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Auditor Report of Cadila Healthcare Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of CADILA HEALTHCARE LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information [in which are incorporated the returns for the year ended on that date audited by other auditor of the Company''s office at Philippines].

Management''s Responsibility for the Financial Statements

The Company''s management is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 standalone 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 evidences 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 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 accounting policies used and the reasonableness of the accounting estimates made by 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements of the Company 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:

1. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2016;

2. in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. 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" statement on the matters specified 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 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 [and proper returns adequate for the purposes of our audit have been received from the branch not visited by us].

(c) The reports on the accounts of the branch offices of the Company audited under section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

(d) 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 [and with the returns received from the branch not visited by us].

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

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

(g) 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".

(h) 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 standalone financial position in its standalone financial statements - Refer Note 20(A) to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

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

"Annexure A" referred to in the Independent Auditor''s Report of even date to the members of CADILA HEALTHCARE LIMITED on the Standalone Financial Statements for the year ended March 31,2016.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company, except for the following cases, where the transfer of title is under process as on the date of report:

Category Total Number Leasehold/ Gross Value of Cases Freehold [INR in Mio]

Building One Freehold 23

Land One Leasehold 65

Category Net Value Remarks [INR in Mio]

Building 23 Deed of Conveyance executed by the Company, pending receipt of registered document from the office of the Sub-Registrar of Assurance.

Land 65 Transfer permission received by the Company from State Industrial and Infrastructure Authority, the execution of lease deed is under process.

2. (a) The inventories have been physically verified by the management during the year. In our opinion, the procedures for the physical verification of inventory followed by management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(b) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of inventory. No material discrepancies were noticed on physical verification of inventory.

3. 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. Accordingly, clause (iii)(a) and (iii)(b) of paragraph of the Order are not applicable to the Company for the current year.

4. In our opinion and according to the information and explanations given to us, the Company has not given any loans, guarantees or security or made any investments to which provisions of section 185 and 186 of the Act is applicable, and accordingly paragraph 3 (iv) of the Order is not applicable to the Company.

5. The Company has not accepted any deposits from the Public within the meaning of the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules frames thereunder. Further, according to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal, in this regard.

6. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under sub-section (1) of section 148 of the Act, 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 cost records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Service tax. Custom duty. Excise duty. Value added Tax, Cess and any other material statutory dues during the year with the appropriate authorities. Moreover, as at March 31, 2016, there are no such undisputed dues payable for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the particulars of dues of Income tax. Sales tax. Excise duty and Service tax and other material statutory dues as at March 31,2016 which have not been deposited on account of any dispute, are as follows:

Name of Nature of Amounts involved Period to which the the Statute Dues (Rs. in Millions) amount relates

The Income Tax Act, Income Tax 7.40 2008-09, 2009-10 1961 0.40 2005-06,2011-12

The Central Sales Sales Tax 116.65 1996-97,1998-99, Tax and Local Sales 1999-00,2001-02, Tax Acts 2004-05 to 2013-14

9.06 1997-98,2001-02

The Central Excise Excise Duty, 9.47 Various cases for the Act and the Service Service Tax period 1985-86 to Tax Act 1988-89,1991-92 to 1998-99

22.96 Various Cases for the period 1997-98, 2005- 06 to 2014-15

258.75 Various cases For the period 1995-96 to 1999-00, 2003-04 to 2013-14

6.33 1994-95,1995-96, 2006-07, 2007-08

Name of the Statute Forum where dispute is pending

The Income Tax Act, 1961 Income Tax Appellate Tribunal

Commissioner of Income Tax (Appeals) The Central Sales Tax and Local Sales Tax Acts Commissioner/Deputy Commissioner/ Joint Commissioner of Sales Tax/ Revision Board/ Adjudicating Authority

Appellate Tribunal

The Central Excise Act and the Service Tax Act ACCE/DCCE/JCCE/Add. Commissioner.

Commissioner (Appeals)

Central Excise and Service Tax

Appellate Tribunal

High Court/Supreme Court

8. According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not defaulted in repayment of loans or borrowings from any financial institution, banks, government or due to debenture holders during the year.

9. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). The term loans raised during the year has been utilised by the Company for the purpose for which the same has been taken.

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

11. According to the information and explanations given to us and on the basis of our examination of the books of account, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 (with schedule V) of the Act.

