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Auditor Report of Torrent Pharmaceuticals Ltd.

Mar 31, 2023

To the Members of

Torrent Pharmaceuticals Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Torrent Pharmaceuticals Limited (the âCompanyâ), which comprise the standalone balance sheet as at 31^st March, 2023, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (in which are included the financial statements of erstwhile Curatio Health Care (I) Private Limited (CHPL) as at 31^st March, 2023 and for the period from 14^th October, 2022 to 31^st March, 2023 audited by other auditor, pursuant to the Scheme of Arrangement in the nature of Amalgamation of CHPL with the Company which has been approved by the National Company Law Tribunal vide its order dated 17^thMay, 2023 with the appointed date of 14^th October, 2022) (hereinafter together referred to as standalone financial statements).

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of report of the other auditor on separate financial statements of CHPL as at 31^st March, 2023 and for the period from 14^th October, 2022 to 31^st March, 2023 as were audited by the other auditor, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2023, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us along with the consideration of the report of the other auditor referred to in paragraph(a) of the âOther Matterâ section below, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

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

Impairment Testing of Goodwill

See Note 4.8.2, 8 and 9 to standalone financial statements

The key audit matter

How the matter was addressed in our audit

The Company tests goodwill for impairment annually, or more frequently when there is an indication that the cash generating unit to which goodwill has been allocated may be impaired.

We identified the annual impairment assessment of goodwill as a key audit matter because the assessment process is complex and judgmental by nature and is based on assumptions on:

â¢ projected future cash inflows;

â¢ expected growth rate and profitability;

â¢ discount rate;

â¢ perpetuity value based on long term growth rate;

Our audit procedures included the following:

â¢ Testing operating effectiveness of controls over determination of the recoverable amounts of cash generating units. Cash generating units for this purpose are those to which the goodwill is allocated;

â¢ Evaluating the model used in determining the recoverable value of the cash generating units;

â¢ Assessing the reasonableness of prior period cash flow forecasts of the Company by reference to actual performance to assess forecast accuracy;

â¢ Challenging the significant assumptions and judgements used in impairment analysis, such as forecast revenue, margins, long term growth and discount rates in comparison to economic and industry forecasts with the assistance of our valuations specialist;

â¢ Performing sensitivity analysis of the key assumptions, such as future revenue growth rates, future gross margins, and the discount rate used in determining the recoverable value;

â¢ Evaluating the adequacy of disclosures, including disclosures of key assumptions, judgements and sensitivities.

Business combination - Purchase Price Allocation for acquisition of Curatio Health Care (I) Private Limited

See Note 4.2.1 and 42 to standalone financial statements

The key audit matter

How the matter was addressed in our audit

On 14^th October, 2022, the Company acquired 100% of the equity shares of Curatio Health Care (I) Private Limited (âCuratioâ) and its two wholly owned subsidiaries, Curatio Inc., Philippines and Curatio International Lanka (PVT) Ltd., Sri Lanka. The purchase price amounted to ''2,000 crores.

Subsequently, the Company filed a Scheme of Arrangement in the nature of Amagamation (''Scheme'') with the National Company Law Tribunal (''NCLT'') for merger of Curatio with the Company. The Scheme was approved by the NCLT on 17^th May, 2023, with an appointed date of 14^th October, 2022.

The acquisition is accounted for in accordance with Ind AS 103 Business Combinations.

The assets, liabilities including the identifiable intangible assets acquired are stated at their fair values which are determined in the course of the purchase price allocation performed. The excess of acquisition cost over the identified fair value of recognised assets and liabilities is recognised as goodwill.

This results in the net assets measured at fair value aggregating to ''1,920.40 crores and goodwill of ''79.60 crores.

The purchase price allocation has been performed by an independent valuer and requires the management and the Board of Directors to make various estimates and assumptions.

Due to the matter described, we considered the business combination and in particular the purchase price allocation as a key audit matter in our audit.

Our audit procedures included the

following:

â¢ Reading the share purchase agreement, the approved scheme of merger and other related documents to obtain an understanding of the acquisition and the key terms and conditions;

â¢ Evaluating the design, implementation, and operating effectiveness of the relevant internal controls over accounting for business combination;

â¢ Evaluating the competence, capabilities, and objectivity of the independent valuer appointed by management. Along with our valuation specialist evaluated the reasonableness of methodology and key assumptions used by management and the independent valuer to measure the assets and liabilities at their fair values;

â¢ Assessing the adequacy and appropriateness of accounting and disclosures made in accordance with Ind AS 103 Business Combinations.

Information Other than the Standalone Financial Statements and Auditorâs Report Thereon

The Companyâs Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and auditorâs report(s) thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed and based on the work done/ audit report of other auditor, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s and Board of Directors'' Responsibilities for the Standalone Financial Statements

The Companyâs Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. The respective Management and Board of Directors of the Companies are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of each 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the respective Management and Board of Directors are responsible for assessing the ability of each Company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors are also responsible for overseeing the financial reporting process of each Company.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

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

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

â¢ Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

â¢ Obtain sufficient appropriate audit evidence regarding the financial statements of CHPL to express an opinion on the standalone financial statements. For the financial statements of CHPL included in the standalone financial statements, which has been audited by other auditor, such other auditor remain responsible for the direction, supervision and performance of the audit carried out by them. We remain solely responsible for our audit opinion. Our responsibilities in this regard are further described in paragraph (a) of the section titled âOther Matterâ in this audit report.

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

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

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

Other Matter

a. We did not audit the financial statements of CHPL (component) included in the standalone financial statements of the Company whose financial statements reflect total assets of ''171.12 crores as at 31^st March, 2023 and total revenue of ''126.35 crores and net cash outflows amounting to ''50.61 crores for the period from 14^th October, 2022 to 31^st March, 2023, as considered in the standalone financial statements. The financial statements of this component have been audited by the other auditor whose report has been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of this component, and our report in terms of Section 143(11) of the Act, in so far as it relates to this component is based solely on the report of such other auditor.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2 A. As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditor on separate financial statements of CHPL, as noted in the âOther Matterâ paragraph (a), we report, to the extent applicable, that:

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

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and the report of the other auditor.

c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows 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 Ind AS specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on 20^th April, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2023 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 with reference to financial statements of the Company and CHPL and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.

B. With respect to the other matters to be included in the Auditorâs 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 and based on the consideration of the report of the other auditor on separate financial statements of CHPL, as noted in the âOther Matterâ paragraph (a):

a. The Company has disclosed the impact of pending litigations as at 31^st March, 2023 on its financial position in its standalone financial statements - Refer Note 41 to the standalone financial statements.

b. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 39 to the standalone financial statements.

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

d (i) The respective management of the Company and CHPL incorporated in India whose financial statements have been audited have represented to us and the other auditor of CHPL that, to the best of their knowledge and belief, as disclosed in the Note 47 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company or CHPL to

or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company or CHPL (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(ii) The respective management of the Company and CHPL incorporated in India whose financial statements have been audited have represented to us and the other auditor of CHPL that, to the best of their knowledge and belief, as disclosed in the Note 47 to the standalone financial statements, no funds have been received by the Company or CHPL from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company or CHPL shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(iii) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances performed by us and that performed by the auditor of CHPL incorporated in India whose financial statements have been audited under the Act, nothing has come to our or other auditor''s notice that has caused us or the other auditor to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.

e. The final dividend paid by the Company during the year, in respect of the same declared for the previous year, is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.

The interim dividend declared and paid by the Company during the year and until the date of this Audit report is in accordance with Section 123 of the Act.

As stated in Note 48 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.

f. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company or CHPL only with effect from 1^st April, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.

