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Auditor Report of Ipca Laboratories Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of Ipca Laboratories Limited("the Company"), which comprises the Balance Sheet as at March 31,2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of 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 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 maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

Auditors'' 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 there under. 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 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 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 on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone 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 March 31,2016, its profit and its 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, a statement on the matters Specified in paragraphs 3 and 4 of the said 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.

(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 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.

(e) On the basis of 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.

(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 34 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.

iii. There are no delays in payment of amounts to the Investor Education and Protection Fund during the year.

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) We have verified the title deeds of immovable properties forming part of Fixed Assets produced before us by the management and based on such verification we confirm that the same are held in the name of the company.

(ii) The management has conducted physical verification of inventory at reasonable intervals during the year. The discrepancies noticed between the book stock and the physical stocks were not material and they have been properly dealt with in the books of accounts.

(iii) During the year the Company has granted loan to its associates covered in the register maintained u/s 189 of the Companies Act 2013.

(a) The terms and conditions of the grant of such loans are not prejudicial to the company''s interest;

(b) The loan is not due for repayment presently and therefore there is no default in its repayment and there is no overdue. Hence, the clause 3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 with respect to loans, investments, guarantees and security given.

(v) The Company has not accepted any deposit from the public pursuant to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under. As informed to us, there is no order that has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of the said sections.

(vi) As informed to us, the maintenance of the cost records under the sub-section (1) of section 148 of the Companies Act, 2013 has been prescribed and we are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have not, however, carried out a detailed examination of the records to ascertain whether they are accurate or complete.

(vii) (a) The Company has been regular in depositing undisputed statutory dues including Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at March 31, 2016 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or Duty of Excise or Value Added Tax which have not been deposited on account of any dispute except as given in the statement attached herewith.

(viii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to the financial institution or banks or to the debenture holders.

(ix) The Company has not raised any money by way of public issue /follow-on offer (including debt instruments). On the basis of the documents submitted to the bankers and the other records perused by us, we have to state that the term loans which are in the nature of External Commercial Borrowings and the buyers credit for purchase of fixed assets taken during the year have been applied for the purpose for which the loans were obtained.

(x) According to the information and explanations given to us and to the best of our knowledge and belief no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) The managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company hence clause 3(xii) of Companies (Auditors Report) Order 2016 is not applicable to the Company.

(xiii) All transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 in so far as our examination of the proceedings of the meetings of the Audit Committee and Board of Directors are concerned. The details of related party transactions have been disclosed in the financial statements as required by the Accounting Standard 18 - Related Party Disclosures of the Companies (Accounting Standards) Rules, 2006.

(xiv) The Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and hence the clause 3(xiv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with directors or persons connected with them and hence the clause 3(xv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(xvi) The nature of business and the activities of the Company are such that the Company is not required to obtain registration under section 45-IA of the Reserve Bank of India Act 1934.

Name of the Nature of Dues Amount Period to which the Statute (Rs, crores) amount relates

Excise Duty Valuation of as Such clearance of RM/PM 0.12 April''2001 to Feb''2003 115%

Excise Duty Payment of Excise duty on 4-OH 0.33 April''2003 to Sept''2007 (Intermediate stage of 4-7 DCQ)

Excise Duty Payment of Excise duty on 4-OH 0.19 Oct''2007 to Dec''2008 (Intermediate stage of 4-7 DCQ)_ Excise Duty Differential Excise duty on WIP on 0.23 2009-10

Excise Duty Wrong availmentof PL Arecreditin 0.68 Dec''2011 to Dec''2013 respect of education cess and secondary & higher education cess at Sikkim_

Excise Duty Wrong availmentof PLArecredit in 0.49 Jan''2014toDec''2014 respect of education cess and secondary & higher education cess at Sikkim

Excise Duty Wrong availmentof PLArecredit in 0.09 Jan''2015&Feb''2015 respect of education cess and secondary & higher education cess at Sikki Excise Duty Interest and penalty on past 4.15 - anti-dumping duty & excise duty

Service Tax Availment of credit of service tax 0.64 2006-07 & 2007-08

Service Tax Availmentof credit of service tax on H.O. 0.23 April''08 to Invoices_ Nov''08

Service Tax Availmentof credit of service tax on H.O. 0.04 Dec''08 to Sept''09 Invoices

Service Tax Availmentof credit of service tax on 0.03 2006-07 & 2007-08 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on 0.01 April''08 to Dec''08 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on 0.01 Jan''09 to Sept''09 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on H.O. 1.42 2006-07 & 2007-08 Invoice

Service Tax Availmentof credit of service tax on H.O. 0.34 April''08 to Nov''08

Service Tax Availmentof credit of service tax on H.O. 0.30 Dec''08 to Sept''09 Invoices

Service Tax Non reversal of proportionate amount of 0.01 2005-06 to 2007-08 tax credit on GTA against Input Mumbai credit reversal on short received and destruction of RM/PM

Service Tax Availmentof credit of service tax on 0.02 2009-10&2010-11 outward freight based on CERA audit queryf

Service Tax Availmentof Cenvat credit of service tax 0.01 2006-07 services

Service Tax Availmentof Cenvat credit on service tax 0.61 2006-07 & 2007-08

Service Tax Non payment of service tax under RCM 2.49 July''2012 to Sept''2013 remittences in foreign currency for product/ patent registration and facility fees to US FDA

Sales Tax Jammu& Kashmir Value Added Tax Act, 0.05 2011-12 Deputy (2011 -12) - Disputed Demand

Sales Tax Gujarat Value Added Tax Act 0.07 2006-07 (2006-07) demand

Sales Tax Gujarat Value Added Tax Act 0.02 2007-08 (2007-2008) demand

Sales Tax UP Value Added Tax Act 0.01 2008-09 (2008-09)- Disputed demand

Sales Tax Gujarat Value Added Tax (Ankleshwar) - 0.08 2010-11 Disputed demand

Sales Tax CST 0.30 2012-13

Sales Tax CST Assessment 0.47 2013-14

Sales Tax VAT Assessment demand 0.10 2013-14

Sales Tax Duburdih Check Post Penalty 0.01 2014-15

Total 13.55



Name of the Forum where dispute is pending

Excise Duty Commissioner, C. Ex. LTU, Mumbai on

Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7

Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7

Excise Duty CESTAT, Ahmadabad

Excise Duty LTU,Mumbai

Excise Duty LTU,Mumbai

Excise Duty LTU,Mumbai

Excise Duty High Court, Gujarat

Service CESTAT, Mumbai

Service Tax Commissioner, C. Ex. LTU Invoices_

Service Tax Commissioner, C. Ex. LTU, Mumbai Invoices

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Commissioner, C. Ex. LTU, Mumbai

Service Tax Commissioner, C. Ex. LTU, Mumba _Invoices

Service Tax Commissioner, C. Ex. LTU, Mumbai

Service Tax Asstt. Commissioner, Central Excise & service tax. LTU, Mumbai

Service Tax Deputy. Commissioner, C. Ex. & S.T, LTU, mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai services

Service Tax CESTAT, Mumbai

Service Tax Commissioner of Central Excise & Service Tax, LTU-

Sales Tax Deputy Commissioner of Commercial Tax (Appeal), Srinagar_

Sales Tax Gujarat VATTribunal,Ahmedabad

Sales Tax Jt. Commissioner of Commercial Tax, Rajkot

Sales Tax Sales Tax Authority, UP_

Sales Tax Deputy Commissioner of VAT,

Sales Tax Deputy Commissioner, Commercial Tax.Ratlam

Sales Tax Deputy Commissioner, Commercial Tax.Ratlam

Sales Tax Addl.Commissioner (Appeal), Commercial Tax.lndore

Sales Tax Deputy Commissioner,Sales Tax, West Bengal

Total

For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No. 106971W





N Jayendran

Mumbai, Partner

30th May, 2016 M. No. 40441


Mar 31, 2016

We have audited the accompanying standalone financial statements of Ipca Laboratories Limited("the Company"), which comprises the Balance Sheet as at March 31,2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of 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 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 maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

Auditors'' 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 there under. 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 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 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 on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone 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 March 31,2016, its profit and its 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, a statement on the matters Specified in paragraphs 3 and 4 of the said 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.

(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 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.

(e) On the basis of 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.

(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 34 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.

iii. There are no delays in payment of amounts to the Investor Education and Protection Fund during the year.

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) We have verified the title deeds of immovable properties forming part of Fixed Assets produced before us by the management and based on such verification we confirm that the same are held in the name of the company.

(ii) The management has conducted physical verification of inventory at reasonable intervals during the year. The discrepancies noticed between the book stock and the physical stocks were not material and they have been properly dealt with in the books of accounts.

(iii) During the year the Company has granted loan to its associates covered in the register maintained u/s 189 of the Companies Act 2013.

(a) The terms and conditions of the grant of such loans are not prejudicial to the company''s interest;

(b) The loan is not due for repayment presently and therefore there is no default in its repayment and there is no overdue. Hence, the clause 3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 with respect to loans, investments, guarantees and security given.

(v) The Company has not accepted any deposit from the public pursuant to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under. As informed to us, there is no order that has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of the said sections.

(vi) As informed to us, the maintenance of the cost records under the sub-section (1) of section 148 of the Companies Act, 2013 has been prescribed and we are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have not, however, carried out a detailed examination of the records to ascertain whether they are accurate or complete.

(vii) (a) The Company has been regular in depositing undisputed statutory dues including Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at March 31, 2016 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or Duty of Excise or Value Added Tax which have not been deposited on account of any dispute except as given in the statement attached herewith.

(viii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to the financial institution or banks or to the debenture holders.

(ix) The Company has not raised any money by way of public issue /follow-on offer (including debt instruments). On the basis of the documents submitted to the bankers and the other records perused by us, we have to state that the term loans which are in the nature of External Commercial Borrowings and the buyers credit for purchase of fixed assets taken during the year have been applied for the purpose for which the loans were obtained.

