Dishman Carbogen Amcis Ltd Directors Report.

To the Members of Dishman Carbogen Amcis Limited Report on the Audit of the Standalone Ind AS Financial Statements

OPINION

We have audited the accompanying standalone Ind AS financial statements of Dishman Carbogen Amcis Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the standalone Ind AS financial statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements").

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 Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Indian Accounting Standards ("Ind AS") prescribed under section 133 of the Act, of the state of affairs of the Company as at March 31, 2021, its loss (including 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 Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Ind AS 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 ("ICAI") together with the ethical requirements that are relevant to our audit of the standalone Ind AS financial statements under the provisions of the Act and 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 Ind AS financial statements.

EMPHASIS OF MATTER

We draw attention to the following matters in the notes to the standalone Ind AS financial statements:

(a) Note 28 of the standalone Ind AS financial statements detailing the accounting treatment relating to the Scheme involving merger of Dishman Pharmaceuticals and Chemicals Limited and Dishman Care Limited with Dishman Carbogen Amcis Limited, which has been accounted in the year 2016-17 under the "Purchase Method" as per the then prevailing Accounting Standard 14 – Accounting for Amalgamation in compliance with the Scheme of Amalgamation pursuant to Sections 391 to 394 of Companies Act, 1956 approved by the Honble High Court of Gujarat. In accordance with the Scheme, the Company had recognized Goodwill on Amalgamation amounting to 1326.86 crores which is amortised over its useful life. This accounting treatment is different from that prescribed under Indian Accounting Standard 103 - Business Combination (Ind AS 103). Had the goodwill not been amortised as required under Ind AS 103, the Depreciation and Amortisation expense as well as Loss before tax for the year ended March 31, 2021 would have been lower by 88.45 crores.

(b) Notes 39 of the standalone Ind AS financial statements explaining the impact of COVID–19, nationwide lockdown and Note 40 in relation to certain audit observations issued by Swissmedic and European Directorate for the Quality of Medicines & Healthcare (EDQM) on account of joint inspection carried out by them for the Companys manufacturing plant at Bavla and certain Certificate of Suitability (CEPs) were also suspended. As a result, Companys operations, production, revenue and profitability were adversely impacted during the year ended March 31, 2021. The Company continues to monitor the impact of COVID-19 on recoverability of receivables / advances, assessment of impairment of goodwill and intangibles, investments and inventory.

(c) Note 41 ofthe standalone IndAS financial statements, which states that due to change brought in by Finance Act, 2021, the depreciation on goodwill will not be available to the Company from Assessment Year 2021-2022 onwards. Due to this, the balance of goodwill amounting to 275.51 crores as per tax books is treated as a non-deductible temporary difference. As a result of that, the deferred tax liability on the same amounting to 96.28 crores has been recognized during the year ended March 31, 2021.