C. With respect to the matter to be included in the Auditorâs Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us the remuneration paid/payable by the Company to their directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid/ payable to any director by the Company is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP Chartered Accountants

Firmâs Registration No.:101248W/W-100022

Sadashiv Shetty Partner

Place: Mumbai Membership No.: 048648

Date: 30^th May 2023 ICAI UDIN: 23048648BGWANN2757

Mar 31, 2022

Torrent Pharmaceuticals LimitedReport on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Torrent Pharmaceuticals Limited (âthe Companyâ), which comprise the standalone balance sheet as at 31^st March, 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2022, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Description of Key Audit Matters

1. Impairment testing of goodwill [Refer Note 4.8.2, 8 and 9 to the Standalone Financial Statements]

The Key Audit Matter	How the matter was addressed in our audit
As disclosed in Note 4.8.2 to the standalone financial	Our audit procedures in respect of impairment testing of goodwill included
statements, the Company tests goodwill for impairment	the following:
annually, or more frequently when there is an indication	â¢ Testing operating effectiveness of controls over determination of the
that the cash generating unit to which goodwill has	recoverable amounts of cash generating units. Cash generating units
been allocated may be impaired.	for this purpose are those to which the goodwill is allocated; â¢ Evaluating the model used in determining the value in use of the cash
We identified the annual impairment assessment of	generating units;
goodwill as a key audit matter because the assessment	â¢ Assessing the reasonableness of prior period cash flow forecasts of
process is complex and judgmental by nature and is	the Company by reference to actual performance to assess forecast
based on assumptions on:	accuracy;
- projected future cash inflows;	â¢ Challenging the significant assumptions and judgements used in
- expected growth rate and profitability;	impairment analysis, such as forecast revenue, margins, long term
- discount rate;	growth and discount rates in comparison to economic and industry
- perpetuity value based on long term growth rate;	forecasts with the assistance of our valuations specialist;
- sensitivity analyses;	â¢ Performing sensitivity analysis of the key assumptions, such as future revenue growth rates, future gross margins, and the discount rate used in determining the recoverable value; â¢ Evaluating the adequacy of disclosures, including disclosures of key assumptions, judgements and sensitivities.

2. Recognition and measurement of Minimum Alternate Tax (MAT) Credit Entitlement - Deferred tax assets (Refer Note 4.13
and 22 to the Standalone Financial Statements):
The Key Audit Matter	How the matter was addressed in our audit
The Company pays minimum alternate tax (MAT) under section	In respect of MAT credit assets, we assessed recognition
115JB of the Income Tax Act, 1961. The MAT paid would be	and measurement by performing the following procedures:
available as an offset over a period of 15 years. As disclosed in	â¢ Evaluating the design, implementation and operating
Note 22 to the Standalone Financial Statements, the MAT credit	effectiveness of the relevant internal controls over
is recognized as a deferred tax asset. The utilization of this asset	recognition and measurement of MAT credit assets and
has commenced as the Company now pays taxes under the	underlying data;
provision of Income Tax Act, 1961. The Company is required to reassess recognition of MAT credit asset at each reporting date.	â¢ Obtaining the approved business plans, projected profitability statements;
The Company has recognized MAT credit assets based on the probability of income tax payable on future taxable profits against which such MAT credit assets can be offset before they expire. The recognition is based on the projected profitability. This is determined based on approved business plans.	â¢ Challenging the assumptions used regarding future business plans and taxable profit in light of fiscal developments, current economic environment and prior performance in determining the recoverability of MAT credit assets recognized within the period available under applicable Income tax laws;
Recognition and measurement of such deferred tax assets has	â¢ Performing sensitivity analysis
been identified as a key audit matter because the assessment	â¢ Testing the computation of amounts recognized as
process involves significant judgement regarding the forecasts	deferred tax assets on MAT credit;
of future income tax. The assessment process is based on assumptions affected by expected future market or economic conditions.	â¢ Focusing on the disclosures on MAT credit assets and assumptions used.

Information Other than the Standalone Financial Statements and Auditorâs Report Thereon

The Companyâs Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the standalone financial statements and our auditorâs report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managementâs and Board of Directorsâ Responsibilities for the Standalone Financial Statements

The Companyâs Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. 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 accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

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

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

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

Report on Other Legal and Regulatory Requirement

1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) We have sought and obtained all the information and 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows 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 Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.

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

a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 41 to the standalone financial statements;

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

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

d) (i) The management has represented that, to the best of its knowledge and belief, as disclosed in note 47 to the

standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

â¢ directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Company or

â¢ provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

ii) The management has represented, that, to the best of its knowledge and belief, as disclosed in note 47 to the standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall:

â¢ directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Funding Party or

â¢ provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (d) (i) and (d) (ii) contain any material mis-statement.

e) i) The interim dividend declared or paid during the year by the Company until the date of this audit report is in

accordance with Section 123 of the Act.

ii) The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.

As stated in Note 48 to the financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP Chartered Accountants

Firmâs Registration No. 101248W/W-100022

Place: Mumbai Jamil Khatri

Date: 25^th May, 2022 Partner

Membership Number: 102527 UDIN:22102527AJNWTT6657

Mar 31, 2021

Opinion

We have audited the standalone financial statements of Torrent Pharmaceuticals Limited (âthe Companyâ), which comprise the standalone balance sheet as at 31^st March, 2021, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2021, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matters

1. Impairment testing of goodwill [Refer Note 4.8.2, 8 and 9 to the Standalone Financial Statements]

The Key Audit Matter

How the matter was addressed in our audit

As disclosed in Note 4.8.2 to the standalone financial statements, the Company tests goodwill for impairment annually, or more frequently when there is an indication that the cash generating unit to which goodwill has been allocated may be impaired.

We identified the annual impairment assessment of goodwill as a key audit matter because the assessment process is complex and judgemental by nature and is based on assumptions on:

- projected future cash inflows;

- expected growth rate and profitability;

- discount rate;

- perpetuity value based on long-term growth rate;

- sensitivity analyses;

Our audit procedures in respect of impairment testing of goodwill included the following:

â¢ Evaluating the model used in determining the value in use of the cash generating units;

â¢ Assessing the accuracy of prior period cash flow forecasts of the Company by reference to actual performance to assess forecast accuracy;

â¢ Challenging the significant assumptions and judgements used in impairment analysis, such as forecast revenue, margins, long-term growth and discount rates in comparison to economic and industry forecasts with the assistance of our valuations specialist, especially in light of the existing economic situation due to COVID-19;

â¢ Performing sensitivity analysis of the key assumptions, such as future revenue growth rates, future gross margins, and the discount rate used in determining the recoverable value;

â¢ Evaluating the adequacy of disclosures, including disclosures of key assumptions, judgements and sensitivities.

2. Recognition and measurement of Minimum Alternate Tax (MAT) Credit Entitlement - Deferred tax assets (Refer Note 4.13 and 22 to the Standalone Financial Statements):

The Key Audit Matter

How the matter was addressed in our audit

The Company pays minimum alternate tax (MAT) under Section 115JB of the Income Tax Act, 1961. The MAT paid would be available as an offset over a period of 15 years. As disclosed in Note 22 to the Standalone Financial Statements, the MAT credit is recognised as a deferred tax asset. The utilisation of this asset will be through offsetting it when the Company pays taxes under the provision of Income Tax Act, 1961. The Company is required to reassess recognition of MAT credit asset at each reporting date.

The Company has recognised MAT credit assets based on the probability of income tax payable on future taxable profits against which such MAT credit assets can be offset before they expire. The recognition is based on the projected profitability. This is determined based on approved business plans.

Recognition and measurement of such deferred tax assets has been identified as a key audit matter because the assessment process involves significant judgement regarding the forecasts of future income tax. The realisation of these assets will be through such income tax within the time limits available under the applicable Income tax laws. The assessment process is based on assumptions affected by expected future market or economic conditions.