(x) According to the information and explanations given to us and to the best of our knowledge and belief no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) The managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company hence clause 3(xii) of Companies (Auditors Report) Order 2016 is not applicable to the Company.

(xiii) All transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 in so far as our examination of the proceedings of the meetings of the Audit Committee and Board of Directors are concerned. The details of related party transactions have been disclosed in the financial statements as required by the Accounting Standard 18 - Related Party Disclosures of the Companies (Accounting Standards) Rules, 2006.

(xiv) The Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and hence the clause 3(xiv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with directors or persons connected with them and hence the clause 3(xv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(xvi) The nature of business and the activities of the Company are such that the Company is not required to obtain registration under section 45-IA of the Reserve Bank of India Act 1934.

Name of the Nature of Dues Amount Period to which the Statute (Rs, crores) amount relates

Excise Duty Valuation of as Such clearance of RM/PM 0.12 April''2001 to Feb''2003 115%

Excise Duty Payment of Excise duty on 4-OH 0.33 April''2003 to Sept''2007 (Intermediate stage of 4-7 DCQ)

Excise Duty Payment of Excise duty on 4-OH 0.19 Oct''2007 to Dec''2008 (Intermediate stage of 4-7 DCQ)_ Excise Duty Differential Excise duty on WIP on 0.23 2009-10

Excise Duty Wrong availmentof PL Arecreditin 0.68 Dec''2011 to Dec''2013 respect of education cess and secondary & higher education cess at Sikkim_

Excise Duty Wrong availmentof PLArecredit in 0.49 Jan''2014toDec''2014 respect of education cess and secondary & higher education cess at Sikkim

Excise Duty Wrong availmentof PLArecredit in 0.09 Jan''2015&Feb''2015 respect of education cess and secondary & higher education cess at Sikki Excise Duty Interest and penalty on past 4.15 - anti-dumping duty & excise duty

Service Tax Availment of credit of service tax 0.64 2006-07 & 2007-08

Service Tax Availmentof credit of service tax on H.O. 0.23 April''08 to Invoices_ Nov''08

Service Tax Availmentof credit of service tax on H.O. 0.04 Dec''08 to Sept''09 Invoices

Service Tax Availmentof credit of service tax on 0.03 2006-07 & 2007-08 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on 0.01 April''08 to Dec''08 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on 0.01 Jan''09 to Sept''09 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on H.O. 1.42 2006-07 & 2007-08 Invoice

Service Tax Availmentof credit of service tax on H.O. 0.34 April''08 to Nov''08

Service Tax Availmentof credit of service tax on H.O. 0.30 Dec''08 to Sept''09 Invoices

Service Tax Non reversal of proportionate amount of 0.01 2005-06 to 2007-08 tax credit on GTA against Input Mumbai credit reversal on short received and destruction of RM/PM

Service Tax Availmentof credit of service tax on 0.02 2009-10&2010-11 outward freight based on CERA audit queryf

Service Tax Availmentof Cenvat credit of service tax 0.01 2006-07 services

Service Tax Availmentof Cenvat credit on service tax 0.61 2006-07 & 2007-08

Service Tax Non payment of service tax under RCM 2.49 July''2012 to Sept''2013 remittences in foreign currency for product/ patent registration and facility fees to US FDA

Sales Tax Jammu& Kashmir Value Added Tax Act, 0.05 2011-12 Deputy (2011 -12) - Disputed Demand

Sales Tax Gujarat Value Added Tax Act 0.07 2006-07 (2006-07) demand

Sales Tax Gujarat Value Added Tax Act 0.02 2007-08 (2007-2008) demand

Sales Tax UP Value Added Tax Act 0.01 2008-09 (2008-09)- Disputed demand

Sales Tax Gujarat Value Added Tax (Ankleshwar) - 0.08 2010-11 Disputed demand

Sales Tax CST 0.30 2012-13

Sales Tax CST Assessment 0.47 2013-14

Sales Tax VAT Assessment demand 0.10 2013-14

Sales Tax Duburdih Check Post Penalty 0.01 2014-15

Total 13.55



Name of the Forum where dispute is pending

Excise Duty Commissioner, C. Ex. LTU, Mumbai on

Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7

Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7

Excise Duty CESTAT, Ahmadabad

Excise Duty LTU,Mumbai

Excise Duty LTU,Mumbai

Excise Duty LTU,Mumbai

Excise Duty High Court, Gujarat

Service CESTAT, Mumbai

Service Tax Commissioner, C. Ex. LTU Invoices_

Service Tax Commissioner, C. Ex. LTU, Mumbai Invoices

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Commissioner, C. Ex. LTU, Mumbai

Service Tax Commissioner, C. Ex. LTU, Mumba _Invoices

Service Tax Commissioner, C. Ex. LTU, Mumbai

Service Tax Asstt. Commissioner, Central Excise & service tax. LTU, Mumbai

Service Tax Deputy. Commissioner, C. Ex. & S.T, LTU, mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai services

Service Tax CESTAT, Mumbai

Service Tax Commissioner of Central Excise & Service Tax, LTU-

Sales Tax Deputy Commissioner of Commercial Tax (Appeal), Srinagar_

Sales Tax Gujarat VATTribunal,Ahmedabad

Sales Tax Jt. Commissioner of Commercial Tax, Rajkot

Sales Tax Sales Tax Authority, UP_

Sales Tax Deputy Commissioner of VAT,

Sales Tax Deputy Commissioner, Commercial Tax.Ratlam

Sales Tax Deputy Commissioner, Commercial Tax.Ratlam

Sales Tax Addl.Commissioner (Appeal), Commercial Tax.lndore

Sales Tax Deputy Commissioner,Sales Tax, West Bengal

Total

For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No. 106971W





N Jayendran

Mumbai, Partner

30th May, 2016 M. No. 40441


Mar 31, 2016

We have audited the accompanying standalone financial statements of Ipca Laboratories Limited("the Company"), which comprises the Balance Sheet as at March 31,2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of 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 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 maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

Auditors'' 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 there under. 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 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 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 on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone 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 March 31,2016, its profit and its 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, a statement on the matters Specified in paragraphs 3 and 4 of the said 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.

(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 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.

(e) On the basis of 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.

(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 34 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.

iii. There are no delays in payment of amounts to the Investor Education and Protection Fund during the year.

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) We have verified the title deeds of immovable properties forming part of Fixed Assets produced before us by the management and based on such verification we confirm that the same are held in the name of the company.

(ii) The management has conducted physical verification of inventory at reasonable intervals during the year. The discrepancies noticed between the book stock and the physical stocks were not material and they have been properly dealt with in the books of accounts.

(iii) During the year the Company has granted loan to its associates covered in the register maintained u/s 189 of the Companies Act 2013.

(a) The terms and conditions of the grant of such loans are not prejudicial to the company''s interest;

(b) The loan is not due for repayment presently and therefore there is no default in its repayment and there is no overdue. Hence, the clause 3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 with respect to loans, investments, guarantees and security given.

(v) The Company has not accepted any deposit from the public pursuant to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under. As informed to us, there is no order that has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of the said sections.

(vi) As informed to us, the maintenance of the cost records under the sub-section (1) of section 148 of the Companies Act, 2013 has been prescribed and we are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have not, however, carried out a detailed examination of the records to ascertain whether they are accurate or complete.

(vii) (a) The Company has been regular in depositing undisputed statutory dues including Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at March 31, 2016 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or Duty of Excise or Value Added Tax which have not been deposited on account of any dispute except as given in the statement attached herewith.

(viii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to the financial institution or banks or to the debenture holders.

(ix) The Company has not raised any money by way of public issue /follow-on offer (including debt instruments). On the basis of the documents submitted to the bankers and the other records perused by us, we have to state that the term loans which are in the nature of External Commercial Borrowings and the buyers credit for purchase of fixed assets taken during the year have been applied for the purpose for which the loans were obtained.

(x) According to the information and explanations given to us and to the best of our knowledge and belief no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) The managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company hence clause 3(xii) of Companies (Auditors Report) Order 2016 is not applicable to the Company.

(xiii) All transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 in so far as our examination of the proceedings of the meetings of the Audit Committee and Board of Directors are concerned. The details of related party transactions have been disclosed in the financial statements as required by the Accounting Standard 18 - Related Party Disclosures of the Companies (Accounting Standards) Rules, 2006.

(xiv) The Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and hence the clause 3(xiv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with directors or persons connected with them and hence the clause 3(xv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(xvi) The nature of business and the activities of the Company are such that the Company is not required to obtain registration under section 45-IA of the Reserve Bank of India Act 1934.

Name of the Nature of Dues Amount Period to which the Statute (Rs, crores) amount relates

Excise Duty Valuation of as Such clearance of RM/PM 0.12 April''2001 to Feb''2003 115%

Excise Duty Payment of Excise duty on 4-OH 0.33 April''2003 to Sept''2007 (Intermediate stage of 4-7 DCQ)

Excise Duty Payment of Excise duty on 4-OH 0.19 Oct''2007 to Dec''2008 (Intermediate stage of 4-7 DCQ)_ Excise Duty Differential Excise duty on WIP on 0.23 2009-10

Excise Duty Wrong availmentof PL Arecreditin 0.68 Dec''2011 to Dec''2013 respect of education cess and secondary & higher education cess at Sikkim_

Excise Duty Wrong availmentof PLArecredit in 0.49 Jan''2014toDec''2014 respect of education cess and secondary & higher education cess at Sikkim

Excise Duty Wrong availmentof PLArecredit in 0.09 Jan''2015&Feb''2015 respect of education cess and secondary & higher education cess at Sikki Excise Duty Interest and penalty on past 4.15 - anti-dumping duty & excise duty

Service Tax Availment of credit of service tax 0.64 2006-07 & 2007-08

Service Tax Availmentof credit of service tax on H.O. 0.23 April''08 to Invoices_ Nov''08

Service Tax Availmentof credit of service tax on H.O. 0.04 Dec''08 to Sept''09 Invoices