12. In our opinion and according to the information and explanations given to us, the Company is not a nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

13. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in Compliance with section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

14. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

15. 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 non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For Mukesh M. Shah & Co.

Chartered Accountants

Firm Registration No. 106625W

Place: Ahmedabad Mukesh M. Shah

Date : May 13,2016 Partner

Membership No. 030190


Mar 31, 2014

We have audited the accompanying financial statements of CADILA HEALTHCARE LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and 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 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 the accounting principles generally accepted in India including the 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.

Auditors'' 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 evidences about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 Company''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 of the Company 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:

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

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

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

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 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 [and proper returns adequate for the purposes of our audit have been received from the branch not visited by us].

(c) The financial statements dealt with by this Report are in agreement with the books of account [and with the returns received from the branch not visited by us].

(d) In our opinion, the financial statements comply with the Accounting Standards referred to in Section 211(3C) of the Act; and

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

Annexure referred to in the Independent Auditors'' Report of even date to the members of CADILA HEALTHCARE LIMITED for the year ended March 31, 2014.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(c) Fixed assets disposed off during the year, in our opinion, do not constitute substantial part of Fixed Assets of the Company and such disposal has not affected the going concern status of the company.

2. (a) The inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable, having regard to the size of the Company and nature of its business.

(b) In our opinion, the procedures for the physical verification of inventory followed by management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of inventory. No material discrepancies were noticed on physical verification of inventory.

3. The Company has neither granted nor taken any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(b) to (iii)(d) of paragraph of the Order are not applicable to the Company for the current year.

4. In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

5. (a) In our opinion, and according to the information and explanations given to us, the particulars of all contracts or arrangements that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions exceeding rupees five lakhs each have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the Public within the meaning of the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Further, we are informed that no order has been passed by the Company Law Board.

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

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under Section 209(a) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and any other material statutory dues during the year with the appropriate authorities. Moreover, as at March 31, 2014, there are no such undisputed dues payable for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the particulars of dues of Income tax, Sales tax, Excise duty and Service tax and other material statutory dues as at March 31, 2014 which have not been deposited on account of any dispute, are as follows:

Name of the Statute Nature of Amounts involved Dues (Rs. in Millions)

The Income Tax Income Tax 16.06 Act, 1961

11.55

The Central Sales Tax Sales Tax 95.99 and Local Sales Tax Acts

9.06 The Central Excise Act Excise Duty, and Service Tax Act Service Tax 9.47

12.92

230.71 6.33

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

The Income Tax Act, 1961 2005-06, 2007-08, Income Tax Appellate Tribunal 2008-09

2005-06, 2009-10 Commissioner of Income Tax and 2010-11 (Appeals)

The Central Sales Tax and Local Sales Tax Acts 1996-97 to Commissioner / Deputy 1999-2000, Commissioner / Joint 2001-02, 2004-05 Commissioner of Sales Tax / to 2011-12 Revision Board / Adjudicating Authority

1997-98, 2001-02 Appellate Tribunal

The Central Excise Act and Service Tax Act Various cases for the period 1986-87 to ACCE/DCCE/JCCE/Add.Comm. 1988-89, 1990-91 to 1992-99 Various Cases for the period 1997-98, Commissioner (Appeals) 2005-06 to 2013-14 Various cases for the period 1995-96 to Central Excise and Service Tax 1999-2000, 2003-04 Appellate Tribunal to 2013-14

1995-96, 2005-06 to High Court/ Supreme Court 2011-12

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

11. As per the information and explanation given to us, the Company has not defaulted in repayment of dues to any banks or financial institutions or debenture holders 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. The Company is not a chit fund/ nidhi/ mutual benefit fund/ society.

14. The Company is not dealing or trading in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees / letter of comforts given by the Company for loans taken by the subsidiaries and other parties from banks are not prima facie, prejudicial to the interest of the Company.

16. Term loans obtained by the Company were applied for the purposes for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Cash Flow Statement and other records examined by us, we report that no funds raised on short term basis have prima facie, been used during the year for long term investment.

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

19. The Company has created securities in respect of Non-convertible debentures issued so far.

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

21. To the best of our knowledge and based on information and explanations received from the management, no fraud on or by the Company has been noticed or reported during the period covered by our audit.

For MUKESH M. SHAH & CO. Chartered Accountants

Firm Registration No.:106625W

Mukesh M. Shah

Partner

Membership No.: 030190

Place : Ahmedabad Date : May 16, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of CADILA HEALTHCARE LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and 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 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 the Accounting Standards referred to in Section 211 (3C) 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.