In respect of MAT credit assets, we assessed recognition and

measurement by performing the following procedures:

â¢ Evaluating the design, implementation and operating effectiveness of the relevant internal controls over recognition and measurement of MAT credit assets and underlying data;

â¢ Obtaining the approved business plans, projected profitability statements;

â¢ Challenging the assumptions used regarding future business plans and taxable profit in light of fiscal developments, current economic environment in light of COVID-19 related situation and prior performance in determining the recoverability of MAT credit assets recognised within the period available under applicable Income tax laws;

â¢ Performing sensitivity analysis;

â¢ Testing the computation of amounts recognised as deferred tax assets on MAT credit;

â¢ Focusing on the disclosures on MAT credit assets and assumptions used.

Information Other than the Standalone Financial Statements and Auditorsâ Report Thereon

The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and our auditorsâ report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s and Board of Directorsâ Responsibility for the Standalone Financial Statements

design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the Management and Board of Directors.

â¢ Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) We have sought and obtained all the information and 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.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31^st March, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2021 from being appointed as a director in terms of Section 164(2) of the Act.

(B) With respect to the other matters to be included in the Auditorsâ 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 as at 31^st March, 2021 on its financial position in its standalone financial statements-Refer Note 41 to the standalone 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8^th November, 2016 to 30^th December, 2016 have not been made in these financial statements since they do not pertain to the financial year ended 31^st March, 2021.

For B S R & Co. LLP Chartered Accountants

Firmâs Registration No. 101248W/W-100022

Jamil Khatri Partner

Mumbai Membership Number: 102527

18^th May, 2021 UDIN: 21102527AAAAAQ5110

Mar 31, 2019

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Torrent Pharmaceuticals Limited (âthe Companyâ), which comprise the standalone balance sheet as at 31 March 2019, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âstandalone financial statementsâ).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2019, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

1. revenue recognition

The Key audit Matter

How the matter was addressed in our audit

- The Company provides a right of return to its customers as a customary business practice. These arrangements result in deductions to gross amounts invoiced. The initial revenue recognition is reduced taking into consideration the anticipated sales returns.

- Refer note 4.12 of the financial statements for details on accounting policy on revenue recognition.

- Due to the Companyâs presence across different regions and the competitive business environment, the estimation of anticipated sales returns is material and considered to be complex and judgemental. Management has determined an accrual of Rs.149.50 crores to be necessary as at 31 March 2019 (31 March 2018: Rs.140.47 crores).

in view of the significance of the matter we applied following

procedures :

- assessed the appropriateness of the Companyâs revenue recognition accounting policies by comparing with applicable accounting standards.

- assessed and tested the design, implementation and operating effectiveness of management key controls over the Companyâs systems relating to the deductions made to gross sales for anticipated sales returns including those controls over accrual rates used for calculations of provision for sales returns.

- performed testing by selecting samples relating to sales returns recorded during the year and comparing the parameters used in the calculation with the relevant source documents.

- compared the assumptions to current trends of sales returns. We have also considered the historical accuracy of the Companyâs estimates as well as current trends of sales return.

- considered the adequacy of the disclosures in respect of revenue.

2. assessment of recoverability of the carrying value of goodwill, intangible assets and investment in subsidiaries

The Key Audit Matter

How the matter was addressed in our audit

As at 31 March 2019, the Company has Rs. 4,386.79 crores of acquired brands under intangible assets and related goodwill of Rs. 209.34 crores. In addition, the Company has Rs. 132.78 crores of investment in subsidiaries. The carrying value of goodwill, acquired brands, and investment in subsidiaries will be recovered through future cash flows and there is inherent risk that these assets will be impaired if these cash flows do not meet the Companyâs expectations. Refer to note 4.8, 7 and 8 in the Standalone Financial Statements for details of accounting policies on impairment of assets and related disclosures.

Valuation of goodwill, acquired brands and investment in subsidiaries is a key audit matter due to:

-The inherent complexity in auditing the forward looking assumptions applied to recoverable value given the significant judgements involved. The key assumptions in the cash flow models include the forecast revenue, margins, terminal growth and discount rates.

We focused on brands acquired through historical acquisitions and related goodwill, as these are the most significant individually and in aggregate.

in view of the significance of the matter we applied following

procedures :

- tested operating effectiveness of controls over the review of the impairment analysis.

- assessed the accuracy of prior period cash flow forecasts of the Company by reference to actual performance.

- using our knowledge of the Company and industry, challenged the significant assumptions and judgements incorporated in impairment analysis specifically in relation to forecast revenue, margins, terminal growth and discount rates with the assistance of our valuations specialist;

- performed sensitivity analysis of the key assumptions, including future revenue growth rates, future gross margins, and the discount rate applied in the recoverable value and considering the resulting impact on the impairment testing and whether selection of these key assumptions is appropriate;

- evaluated the adequacy of disclosures, including disclosures of key assumptions, judgements and sensitivities.

3. Minimum Alternate Tax (MAT) Credit Entitlement - Deferred tax assets:

The Key Audit Matter

How the matter was addressed in our audit

The Company pays minimum alternate tax (MAT) under section 115JB of the Income Tax Act, 1961. The MAT paid would be available as an offset over a period of 15 years. The MAT credit is recognized as a deferred tax asset to be available for offset when the Company pays taxes under the provision of Income Tax Act, 1961. The balance of MAT credit receivable as at 31 March 2019 is Rs. 721.82 crores (refer note 20 to the standalone financial statements).

The recognition and recoverability of deferred tax asset on account of MAT credit requires significant judgement regarding the Companyâs future profitability and taxable income which will result in utilization of the MAT credit within the time limits available under the applicable Income tax laws.

in respect of such deferred tax assets, we assessed recoverability from a tax perspective by performing the following procedures:

- understanding why the MAT credit entitlement arose and understanding whether the MAT credit entitlement can be utilized

- assessing any restriction in use of the MAT credit entitlement and

- determining when the MAT credit entitlement will expire

Further, we assessed the applicability of Ind AS 12 Income Taxes by assessing managementâs assessment of recoverability of MAT credit entitlement against forecast income streams, including reliability of future income projections.

We validated the appropriateness of the related disclosures in note 20 to the standalone financial statements, including the enhanced disclosures made in respect of the utilization period of deferred tax assets in relation to MAT credit entitlement.

Information Other than the Standalone Financial Statements and Auditorâs Report thereon (Other information)

The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the standalone financial statements and our auditorsâ report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managementâs Responsibility for the Standalone Financial Statements

The Companyâs management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. 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 judgements 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Companyâs financial reporting process.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(A) 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.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of Section 164(2) of the Act.

(B) With respect to the other matters to be included in the Auditorsâ 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 as at 31 March 2019 on its financial position in its standalone financial statements - Refer Note 41 to the standalone 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. The disclosures in the financial statements regarding holdings as well as dealings in specified bank notes during the period from 8^th November, 2016 to 30^th December, 2016 have not been made since they do not pertain to the financial year ended 31^st March, 2019.

In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

(Referred to in our report of even date)

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

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

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the tittle deeds of immovable properties are held in the name of the Company. Immovable properties of land and building whose tittle have been pledged as security for loans are held in the name of the Company. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been appropriately dealt with in the books of accounts.

(iii) During the current year, the Company has not granted any loans, secured or unsecured to parties covered in the register maintained under section 189 of the Companies Act, 2013. However in earlier years, an interest bearing unsecured loan was granted to one wholly owned subsidiary covered in the register maintained under Section 189 of the Act, which was repaid along with interest, before the date of the balance sheet.