Service Tax Availmentof credit of service tax on 0.03 2006-07 & 2007-08 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on 0.01 April''08 to Dec''08 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on 0.01 Jan''09 to Sept''09 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on H.O. 1.42 2006-07 & 2007-08 Invoice

Service Tax Availmentof credit of service tax on H.O. 0.34 April''08 to Nov''08

Service Tax Availmentof credit of service tax on H.O. 0.30 Dec''08 to Sept''09 Invoices

Service Tax Non reversal of proportionate amount of 0.01 2005-06 to 2007-08 tax credit on GTA against Input Mumbai credit reversal on short received and destruction of RM/PM

Service Tax Availmentof credit of service tax on 0.02 2009-10&2010-11 outward freight based on CERA audit queryf

Service Tax Availmentof Cenvat credit of service tax 0.01 2006-07 services

Service Tax Availmentof Cenvat credit on service tax 0.61 2006-07 & 2007-08

Service Tax Non payment of service tax under RCM 2.49 July''2012 to Sept''2013 remittences in foreign currency for product/ patent registration and facility fees to US FDA

Sales Tax Jammu& Kashmir Value Added Tax Act, 0.05 2011-12 Deputy (2011 -12) - Disputed Demand

Sales Tax Gujarat Value Added Tax Act 0.07 2006-07 (2006-07) demand

Sales Tax Gujarat Value Added Tax Act 0.02 2007-08 (2007-2008) demand

Sales Tax UP Value Added Tax Act 0.01 2008-09 (2008-09)- Disputed demand

Sales Tax Gujarat Value Added Tax (Ankleshwar) - 0.08 2010-11 Disputed demand

Sales Tax CST 0.30 2012-13

Sales Tax CST Assessment 0.47 2013-14

Sales Tax VAT Assessment demand 0.10 2013-14

Sales Tax Duburdih Check Post Penalty 0.01 2014-15

Total 13.55



Name of the Forum where dispute is pending

Excise Duty Commissioner, C. Ex. LTU, Mumbai on

Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7

Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7

Excise Duty CESTAT, Ahmadabad

Excise Duty LTU,Mumbai

Excise Duty LTU,Mumbai

Excise Duty LTU,Mumbai

Excise Duty High Court, Gujarat

Service CESTAT, Mumbai

Service Tax Commissioner, C. Ex. LTU Invoices_

Service Tax Commissioner, C. Ex. LTU, Mumbai Invoices

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Commissioner, C. Ex. LTU, Mumbai

Service Tax Commissioner, C. Ex. LTU, Mumba _Invoices

Service Tax Commissioner, C. Ex. LTU, Mumbai

Service Tax Asstt. Commissioner, Central Excise & service tax. LTU, Mumbai

Service Tax Deputy. Commissioner, C. Ex. & S.T, LTU, mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai services

Service Tax CESTAT, Mumbai

Service Tax Commissioner of Central Excise & Service Tax, LTU-

Sales Tax Deputy Commissioner of Commercial Tax (Appeal), Srinagar_

Sales Tax Gujarat VATTribunal,Ahmedabad

Sales Tax Jt. Commissioner of Commercial Tax, Rajkot

Sales Tax Sales Tax Authority, UP_

Sales Tax Deputy Commissioner of VAT,

Sales Tax Deputy Commissioner, Commercial Tax.Ratlam

Sales Tax Deputy Commissioner, Commercial Tax.Ratlam

Sales Tax Addl.Commissioner (Appeal), Commercial Tax.lndore

Sales Tax Deputy Commissioner,Sales Tax, West Bengal

Total

For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No. 106971W





N Jayendran

Mumbai, Partner

30th May, 2016 M. No. 40441


Mar 31, 2016

We have audited the accompanying standalone financial statements of Ipca Laboratories Limited("the Company"), which comprises the Balance Sheet as at March 31,2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of 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 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 maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

Auditors'' 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 there under. 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 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 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 on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone 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 March 31,2016, its profit and its 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, a statement on the matters Specified in paragraphs 3 and 4 of the said 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.

(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 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.

(e) On the basis of 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.

(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 34 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.

iii. There are no delays in payment of amounts to the Investor Education and Protection Fund during the year.

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) We have verified the title deeds of immovable properties forming part of Fixed Assets produced before us by the management and based on such verification we confirm that the same are held in the name of the company.

(ii) The management has conducted physical verification of inventory at reasonable intervals during the year. The discrepancies noticed between the book stock and the physical stocks were not material and they have been properly dealt with in the books of accounts.

(iii) During the year the Company has granted loan to its associates covered in the register maintained u/s 189 of the Companies Act 2013.

(a) The terms and conditions of the grant of such loans are not prejudicial to the company''s interest;

(b) The loan is not due for repayment presently and therefore there is no default in its repayment and there is no overdue. Hence, the clause 3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 with respect to loans, investments, guarantees and security given.

(v) The Company has not accepted any deposit from the public pursuant to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under. As informed to us, there is no order that has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of the said sections.

(vi) As informed to us, the maintenance of the cost records under the sub-section (1) of section 148 of the Companies Act, 2013 has been prescribed and we are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have not, however, carried out a detailed examination of the records to ascertain whether they are accurate or complete.

(vii) (a) The Company has been regular in depositing undisputed statutory dues including Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at March 31, 2016 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or Duty of Excise or Value Added Tax which have not been deposited on account of any dispute except as given in the statement attached herewith.

(viii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to the financial institution or banks or to the debenture holders.

(ix) The Company has not raised any money by way of public issue /follow-on offer (including debt instruments). On the basis of the documents submitted to the bankers and the other records perused by us, we have to state that the term loans which are in the nature of External Commercial Borrowings and the buyers credit for purchase of fixed assets taken during the year have been applied for the purpose for which the loans were obtained.

(x) According to the information and explanations given to us and to the best of our knowledge and belief no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) The managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company hence clause 3(xii) of Companies (Auditors Report) Order 2016 is not applicable to the Company.

(xiii) All transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 in so far as our examination of the proceedings of the meetings of the Audit Committee and Board of Directors are concerned. The details of related party transactions have been disclosed in the financial statements as required by the Accounting Standard 18 - Related Party Disclosures of the Companies (Accounting Standards) Rules, 2006.

(xiv) The Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and hence the clause 3(xiv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with directors or persons connected with them and hence the clause 3(xv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(xvi) The nature of business and the activities of the Company are such that the Company is not required to obtain registration under section 45-IA of the Reserve Bank of India Act 1934.

Name of the Nature of Dues Amount Period to which the Statute (Rs, crores) amount relates

Excise Duty Valuation of as Such clearance of RM/PM 0.12 April''2001 to Feb''2003 115%

Excise Duty Payment of Excise duty on 4-OH 0.33 April''2003 to Sept''2007 (Intermediate stage of 4-7 DCQ)

Excise Duty Payment of Excise duty on 4-OH 0.19 Oct''2007 to Dec''2008 (Intermediate stage of 4-7 DCQ)_ Excise Duty Differential Excise duty on WIP on 0.23 2009-10

Excise Duty Wrong availmentof PL Arecreditin 0.68 Dec''2011 to Dec''2013 respect of education cess and secondary & higher education cess at Sikkim_

Excise Duty Wrong availmentof PLArecredit in 0.49 Jan''2014toDec''2014 respect of education cess and secondary & higher education cess at Sikkim

Excise Duty Wrong availmentof PLArecredit in 0.09 Jan''2015&Feb''2015 respect of education cess and secondary & higher education cess at Sikki Excise Duty Interest and penalty on past 4.15 - anti-dumping duty & excise duty

Service Tax Availment of credit of service tax 0.64 2006-07 & 2007-08

Service Tax Availmentof credit of service tax on H.O. 0.23 April''08 to Invoices_ Nov''08

Service Tax Availmentof credit of service tax on H.O. 0.04 Dec''08 to Sept''09 Invoices

Service Tax Availmentof credit of service tax on 0.03 2006-07 & 2007-08 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on 0.01 April''08 to Dec''08 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on 0.01 Jan''09 to Sept''09 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on H.O. 1.42 2006-07 & 2007-08 Invoice

Service Tax Availmentof credit of service tax on H.O. 0.34 April''08 to Nov''08

Service Tax Availmentof credit of service tax on H.O. 0.30 Dec''08 to Sept''09 Invoices

Service Tax Non reversal of proportionate amount of 0.01 2005-06 to 2007-08 tax credit on GTA against Input Mumbai credit reversal on short received and destruction of RM/PM

Service Tax Availmentof credit of service tax on 0.02 2009-10&2010-11 outward freight based on CERA audit queryf

Service Tax Availmentof Cenvat credit of service tax 0.01 2006-07 services

Service Tax Availmentof Cenvat credit on service tax 0.61 2006-07 & 2007-08

Service Tax Non payment of service tax under RCM 2.49 July''2012 to Sept''2013 remittences in foreign currency for product/ patent registration and facility fees to US FDA

Sales Tax Jammu& Kashmir Value Added Tax Act, 0.05 2011-12 Deputy (2011 -12) - Disputed Demand

Sales Tax Gujarat Value Added Tax Act 0.07 2006-07 (2006-07) demand

Sales Tax Gujarat Value Added Tax Act 0.02 2007-08 (2007-2008) demand

Sales Tax UP Value Added Tax Act 0.01 2008-09 (2008-09)- Disputed demand

Sales Tax Gujarat Value Added Tax (Ankleshwar) - 0.08 2010-11 Disputed demand

Sales Tax CST 0.30 2012-13

Sales Tax CST Assessment 0.47 2013-14

Sales Tax VAT Assessment demand 0.10 2013-14

Sales Tax Duburdih Check Post Penalty 0.01 2014-15

Total 13.55



Name of the Forum where dispute is pending

Excise Duty Commissioner, C. Ex. LTU, Mumbai on

Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7

Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7

Excise Duty CESTAT, Ahmadabad

Excise Duty LTU,Mumbai

Excise Duty LTU,Mumbai

Excise Duty LTU,Mumbai

Excise Duty High Court, Gujarat

Service CESTAT, Mumbai

Service Tax Commissioner, C. Ex. LTU Invoices_

Service Tax Commissioner, C. Ex. LTU, Mumbai Invoices

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Commissioner, C. Ex. LTU, Mumbai