Our opinion is not modified in respect of these matters.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements of the current year. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Impairment assessment of the carrying value of Goodwill Our audit procedures on testing for goodwill impairment includes the following:
(Refer Note 3 to the standalone Ind AS financial statements) The Company carries goodwill amounting to 774.03 crores in its standalone Ind AS financial statements as at March 31, 2021 which was recorded due to the merger of Dishman Pharmaceuticals and Chemical Limited and Dishman Care Limited into Dishman Carbogen Amcis Limited. • Obtained an understanding from the management with respect to process and controls followed by the Company to perform annual impairment test related to goodwill and performed necessary audit procedures to test the operating effectiveness of the relevant internal controls during the year ended and as of March 31, 2021;
In terms with Ind AS 36, goodwill is tested for impairment annually at the CGU level whereby the carrying amount of the CGU (including goodwill) is compared with the recoverable amount of the CGU. However the goodwill generated on the merger is amortised over 15 years. The recoverable amount is determined on the basis of the value in use which is the present value of future cash flows of the CGU using discounted cash flow model (‘Model), which involves estimates pertaining to expected business and earnings forecasts and key assumptions including those related to discount and long-term growth rates. These estimates require high degree of management judgment resulting in inherent subjectivity. • Evaluated managements identification of CGUs, the carrying value of each CGU and the methodology followed by management for the impairment assessment in compliance with the prevailing accounting standards;
We considered this as a key audit matter due to significant judgment and assumption involved in estimating future cash flows using the Model. • Evaluated appropriateness of key assumptions included in the cash flow forecasts used in computing recoverable amount of each CGU, such as growth rates, profitability, discount rates, etc., with reference to our understanding of their business and historical trends; and comparing past projections with actual results, including discussions with management relating to these projections;
• Considered the impairment testing valuation report for goodwill outstanding in standalone books carried on by independent valuer;
• Considered the fair value of Investment in subsidiaries based on the valuation certified by the subsidiary auditors;
• Performed sensitivity analysis on these key assumptions to assess potential impact of downside in the underlying cash flow forecasts and assessed the possible mitigating actions identified by management; and
• Evaluated the appropriateness of the disclosure in the standalone Ind AS financial statements and assessed the completeness and mathematical accuracy.
Impairment assessment of carrying value of investments in subsidiaries Our audit procedures on impairment assessment of Investments include the following :
(Refer Note 4(a) to the standalone Ind AS financial statements) The Company has equity investments in its unlisted wholly owned subsidiaries amounting to 2,759.09 crores as at March 31, 2021 ("Investments") which are carried at cost (net of provision) as per Ind AS 27 on ‘Separate Financial Statements. • Obtained understanding of design and implementation of relevant internal controls with respect to Investments including its impairment assessment;
We considered the valuation of such Investments to be significant to the audit, because of the materiality of the Investments to the standalone Ind AS financial statements of the Company. • Performed necessary audit procedures to test the operating effectiveness of the relevant internal controls with respect to valuation of Investments including impairment assessment thereof during the year ended as of March 31, 2021;
The management assesses at least annually the existence of impairment indicators of each Investments. The Management has assessed the impairment of its Investments by reviewing the business forecasts of subsidiaries, using discounted cash flow valuation model (the "Model"). The recoverable amounts of the Investments is determined based on the managements estimates of future cash flows and their judgment with respect to the investees performance including key assumptions related to discount and long-term growth rates. • Performed the following substantive procedures:
Accordingly, the impairment assessment of Investments was determined to be a key audit matter in our audit of the standalone Ind AS financial statements. Obtained managements evaluation of impairment analysis including future cash flows used by the management in the model to compute the recoverable value/ value in use.
Obtained the valuation report on Impairment testing of goodwill for consolidation covering the investments in standalone books.
Obtained the subsidiary auditors Impairment testing working file certifying the fair value of Investment at various subsidiaries.
Compared the impairment working certified by the independent valuer with the carrying value of Investments in standalone books of accounts to check whether any impairment is necessary.
Evaluated the appropriateness of the disclosure in the standalone Ind AS financial statements and assessed the completeness and mathematical accuracy.
Evaluation of uncertain tax positions Our audit procedures include the following substantive procedures:
(Refer Note 2.16 and Note 29 to the standalone Ind AS financial statements) The Company operates in multiple jurisdictions and is subject to periodic challenges by local tax authorities on a range of tax matters during the normal course of business including transfer pricing and indirect tax matters. This involve significant management judgment to determine the possible outcome of the uncertain tax positions, consequently having an impact on related accounting and disclosures in the standalone financial statements. Hence, this has been considered as a key audit matter. • Obtained detailed list of matters under dispute and other uncertain tax positions as at March 31, 2021;
• Read and evaluated select key correspondences, external legal opinions / consultations by the management;
• Discussed with appropriate senior management and evaluated managements underlying key assumptions in estimating the tax provisions; and
• Assessed the managements estimate of the possible outcome of the disputed cases.
Accounting and valuation of Hedging Instrument Our audit procedures included but not limited to:
(Refer Note 25(D) to the standalone Ind AS financial statements) The Company hedges its foreign currency risk and interest rate risk through derivative instruments and applies hedge accounting principles for derivative instruments as prescribed by Ind AS 109. Asset pertaining to derivative instruments as at March 31, 2021 is amounting to 53.21 crores and credit balance of Cash Flow Hedge Reserve of 27.12 crores as on that date. • Obtained understanding and evaluated the design and implementation of the processes and internal controls relating to accounting and valuation of hedge instruments;
These contracts are recorded at fair value and cash flow hedge accounting is applied, such that gains and losses arising from fair value changes are deferred in equity and recognized in the standalone statement of profit and loss when hedges mature and / or when the hedge item occurs. • Tested the Companys key internal financial controls for derivative financial instruments and hedge accounting;
The valuation of hedging instruments and consideration of hedge effectiveness has been identified as a key audit matter as it involves a significant degree of complexity and management judgment and are subject to an inherent risk of error. • Verified, on a sample basis, hedge documentation and contracts;
• Re-performed, on a sample basis, the year-end valuations of derivative financial instruments and calculations of hedge effectiveness; and
• Obtained confirmation of year-end derivative financial instruments from counterparties, on a sample basis.