(a) In our opinion and according to the information and explanations given to us, the terms and conditions under which the aforesaid loan was granted is not prejudicial to the Companyâs interest.

(b) In respect of aforesaid loan, repayment of the principal amount is as stipulated and payment of interest has been regular.

(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 of the Act during the year. The Company has complied with the provisions of Section 186 of the Act, in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public in accordance with the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub-section 1 of section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income-Tax, Goods and Service Tax, Duty of Customs, Cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. Pending clarity on the matter as explained in Note 41 to the standalone financial statements, the Company is currently unable to determine the extent of arrears of such provident fund due as at 31 March 2019 outstanding for a period of more than six months from the date they become payable.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income-Tax, Goods and Service Tax, Duty of Customs, Cess and other material statutory dues were in arrears as at 31 March 2019 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Income-tax, Sales-Tax, Service Tax, Goods and Service Tax, Duty of customs, Duty of Excise, Value Added Tax, Cess as at 31 March 2019, which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in Enclosure I to this report.

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers, government, financial institution and its debenture holders.

(ix) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not raised any money by way of initial public offer, further public offer (including debt instruments) during the year. In our opinion and according to information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were raised.

(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) I n our opinion and according to the information and explanations given to us, the Company is not a Nidhi company as prescribed under section 406 of the Act. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with the provisions of Sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the Standalone financial statements as required by the applicable Indian Accounting Standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

ENCLOSURE I

Name of the Statute	Nature of Dues	Forum where dispute is pending	Period to which the amount relates	Amount demanded (Rs. in crores)	Amount unpaid (Rs. in crores)
The E.S.I. Act,1948	E.S.I. Contribution	Gujarat High Court	1993-94 to 2018-19	13.25	13.25
The Central Excise Act, 1944	Demand of Excise duty/Interest/ Penalty	Deputy Commissioner of CGST & Central Excise, Kalol	2005-06	0.05	0.03
The Central Excise Act, 1944	Demand of Excise duty/Interest/ Penalty	CESTAT - Ahmedabad	2005-06 to 2006-07 and 2009-10 to 2010-11	0.17	0.15
The Central Excise Act, 1944	Cenvat Credit/Input service tax/demand of duty & penalty/ Refund	CESTAT - Kolkatta	2011-12	2.37	2.07
Cenvat Credit Rules, 2004	Cenvat Credit/Input service tax/ demand of duty & penalty	CESTAT - Ahmedabad	2006-07 to 2008-09	0.34	0.15
Cenvat Credit Rules, 2004	Cenvat Credit/Input service tax/demand of duty, Interest & penalty	Commissioner (Appeals) Central Excise and CGST, Silliguri	2012-13 to July-2015	0.04	0.04
Cenvat Credit Rules, 2004	Cenvat Credit/Input service tax/ demand of duty & penalty	Commissioner (Appeals) Central Excise and CGST, Indore	2015-16 to 2016-17	0.45	0.45
Finance Act, 1994	Demand of Service Tax/Interest/ Penalty	CESTAT - Ahmedabad	2013-14	4.61	4.61
Finance Act, 1994	Demand of Service Tax/Interest/ Penalty	Commissioner (Appeals), CGST Ahmedabad	2011-12 to 2013-14	0.66	0.65
Finance Act, 1994	Demand of Penalty	CESTAT - Ahmedabad	2008-09 to 2010-11	0.18	0.18
Finance Act, 1994	Interest on refund	CESTAT - Ahmedabad	2014-15	1.14	1.14
Finance Act, 1994	Demand of Service Tax/Interest/ Penalty	Supreme Court of India	2007-08 to June 2012	53.30	53.30
Kerala Value Added Tax Act, 2003	Demand of Tax	Deputy Commissioner Appeals	2006-07 to 2007-08	0.47	0.47
Kerala Value Added Tax Act, 2003	Demand of Tax	Deputy Commissioner Appeals	2009-10 to 2010 11	0.07	0.07
Kerala Value Added Tax Act, 2003	Demand of Tax	Deputy Commissioner Appeals	2012-13 to 2015-16	0.04	0.04
Madhyapradesh Vat Act, 2002	Demand of Tax	Assistant Commissioner of Commercial Tax, Madhyapradesh	2014-15 and 2015-16	0.10	0.10
Uttar Pradesh Trade Tax Act, 1948	Demand of Tax	Joint Commissioner Commercial Tax, Uttar Pradesh	2003-04 and 2005-06	0.41	0.41
Uttar Pradesh Trade Tax Act, 2008	Demand of Tax	Joint Commissioner Commercial Tax, Uttar Pradesh	2012-13	1.13	1.13
West Bengal Value Added Tax Act, 2003	Demand of Tax	Additional Commissioner of Commercial Tax, West Bengal	2008-09	1.22	1.22
West Bengal Value Added Tax Act, 2003	Demand of Tax	Joint Commissioner Commercial Tax, West Bengal	2015-16	1.02	1.02
Bihar Value Added Tax Act, 2005	Demand of Tax	Assistant Commissioner of Commercial Tax, Bihar	2015-16	0.01	0.01

Report on the internal Financial Controls with reference to the aforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013.

(Referred to in paragraph 1(A)(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)

Opinion

We have audited the internal financial controls with reference to financial statements of Torrent Pharmaceuticals Limited (âthe Companyâ) as of 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the âGuidance Noteâ).

Managementâs Responsibility for internal Financial Controls

The Companyâs management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (âthe Actâ).

Auditorâs Responsibility

Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

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

Meaning of internal Financial Controls with Reference to Financial Statements

A companyâs internal financial control with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of internal Financial Controls with Reference to Financial Statements

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

For B S R & Co. LLP

Chartered Accountants

(Firmâs Registration No. 101248W/W-100022)

Jamil Khatri

Ahmedabad Partner

20^th May, 2019 Membership No. 102527

Mar 31, 2018

Report on the Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Torrent Pharmaceuticals Limited (âthe Companyâ), which comprise the Balance Sheet as at 31^st March, 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and summary of the significant accounting policies and other explanatory information (herein after referred to as âstandalone Ind AS financial statementsâ).

Managementâs Responsibility for the Standalone Ind AS Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditorâs Responsibility

Our responsibility is to express an opinion on these standalone Ind AS 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 of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.

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

We are also responsible to conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entityâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditorâs report. However, future events or conditions may cause an entity to cease to continue as a going concern.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31^st March, 2018, its profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Other Matters

The audited standalone Ind AS financial statements of the Company for the corresponding year ended 31^st March, 2017 prepared in accordance with Ind AS included in these standalone Ind AS financial statements, have been audited by the predecessor auditors whose audit report dated 26^th May, 2017 expressed an unmodified opinion on those audited standalone Ind AS financial statements. Our opinion is not modified in respect of these matter.

Report on Other Legal and Regulatory Requirements

1. Ps required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31^st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2018 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ

(g) With respect to the other matters to be included in the Auditorâs 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 standalone Ind AS financial statements - Refer Note 41 to the standalone Ind AS 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;

(Referred to in our report of even date)

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

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the tittle deeds of immovable properties are held in the name of the Company. Immovable properties of land and building whose tittle have been pledged as security for loans are held in the name of the Company based on the confirmations received from parties. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraphs 3 (iii) (a), (b) and (c) of the Order are not applicable to the Company.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income-Tax, Sales-Tax, Service Tax, Goods and Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues were in arrears as at 31^st March, 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Income-tax, Sales tax, Service tax, Goods and Service Tax, Duty of customs, Duty of excise, Value added tax and Cess as at 31^st March, 2018, which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in Enclosure I to this report.

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

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company as prescribed under section 406 of the Act. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with the provisions of Sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the Standalone Ind AS financial statements as required by the applicable Indian Accounting Standards.