Service Tax Commissioner, C. Ex. LTU, Mumba _Invoices

Service Tax Commissioner, C. Ex. LTU, Mumbai

Service Tax Asstt. Commissioner, Central Excise & service tax. LTU, Mumbai

Service Tax Deputy. Commissioner, C. Ex. & S.T, LTU, mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai services

Service Tax CESTAT, Mumbai

Service Tax Commissioner of Central Excise & Service Tax, LTU-

Sales Tax Deputy Commissioner of Commercial Tax (Appeal), Srinagar_

Sales Tax Gujarat VATTribunal,Ahmedabad

Sales Tax Jt. Commissioner of Commercial Tax, Rajkot

Sales Tax Sales Tax Authority, UP_

Sales Tax Deputy Commissioner of VAT,

Sales Tax Deputy Commissioner, Commercial Tax.Ratlam

Sales Tax Deputy Commissioner, Commercial Tax.Ratlam

Sales Tax Addl.Commissioner (Appeal), Commercial Tax.lndore

Sales Tax Deputy Commissioner,Sales Tax, West Bengal

Total

For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No. 106971W





N Jayendran

Mumbai, Partner

30th May, 2016 M. No. 40441


Mar 31, 2016

We have audited the accompanying standalone financial statements of Ipca Laboratories Limited("the Company"), which comprises the Balance Sheet as at March 31,2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended, and a summary of 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 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 maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

Auditors'' 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 there under. 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 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 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 on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone 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 March 31,2016, its profit and its 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, a statement on the matters Specified in paragraphs 3 and 4 of the said 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.

(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 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.

(e) On the basis of 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.

(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 34 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.

iii. There are no delays in payment of amounts to the Investor Education and Protection Fund during the year.

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) We have verified the title deeds of immovable properties forming part of Fixed Assets produced before us by the management and based on such verification we confirm that the same are held in the name of the company.

(ii) The management has conducted physical verification of inventory at reasonable intervals during the year. The discrepancies noticed between the book stock and the physical stocks were not material and they have been properly dealt with in the books of accounts.

(iii) During the year the Company has granted loan to its associates covered in the register maintained u/s 189 of the Companies Act 2013.

(a) The terms and conditions of the grant of such loans are not prejudicial to the company''s interest;

(b) The loan is not due for repayment presently and therefore there is no default in its repayment and there is no overdue. Hence, the clause 3(iii)(c) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 with respect to loans, investments, guarantees and security given.

(v) The Company has not accepted any deposit from the public pursuant to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under. As informed to us, there is no order that has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of the said sections.

(vi) As informed to us, the maintenance of the cost records under the sub-section (1) of section 148 of the Companies Act, 2013 has been prescribed and we are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have not, however, carried out a detailed examination of the records to ascertain whether they are accurate or complete.

(vii) (a) The Company has been regular in depositing undisputed statutory dues including Provident fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at March 31, 2016 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Service Tax, Duty of Customs or Duty of Excise or Value Added Tax which have not been deposited on account of any dispute except as given in the statement attached herewith.

(viii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to the financial institution or banks or to the debenture holders.

(ix) The Company has not raised any money by way of public issue /follow-on offer (including debt instruments). On the basis of the documents submitted to the bankers and the other records perused by us, we have to state that the term loans which are in the nature of External Commercial Borrowings and the buyers credit for purchase of fixed assets taken during the year have been applied for the purpose for which the loans were obtained.

(x) According to the information and explanations given to us and to the best of our knowledge and belief no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) The managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company hence clause 3(xii) of Companies (Auditors Report) Order 2016 is not applicable to the Company.

(xiii) All transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 in so far as our examination of the proceedings of the meetings of the Audit Committee and Board of Directors are concerned. The details of related party transactions have been disclosed in the financial statements as required by the Accounting Standard 18 - Related Party Disclosures of the Companies (Accounting Standards) Rules, 2006.

(xiv) The Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and hence the clause 3(xiv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with directors or persons connected with them and hence the clause 3(xv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.

(xvi) The nature of business and the activities of the Company are such that the Company is not required to obtain registration under section 45-IA of the Reserve Bank of India Act 1934.

Name of the Nature of Dues Amount Period to which the Statute (Rs, crores) amount relates

Excise Duty Valuation of as Such clearance of RM/PM 0.12 April''2001 to Feb''2003 115%

Excise Duty Payment of Excise duty on 4-OH 0.33 April''2003 to Sept''2007 (Intermediate stage of 4-7 DCQ)

Excise Duty Payment of Excise duty on 4-OH 0.19 Oct''2007 to Dec''2008 (Intermediate stage of 4-7 DCQ)_ Excise Duty Differential Excise duty on WIP on 0.23 2009-10

Excise Duty Wrong availmentof PL Arecreditin 0.68 Dec''2011 to Dec''2013 respect of education cess and secondary & higher education cess at Sikkim_

Excise Duty Wrong availmentof PLArecredit in 0.49 Jan''2014toDec''2014 respect of education cess and secondary & higher education cess at Sikkim

Excise Duty Wrong availmentof PLArecredit in 0.09 Jan''2015&Feb''2015 respect of education cess and secondary & higher education cess at Sikki Excise Duty Interest and penalty on past 4.15 - anti-dumping duty & excise duty

Service Tax Availment of credit of service tax 0.64 2006-07 & 2007-08

Service Tax Availmentof credit of service tax on H.O. 0.23 April''08 to Invoices_ Nov''08

Service Tax Availmentof credit of service tax on H.O. 0.04 Dec''08 to Sept''09 Invoices

Service Tax Availmentof credit of service tax on 0.03 2006-07 & 2007-08 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on 0.01 April''08 to Dec''08 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on 0.01 Jan''09 to Sept''09 telephone/cell phone /taxi hire charges

Service Tax Availmentof credit of service tax on H.O. 1.42 2006-07 & 2007-08 Invoice

Service Tax Availmentof credit of service tax on H.O. 0.34 April''08 to Nov''08

Service Tax Availmentof credit of service tax on H.O. 0.30 Dec''08 to Sept''09 Invoices

Service Tax Non reversal of proportionate amount of 0.01 2005-06 to 2007-08 tax credit on GTA against Input Mumbai credit reversal on short received and destruction of RM/PM

Service Tax Availmentof credit of service tax on 0.02 2009-10&2010-11 outward freight based on CERA audit queryf

Service Tax Availmentof Cenvat credit of service tax 0.01 2006-07 services

Service Tax Availmentof Cenvat credit on service tax 0.61 2006-07 & 2007-08

Service Tax Non payment of service tax under RCM 2.49 July''2012 to Sept''2013 remittences in foreign currency for product/ patent registration and facility fees to US FDA

Sales Tax Jammu& Kashmir Value Added Tax Act, 0.05 2011-12 Deputy (2011 -12) - Disputed Demand

Sales Tax Gujarat Value Added Tax Act 0.07 2006-07 (2006-07) demand

Sales Tax Gujarat Value Added Tax Act 0.02 2007-08 (2007-2008) demand

Sales Tax UP Value Added Tax Act 0.01 2008-09 (2008-09)- Disputed demand

Sales Tax Gujarat Value Added Tax (Ankleshwar) - 0.08 2010-11 Disputed demand

Sales Tax CST 0.30 2012-13

Sales Tax CST Assessment 0.47 2013-14

Sales Tax VAT Assessment demand 0.10 2013-14

Sales Tax Duburdih Check Post Penalty 0.01 2014-15

Total 13.55



Name of the Forum where dispute is pending

Excise Duty Commissioner, C. Ex. LTU, Mumbai on

Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7

Excise Duty CESTAT, New Delhi (Intermediate stage of 4-7

Excise Duty CESTAT, Ahmadabad

Excise Duty LTU,Mumbai

Excise Duty LTU,Mumbai

Excise Duty LTU,Mumbai

Excise Duty High Court, Gujarat

Service CESTAT, Mumbai

Service Tax Commissioner, C. Ex. LTU Invoices_

Service Tax Commissioner, C. Ex. LTU, Mumbai Invoices

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Commissioner, C. Ex. LTU, Mumbai

Service Tax Commissioner, C. Ex. LTU, Mumba _Invoices

Service Tax Commissioner, C. Ex. LTU, Mumbai

Service Tax Asstt. Commissioner, Central Excise & service tax. LTU, Mumbai

Service Tax Deputy. Commissioner, C. Ex. & S.T, LTU, mumbai

Service Tax Asstt. Commissioner/Dy. Commissioner, C. Ex. LTU, Mumbai services

Service Tax CESTAT, Mumbai

Service Tax Commissioner of Central Excise & Service Tax, LTU-

Sales Tax Deputy Commissioner of Commercial Tax (Appeal), Srinagar_

Sales Tax Gujarat VATTribunal,Ahmedabad

Sales Tax Jt. Commissioner of Commercial Tax, Rajkot

Sales Tax Sales Tax Authority, UP_

Sales Tax Deputy Commissioner of VAT,

Sales Tax Deputy Commissioner, Commercial Tax.Ratlam

Sales Tax Deputy Commissioner, Commercial Tax.Ratlam

Sales Tax Addl.Commissioner (Appeal), Commercial Tax.lndore

Sales Tax Deputy Commissioner,Sales Tax, West Bengal

Total

For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No. 106971W





N Jayendran

Mumbai, Partner

30th May, 2016 M. No. 40441


Mar 31, 2015

We have audited the accompanying standalone financial statements of Ipca Laboratories Limited ("the Company"), which comprise the Balance Sheet as at 31st 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 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 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.

Auditors'' 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 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 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 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 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 31st March, 2015, and its profit and its 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, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the said 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 purpose of our audit.

(b) In our opinion, proper books of accounts 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of accounts.

(d) 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.

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

(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 34 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.

iii. There are no delays in payment of amounts to the Investor Education and Protection Fund during the year.

