 47,712 Finance Act, 1994

Chapter V of Service Tax 543,460 Finance Act, 1994

Central Excise Excise Duty 406,677 Act,1944

Customs Act,1962 Customs Duty 21,248,482

Income-Tax Act, 1961 Income- Tax 42,373,443

Karnataka VAT Central SalesTax 224,685 Act, 2003

Income-Tax Income- Tax 79,727,230 Act, 1961

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

Central Excise Act 1944 July 2005 to Chief Commissioner, September 2010 Central Excise (LTU)

Chapter V of Finance Act 1994 1 July 2001 to 15 Deputy Commissioner, August 2002 Service tax, Bangalore

Chapter V of Finance Act 1994 16 November 1997 Commissionrate- to 2 June 1998 Service Tax, Bangalore

Central Excise Act 1944 August 1998 to July Customs Excise 1999 and Service Tax Appellate Tribunal, Bangalore

Customs Act 1962 2006 Deputy Commissioner, Customs, Mumbai

Income-Tax Act 1961 1996-97 Honorable High Court, Karnataka

Karnataka VAT Act 2003 2004-2005 Deputy Commissioner of Commercial Taxes, Bangalore

Income-Tax Act, 1961 2008-09 Deputy Commissioner of Income Tax (LTU), Bangalore

(x) The Company does not have any accumulated losses at the end of the financial year. The Company has incurred cash losses in the current financial year. However, no cash losses were incurred in the immediately preceding financial year.

(xi) The Company did not have any outstanding dues to any financial institution, banks or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanation given to us, the Company is not a chit fund/ nidhi / mutual benefit fund / society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that funds raised on short- term basis amounting to Rs. 48,136,095 have been used for long-term investment in fixed assets

(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

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

for B S R & Co.

Chartered Accountants

Firm Registration No.: 101248W

Place: Bangalore Natrajh Ramakrishna

Date: 21 May 2013 Partner

Membership No. 032815


Mar 31, 2012

We have audited the attached balance sheet of AstraZeneca Pharma India Limited ("the Company") as at 31 March 2012, the statement of proft and loss and the cash fow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003, as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(iii) the balance sheet, the statement of proft and loss and the cash fow statement dealt with by this report are in agreement with the books of account;

(iv) in our opinion, the balance sheet, the statement of proft and loss and the cash fow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) on the basis of written representations received from the directors of the Company as on 31 March 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualifed as on 31 March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) without qualifying our opinion, we draw attention to Para 2.47 of the notes to the financial statements wherein it is stated that a foreign national was appointed as Whole time Director during the year. The appointment and remuneration payable for the year is subject to the approval of the Central Government. The Company has fled an application with the central government for the approval of the aforesaid appointment and remuneration payable; and,

(vii) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2012;

b. in the case of the statement of proft and loss, of the proft of the Company for the year ended on that date; and

c. in the case of the cash fow statement, of the cash fows for the year ended on that date.

Annexure to the Auditors' Report Annexure referred to in the Auditors' Report to the Members of AstraZeneca Pharma India Limited ("the Company") for the year ended 31 March 2012. We report that:

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

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

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

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

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

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

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, frms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

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

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time, except for purchases of certain services which are for the Company's specialised requirements and for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of bulk drugs and formulations and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanation given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees' State Insurance, Investor Education and Protection Fund, Income-tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues have been regularly deposited during the year with the appropriate authorities though there has been a slight delay in a few cases.

According to the information and explanations given to us no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Investor Education and Protection Fund, Income- tax, Wealth Tax, Service Tax, Customs Duty, Sales Tax, Excise Duty and other material statutory dues were in arrears as at 31 March 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax and Cess which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income-tax, Sales Tax, Customs Duty, Excise Duty and Service Tax have not been deposited by the Company on account of disputes.

Name of the Nature of the Amount (Rs.) Statute dues

Central Excise Excise Duty 968,801 Act, 1944

Chapter V of Service Tax 47,712 Finance Act, 1994

Chapter V of Service Tax 543,460 Finance Act, 1994

Central Excise Excise Duty 406,677 Act, 1944

Customs Act, 1962 Customs Duty 21,248,482 Income-Tax Act, 1961 Income- Tax 45,460,290*



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

Central Excise Act, 1944 July 2005 to Chief Commissioner, September 2010 Central Excise (LTU)

Chapter V of Finance Act, 1994 1 July 2001 to 15 Deputy Commissioner, August 2002 Service tax, Bangalore

Chapter V of Finance Act, 1994 16 November 1997 Commissionrate- to 2 June 1998 Service Tax, Bangalore

Central Excise Act, 1944 August 1998 to July Customs Excise 1999 and Service Tax Appellate Tribunal, Bangalore

Customs Act, 1962 2006 Deputy Commissioner, Customs, Mumbai

Income-Tax Act, 1961 1996-97 Income Tax Appellate Tribunal, Bangalore

* The amount shown above is net of amount paid Rs. 10,000,000.

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

(xi) The Company did not have any outstanding dues to any financial institution, banks or debentureholders during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanation given to us, the Company is not a chit fund/ nidhi / mutual benefit fund / society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to companies/frms/parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) We have been informed by the Management that one of the distributors sold certain goods to an Institutional customer at prices higher than the agreed price. According to the information available with the Company, the wholesaler did not provide true information and it appears to have forged sales documents resulting in a potential loss to the Company in the region of Rs. 11 million which is based on sales made by the Company to the distributor.

A First Information Report (FIR) was fled by the Central Bureau of Investigation against the Company on 23 February 2012 wherein it is alleged that the Company submitted a false affdavit with respect to rates quoted by the Company to the institution (Directorate of Health Services, Delhi). It is further alleged that unknown offcers of the Directorate of Health Services, Delhi (DHS) and unknown offcials of the Company conspired to cancel the recovery proceedings by DHS. We are informed by the management that the Company is fully cooperating with the ongoing investigations.

According to the information and explanations given to us, save as above, no other allegation of fraud on or by the Company has been reported and no fraud on or by the Company has been noticed by the Company during the course of the audit.

for B S R & Co.

Chartered Accountants

Firm Registration Number: 101248W

Zubin Shekary

Partner Membership No. 048814 Place: Bangalore Date: May 11, 2012


Mar 31, 2011

We have audited the attached balance sheet of AstraZeneca Pharma India Limited ("the Company") as at 31 March 2011, the profit and loss account and the cash flow statement for the period from January 01, 2010 to March 31, 2011 (the period) ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003, as amended, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

1) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

2) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

*

3) the balance sheet, the profit and loss account and the cash flow statement dealt with by this report are in agreement with the books of account;

4) in our opinion, the balance sheet, the profit and loss account and the cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

5) on the basis of written representations received from the directors of the Company as on 31 March 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

6) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2011;

b) in the case of the profit and loss account, of the profit of the Company for the period ended on that date; and

c) in the case of the cash flow statement, of the cash flows for the period ended on that date.

Annexure to the Auditors Report

Annexure referred to in the Auditors Report to the Members of AstraZeneca Pharma India Limited ("the Company") for the period ended 31 March 2011. We report that:

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

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

(c) Fixed assets disposed off during the period were not substantial, and therefore, do not affect the going concern assumption.

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

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

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

3. The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, and having regards to the explanation that purchases of certain items of inventory are for the Companys specialised requirements and similarly for sale of goods and services of the buyer and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system

commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts and arrangements referred to in (a) above and exceeding the value of Rs.5 lakh with any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time, except for purchases of certain services which are for the Companys specialised requirements and similarly for sale of certain goods for the specialised requirements of the buyers and for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

6. The Company has not accepted any deposits from the public.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956 in respect of bulk drugs and formulations and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

9. (a) According to the information and explanation given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Investor Education and Protection Fund, Income-tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues have been regularly deposited during the period with the appropriate authorities.

Further, since the Central Government has till date not prescribed the amount of Cess payable under Section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

According to the information and explanations given to us no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Investor Education and Protection Fund, Income- tax, Wealth Tax, Service Tax, Customs Duty, Sales Tax, Excise Duty, Cess and other material statutory dues were in arrears as at 31 March 2011 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax and Cess which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income-tax, Sales Tax, Customs Duty, Excise Duty and Service Tax have not been deposited by the Company on account of disputes.

Name of the Statute Nature of the Amount (Rs.) Period to which the Forum where dispute is dues amount relates pending

Central Excise Excise Duty 698,427 1996-1997 to 1999- Customs Excise and Service Act,1944 2000 tax Appellate tribunal, Bangalore

Central Excise Excise Duty 968,801 2010 Chief Commissioner, Central Act,1944 Excise (LTU)

Chapter V of Finance Service Tax 47,712 1 July 2001 to 15 Deputy Commissioner, Service Act, 1994 August 2002 tax, Bangalore

Chapter V of Finance Service Tax 543,460 16 November 1997 Commissionrate- Service Tax, Act, 1994 to 2 June 1998 Bangalore

Central Excise Excise Duty 406,677 August 1998 to July Customs Excise and Service Act,1944 1999 Tax Appellate Tribunal, Bangalore

Customs Act, 1962 Customs Duty 21,248,482 2006 Deputy Commissioner, Customs, Mumbai

Income-Tax Act, Income-Tax 45,460,290* 1996-97 Additional commissioner of 1961 income-tax, Bangalore

Income-Tax Act, Income-Tax 14,779,240 2007-08 to 2008-09 Commissioner of income-tax, 1961 (Appeals) Bangalore

* The Company has obtained the stay order for the same. The amount shown above is net of amount paid Rs.10,000,000.

10. The Company does not have any accumulated losses at the end of the financial period and has not incurred cash losses in the financial period and in the immediately preceding financial year.

11. The Company did not have any outstanding dues to any financial institution, banks or debentureholders during the year.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanation given to us, the Company is not a chit fund/ nidhi / mutual benefit fund / society.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

16. The Company did not have any term loans outstanding during the period.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

18. The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under Section 301 of the Companies Act, 1956.

19. The Company did not have any outstanding debentures during the period.

20. The Company has not raised any money by public issues during the period.

21. We have been informed by the Management that one of the liaison agents and one of the accredited wholesalers of the Company had procured goods for sales to institutions by submitting forged documents. The Company has filed a criminal complaint against the liaison agent. Further, based on a settlement, the Company has recovered ^0.65 million from the accredited wholesalers. These have resulted in loss to the Company amounting to ^11.15 million and Rs. 0.13 million respectively. The unrecovered amounts have been fully provided for. According to the information and explanations given to us, no other fraud on or by the Company has been noticed or reported during the course of our audit.

for B S R & Co.

Chartered Accountants Firm Reg No: 101248W

Rajesh Arora

Partner Membership No. 76124 Place: Bangalore

Date: May 13, 2011

 
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