ENCLOSURE 1-

Name of the Statute	Nature of Dues	Forum where dispute is pending	Period to which the amount relates	Amount demanded (Rs. in crores)	Amount unpaid (Rs. in crores)
The E.S.I. Act,1948	E.S.I. Contribution	Gujarat High Court	1993-94 to 2017-18	11.96	11.96
The Central Excise Act, 1944	Cenvat Credit/Input service tax/ demand of duty and penalty	CESTAT- Ahmedabad	2005-06 to 2010-11	0.55	0.33
The Central Excise Act, 1944	Cenvat Credit/Input service tax/ demand of duty and penalty	CESTAT- Kolkata	2011-12	2.26	2.20
The Central Excise Act, 1944	Cenvat Credit/Input service tax/ demand of duty and penalty	Commissioner (Appeals) Central Excise and CGST, Ahmedabad	2006-07	0.02	0.02
The Central Excise Act, 1944	Cenvat Credit/Input service tax/ demand of duty and penalty	Commissioner (Appeals) Central Excise and CGST, Siliguri	2014-15	0.37	0.37
The Central Excise Act, 1944	Cenvat Credit/Input service tax/ demand of duty and penalty	Commissioner (Appeals) Central Excise and CGST, Indore	2005-06 to 2015-16	0.22	0.22
Finance Act, 1994	Demand of Service Tax/Interest/ Penalty	CESTAT- Ahmedabad	2013-14 to 2016-17	5.53	5.53
Finance Act, 1994	Demand of Penalty	CESTAT- Ahmedabad	2006-07 to 2011-12	0.51	0.31
Finance Act, 1994	Demand of Service Tax/Interest/ Penalty	Deputy Commissioner Of Central Excise & CGST, Ahmedabad	2011-12 to 2013-14	0.63	0.63
Finance Act, 1994	Demand of Service Tax/Interest/ Penalty	Supreme Court of India	2007-08 to 2012-13	51.72	51.72
Kerala Value Added Tax Act , 2003	Demand of Tax	Deputy Commissioner Appeals	2005-06 to 2007-08	0.69	0.69
Kerala Value Added Tax Act , 2003	Demand of Tax	Deputy Commissioner Appeals	2009-10 to 2010-11	0.07	0.07
Kerala Value Added Tax Act , 2003	Demand of Tax	Deputy Commissioner Appeals	2012-13 to 2015-16	0.04	0.04
Orissa Value Added Tax Act, 2004	Demand of Tax	Additional Commissioner of Sales Tax, Orrisa	2004-05 to 2008-09, 2012-13 to 2013-14	0.53	0.53
The West Bengal Sales Tax Act,1994	Demand of Tax	Taxation Tribunal, West Bengal	2004-05	0.10	0.10
Uttar Pradesh Trade Tax Act, 1948	Demand of Tax	Joint Commissioner Commercial Tax, Uttar Pradesh	2003-04 and 2005-06	0.41	0.41
Uttar Pradesh Trade Tax Act, 2008	Demand of Tax	Joint Commissioner Commercial Tax, Uttar Pradesh	2012-13	1.12	1.12
West Bengal Value Added Tax Act,2003	Demand of Tax	Additional Commissioner of Commercial Tax , West Bengal	2005-06, 2007-08 to 2008-09	1.31	1.31
West Bengal Value Added Tax Act,2003	Demand of Tax	Joint Commissioner Commercial Tax, West Bengal	2010-11	0.47	0.47
The Income Tax Act, 1961	Demand of Tax and Interest	Commissioner (Appeals), Income Tax	A.Y 2013-14 to 2014-15	13.60	13.60

For B S R & Co. LLP

Chartered Accountants

(Firmâs Registration No. 101248W/W-100022)

Jamil Khatri

Ahmedabad Partner

30^th May, 2018 Membership No. 102527

Mar 31, 2017

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of TORRENT PHARMACEUTICALS LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31^st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs Responsibility for the Standalone Ind AS Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

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

In conducting 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 believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2017 and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. Ts required by Section 143(3) of the Act, based on our audit on the separate financial statements, we report, to the extent applicable that:

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

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

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31^st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2017 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 âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, 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 standalone Ind AS financial statements - Refer Note 41 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8^th November, 2016 of the Ministry of Finance, during the period from 8^th November 2016 to 30^th December 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.

2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)

Report of even date on Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

(b) The Property, Plant and Equipment were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the Property, Plant and Equipment at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings whose title deeds have pledged as security for loans are held in the name of the Company based on the confirmations directly received by us from parties. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 and hence reporting under clause (iii) of CARO 2016 is not applicable.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public to which directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2014, as amended, would apply. Accordingly, paragraph 3(v) of the order is not applicable to the Company.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31^st March, 2017 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Value Added Tax which have not been deposited as on 31^st March, 2017 on account of disputes are given below:

Name of Statute	Nature of Dues	Forum where Dispute is Pending	Period to which the Amount Relates	Amount Involved and Unpaid (Rs. in crores)
The E.S.I. Act, 1948	E.S.I. Contribution	Gujarat High Court	1993-94 to 2016-17	10.44
Kerala Value Added Tax Act, 2003	Demand of Tax	Deputy Commissioner Appeals	2005-06 to 2007-08	0.69
Maharashtra Value Added Tax Act, 2002	Demand of Tax	Deputy Commissioner Appeals	2006-07	0.53
Orissa Value Added Tax Act, 2004	Demand of Tax	Additional Commissioner of Sales Tax, Orissa	2004-05 to 2008-09 and 2012-13 to 2013-14	0.53
The West Bengal Sales Tax Act, 1994	Demand of Tax	Taxation Tribunal, West Bengal	2004-05	0.10
Uttar Pradesh Trade Tax Act, 1948	Demand of Tax	Joint Commissioner Commercial Tax, Uttar Pradesh	2003-04 and 2005-06	0.41
Uttar Pradesh Trade Tax Act, 2008	Demand of Tax	Joint Commissioner Commercial Tax, Uttar Pradesh	2012-13	1.12
West Bengal Value Added Tax Act, 2003	Demand of Tax	Additional Commissioner of Commercial Tax, West Bengal	2005-06, 2007-08 and 2008-09	1.31
West Bengal Value Added Tax Act, 2003	Demand of Tax	Joint Commissioner Commercial Tax, West Bengal	2010-11	0.47
Madhya Pradesh Value Added Tax Act, 2002	Demand of Tax	Taxation Tribunal, Madhya Pradesh	2002-03 to 2003-04	0.26
Central Sales Tax Act, 1956	Demand of Tax	Deputy Commissioner (Appeals), Madhya Pradesh	2010-11 to 2014-15	0.29
The Income Tax Act, 1961	Demand of Tax and Interest	Commissioner (Appeals), Income Tax	A.Y. 2013-14 to 2014-15	64.07
The Income Tax Act, 1961	Demand of Tax	Supreme Court of India	A.Y.1994-95 to 1996-97 and 1999-2000	3.31
The Income Tax Act, 1961	Demand of Tax	Gujarat High Court	A.Y. 2003-04	0.07
The Income Tax Act, 1961	Demand of Tax	Commissioner (Appeals), Income Tax	A.Y. 2008-09	0.01
The Finance Act, 1994	Demand of Tax and Penalty	Supreme Court of India	2007-08 to 2012-13	50.14
The Finance Act, 1994	Demand of Penalty	CESTAT-Ahmedabad	2006-07 to 2011-12	0.31
The Finance Act, 1994	Demand of tax & penalty	Assistant Commissioner Of Service tax, Ahmedabad	2011-12 to 2014-15	0.74
The Finance Act, 1994	Demand of tax & penalty	Principal Commissioner of service tax, Ahmedabad	2012-13 to 2014-15	8.65
The Finance Act, 1994	Demand of tax & penalty	Commissioner of service tax -Audit, Ahmedabad	2013-14	4.17
The Central Excise Act, 1944	Cenvat Credit / Input Service Tax / Demand of Duty and penalty	CESTAT-Ahmedabad	2005-06 to 2011-12	0.25
The Central Excise Act, 1944	Cenvat Credit	Indore High Court	2007-08 to 2011-12	1.19
The Central Excise Act, 1944	Cenvat Credit / Input Service Tax / Demand of Duty and penalty	CESTAT-Kolkata	2011-12	2.10
The Central Excise Act, 1944	Cenvat Credit	Deputy Commissioner Of Central Excise, Kalol	2006-07 to 2008-09 and 2013-14 to 2014-15	0.29
The Central Excise Act, 1944	Cenvat Credit / Input Service Tax / Demand of Duty and penalty	Assistant Commissioner. Central Excise and Service Tax, Pithampur	2016-17	0.01