Annexure referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements of our report of even date

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management were 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 as compared to book records.

(iii) (a) The Company has granted interest free unsecured loan to its wholly owned subsidiary and a joint venture company covered in the register maintained u/s 189 of the Companies Act 2013.

(b) The Loan is not due for repayment presently and therefore there is no default in its repayment and there is no overdue.

(iv) In our opinion and according to the information and explanations given to us, 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 sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) The Company has not accepted any deposit from the public pursuant to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed thereunder. Therefore, the provisions of clause 3(v) of the Companies (Auditors Report) Order 2015 are not applicable to the Company. As informed to us, there is no order that has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of the said sections.

(vi) As informed to us, the maintenance of the cost records under the sub-section (1) of section 148 of the Companies Act, 2013 has been prescribed and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not however carried out a detailed examination of the records to ascertain whether they are accurate or complete.

(vii) (a) The Company has been regular in depositing 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 other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2015 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Value Added Tax, Cess which have not been deposited on account of any dispute except as given in the statement attached herewith.

(c) The amounts to be transferred to the Investor Education and Protection Fund have been transferred on time as required by the extant laws.

(viii) The Company does not have any accumulated losses and has not incurred cash losses during the financial year and also in the immediately preceding financial year.

(ix) According to the information and explanations given to us and based on the documents and records produced to us, the company has not defaulted in repayment of dues to any Financial Institution, Bank or Debenture Holders.

(x) According to the information and explanations given to us and the records examined by us, the terms and conditions of guarantee given by the Company for loan taken by its wholly owned subsidiary from bank are not prima facie prejudicial to the interest of the Company.

(xi) On the basis of the documents submitted to the bankers and the other records perused by us, we have to state that the term loans which are in the nature of External Commercial Borrowings and the buyers credit for purchase of fixed assets taken during the year have been applied for the purpose for which the loans were obtained.

(xii) According to the information and explanations given to us and to the best of our knowledge and belief, no fraud on or by the Company has been noticed or reported during the year.

Statement of statutory dues outstanding on account of disputes, as on 31st March, 2015, referred to in para (vii)(b) of the Annexure to Auditors'' Report

Name of the Nature of Dues Amount Statute (Rs. crores)

Excise Duty Valuation of as such clearance of 0.12 RM/PM on 115%

Excise Duty Payment of Excise duty on 4-OH 0.33 (Intermediate stage of 4-7 DCQ)

Excise Duty Payment of Excise duty on 4-OH 0.19 (Intermediate stage of 4-7 DCQ)

Excise Duty Differential Excise duty on WIP on 0.23 Debonding

Excise Duty Interest and penalty on past anti- 4.15 dumping duty & excise duty

Service Tax Availment of credit of service tax 0.64

Service Tax Availment of credit of service tax on 0.23 H.O. Invoices

Service Tax Availment of credit of service tax on 0.04 H.O. Invoices

Service Tax Availment of credit of service tax 0.03 on Telephone/Cell phone/Taxi hire charges

Service Tax Availment of credit of service tax 0.01 on Telephone/Cell phone/Taxi hire charges

Service Tax Availment of credit of service tax 0.01 on Telephone/Cell phone/Taxi hire charges

Service Tax Availment of credit of service tax on 1.42 H.O. Invoices

Service Tax Availment of credit of service tax on 0.34 H.O. Invoices

Service Tax Availment of credit of service tax on 0.30 H.O. Invoices

Service Tax Non reversal of proportionate 0.01 amount of service tax credit on GTA against Input credit reversal on short received and destruction of RM/PM

Service Tax Availment of credit of service tax 0.02 on Outward freight based on CERA audit query

Service Tax Availment of Cenvat credit of 0.01 service tax on Telephone, Courier & construction services

Service Tax Availment of Cenvat Credit of 0.61 Service Tax

Sales Tax Central Sales Tax, Orissa (2006- 0.01 2007)- Disputed demand

Sales Tax Gujarat VAT Act (2006-07)-Disputed 0.07 demand

Sales Tax Gujarat VAT Act 0.02 (2007-2008)-Disputed demand

Sales Tax UP VAT Act (2008-09)-Disputed 0.01 demand

Sales Tax Gujrat VAT (Ankleshwar, Nandesari) - 0.08 Disputed demand

Sales Tax CST Assessment 0.34

Sales Tax Sendhwa Check post penalty 0.04

Sales Tax Sendhwa Check post penalty 0.01

Sales Tax Duburdih Check Post Penalty 0.01

Income Tax Disputed disallowances 2.03

Income Tax Disputed disallowances 0.57

Income Tax Disputed demand 0.31

Income Tax Appeal against penalty order 0.09

Total 12.28

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

Excise Duty April''2001 to Commissioner, C. Ex. LTU, Mumbai Feb''2003

Excise Duty April''2003 to CESTAT, New Delhi Sept''2007

Excise Duty Oct''2007 to CESTAT, New Delhi Dec''2008

Excise Duty 2009- 10 CESTAT, Ahmedabad

Excise Duty - High Court, Gujarat

Service Tax 2006-07 & 2007-08 CESTAT, Mumbai

Service Tax April''08 to Nov''08 Commissioner, C. Ex. LTU, Mumbai

Service Tax Dec''08 to Sept''09 Commissioner, C. Ex. LTU, Mumbai

Service Tax 2006-07 & 2007-08 Asstt. Commissioner/ Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax April''08 to Dec''08 Asstt. Commissioner/ Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax Jan''09 to Sept''09 Asstt. Commissioner/ Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax 2006-07 & 2007-08 Commissioner, C. Ex. LTU, Mumbai

Service Tax April''08 to Nov''08 Commissioner, C. Ex. LTU, Mumbai

Service Tax Dec''08 to Sept''09 Commissioner, C. Ex. LTU, Mumbai

Service Tax 2005- 06 to 2007-08 Asstt. Commissioner, Central Excise & service tax. LTU, Mumbai

Service Tax 2009-10 & 2010-11 Deputy Commissioner, C. Ex. & S.T, LTU, Mumbai

Service Tax 2006-07 Asstt. Commissioner/ Dy. Commissioner, C. Ex. LTU, Mumbai

Service Tax 2006- 2007 & 2007- CESTAT, Mumbai 2008

Sales Tax 2006-07 Sales Tax Authority, Cuttack

Sales Tax 2006- 07 Gujarat VAT Tribunal, Ahmedabad

Sales Tax 2007- 08 Jt. Commissioner of Commercial Tax, Rajkot

Sales Tax 2008- 09 Sales Tax Authority, UP

Sales Tax 2010- 11 Deputy Commissioner of VAT, Baroda

Sales Tax 2011- 12 Application filed before Assessing Authority (Re- assessment), Ratlam

Sales Tax 2014-15 Deputy Commissioner, Sales Tax (appeal), LTU Indore

Sales Tax 2014-15 Deputy Commissioner, Sales Tax (appeal), LTU Indore

Sales Tax 2014-15 Deputy Commissioner, Sales Tax , West Bengal

Income Tax A.Y.2008-09 ITAT, Mumbai

Income Tax A.Y.2007-08 ITAT, Mumbai

Income Tax A.Y.2005-06 ITAT, Ahmedabad

Income Tax A.Y.2008-09 ITAT, Ahmedabad

For Natvarlal Vepari & Co. Chartered Accountants Firm Registration No. 106971W

N Jayendran Partner M. No. 40441

Mumbai, 30th May, 2015


Mar 31, 2014

We have audited the accompanying Financial Statements of Ipca Laboratories Limited ("the Company"), which comprises the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory notes.

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 the 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 and General Circular 08/2014 dated April 4, 2014 with respect to the Financial Statements. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that 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 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 reasonable basis for our 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:

(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 flow 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 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.

2. As required by Section 227(3) of the Companies Act 1956, 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 accounts as required by law have been kept by the Company so far as it appears from our examination of the books.

iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

iv) In our opinion, the Balance Sheet, Statement of 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 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

v) On the basis of the written representation received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of Clause (g) of Sub-section (1) of section 274 of the Companies Act, 1956 on the said date.

Annexure to the Auditors'' Report

(Referred to in our report of even date)

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management at reasonable intervals and material discrepancies, if any, noticed on such verification have been properly dealt with in the books of account;

(c) The Company has not disposed off any substantial part of fixed assets.

(ii) (a) Stock of finished goods, stores, spare parts and raw materials has been physically verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of stock followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The valuation of stock has been done on the basis of physically verified quantity. Therefore shortage / excess automatically gets adjusted and the same is properly dealt in the books of accounts.

(iii) The Company has neither granted nor taken any fresh loan from parties listed in the register maintained under section 301 of the Companies Act. Therefore, the other sub-clauses of clause 4(iii) of the Companies (Auditors'' Report) Order, 2003 are not applicable.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not come across any major weaknesses or continuing failure to correct any major weaknesses in the internal control system of the Company in respect of this area.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Act have been entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (v)(a) above and exceeding the value ofRs. 5.00 lacs with any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public during the year under review, and consequently the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed there under are not applicable. There is no order that has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of the said sections.

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

(viii) According to the records produced and information given to us, the cost records and accounts as prescribed by the Central Government under section 209(1 )(d) of the Companies Act, 1956 have been made and maintained by the Company but no detailed examination of such records and accounts has been carried out by us.

(ix) (a) The Company is by and large regular in depositing provident fund, employees state insurance, income tax, sales tax, service tax, customs duty, excise duty and cess dues with the appropriate authorities.

(b) There are no arrears of outstanding statutory dues as at the last day of the financial year for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, details of dues of income tax, sales tax/VAT, service tax, customs duty, excise duty and cess, which have not been deposited on account of any dispute, are stated in the statement attached herewith.

(x) The Company does not have any accumulated losses and has not incurred cash losses during the financial year and also in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us by the Management, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not granted loans or advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4(xii) of the Companies (Auditors'' Report) Order, 2003 are not applicable..

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society and accordingly the provisions of clause 4(xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable.

(xiv) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4(xiv) of the Companies (Auditors'' Report) Order, 2003 are not applicable.

(xv) According to the information and explanations given to us and the records examined by us, the terms and conditions of guarantee given by the Company for loan taken by its wholly owned subsidiary from bank are not prima facie prejudicial to the interest of the Company.

(xvi) On the basis of the documents submitted to the bankers and the other records perused by us, we have to state that the term loans which are in the nature of External Commercial Borrowings taken during the year have been applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanation given to us, on an overall examination of the Balance Sheet of the Company and the necessary representations from the management, we report that no short term funds raised by the Company have been applied towards long term assets / investments.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. Accordingly clause 4(xviii) of the Companies (Auditors'' Report) Order, 2003 is not applicable.

(xix) The company did not issue any debentures during the period and therefore the provisions of clause 4(xix) of the Companies (Auditors'' Report) Order, 2003 are not applicable.

(xx) The Company has not raised any money by public issues during the year and accordingly clause 4(xx) of Companies (Auditors'' Report) Order, 2003 is not applicable;

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the period.

Statement Of Statutory Dues Outstanding On Account Of Disputes, As On March 31,2014, Referred To In Para 4(ix)(c) of The Annexure To Auditors'' Report

Name of the Amount Period to which the Nature of Dues Statute (Rs. crores) amount relates

Excise Duty/ Availment of Cenvat Credits on 0.03 2006-2007 & Service Tax Input Services. 2007-2008

Excise Duty/ Availment of Cenvat Credits on 0.01 April 2008 - Service Tax Input Services. Dec 2008

Excise Duty/ Availment of Cenvat Credits on 0.01 Jan 2009- Service Tax Input Services. Sept 2009

Service Tax Availment of Credit of Service Tax 2.06 April 2006- on H.O. invoices. Sept 2009

Service Tax Availment of Credit of Service Tax 0.91 April 2006- on H.O. invoices. Sept 2009

Service Tax Non reversal of proportionate 0.01 2005-2006 to amount of service tax credit against 2007-2008 input credit reversal on short receipt and destruction of RM/PM

Excise Duty Differential Excise Duty on WIP on 0.23 2009-2010 de-bonding

Excise Duty Interest and penalty on past anti- 4.15 - dumping duty and excise duty

Service Tax Availment Of Cenvat Credit on 0.01 2006-2007 Service Tax

Service Tax Availment Of Cenvat Credit on 0.02 2009-2010& Service Tax 2010-2011

Service Tax Availment Of Cenvat Credit on 0.02 2009-2010& Service Tax 2010-2011

Excise Duty Valuation of as such clearances of 0.12 2001-2002 & RM/PM on 115% 2002-2003

Excise Duty Payment of excise duty on 4-OH 0.33 Apr 2003- Sept2007

Excise Duty Payment of excise duty on 4-OH 0.18 Oct 2007- Dec 2008

Service Tax Availment Of Cenvat Credit on 0.76 2006-2007 & Service Tax 2007-2008

Service Tax Service tax on import of services 0.20 Oct 2008- Dec 2012

Sales Tax Disputed Demand 0.08 2010-2011

Sales Tax Demand due to non- submission of 0.04 2010-2011 Form C

Sales Tax Check post penalty 0.04 2013-2014

Sales Tax Check post penalty 0.01 2013-2014

Sales Tax Check post penalty 0.03 2013-2014

Sales Tax Check post penalty 0.01 2013-2014

Sales Tax Disputed demand 0.01 2006-2007

Sales Tax Disputed demand 0.07 2006-2007

Sales Tax Disputed demand 0.02 2007-2008

Sales Tax Disputed demand 0.01 2008-2009

Income Tax Disputed disallowances 0.57 AY:-2007-08

Income Tax Disputed disallowances 2.03 AY:-2008-09

Income Tax Disputed Demand 0.31 AY:-2005-06

Income Tax Appeal against penalty order 0.09 AY:-2008-09

Total 12.37

Name of the Statute Forum where dispute is pending

Excise Duty/ Service Tax Assistant Commissioner/Deputy Commissioner, Central Excise, LTU Mumbai

Excise Duty / Service Tax Assistant Commissioner/Deputy Commissioner, Central Excise, LTU Mumbai

Excise Duty / Service Tax Assistant Commissioner/Deputy Commissioner, Central Excise, LTU Mumbai

Service Tax Commissioner of Central Excise, LTU Mumbai

Service Tax Commissioner of Central Excise, LTU Mumbai

Service Tax Assistant Commissioner of Central Excise & Service Tax, LTU Mumbai

Excise Duty CESTAT. Ahmedabad

Excise Duty High Court, Gujarat

Service Tax Assistant Commissioner/Deputy Commissioner, Central Excise & Service Tax, LTU Mumbai

Service Tax Deputy Commissioner, Central Excise & Service Tax, LTU Mumbai

Service Tax Deputy Commissioner, Central Excise & Service Tax, LTU Mumbai

Excise Duty Commissioner, Central Excise & Service Tax, LTU Mumbai

Excise Duty CESTAT, New Delhi

Excise Duty CESTAT, New Delhi

Service Tax CESTAT, Mumbai

Service Tax Service Tax, LTU Mumbai

Sales Tax Deputy Commissioner of VAT, Baroda

Sales Tax Additional Commissioner, Sales Tax, Indore

Sales Tax Deputy Commissioner, Sales Tax (appeal), LTU Indore

Sales Tax Deputy Commissioner, Sales Tax (appeal), LTU Indore

Sales Tax Deputy Commissioner, Sales Tax (appeal), LTU Indore

Sales Tax Deputy Commissioner, Sales Tax (appeal), LTU Indore

Sales Tax Sales Tax Authority, Cuttack

Sales Tax Gujarat VATThbunal, Ahmedabad

Sales Tax Jt. Commissioner of Commercial Tax, Rajkot

Sales Tax Sales Tax Authority, UP

Income Tax ITAT, Mumbai

Income Tax ITAT, Mumbai

Income Tax ITAT, Ahmedabad

Income Tax CIT(A),Vadodara

For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No 106971W

N Jayendran

Partner

M. No. 40441

Mumbai,

29th May, 2014


Mar 31, 2013

Report on Financial Statements

We have audited the accompanying Financial Statements of Ipca Laboratories Limited ("the Company"), which comprises the Balance Sheet as at 31st March, 2013 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory notes.

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 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 fair presentation of the financial statements that 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 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 reasonable basis for our 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:

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

(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 flow for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 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.

2. As required by Section 227(3) of the Companies Act 1956, 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 accounts as required by law have been kept by the Company so far as it appears from our examination of the books.

iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

iv) In our opinion, the Balance Sheet, Statement of Profit and Loss 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.

v) On the basis of the written representation received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2013 from being appointed as a director in terms of Clause (g) of Sub-section (1) of section 274 of the Companies Act, 1956 on the said date.

Annexure to the Auditors'' Report

(Referred to in our report of even date)

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The fi xed assets have been physically verified by the management at reasonable intervals and any material discrepancies noticed on such verification have been properly dealt with in the books of account;

(c) The Company has not disposed off any substantial part of fixed assets.

(ii) (a) Stock of finished goods, stores, spare parts and raw materials has been physically verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of stock followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The valuation of stock has been done on the basis of physically verifi ed quantity. Therefore shortage / excess automatically gets adjusted and the same is properly dealt in the books of accounts.

(iii) The Company has neither granted nor taken any fresh loan from parties listed in the register maintained under section 301 of the Companies Act. Therefore the provisions of clause 4(iii) of the Companies (Auditors'' Report) Order, 2003 is not applicable.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods. We have not come across any continuing failure to correct major weaknesses in internal control.

(v) (a) In our opinion and according to the information and explanations given to us the transactions that need to be entered into a register in pursuance of section 301 of the Act has been properly entered.

(b) All the transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time and the nature of services rendered by such party.

(vi) The Company has not accepted any deposits from the public during the year under review, and consequently the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed there under are not applicable.

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

(viii) According to the records produced and information given to us, the cost records and accounts as prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 have been made and maintained by the Company but no detailed examination of such records and accounts has been carried out by us.

(ix) (a) The Company is regular in depositing provident fund, employees state insurance, income tax, sales tax, service tax, customs duty and excise duty dues with the appropriate authorities and there are no arrears of outstanding statutory dues as at the last day of the financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, the following tax / duty etc has not been deposited on account of dispute.

(x) The Company does not have any accumulated losses and has not incurred cash losses in current year and in the previous year.

(xi) We are informed that the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

(xii) On the basis of the audit procedures followed and the representations from the management, we report that the Company has not granted loans or advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore the provisions of clause 4(xii) of the Companies (Auditors'' Report) Order, 2003 is not applicable.

(xiii) The Company is not a nidhi/ mutual benefit fund/society and accordingly clause 4(xiii) of the Companies (Auditors''Report) Order, 2003 is not applicable.

(xiv) The Company does not deal or trade in shares, securities, debentures and other investments. Therefore clause 4(xiv) of the Companies (Auditors'' Report) Order, 2003 is not applicable.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank, and therefore clause 4(xv) of the Companies (Auditors'' Report) Order, 2003 is not applicable.

(xvi) On the basis of the documents submitted to the bankers and the other records perused by us we have to state that the term loans which are in the nature of External Commercial Borrowings taken during the year have been applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanation given to us, on an overall examination of the Balance Sheet of the Company and the necessary representations from the management, we report that no short term funds raised by the Company have been applied towards long term assets / investments.

(xviii)The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. Accordingly clause 4(xviii) of the Companies (Auditors'' Report) Order, 2003 is not applicable.

(xix) The Company has made fresh issue of debentures during the year. The Company has executed the debenture trust deed as per section 117A of the Act and proper security or charge has been created in favour of the debenture trust.

(xx) The Company has not raised any money by public issues during the year and accordingly clause 4(xx) of Companies (Auditors'' Report) Order, 2003 is not applicable;

(xxi) Based on the audit procedures performed and the information and explanation given by the management we report that no fraud on or by the Company has been noticed or reported during the year.

For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No 106971W

N Jayendran

Mumbai, Partner

May 30, 2013 M. No. 40441


Mar 31, 2012

1. We have audited the attached Balance Sheet of Ipca Laboratories Limited as at 31st March, 2012 and the Statement of Profit and Loss and 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 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 (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 Statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Pursuant to the Amalgamation of Tonira Pharma Limited into the Company, the effect for which is given in the attached Balance Sheet, Statement of Profit and Loss and the Cash flow statement, the Company has treated the business of the said Tonira Pharma Limited as a Branch and the accounts have been separately audited by M/s Mitesh P Vora & Co., Chartered Accountants the Statutory auditors of the erstwhile Tonira Pharma Limited as the Branch Auditor who has been appointed as such by the Board of Directors. The Branch Auditors' report provided to us has been considered for overall reporting of the Company.

5. 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 accounts as required by law have been kept by the Company so far as it appears from our examination of the books.

iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

iv) In our opinion, the Balance Sheet, Statement of Profit and Loss 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.

v) On the basis of the written representation received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st 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) In our opinion and to the best of our information and according to the explanation given to us, the accounts and the other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view

(a) in the case of Balance Sheet, of the State of Affairs of the Company as at 31st March, 2012 and

(b) in the case of the Statement of Profit and Loss, of the Profit for the year ended on 31st March, 2012 and

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

Annexure to the Auditors' Report

(Referred to in our report of even date)

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management at reasonable intervals and any material discrepancies noticed on such verification have been properly dealt with in the books of account;

(c) The Company has not disposed off any substantial part of fixed assets.

(ii) (a) Stock of finished goods, stores, spare parts and raw materials has been physically verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of stock followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The valuation of stock has been done on the basis of physically verified quantity. Therefore shortage / excess automatically gets adjusted and the same is properly dealt in the books of accounts.

(iii) The Company has not taken any fresh loan from parties listed in the register maintained under section 301 of the Companies Act.

The Company has given loans to parties listed in the register maintained under section 301 of the Companies Act. The balance outstanding is NIL and the maximum amount outstanding during the period is Rs. 5.77 crores. The terms and conditions of the loan are prima facie not prejudicial to the interests of the Company and the principal is being repaid as stipulated. There is no outstanding at the end of the year.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control procedure 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. We have not come across any continuing failure to correct major weaknesses in internal control.

(v) (a) In our opinion and according to the information and explanations given to us the transactions that need to be entered into a register in pursuance of section 301 of the Act has been properly entered.

(b) All the transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time and the nature of services rendered by such party.

(vi) The Company has not accepted any deposits from the public during the year under review, and consequently the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed there under are not applicable.

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

(viii) According to the records produced and information given to us, the cost records and accounts as prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 have been made and maintained by the Company but no detailed examination of such records and accounts has been carried out by us.

(ix) (a) The Company is regular in depositing provident fund, employees state insurance, income tax, sales tax, service tax, customs duty and excise duty dues with the appropriate authorities and there are no arrears of outstanding statutory dues as at the last day of the financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, the following tax / duty, etc. has not been deposited on account of dispute.

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

Excise Duty Valuation of Inputs 0.12 2001-2002 & 2002-2003 Commissioner of Central Excise

Cenvat availed on direct clearance of Excise Duty 0.34 April 2002 - Jan 2005 CESTAT goods from job worker's premises.

Excise Duty Availment of Cenvat Credos on 0.03 2006-2007 & 2007-2008 Assistant Commissioner of Central Excise Service Tax Input Services

Excise Duty/ Availment of Cenvat Credits on Service Tax Input Services 0.01 April 2008 - Dec 2008 Assistant Commissioner of Central Excise

Excise Duty/ Availment of Cenvat Credits on Service Tax Input Services 0.01 Jan 2009 - Sep 2009 Assistant Commissioner of Central Excise

Service Tax Availment of Cenvat Credits on 0.91 April 2006 -Nov 2008 Commissioner of Central Excise H.O invoices

Service Tax Availment of Cenvat Credits on 2.06 April 2006 -Nov 2008 Commissioner of Central Excise H.O invoices

Excise Duty / Availment of Cenvat Credits on Service Tax Common Inputs 5.76 May 2007 -March 2008 Commissioner of Central Exase

Excise Duty Non reversal of service tax credit on short 0.01 2005-2006 to 2007-2008 Assistant Commissioner of Central Excise receipt and destruction of RM/PM

Excise Duty Payment of Excise Duty 0.51 April 2003 to Dec 2008 CESTAT - New Delhi

Commissioner of Central Excise & Excise Duty Excise Duty on WIP on de- bonding 0.23 Customs, Surat

Interest and penalty on past Excise Duty 4.15 High Court, Gujarat anti-dumping duty and excise duty

Availment of Cenvat Credit on Service Deputy Commissioner, CX & ST, Service Tax 0.02 2009-2010 & 2010-2011 Tax on outward freight LTU Mumbai

Service Tax Availment of Cenvat Credit on 0.01 2006-2007 Assistant Commissioner of Central Excise Service Tax

Sales Tax Disputed demand 0.01 2001-2002 Sales Tax authority-Patna

Sales Tax Disputed demand 0.03 2004-2005 Sales Tax authority-Jaipur

Sales Tax Disputed demand 0.08 2006-2007 Gujarat VAT Tribunal, Ahmedabad

Jt. Commissioner of Commercial Sales Tax Disputed demand 0.03 2007-2008 Tax, Rajkot

Sales Tax Disputed demand 0.01 2008-2009 Sales Tax authority-U.P.

Deputy Commissioner of Commercial Sales Tax Disputed demand 1.23 2006-2007 Tax (Appeal), Baroda

Income tax Disputed disallowances 0.57 AY:-2007 -08 ITAT Mumbai

Income tax Disputed disallowances 2.03 AY:-2008 -09 CIT(A)

Income tax Disputed Demand 0.31 AY:-2005 -06 ITAT, Ahmedabad

Income tax Appeal against penalty order 0.09 AY:-2008 -09 CIT(A), Baroda

(x) The Company does not have any accumulated losses and has not incurred cash losses in current year and the previous year.

(xi) We are informed that the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

(xii) On the basis of the audit procedures followed and the representations from the management, we report that the Company has not granted loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a nidhi/ mutual benefit fund/society and accordingly clause (xiii) of the Companies (Auditors' Report) Order, 2003 is not applicable.

(xiv) The Company does not deal or trade in shares and securities and other investments. Therefore clause (xiv) of the Companies (Auditors' Report) Order, 2003 is not applicable.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank, and therefore clause (xv) of the Companies (Auditors' Report) Order, 2003 is not applicable.

(xvi) On the basis of the documents submitted to the bankers and the other records perused by us we have to state that the term loans which are in the nature of External Commercial Borrowings taken during the year have been applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanation given to us, on an over all examination of the Balance Sheet of the Company and the necessary representations from the management, we report that no short term funds raised by the Company have been applied towards long term assets / investments.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. Accordingly clause (xviii) of the Companies (Auditors' Report) Order, 2003 is not applicable.

(xix) The Company has made fresh issue of debentures during the year. The Company has executed the debenture trust deed as per section 117A of the Act and proper security or charge has been created in favour of the debenture trust.

(xx) The Company has not raised any money by public issues during the year and accordingly clause (xx) of Companies (Auditors' Report) Order, 2003 is not applicable;

(xxi) Based on the audit procedures performed and the information and explanation given by the management we report that no fraud on or by the Company has been noticed or reported during the year.



For Natvarlal Vepari & Co.

Chartered Accountants

Firm Registration No. 106971W

N. Jayendran

Mumbai, Partner

May 29, 2012 M. No. 40441


Mar 31, 2011

We have audited the attached Balance Sheet of Ipca Laboratories Limited as at 31st March, 2011 and also the Profit and Loss Account and 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.

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 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:

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 accounts as required by law have been kept by the company so far as it appears from our examination of the books.

iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

iv) In our opinion, the Balance Sheet, 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.

v) On the basis of the written representation received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st 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.

vi) In our opinion and to the best of our information and according to the explanation given to us, the accounts and the other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view.

(a) in the case of Balance Sheet, of the State of Affairs of the Company as at 31st March, 2011 and

(b) in the case of Profit and Loss Account, of the Profit for the year ended on 31st March 2011.

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in our report of even & date)

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management at reasonable intervals and any material discrepancies noticed on such verification have been properly dealt with in the books of account;

(c) The Company has not disposed off any substantial part of fixed assets.

(ii) (a) Stock of finished goods, stores, spare parts and raw materials has been physically verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of stock followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The valuation of stock has been done on the basis of physically verified quantity. Therefore shortage / excess automatically gets adjusted and the same is properly dealt in the books of accounts.

(iii) The Company has not taken / given any loan from / to any party listed in the register maintained under Section 301.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control procedure 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. We have not come across any continuing failure to correct major weaknesses in internal control.

(v) (a) In our opinion and according to the information and explanations given to us the transactions that need to be entered into a register in pursuance of Section 301 of the Act has been properly entered.

(b) All the transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time and the nature of services rendered by such party.

(vi) The Company has not accepted any deposits from the public during the year under review, and consequently the directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA of the Act and the rules framed there under are not applicable.

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

(viii) According to the records produced and information given to us, the cost records and accounts as prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 have been made and maintained by the company but no examination of such records and accounts has been carried out by us.

(ix) (a) The Company is regular in depositing provident fund, employees state insurance, income tax, sales tax, service tax, customs duty and excise duty dues with the appropriate authorities and there are no arrears of outstanding statutory dues as at the last day of the financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, the following tax / duty, etc., has not been deposited on account of dispute.

Name of the Nature of Dues Amount Period to which the Statute (Rs in amount relates crores)

Excise Duty Valuation of Inputs 0.12 2001-2002 & 2002-2003

Excise Duty Cenvat availed on direct 0.34 April 2002 - Jan 2005 clearance of goods from job workers premises.