OTHER INFORMATION

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Directors Report and its Annexures and Management Discussion and Analysis but does not include the standalone Ind AS financial statements, consolidated Ind AS financial statements and our auditors report thereon.

Our opinion on the standalone Ind AS 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 Ind AS 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 Ind AS 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.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE IND AS FINANCIAL STATEMENTS

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act 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), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including Ind AS prescribed under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 standalone Ind AS financial statements, management is responsible for assessing the Companys 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.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors 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 this standalone Ind AS financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone Ind AS 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 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 managements 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone Ind AS 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 auditors 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 Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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.

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 Ind AS financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditors 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 (Auditors Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of section 143(11) of the Act, we give in "Annexure 1", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(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 (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows 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 Ind AS prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

e. On the basis of the written representations received from the directors as on March 31, 2021, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021 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 "Annexure 2";

g. With respect to the other matter to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid/ provided by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act;

h. With respect to the other matters to be included in the Auditors 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 29 on Contingent Liabilities to the standalone Ind AS financial statements;

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Notes 12 and 25 to the standalone Ind AS financial statements;

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

ANNEXURE 1 TO THE INDEPENDENT AUDITORS REPORT

[Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section in the Independent Auditors Report of even date to the members of Dishman Carbogen Amcis Limited on the standalone Ind AS financial statements for the year ended March 31, 2021]

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

(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 the fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties other than self-constructed properties recorded as Property, Plant and Equipment in the books of account of the Company as on March 31, 2021 are held in the name of the erstwhile Dishman Pharmaceuticals and Chemicals Limited. Subsequent to merger, the transfer of immovable properties from Dishman Pharmaceuticals and Chemicals Limited into the name of the Company is under process. However in respect of one lease hold land with gross block of 104.70 Crores and net block of 97.83 Crores, the lease deed has been executed but not registered with the relevant authorities.

(ii) The inventory, except goods-in-transit and stocks lying with third parties, have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. For stocks lying with third parties at the year end, these have substantially been confirmed by them. No material discrepancies were noticed on physical verification carried out during the year.

(iii) The erstwhile Dishman Pharmaceuticals and Chemicals Limited, has granted unsecured loan in earlier years to one company covered in the register maintained under section 189 of the act whose outstanding balance as on March 31, 2021 is 38.72 crores. Further, the company has not granted during the year any loan, secured or unsecured, to companies, firms, Limited Liability

Partnerships or other parties covered in the register maintained under section 189 of the Act.

(a) The terms and conditions of the aforesaid loans granted by the Company are not prejudicial to the interest of the Company.

(b) The schedule of repayment of principal and payment of interest in respect of such loans has been stipulated. As per the terms of agreement, no repayment of principal or interest was due during the year.

(c) In respect of the aforesaid loans, there is no overdue amount as at year end.

(iv) The Company has complied with the provisions of sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) In our opinion, the Company has not accepted any deposits from the public within the provisions of sections 73 to 76 of the Act and the rules framed there under. Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) The maintenance of cost records has been specified by the Central Government under subsection (1) of section 148 of the Act and rules thereunder. We have broadly reviewed such records and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(vii)

(a) The Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees state insurance, income tax, goods and services tax (GST), customs duty, cess and any other material statutory dues applicable to it. During the year 2017-18, sales tax, value added tax, service tax and duty of excise subsumed in GST and are accordingly reported under GST.

No undisputed amounts payable in respect of provident fund, employees state insurance, income tax, GST, customs duty, cess and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) There are no dues with respect to income tax, sales tax, service tax, value added tax, GST, customs duty, excise duty which have not been deposited on account of any dispute, except as follows:

Nature of statue Nature of Dues Amount (in Period which the Forum where dispute is
Crores) Amount Relates pending
Central Excise Act, 1944 Excise Duty and 1.50 2006-07 Central Excise and Service
Service Tax 2009-10 Tax Appellate Tribunal
2013-14
2017-18
4.95 2006-07 Commissioner of Central
To Excise (Appeals)
2016-17
Central Sales Tax Act, Sales tax 0.24 2001-02 Joint Commissioner,
1956 Commercial Tax
1.18 2006-07 Commercial Tax Gujarat
VAT Tribunal
Gujarat Sales Tax, Act Sales tax 0.07 2001-02 Joint Commissioner,
Commercial Tax
2.84 2006-07 Commercial Tax Gujarat VAT
Tribunal
Income Tax Act, 1961 Demand U/S - 143(3) 1.84 FY 2001-02 High Court of Gujarat
Income Tax Act, 1961 Demand U/S - 143(3) 4.41 FY 2002-03 High Court of Gujarat
Income Tax Act, 1961 Demand U/S - 143(3) 1.51 FY 2003-04 High Court of Gujarat
Income Tax Act, 1961 Demand U/S - 143(3) 7.22 FY 2004-05 High Court of Gujarat
Income Tax Act, 1961 Demand U/S - 14.32 FY 2005-06 High Court of Gujarat
143(3).r.w.s.144
Income Tax Act, 1961 Demand U/S - 3.04 FY 2005-06 High Court of Gujarat
271(1) ( C )
Income Tax Act, 1961 Demand U/S - 14.28 FY 2006-07 High Court of Gujarat
143(3).r.w.s.144
Income Tax Act, 1961 Demand U/S - 4.73 FY 2006-07 High Court of Gujarat
271(1) ( C )
Income Tax Act, 1961 Demand U/S - 8.41 FY 2007-08 High Court of Gujarat
143(3).r.w.s.144
Income Tax Act, 1961 Demand U/S - 0.24 FY 2008-09 High Court of Gujarat
143(3).r.w.s.144
Income Tax Act, 1961 Demand U/S - 0.47 FY 2008-09 Income Tax Appellate
271(1) ( C ) Tribunal
Income Tax Act, 1961 Demand U/S - 1.52 FY 2009-10 Income Tax Appellate
143(3).r.w.s.147 Tribunal and Commissioner
of Income Tax (Appeals)
Income Tax Act, 1961 Demand U/S - 27.07 FY 2010-11 Commissioner of Income Tax
143(3).r.w.s.147 (Appeals)
Income Tax Act, 1961 Demand U/S - 41.86 FY 2011-12 Commissioner of Income Tax
143(3).r.w.s.147 (Appeals)
Income Tax Act, 1961 Demand U/S - 26.68 FY 2012-13 Commissioner of Income Tax
143(3).r.w.s.144 (Appeals)
Income Tax Act, 1961 Demand U/S - 13.89 FY 2013-14 Commissioner of Income Tax
143(3).r.w.s.144 (Appeals)
Income Tax Act, 1961 Demand U/S – 0.005 FY 2014-15 Commissioner of Income Tax
143(3) r.w.s 144C (Appeals)
Income Tax Act, 1961 Demand U/S – 20.71 FY 214-15 Commissioner of Income Tax
143(3) r.w.s. 144C (Appeals)

Out of above, amount paid under protest by the Company for income tax is 56.01 Crores.

(viii) During the year, the Company has not defaulted in repayment of loans or borrowings to financial institutions. The Company has not borrowed any money from government nor has it issued any debentures.

(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.

(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 fraud by the Company or any fraud on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such instance by the management.

(xi) Managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, the Company is not a Nidhi Company. Therefore, clause 3(xii) of the Order is not applicable to the Company.

(xiii) All transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of Act, where applicable, and the details have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Therefore, clause 3(xiv) of the Order is not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with directors or persons connected with them during the year and hence provisions of section 192 of the Act are not applicable.

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

ANNEXURE 2 TO THE INDEPENDENT AUDITORS REPORT

[Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory Requirements section in our Independent Auditors Report of even date to the members of Dishman Carbogen Amcis Limited on the standalone Ind AS financial statements for the year ended March 31, 2021]

REPORT ON THE INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS UNDER CLAUSE _I_ OF SUB SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 _"THE ACT"_

We have audited the internal financial controls with reference to financial statements of Dishman Carbogen Amcis Limited ("the Company") as of March 31, 2021 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control 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 (the "Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). 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 Companys 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 Act.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the Companys 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 specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. 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 if 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 internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the 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 Companys internal financial controls with reference to financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

A companys 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 companys 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 companys 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 controls 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.

OPINION

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2021, based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal controls stated in the Guidance Note issued by the ICAI.