The Central Excise Act, 1944	Cenvat Credit / Input Service Tax / Demand of Duty and penalty	Commissioner (Appeals) Central Excise and Service Tax, Bhopal	2005-06 to 2015-16	0.38
The Central Excise Act, 1944	Cenvat Credit / Input Service Tax / Demand of Duty and penalty	Commissioner of Central Excise, Siliguri	2012-13 to 2013-14	4.59
The Central Excise Act, 1944	Cenvat Credit / Input Service Tax / Demand of Duty and penalty	Commissioner(Appeals) of Central Excise and Service Tax, Siliguri	2012-13	0.05
The Central Excise Act, 1944	Cenvat Credit / Input Service Tax / Demand of Duty and penalty	Commissioner(Appeals) of Central Excise and Service Tax, Ahmedabad	2006-07	0.02
The Central Excise Act, 1944	Cenvat Credit / Input Service Tax / Demand of Duty and penalty	Deputy Commissioner of Central Excise and Service tax, Siliguri	2012-13 to 2015-16	0.48
The Central Excise Act, 1944	Cenvat Credit	Superintendent of Excise, Baddi	2016-17	0.16

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks, financial institutions and government and dues to debenture holders.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). In our opinion and according to information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were raised, other than temporary deployment pending application of proceeds.

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

(xi) In our opinion and according to the information and explanations given to us, the Company has paid managerial remuneration 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 and hence reporting under clause (xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 117365W)

Hemendra Shah

Ahmedabad Partner

26^th May, 2017 Membership No. 33590

Mar 31, 2014

We have audited the accompanying financial statements of TORRENT PHARMACEUTICALS LIMITED ("the Company"), which comprise 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 the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notifed under the Companies Act, 1956 ("the Act")(which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

Opinion

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

(a) in 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 of the Company for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

(d) In our opinion, the Balance Sheet, the Statement of profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notifed under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

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

ANNEXURE TO THE AUDITORS'' REPORT

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

(i) Having regard to the nature of the Company''s business/activities, clauses (xiii) and (xiv) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verifed over a period of three years by the Management in accordance with a regular programme of verifcation which, in our opinion, provides for physical verifcation of all the fixed assets at reasonable intervals. According to the information and explanations given to us, discrepancies noticed on such verifcation have been properly dealt with in the books of account.

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

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verifed during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of inventories 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 explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verifcation.

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

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) the particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) transactions during the year exceeding the value of Rupees Five lacs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

(viii) In our opinion, the internal audit functions carried out during the year by firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been generally regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax/VAT, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and employees'' state insurance which have not been deposited as on 31st March, 2014 on account of disputes are given below:

Statute Nature of Dues Forum where Dispute is pending

The West Bengal Sales Demand of Tax Taxation Tribunal, Tax Act,1994 West Bengal

West Bengal Value Demand of Tax Additional C.C.T , Added Tax Act,2003 West Bengal

Demand of Tax Joint Commissioner West Bengal Value Commercial Tax, West Added Tax Act,2003 Bengal

Demand of Tax Joint Commissioner Uttar Pradesh Trade Tax Commercial Tax, Uttar Act, 1948 Pradesh

Uttar Pradesh Trade Tax Demand of Penalty Tribunal, Uttar Act, 1948 Pradesh

Kerala Value Added Tax Demand of Tax Deputy Commissioner Act , 2003 - Appeals

Maharashtra Value Demand of Tax Deputy Commissioner Added Tax Act,2002 - Appeals

Demand of Tax Commissioner of Income Tax Act, 1961 Income Tax (Appeals)

E.S.I Contribution Gujarat High Court E.S.I Act, 1948

Cenvat Credit / Input Additional / Deputy Service Tax / Demand Commissioner / of Duty and penalty Commissioner (Appeals)

Cenvat Credit / Input Deputy Commissioner Service Tax / Demand of Central Excise Kalol Central Excise Act, 1944 of Duty and penalty Cenvat Credit / Input Commissioner Service Tax / Demand (Appeals) of Duty and penalty

Cenvat Credit / Input CESTAT Service Tax / Demand of Duty and penalty

Statue Period to which Amount the amount involved relates (Rs. in lacs)

The West Bengal Sales Tax Act,1994 2004-05 9.98

West Bengal Value Added Tax Act,2003 2007-08 to 149.82 2009-10

West Bengal Value Added Tax Act,2003 2010-11 47.00

Uttar Pradesh Trade Tax Act, 1948 2003-04 to 42.41 2010-11

Uttar Pradesh Trade Tax Act, 1948 2009-10 1.84

Kerala Value Added Tax Act , 2003 2005-06 to 41.13 2007-08

Maharashtra Value Added Tax Act ,2002 2006-07 84.66

Income Tax Act, 1961 2004-05 0.15

E.S.I Act, 1948 1993-94 to 730.75 2013-14

2013-14 32.14

2012-13 9.97

Central Excise Act, 1944 2006-07 to 14.16 2012-13

2005-06 to 86.69 2011-12

Statute Nature of Dues Forum where Dispute is pending

Demand of Penalty CESTAT

Demand of Duty, CESTAT Finance Act, 1994 Interest & Penalty

Demand of Penalty Commissioner (Appeals)

Statue Period to which Amount the amount involved relates (Rs. in lacs)

2008-09 to 18.21 2010-11

Finance Act, 1994 2007-08 to June 3,630.08 2012

2006-07 to 13.35 2011-12

(xi) The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding the financial year.

(xii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions. The Company has not issued any debentures.

(xiii) In our opinion, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not prima facie prejudicial to the interests of the Company.

(xv) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xvi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xvii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xviii) The Company has not issued any debenture during the year.

(xix) The Company has not raised money by public issue during the year.

(xx) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Firm''s Registration No. 117365W)

Hemendra L. Shah

Ahmedabad Partner

9th May, 2014 (Membership No. 33590)

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of TORRENT PHARMACEUTICALS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March ,2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

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

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

(i) Having regard to the nature of the Company''s business/activities, clauses (xiii) and (xiv) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified over a period of three years by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, discrepancies noticed on such verification have been properly dealt with in the books of account.