Excise Duty/ Availment of Cenvat 0.03 2006-2007 and 2007- Service Tax Credits on Input 2008 Services.

Excise Duty / Availment of Cenvat 0.01 April 2008 - Dec 2008 Service Tax Credits on Input Services.

Excise Duty / Availment of Cenvat 0.01 Jan 2009 - Sep 2009 Service Tax Credits on Input Services.

Service Tax Availment of Cenvat 0.91 April 2006 -Nov 2008 Credits on H.O invoices.

Service Tax Availment of Cenvat 2.06 April 2006 -Nov 2008 Credits on H.O invoices.

Excise Duty / Availment of Cenvat 5.76 May 2007 -March 2008 Service Tax Credits on Common Inputs.

Excise Duty Non reversal of service 0.01 2005-2006 to 2007-2008 tax credit on short receipt and destruction of RM/PM

Excise Duty Payment of Excise Duty 0.51 April 2003 to Dec 2008

Service Tax Availment Of Cenvat 0.01 2006-2007 Credit on Service Tax

Sales Tax Disputed demand 0.01 2001-2002

Sales Tax Disputed demand 0.03 2004-2005

Sales Tax Disputed Demand 0.95 2006-2007

Sales Tax Disputed Demand 0.08 2008-2009

Income tax Disputed disallowances 0.57 AY:-2007-08

Name of the Forum where dispute is statute pending

Excise Duty Commissioner of Central Excise

Excise Duty CESTAT

Excise Duty/ Assistant Commissioner of Service Tax Central Excise

Excise Duty / Assistant Commissioner of Service Tax Central Excise

Excise Duty / Assistant Commissioner of Service Tax Central Excise

Service Tax Commissioner of Central Excise.

Service Tax Commissioner of Central Excise.



Excise Duty / Commissioner of Central Service Tax Excise.



Excise Duty Assistant Commissioner of Central Excise

Excise Duty CESTAT-New Delhi

Service Tax Asst Commissioner of Central Excise

Sales Tax Sales Tax Authority- Patna



Sales Tax Sales Tax Authority - Jaipur

Sales Tax Gujarat Sales Tax

Sales Tax Sales Tax Authority-UP

Income tax CIT(Appeal)

(x) The Company does not have any accumulated losses and has not incurred cash losses in current year and the previous year.

(xi) We are informed that the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

(xii) On the basis of the audit procedures followed and the representations from the management, we report that the Company has not granted loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a nidhi/ mutual benefit fund/society and accordingly clause (xiii) of the Companies (Auditors Report) Order, 2003 is not applicable.

(xiv) The company does not trade in securities and other investments. However in respect of shares and other securities held as investments, the said investments are in the name of the company.

(xv) According to the information and explanations given to us, the company has given guarantee for loans taken by others from bank, the terms and conditions whereof are not prejudicial to the interest of the company.

(xvi) On the basis of the documents submitted to the bankers and the other records perused by us we have to state that the term loans which are in the nature of External Commercial Borrowings taken during the year have been applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanation given to us, on an over all examination of the Balance Sheet of the company and the necessary representations from the management, we report that no short term funds raised by the company have been applied towards long term assets / investments.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act. Accordingly clause (xviii) of the Companies (Auditors Report) Order, 2003 is not applicable.

(xix) The Company has not made any fresh issue of debentures during the year and accordingly clause (xix) of Companies (Auditors Report) Order, 2003 is not applicable

(xx) The Company has not raised any money by public issues during the year and accordingly clause (xx) of Companies (Auditors Report) Order, 2003 is not applicable;

(xxi) Based on the audit procedures performed and the information and explanation given by the management we report that no fraud on or by the company has been noticed or reported during the year.



For Natvarlal Vepari & Co. Chartered Accountants Firm Registration No. 106971W

N. Jayendran Partner M.No. 40441

Mumbai, May 24, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of Ipca Laboratories Limited as at 31st March, 2010 and also the Profit and Loss Account and 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.

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 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:

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 accounts as required by law have been kept by the company so far as it appears from our examination of the books.

iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

iv) In our opinion, the Balance Sheet, 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.

v) On the basis of the written representation received from the directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on Sis5* March, 2010 from being appointed as a director in terms of Clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanation given to us, the accounts and the other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view.

(a) in the case of Balance Sheet, of the State of Affairs of the Company as at 31 * March, 2010 and

(b) in the case of Profit and Loss Account, of the Profit for the year ended on 31s March 2010.

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to in our report of even date)

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management at reasonable intervals and any material discrepancies noticed on such verification have been properly dealt with in the books of account;

(c) The Company has not disposed off any substantial part of fixed assets.

(ii) (a) Stock of finished goods, stores, spare parts and raw materials has been physically verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of stock followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The valuation of stock has been done on the basis of physically verified quantity. Therefore Shortage/Excess automatically gets adjusted and the same is properly dealt in the books of accounts.

(iii) The Company has not taken/given any loan from/to any party listed in the register maintained under Section 301.

(iv) In our opinion and according to the information and explanations given to us there is an adequate internal control procedure 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. We have not come across any continuing failure to correct major weaknesses in internal control.

(v) (a) In our opinion and according to the information and explanations given to us the transactions that need to be entered into a register in pursuance of Section 301 of the Act has been properly entered.

(b) All the transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time and the nature of services rendered by such parties.

(vi) The Company has not accepted any deposits from the public during the year under review, and consequently the directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA of the Act and the rules framed there under are not applicable.

(vii) In our opinion the Company has an Internal Audit system commensurate with the size of the company and the nature of its business.

(viii) According to the records produced and information given to us, the cost records and accounts as prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 have been made and maintained by the company but no examination of such records and accounts has been carried out by us.

(ix) (a) The Company is regular in depositing Provident Fund, Employees State Insurance, income tax, sales tax, service tax, customs duty and excise duty dues with the appropriate authorities and there are no arrears of outstanding statutory dues as at the last day of the financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, the following Tax/duty, etc, has not been deposited on account of dispute.

Name of the Nature of Dues Amount (Rs) Period to Forum where which the dispute is Statute amount pending relates Excise Duty Valuation of Inputs 12,00,441 2001-02 & Commissioner of 2002-03 Central Exclse Excise Duty Cenvat availed on 34,37,000 April 2002 - Jan 2005 CESTAT direct clearance of goods from job workers premises. Excise Duty Availment of Cenvat 2,84,190 2006-2007 and 2007- Assistant Commissioner of Service Tax Credits on Input 2008 Central Excise Services. Excise Duty Availment of Cenvat 1,01,888 April 2008 - Dec 2008 Assistant Commissioner of Service Tax Credits on Input Central Excise Services. Excise Duty Availment of Cenvat 40,477 Jan 2009 - Sep 2009 Assistant Commissioner of Service Tax Credits on Input Central Excise Services. Service Tax Availment of Cenvat 90,58,560 April 2006 Nov 2008 Commissioner of Central Credits on H.O invoices. Excise. Service Tax Availment of Cenvat 2,05,49,912 April 2006 Nov 2008 Commissioner of Central Credits on H.O invoices. Excise. Excise Duly Incorrect classification 13,47,42,700 March 2005 March Commissioner of Central of derivative product, 2008 Excise Service Tax Incorrect classification 2,22,664 March 2005 March Commissioner of Central of derivative product, 2008 Excise Excise Duty Availment of Cenvat 5,75,52,022 May 2007 March 2008 Commissioner of Central Service Tax Credits on Common Excise. Inputs Excise Duty Non reversal of service 1,06,865 2005-06 to 2007-08 Assistant Commissioner of tax credit on short Central Excise receipt and destruction of RM/PM Excise Duty Service Tax on 3,58,05,442 2002-03 to inport of 2005-06 Commissioner of Service services Tax Mumbai Sales Tax Disputed demand 67,846 2001-2002 Sales Tax authority- Patna Sales Tax Disputed demand 2,98,219 2004-2005 Sales Tax authority - Jaipur Income Tax Disallowances and 1,82,45,741 A.Y:-2005 -2006 CIT(A) XIX, Mumbai, additions during assessments

Income Tax Disputed Demands 3,28,66,390 A.Y:-2004 -2005 Mumbai High Court Income Tax Order u/s 143(3) 45,84,510 A.Y:-2006 -2007 DRP-1, Mumbai

(x) The Company does not have any accumulated losses and has not incurred cash losses in current year and the previous year.

(xi) We are informed that the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

(xii) On the basis of the audit procedures followed and the representations from the management, we report that the Company has not granted loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiiij The Company is not a nidhi/mutual benefit fund/society and accordingly Clause (xiii) of the Companies (Auditors Report) Order, 2003 is not applicable.

(xiv) The company has maintained proper records of securities and other investments, which it has traded in and also in respect of shares and other securities, held as investments and the sdid investments are in the name of the company.

(xv) According to the information and explanations given to us, the company has given guarantee for loans taken by others from bank, the terms and conditions whereof are not prejudicial to the interest of the company.

(xvi) The term loans which are in the nature of External Commercial Borrowings taken during the year have been applied for the purpose for which the loans were obtained,

(xvii) According to the information and explanation given to us, on an over all examination of the Balance sheet of the company and the necessary representations from the management, we report that no short term funds raised by the company have been applied towards long term assets/investments,

(xviii)The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act. Accordingly Clause (xviii) of the Companies (Auditors Report) Order, 2003 is not applicable,

(xix) The Company has not made any fresh issue of debentures during the year and accordingly Clause (xix) of Companies (Auditors Report) Order, 2003 is not applicable.

(xx) The Company has not raised any money by public issues during the year and accordingly Clause (xx) of Companies (Auditors Report) Order, 2003 is not applicable.

(xxi) Based on the audit procedures performed and the information and explanation given by the management we report that no fraud on or by the company has been noticed or reported during the year.

For Natvarlal Vepari & Co. Chartered Accountants Firm Registration No. 106971W N. Jayendran Mumbai Partner 28th May, 2010 M.No. 40441