Auditors'' 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 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 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 Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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 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:

(a) in case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

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

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 in terms of Section 227(4A) 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 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 [and proper returns adequate for the purposes of our audit have been received from the branches not visited by us],

(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 [and with the returns received from the branches not visited by us],

(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 Section 211 (3C) of the Act.

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

Annexure referred to in the Auditors'' Report

With reference to the Annexure referred to in paragraph 3 of the Auditors'' Report to the Members of Cadila Healthcare Limited on the financial statements for the year ended March 31, 2013, we report that:

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

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year, in our opinion, do not constitute substantial part of Fixed Assets of the Company and such disposal has not affected the going concern status of the company.

2. (a) The inventories has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable, having regard to the size of the Company and nature of its business.

(b) In our opinion, the procedures for the physical verification of inventory followed by management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the company has maintained proper records of inventory. No material discrepancies were noticed on physical verification of inventory.

3. The company has neither granted nor taken any loans, secured or unsecured, to Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause (iii)(b) to (iii)(d) of paragraph 4 of the Order are not applicable to the company for the current year.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems.

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, transactions made in pursuance of such contracts or arrangements and exceeding Rs. Five Lacs, in respect of any party during the year, have been made at prices, which are reasonable having regard to prevailing market price at the relevant time.

6. The company has not accepted any deposits from the public as per provisions of sections 58A, 58AA or other relevant provisions of the Companies Act, 1956 and the rules framed there under.

7. The company has an internal audit system, which, in our opinion is commensurate with its size and the nature of its business.

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and any other statutory dues during the year with the appropriate authorities. Moreover, as at March 31, 2013, there are no such undisputed dues payable for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the particulars of dues of Income tax, Sales tax, Excise duty and Service tax and other material statutory dues as at March 31, 2013 which have not been deposited on account of any dispute, are as follows:

Name of the Statute Nature of Amounts involved Dues (Rs. in Millions)

The Income Tax Act, 1961 Income Tax 0.70

21.49

2.44

The Central Sales Tax Sales Tax 81.32 and Local Sales Tax Acts

13.70

The Central Excise Act Excise Duty, 0.01 and the Service Tax Act Service Tax

4.73

147.20

6.33

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

The Income Tax Act 1961 2010-11 Assessing Officer

2002-03, 2005-06, Commissioner of Income Tax 2007-08 and 2009-10 (Appels)

2007-08 and 2008-09 Income Tax Appelate Tribunal

The Central Sales Tax and Local Sales Tax Acts 1996-97 to 1999-00, Commissioner / Deputy 2001-02, 2004-05 to Commissioner / Joint 2007-08, 2009-10 and Commissioner of Sales Tax/ 2010-11 Revision Board / Adjudicating Authority

1997-98, 2001-02 Appellate Tribunal and 2006-07

The Central Excise Act and the Service Tax Act 1986-87 to 1988-89, ACCE/DCCE/JCCE/Add.Comm. 1990-91 to 1992-93

Various Cases Commissioner (Appeals) for the period 1997, 2005-06 to 2011-12

Various cases Central Excise and Service Tax For the period Appellate Tribunal 1995 to 2000, 2003-04 to 2011-12

Jan. ''95 to Nov. ''95, High Court / Supreme Court 2005-06 to 2011-12

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

11. The company has not defaulted in repayment of dues to financial institution or bank or debenture holder.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares during the year.

13. The company is not a chit fund company/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. In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees/ letter of comfort given by the company for loans taken by subsidiaries and other parties from banks are not prima facie, prejudicial to the interest of the company.

16. Term loans obtained by the Company were applied for the purposes for which the loans were obtained.

17. According to the Cash-flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short-term basis have not, prima facie, been used during the year for long-term investment.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company has created securities in respect of non-convertible debentures issued so far.

20. The company has not raised any money by public issues during the year.

21. To the best of our knowledge and belief, and according to the information and explanations given to us, no material fraud on or by the company was noticed or reported during the year.

For Mukesh M. Shah & Co.,

Chartered Accountants

Firm Registration No.: 106625W

Chandresh S. Shah

Partner

Membership No.: 042132

Place : Ahmedabad

Date : August 30, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of Cadila Healthcare Limited ('the Company') as at March 31, 2012, Statement of Profit and Loss and also the Cash Flow 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.