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

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories 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 explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

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

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act,1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Transactions during the year exceeding the value of Rupees Five lacs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

(viii) In our opinion, the internal audit functions carried out during the year by firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been generally regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax/VAT, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and employees'' state insurance which have not been deposited as on 31st March, 2013 on account of disputes are given below:

Statute Nature of Dues Forum where Dispute is Period to which Amount pending the amount involved relates (Rs. in lacs)

The West Bengal Sales Demand of Tax Taxation Tribunal, 2004-05 9.98 Tax Act, 1994 West Bengal

West Bengal Value Added Demand of Tax Assessing Officer of 2007-08 0.87 Tax Act, 2003 Sales Tax, West Bengal

Uttar Pradesh Trade Demand of Tax Joint Commissioner 2003-04 2.72 Tax Act, 1948 Commercial Tax, Uttar Pradesh

Uttar Pradesh Trade Demand of Tax Joint Commissioner 2005-06 2.03 Tax Act, 1948 Commercial Tax, Uttar Pradesh

Uttar Pradesh Trade Demand of Penalty Tribunal, Uttar Pradesh 2009-10 1.84 Tax Act, 1948

Cenvat Credit Commissioner of Central 2006-07 11.47 excise, Ahmedabad-III

Cenvat Credit/ CESTAT 2005-06 to 67.81 InputS ervice Tax/ 2010-11 Central Excise Act, 1944 Demand of Duty and penalty

Demand of Interest Dy. Commissioner of 2001-02 and 3.02 Central Excise-Kalol 2002-03

Demand of Duty Commissioner 2005-06 and 0.71 and penalty (Appeals - Ankleshwar) 2006-07

Demand of Penalty CESTAT 2008-09 to 18.21 2010-11

Commissioner, Service tax 2007-08 to 2,862.78 Finance Act, 1994 Demand of duty Ahmedabad 2012-13

and penalty Additional Commissioner, 2006-07 to 13.35 Service tax Ahmedabad 2011-12

E.S.I Act,1948 E.S.I Contribution Gujarat High Court 1993-94 to 580.23 2012-13

Income Tax Act,1961 Demand of Tax Commissioner of Income 2004-05 0.15 Tax (Appeals)

(xi) The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding the financial year.

(xii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions.The Company has not issued any debentures.

(xiii) In our opinion, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) In our opinion and according to the information and explanations given to us, during the year, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

(xv) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xvi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xvii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xviii) The Company has not issued any debenture during the year.

(xix) The Company has not raised money by public issue during the year.

(xx) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 117365W)

Hemendra L. Shah

Place : Ahmedabad Partner

Dated: 30th May, 2013 (Membership No. 33590)

Mar 31, 2012

1. We have audited the attached Balance Sheet of TORRENT PHARMACEUTICALS LIMITED ("the Company") as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These fi -nancial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the signifi cant estimates made by the Management, as well as evaluating the overall fi nancial 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 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

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

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

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

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

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

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

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

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

5. On the basis of the written representations received from the Directors as on 31st March, 2012 taken on record by the Board of Directors, none of the Directors is disqualifi ed as on 31st March, 2012 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company's business/activities, clauses (xiii) and (xiv) of CARO are not applicable. (ii) In respect of the Company's fixed assets:

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

(b) The fixed assets were physically verifi ed over a period of three years by the Management in accordance with a regular programme of verifi cation which, in our opinion, provides for physical verifi cation of all the fixed assets at reasonable intervals. According to the information and explanations given to us, discrepancies noticed on such verifi cation have been properly dealt with in the books of account.

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

(iii) In respect of the Company's inventories:

(a) As explained to us, the inventories were physically verifi ed during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifi cation of inventories 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 explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verifi cation.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, fi rms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Transactions during the year exceeding the value of Rupees Five lacs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposits during the year from public within the meaning of provision of section 58A and 58AA or any other relevant provision of the Companies Act, 1956 and rules made thereafter.

(viii) In our opinion, the internal audit functions carried out during the year by a fi rm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

(ix) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been generally regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2012 for a period of more than six months from the date they became payable.

(c) Details of dues of Income Tax, Sales Tax/VAT, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and Employees' State Insurance which have not been deposited as on 31st March, 2012 on account of disputes are given below:

Statute Nature of Dues Forum where Dispute is pending

The West Bengal Sales Demand of Tax Taxation Tribunal, West Tax Act,1994 Bengal

West Bengal Value Demand of Tax Assessing Offi cer of Sales Added Tax Act,2003 Tax, West Bengal

Uttar Pradesh Trade Tax Demand of Tax Joint Commissioner Act, 1948 Commercial Tax, Uttar Pradesh

Uttar Pradesh Trade Tax Demand of Tribunal, Uttar Pradesh Act, 1948 Penalty

Gujarat Value Added Demand of Tax Joint Commissioner of Tax, 2003 and Penalty Commercial Tax (Appeals), Ahmedabad

Input Service CESTAT Tax / Demand of Duty and Penalty

Demand of Duty Commissioner (Appeals- Ankleshwar)

Cenvat Credit Commissioner of Central Excise, Ahmedabad-III

Central Excise Act, 1944 Demand of Dy. Commissioner of Central Interest Excise-Kalol

Demand of Duty Assistant Commissioner of Central Excise-Kalol

Demand of Duty Commissioner (Appeals) and Penalty

Service Tax and Commissioner (Appeals) Demand of Duty Finance Act, 1994 and Penalty

Demand of Joint Commissioner of Penalty Central Excise

E.S.I Act, 1948 E.S.I Gujarat High Court Contribution

Income Tax Act, 1961 Demand of Tax Commissioner of Income Tax (Appeals)

Statue Period to which Amount the amount involved relates (Rs. in lacs)

The West Bengal Sales Tax Act,1994 2004-05 9.98

West Bengal Value Added Tax Act,2003 2007-08 0.87

Uttar Pradesh Trade Tax Act, 1948 2005-06 2.03

Uttar Pradesh Trade Tax Act, 1948 2009-10 1.84

Gujarat Value Added Tax, 2003 2006-07 and 49.75 2007-08

2005-06 to 28.62 2008-09

Central Excise Act, 1944 2005-06 and 0.71 2006-07

2006-07 11.47

2001-02 and 3.02 2002-03

2008-09 and 8.28 2009-10

2009 -10 and 40.51 2010-11

2001-02 / 12.30 2004-05 and 2005-06

Finance Act, 1994 2008-09 18.01

E.S.I Act, 1948 1993-94 to 497.79 2011-12

Income Tax Act, 1961 2004-05 0.15

(xi) The Company does not have accumulated losses at the end of the fi nancial year. The Company has not incurred cash losses during the fi nancial year covered by the audit and in the immediately preceding the financial year.

(xii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions. The Company has not issued any debentures.

(xiii) In our opinion, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not prima facie prejudicial to the interests of the Company.

(xv) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xvi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long-term investment.

(xvii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xviii) The Company has not issued any debenture during the year.

(xix) The Company has not raised money by public issue during the year.

(xx) To the best of our knowledge and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year. For DELOITTE HASKINS & SELLS

Chartered Accountants (Registration No. 117365W)

Gaurav J. Shah

Place: Gangtok, Sikkim Partner

Date: 18th May, 2012 Membership No. 35701

Mar 31, 2011

1. We have audited the attached Balance Sheet of TORRENT PHARMACEUTICALS LIMITED ("the Company") as at 31st March, 2011, the profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

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

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

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

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

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

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

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

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

5. On the basis of the written representations received from the Directors as on 31st March, 2011 taken on record by the Board of Directors, none of the Directors is disqualifi ed as on 31st March, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Companys business/activities, clauses (x), (xiii) and (xiv) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verifi ed over a period of three years by the Management in accordance with a regular programme of verifi cation which, in our opinion, provides for physical verifi cation of all the fixed assets at reasonable intervals. According to the information and explanations given to us, discrepancies noticed on such verifi cation have been properly dealt with in the books of account.