2. We conducted our audit in accordance with the 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.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) 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.

4. Further to our comments in the Annexure referred to above, 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 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 appears from our examination of those books;

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

d) in our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in section 211(3C) of the Companies Act, 1956;

e) on the basis of the written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Director is disqualified as on March 31, 2012 from being appointed as a Director in terms of section 274 (1)(g) of the Companies Act, 1956;

f) in our opinion and to the best of our information and according to explanations given to us, the said financial statements, read together with the significant accounting policies and notes thereon, more particularly Note No. 37(B) regarding change in accounting policy in respect of derivative financial instruments and its consequential effect on the profits for the reporting period, 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;

(i) in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2012; (ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and (iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure referred to in the Auditors' Report

With reference to the annexure referred to in paragraph 3 of the Auditors' Report to the Members of Cadila Healthcare Limited on the financial statements for the year ended March 31, 2012, we report that:

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

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of verification which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year, in our opinion, do not constitute substantial part of fixed assets of the company and such disposal has not affected the going concern status of the company.

2. (a) The inventories has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable, having regard to the size of the company and nature of its business.

(b) In our opinion, the procedures for the physical verification of inventory followed by management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the company has maintained proper records of inventory. No material discrepancies were noticed on physical verification of inventory.

3. The company has neither granted nor taken any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause (iii)(b) to (iii) (d) of paragraph 4 of the Order are not applicable to the company for the current year.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems.

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, transactions made in pursuance of such contracts or arrangements and exceeding Rs. five lacs, in respect of any party during the year, have been made at prices, which are reasonable having regard to prevailing market price at the relevant time.

6. The company has not accepted any deposits from the public as per provisions of sections 58A, 58AA or other relevant provisions of the Companies Act, 1956 and the rules framed there under.

7. The company has an internal audit system which in our opinion is commensurate with its size and the nature of its business.

8. We have broadly reviewed the books of accounts maintained by the company pursuant to the Rules made by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and any other statutory dues during the year with the appropriate authorities. Moreover, as at March 31, 2012, there are no such undisputed dues payable for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the particulars of dues of Income tax, Sales tax, Excise duty and Service tax and other material statutory dues as at March 31, 2012 which have not been deposited on account of any dispute, are as follows:

Name of the Statute Nature of Amounts involved Period to which the Dues (Rs. in Millions) amount relates

The Income Tax Act, 1961 Income Tax 346 2006-07 and 2007-08

571 2006-07 and

2008-09

0.20 1995-96

The Central Sales Tax Sales Tax 72 1996-97 to 1999-00, and State Sales Tax Act 2001-02 and 2004-05 to 2007-08

9 1997-98 and 2001-02 The Central Excise Act Excise Duty, 0.02 1985-86, 1986-87, and the Service Tax Act Service Tax 1987-88, 1988-89 and

1992-93

5 Various cases for the period 1995 to 1999, 2005-06, 2006-07, 2007-08 and 2008-09

25 Various cases For the period 1995 to 2000, 2003-04, 2005-06, 2006-07, 2007-08 and 2008-09

2 Jan. '95 to Nov. '95



Name of the Statue Forum where the dispute is pending

The Income Tax Act, 1961 Income Tax Appellate Tribunal

Commissioner of Income Tax (Appeals)

Deputy Commissioner of Income Tax (OSD)

The Central Sales Tax and State Sales Tax Act Commissioner/ Deputy Commissioner / Joint Commissioner of Sales Tax / Revision Board

Appellate Tribunal

The Central Excise Act and the Service Tax Act ACCE/DCCE/JCCE/Add.Comm.

Commissioner (Appeals) CESTAT

Bombay High Court

10. The company does not have any accumulated loss at the end of the financial year and has not incurred cash losses during the financial year and during the immediately preceding financial year.

11. The company has not defaulted in repayment of dues to any financial institution or bank or debenture holder.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares during the year.

13. The company is not a chit fund company/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. In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees/ letter of comfort given by the company for loans taken by subsidiaries and other parties from banks are not prima facie prejudicial to the interest of the company.

16. Term loans obtained by the company were applied for the purposes for which the loans were obtained.

17. According to the cash-flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have not, prima facie, been used during the year for long-term investment.

18.The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company has created securities in respect of non-convertible debentures issued so far.

20. The company has not raised any money by public issues during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the company was noticed or reported during the year.

For Mukesh M. Shah & Co.

Chartered Accountants

Firm Registration No. 106625W

Mukesh M. Shah

Partner

Membership Number : 030190

Place : Ahmedabad

Date : May 10, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of Cadila Healthcare Limited (the company) as at 31st March, 2011, Profit and Loss Account and also the Cash Flow Statement for the year 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.

2. We conducted our audit in accordance with the 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

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) 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.

4. Further to our comments in the Annexure referred to above, 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 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 appears from our examination of those books;

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

d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in section 211(3C) of the Companies Act, 1956;

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

f) in our opinion, and to the best of our information and according to explanations given to us, the said financial statements, read together with the significant accounting policies and notes thereon, 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;

(i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2011;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and (iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to the Auditors Report

With reference to the Annexure referred to in paragraph 3 of the Auditors Report to the Members of Cadila Healthcare Limited on the financial statements for the year ended 31st March, 2011, we report that:

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

assets.

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year, in our opinion, do not constitute substantial part of Fixed Assets of the Company and such disposal has not affected the going concern status of the company.

2. (a) The inventories has been physically verified by the management during the year. In our opinion, the frequency of such

verification is reasonable, having regard to the size of the Company and nature of its business.

(b) In our opinion, the procedures for the physical verification of inventory followed by management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the company has maintained proper records of inventory. No material discrepancies were noticed on physical verification of inventory.

3. The company has neither granted nor taken any loans, secured or unsecured, to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act,1956. Accordingly, clause (iii)(b) to (iii)(d) of paragraph 4 of the Order are not applicable to the company for the current year.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems.

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, transactions made in pursuance of such contracts or arrangements and exceeding Rs. Five Lacs, in respect of any party during the year, have been made at prices, which are reasonable having regard to prevailing market price at the relevant time.

6. The company has not accepted any deposits from the public as per provisions of sections 58A, 58AA or other relevant provisions of the Companies Act, 1956 and the rules framed there under.

7. The company has an internal audit system, which, in our opinion is commensurate with its size and the nature of its business.

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the

company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and any other statutory dues during the year with the appropriate authorities. Moreover, as at 31st March, 2011, there are no such undisputed dues payable for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the particulars of dues of Income tax, Sales tax, Excise duty and Service tax and other material statutory dues as at 31st March, 2011 which have not been deposited on account of any dispute, are as follows:

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

The Income Tax Act, 1961 Income Tax 66.27 2005-06 Income Tax Appellate Tribunal

0.2 1995-96 Deputy Commissioner of Income Tax (OSD)

The Central Sales Tax and Sales Tax 83.59 1996-97 Commissioner of to Sales Tax Local Sales Tax Acts 1999-00, 2001-02, 2004-05 to 2007-08

1997-98 9.06 2001-02 Tribunal

The Central Excise Act Excise Duty, 0.04 1985-86, ACCE/DCCE/JCCE/ Add.Comm. and the Service Tax Act Service Tax 1987-88, 1988-89, 1992-93

4.61 Various cases for the Commissioner (Appeals) period 1995 to 1998, 2006-07, 2007-08, 2008-09

23.69 Various cases for the CESTAT period 1995 to 2000, 2003-04, 2005-06, 2006-07, 2007-08, 2008-09

2.19 Jan. 95 to Nov. 95 High Court

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

11. The company has not defaulted in repayment of dues to financial institution or bank or debenture holder.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares during the year.

13. The company is not a chit fund company/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. In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees / letter of comfort given by the company for loans taken by subsidiaries and other parties from banks are not prima facie, prejudicial to the interest of the company.

16. Term loans obtained by the Company were applied for the purposes for which the loans were obtained.

17. According to the Cash-flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short-term basis have not, prima facie, been used during the year for long-term investment.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company has created securities in respect of non-convertible debentures issued so far.

20. The company has not raised any money by public issues during the year.

21. To the best of our knowledge and belief, and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

For MUKESH M. SHAH & CO.

Chartered Accountants

Firm Registration No.: 106625W

Mukesh M. Shah

Partner

Membership Number : 30190

Place : Ahmedabad Date : May 6, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Cadila Healthcare Limited (the company) as at March 31, 2010, Profit and Loss Account and also the Cash Flow Statement for the year 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 ouraudit.

2. We conducted our audit in accordance with the 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.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of section 227(4A) 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.

4. Further to our comments in the Annexure referred to above, 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 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 appears from our examination of those books;

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

d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in section 211(3C) of the Companies Act, 1956;

e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, we report that none of the director is disqualified as on March 31, 2010 from being appointed as a director in terms of section 274 (l)(g) of the Companies Act, 1956;

In our opinion, and to the best of our information and according to explanations given to us, the said financial statements, read together with the significant accounting policies and notes thereon, 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;

(i) in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2010;

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

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

Annexure to the Auditors Report With reference to the Annexure referred to in paragraph 3 of the Auditors Report to the Members of Cadila Healthcare Limited on the financial statements for the year ended March 31, 2010, we report that:

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

(b) Some of the fixed assets were physically verified during the year by the management in accordance with programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

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

2. (a) The inventories has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable, having regard to the size of the Company and nature of its business.

(b) In our opinion, the procedures for the physical verification of inventory followed by management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has maintained proper records of inventory. No material discrepancies were noticed on physical verification of inventory.

3. (a) The company has not granted any loans, secured or unsecured, to Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act,1956. Accordingly, clause (iii) (b) to (iii)(d) of paragraph 4 of the Order are not applicable to the company for the current year.

(b) The company has not taken any loans, secured or unsecured, from Companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clause (iii)(f) and (iii)(g) of paragraph 4 of the Order are not applicable to the company for the current year.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems.

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, transactions made in pursuance of such contracts or arrangements and exceeding Rs. Five Lacs, in respect of any party during the year, have been made at prices, which are reasonable having regard to prevailing market price at the relevant time.

6. The company has not accepted any deposits from the public as per provisions of sections 58A, 58AA or other relevant provisions of the Companies Act, 1956 and the rules framed there under.

7. The company has an internal audit system, which, in our opinion is commensurate with its size and the nature of its business. -

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

9. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and any other statutory dues during the year with the appropriate authorities. Moreover, as at March 31, 2010, there are no such undisputed dues payable for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the particulars of dues of Income tax, Sales tax, Excise duty and Service tax as at March 31, 2010, which have not been deposited on account of any dispute, are as follows:

Name of the Statute Nature of Amounts involved

dues (Rs. in Millions)

The Income Tax Act, 1961 Income Tax 9.41

2.55

The Central Sales Tax and Sales Tax 65.31

Local Sales Tax Acts

9.04

The Central Excise Act State Excise Duty 7.35

and the Service Tax Act Excise Duty, 9.44

Service Tax

9.31 21.06

2.19

Name of the Statute Period to which the Forum where the dispute is

amount relates pending

The Income Tax Act,1961 2005-06 Commissioner of Income Tax

(Appeals)

2001-02 and 2008-09 Assessing Officer 1996-97 Commissioner of Sales Tax

1997-98

1998-99

1999-00

2004-05

2005-06

2006-07

2001-02 Tribunal

The Central Excise Act 2005-06 to2008-09 and the Service Tex Act Dy. Secretary, Govt, of Gujarat

1985-86 ACCE/DCGE/JCCE/ Add.Comm.

1986-87

1982-88

1988-89 Various Cases for the period 1991 to 1998

1997-98 Commissioner (Appeals)

Various Cases for the period 2005-06 to 2008-09

Various cases CESTAT

for the period

1995 to 2000,

2003 and

2005-06 to 2008-09

Jan. 95 to Nov. 95 High Court

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

11. The company has not defaulted in repayment of dues to financial institution or bank or debenture holder.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares during the year.

13. The company is not a chit fund company/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. In our opinion and according to the information and explanations given to us, the terms and conditions of guarantees / letter of comfort given by the company for loans taken by subsidiaries from banks are not prima facie, prejudicial to the interest of the company.

16. Term loans obtained by the Company were applied for the purposes for which the loans were obtained.

17. According to the Cash-flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short-term basis have not, prima facie, been used during the year for long-term investment.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company has issued non-convertible debentures during the year. The company has created Securities in respect of debentures so issued.

20. The company has not raised any money by public issues during the year.

21. To the best of our knowledge and belief, and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

For MUKESH M. SHAH & CO.

Chartered Accountants

Mukesh M. Shah

Partner

Membership No.: 30190

Firm Registration No.: 106625W

Place: Ahmedabad Date : April 29, 2010.

 
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