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

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verifi ed during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifi cation of inventories 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 explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verifi cation.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, fi rms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Transactions during the year exceeding the value of Rupees Five lacs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the internal audit functions carried out during the year by fi rm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

(ix) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 for the Companys products to which the said rules are made applicable and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(x) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been generally regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2011 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax/VAT, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and Employees State Insurance which have not been deposited as on 31st March, 2011 on account of disputes are given below:

Period to which Amount Nature of Forum where Dispute is Statute the amount involved Dues pending relates (Rs. in lacs)

The West Bengal Demand of Tax Taxation Tribunal, West Bengal 2004-05 9.98 Sales Tax Act,1994

West Bengal Value Added Tax Additional Commissioner of Demand of Tax 2005-06 5.21 Act, 2003 Sales Tax, West Bengal

Additional Commissioner of Central Sales Tax Act,1956 Demand of Tax 2005-06 0.72 Sales Tax, West Bengal

Uttar Pradesh Trade Tax Act, Joint Commissioner Demand of Tax 2005-06 2.03 1948 Commercial Tax, Uttar Pradesh

Joint Commissioner of Gujarat Value Added Tax, Demand of Tax Commercial Tax (Appeal), 2006-07 43.91 2003 Ahmedabad

Input Service CESTAT 2006-07 0.69 Credit

Commissioner (Appeals- 2005-06 and Demand of Duty 0.70 Ankleshwar) 2006-07

Commissioner of Central Cenvat Credit 2006-07 11.47 excise, Ahmedabad-III

Demand of Duty CESTAT 2005-06 2.71 and penalty Central Excise Act,1944 Demand of Dy. Commissioner of Central 2001-02 and 3.02 Interest Excise-Kalol 2002-03

Demand of 2005-06 and CESTAT 0.50 penalty 2006-07

Assistant Commissioner of 2008-09 and Demand of Duty 8.28 Central Excise-Kalol 2009-10

Demand of Duty CESTAT 2009-10 12.92 and penalty

Service Tax Commissioner (Appeals) 2001-02 6.09

Demand of Duty 2004-05 and Commissioner (Appeals) 6.21

Finance Act, 1994 and penalty 2005-06

Demand of Joint Commissioner of Central 2008-09 18.01 Penalty Excise

E.S.I 1993-94 to E.S.I Act, 1948 Gujarat High Court 390.98 Contribution 2010-11

Demand of Tax Assessment Offlcer-TDS 2007-08 15.92 and interest Range, Ahmedabad

Commissioner of Income Tax Income Tax Act, 1961 Demand of Tax 2004-05 0.15 (Appeals)

Demand of Commissioner of Income Tax 2005-06 39.59 Penalty (Appeals)

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions. The Company has not issued any debentures.

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

(xiii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not prima facie prejudicial to the interests of the Company.

(xiv) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xv) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xvi) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xvii) The Company has not issued any debenture during the year.

(xviii) The Company has not raised money by public issue during the year.

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 117365W)

Gaurav J. Shah

Ahmedabad Partner

28th May, 2011 Membership No. 35701

Mar 31, 2010

1. We have audited the attached Balance Sheet of TORRENT PHARMACEUTICALS LIMITED ("the Company") as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

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

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

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

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 21 1 (3C) of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1 956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; (ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and

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

5. On the basis of the written representations received from the Directors as on 31st March, 2010 taken on record by the Board of Directors, none of the Directors is disqualified as on 31stMarch, 201 0 from being appointed as a Director in terms of Section 274(1 )(g) of the Companies Act, 1956.

Annexure to the Auditors Report (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Companys business / activities, clauses (x), (xiii) and (xiv) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified over a period of three years by the management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, discrepancies noticed on such verification have been properly dealt with in the books of account.

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

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories 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 explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

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

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

i (vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1 956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Transactions during the year exceeding the value of Rupees Five lacs in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1 975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii) In our opinion, the internal audit functions carried out during the year by firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

(ix) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1 956 for the Companys products to which the said rules are made applicable and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(x) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been generally regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 201 0 for a period of more than six months from the date they became payable.

(c) Details of dues of Income Tax, Sales Tax / VAT, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and Employees State Insurance which have not been deposited as on 31st March, 2010 on account of disputes are given below:

Forum where Dispute Statute Nature of Dues is pending

The West Bengal Taxation Tribunal, Sales Tax Act,l 994 Demand of Tax West Bengal

West Bengal Value Additional Commissioner of Added Tax Act, Demand of Tax Sales Tax, West Bengal 2003

Central Sales Tax Additional Commissioner of Act,1956 Demand of Tax Sales Tax, West Bengal

Joint Commissioner Uttar Pradesh Trade Demand ot Tax Commercial tax, Uttar TaxAct1948 Pradesh

Sr. Dy. Commissioner of Bombay Sales Tax Demand of Tax Sales Tax (Assessment), Act 1959 Maharashtra

Joint Commissioner of Gujarat Value Demand of Tax Commercial Tax (Appeal), Added Tax, 2003 Anmedabad

Service Tax Commissioner (Appeals)

Input Service CESTAT Credit

Commissioner (Appeals- Demand ot Duty Ankleshwar)

Commissioner of Central Cenvat Credit excise, Ahmedabad-III

Central Excise Act, 1944 Demand of Duty CESTAT and penalty

Demand of Dy. Commissioner of Interest Central Excise-Kalol

Demand of CESTAT penalty

Assistant Commissioner of Demand ot Duty Central Excise-Kalol

E.S.I Act, 1948 E.S.I Contribution Gujarat High Court

Income Tax Act, Demand of Tax Assessment Officer-TDS 1961 and interest Range, Ahmedabad

Statue Period to Amount which the involved amount relates (Rs. in iocs)

The West Bengal Sales Tax Act, 1994 2004-05 9.98

West Bengal Value Added Tax Act, 2003 2005-06 5.21

2006-07 2.77

Central Sales Tax Act, 1956 2005-06 0.72

Uttar Pradesh Trade Tax Act, 1948 2003-04 0.50

2005-06 2.03

Bombay Sales Tax Act, 1959 2003-04 0.95

Gujarat Value Added Tax, 2003 2006-07 43.91

2001-02 6.09

2006-07 0.69

2005-06 and 0.70 2006-07

2006-07 11.47

Central Excise Act, 1944 2005-06 2.71

2001-02 and 2002-03 3.02

2005-06 and 2006-07 0.50

2008-09 and 2009-10 4.73

E.S.I Act, 1948 1993-09 287.54

Income TaxAct, 1961 2007-08 20.92

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions. The Company has not issued any debentures.

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

(xiii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not prima facie prejudicial to the interests of the Company.

(xiv) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xv) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long-term investment.

(xvi) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xvii) The Company has not issued any debenture during the year.

(xviii) The Company has not raised money by public issue during the year.

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

For C.C.Chokshi & Co.

Chartered Accountants (Registration No. 101876W)

Gaurav J. Shah

Ahmedabad Partner

6th May, 2010 Membership No. 35701

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Auditor Report of Torrent Pharmaceuticals Ltd.

Opinion

Basis for Opinion

Key Audit Matters

Description of Key Audit Matters

Information Other than the Standalone Financial Statements and Auditorâs Report Thereon

Managementâs and Board of Directorsâ Responsibilities for the Standalone Financial Statements

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

Report on Other Legal and Regulatory Requirement

1. Impairment testing of goodwill [Refer Note 4.8.2, 8 and 9 to the Standalone Financial Statements]

2. Recognition and measurement of Minimum Alternate Tax (MAT) Credit Entitlement - Deferred tax assets (Refer Note 4.13 and 22 to the Standalone Financial Statements):

Information Other than the Standalone Financial Statements and Auditorsâ Report Thereon

Management''s and Board of Directorsâ Responsibility for the Standalone Financial Statements

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Information Other than the Standalone Financial Statements and Auditorsâ Report Thereon

Management''s and Board of Directorsâ Responsibility for the Standalone Financial Statements

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements