Kabra Drugs Ltd Auditor Reports

To The Members of KABRA DRUGS LIMITED

Report on the Standalone Indian Accounting Standards (IND AS) Financial Statements

Opinion

We have audited the accompanying standalone financial statements of KABRA DRUGS LIMITED ("the Company"), which comprise the Standalone Balance Sheet as at March 31, 2026, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Cash Flow Statement and the Statement of Changes in Equity for the year ended on that date, and notes to the financial statements, including a summary of material 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 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act, ("IND AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2026 and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing ("SAs") specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibility 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 ("ICAI") 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 made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit 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.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors Responsibility for the Audit of the Standalone Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key Audit Matter	How our audit addressed the Key Audit Matter
Revenue Recognition on Commencement of Manufacturing with Trading Operations (Refer Note 2 - Material Accounting Policies; Note 21 - Revenue from Operations; and Note 23 - Purchase of Stock-in-Trade to the Standalone Financial Statements)	Our audit procedures in relation to revenue recognition included, among others:
The Company recognised revenue from operations of ? 9,274.00 lakhs for the year ended March 31, 2026, against nil revenue in the preceding year. The whole of that revenue arises from the sale of products, and the corresponding purchase of stock- in-trade amounts to ? 8,366.40 lakhs, yielding a gross margin of approximately 9.8%.	• Obtained an understanding of the Companys Manufacturing with trading activity, the arrangements under which goods are procured and sold, and the commercial rationale for the model adopted, and assessed whether the revenue recognition policy stated in the financial statements reflects that activity and complies with Ind AS 115;
The Company commenced manufacturing with trading operations during the year after a period in which it had no revenue. Revenue is recognised in accordance with Ind AS 115 - Revenue from Contracts with Customers, which requires the identification of the contract and the performance obligations, the determination and allocation of the transaction price, and the recognition of revenue when control of the goods passes to the customer. The standard also requires management to determine whether the Company acts as principal or as agent in each arrangement, a judgement of particular significance in a manufacturing with trading model conducted at a narrow margin and without any inventory being held at either the beginning or the end of the year.	• Evaluated the design and implementation, and tested the operating effectiveness, of the controls established over the new activity, including controls over the approval of counterparties, the authorisation of purchase and sale transactions, and the recording of despatches;
Revenue is recorded as a single amount without disaggregation by category of goods, customer or timing of transfer, and no inventory was carried at the balance sheet date notwithstanding purchases of ? 8,366.40 lakhs during the year, which indicates that goods were despatched directly to customers.	• Assessed managements determination that the Company acts as principal rather than as agent, by examining the contractual terms governing the transfer of control, the exposure to inventory risk, the discretion in establishing prices, and the responsibility for fulfilment, and evaluated the conclusion against the indicators in Ind AS 115;
Because revenue is the largest item in the financial statements, arises entirely in a year in which operations commenced, is unsupported by any comparative, and depends on judgements as to the passing of control and as to the principal or agent determination, revenue recognition has been determined to be a key audit matter.	• Tested, on a sample basis selected using statistical sampling, revenue transactions recorded during the year by agreeing them to customer purchase orders, sales invoices, despatch documentation, e-way bills, proof of delivery and subsequent receipt of consideration;
	• Traced a sample of sale transactions to the corresponding purchase transactions, examined the matching of quantities and the movement of goods directly to the customer, and evaluated whether the arrangements exhibit the characteristics of principal transactions;
	• Performed cut-off testing on transactions recorded immediately before and after March 31, 2026 by reference to despatch and delivery documentation, in order to assess whether revenue was recorded in the correct accounting period;
	• Examined credit notes, returns and rate revisions recorded after the balance sheet date to identify revenue that may have been recognised prematurely;
	• Enquired into the absence of any closing inventory notwithstanding purchases of 8,366.40 lakhs, corroborated the direct despatch arrangements against transport documentation, and evaluated whether the accounting reflects the substance of the transactions;
	• Obtained the composition of revenue by customer, evaluated the degree of concentration and the credit standing of the principal counterparties, and enquired into whether any counterparty is a related party requiring identification under Ind AS 24;
	• Tested journal entries posted to revenue during the year by applying risk-based criteria to identify manual, unusual or irregular items, with particular attention to entries recorded near the year end; and
	• Assessed the adequacy of the disclosures relating to revenue, including the disaggregation required by Ind AS 115 and the disclosure of the judgements made in applying the standard.

 

Key Audit Matter	How our audit addressed the Key Audit Matter
Recoverability of Trade Receivables and Measurement of Expected Credit Losses (Refer Note 2 - Material Accounting Policies; Note 8 - Trade Receivables	Our audit procedures in relation to trade receivables and expected credit losses included, among others:
Trade receivables increased from m 60.05 lakhs as at March 31, 2025 to m 7,077.60 lakhs as at March 31, 2026, and now represent approximately 82% of the total assets of the Company. Of that balance, m 6,911.73 lakhs is stated to be outstanding for less than six months and m 105.82 lakhs for between six months and one year.	• Evaluated the design and implementation, and tested the operating effectiveness, of the Companys controls over the approval of credit limits, the monitoring of outstanding balances, the follow-up of overdue amounts and the determination of the loss allowance;
The provision for doubtful debts carried in the financial statements is m 11.51 lakhs, being the same amount as was carried in the preceding year and relating to a credit-impaired balance of that earlier period. No loss allowance has been recognised in respect of the 7,017.55 lakhs of receivables that arose during the year.	• Obtained the trade receivables ageing schedule as at March 31, 2026, tested its arithmetical accuracy, assessed whether the ageing has been measured from the due date of payment as required by Schedule III to the Act, and reconciled it to the general ledger and to the amount presented in Note 8;
Ind AS 109 - Financial Instruments requires a loss allowance to be recognised for trade receivables at an amount equal to lifetime expected credit losses, applying the simplified approach. That measurement requires management to develop an expectation of credit losses having regard to the credit characteristics of the counterparties, the ageing of the balances, historical loss experience and forward-looking information, and an allowance is required even where no balance is past due.	• Tested, on a sample basis, the ageing classification of individual balances by agreeing invoice dates and agreed credit terms to the underlying invoices and customer arrangements;
The Company has no meaningful loss history against which to calibrate such an estimate, the receivables arose from counterparties with whom activities commenced during the year, and the entire balance has been assessed as recoverable in full.	• Circularised independent balance confirmations to the principal counterparties, covering the substantial majority of the balance by value, and performed alternative procedures, including verification of subsequent receipts and examination of despatch and acceptance documentation, where confirmations were not received;
Because the balance is the dominant asset in the financial statements, arose in a single year, and its measurement depends on an expected credit loss estimate for which no historical basis exists, the recoverability of trade receivables and the measurement of expected credit losses has been determined to be a key audit matter.	• Examined receipts recorded after the balance sheet date up to the date of our report and traced them to the corresponding invoices, in order to assess the extent to which the year-end balance has been realised;
	• Evaluated the concentration of the receivable balance among counterparties, obtained such financial and credit information as was available in respect of the principal counterparties, and assessed their capacity to settle the amounts outstanding;
	• Challenged managements assessment that no loss allowance is required in respect of the receivables arising during the year, having regard to the requirement in Ind AS 109 that lifetime expected credit losses be recognised on trade receivables irrespective of whether any amount is past due, and evaluated whether the absence of an allowance is supported by evidence rather than by the absence of a loss history;
	• Assessed the reasonableness of the inputs that would be applied in a provision matrix, including the ageing bands, the assumed loss rates and the forward-looking adjustment, and evaluated the sensitivity of the reported profit to a change in those inputs;
	• Examined the continued carrying of the ? 11.51 lakhs allowance recognised in the earlier period and enquired into whether the underlying balance remains appropriately provided or should be written off; and
	• Assessed the adequacy of the disclosures relating to trade receivables and credit risk, including the ageing schedule required by Schedule III and the credit risk disclosures required by Ind AS 107.

 

Key Audit Matter	How our audit addressed the Key Audit Matter
Trade Payables and the Working Capital Position arising from the Manufacturing with Trading Activity (Refer Note 18 - Trade Payables; Note 34 - Disclosure relating to Suppliers registered under the MSMED Act, 2006;	Our audit procedures in relation to trade payables and the working capital position included, among others:
Trade payables increased from nil as at March 31, 2025 to ? 5,487.98 lakhs as at March 31, 2026, the whole of which is stated to be outstanding for less than one year and none of which is stated to be due to micro or small enterprises. Trade payables now constitute approximately 97% of the total liabilities of the Company.	• Obtained an understanding of, and tested the operating effectiveness of, the controls over the recording of purchases, the matching of supplier invoices to goods received documentation and the recording of liabilities;
The payables arose from the purchases of stock-in-trade made during the year in connection with manufacturing with trading activity commenced. The note states that no specific due dates of payment are specified in respect of the amounts outstanding and that the balances are non-interest bearing.	• Obtained the trade payables ageing schedule as at March 31, 2026, tested its arithmetical accuracy and reconciled it to the general ledger and to the amount presented in Note 18;
The completeness of trade payables and of the corresponding purchases is a matter requiring audit attention in the first year of a new activity, since unrecorded liabilities would understate both the payable balance and the cost of goods sold. The determination of whether any supplier is registered under the Micro, Small and Medium Enterprises Development Act, 2006 additionally affects the disclosure required by that Act and by Schedule III, and bears upon the allowability of the expenditure under section 43B(h) of the Income-tax Act, 1961.	• Circularised independent balance confirmations to the principal suppliers, covering the substantial majority of the balance by value, and reconciled the confirmed balances to the Companys records, investigating the reconciling items identified;
The absence of stated due dates also affects the presentation of the liquidity maturity analysis and the assessment of the Companys ability to meet its obligations as they fall due.	• Performed a search for unrecorded liabilities by examining payments made after the balance sheet date, supplier invoices received after the year end and goods received documentation around the year end, and tested whether the corresponding liabilities were recorded in the correct period;
Having regard to the magnitude of the balance, its emergence within a single year and the matters described above, trade payables and the associated working capital position has been determined to be a key audit matter.	• Tested a sample of purchase transactions by agreeing them to purchase orders, supplier invoices, transport documentation and evidence of payment, and assessed whether the purchases correspond to the sales recorded;
	• Tested the basis on which management determined that no supplier is registered under the MSMED Act, 2006, by examining the declarations and registration particulars obtained from suppliers and the procedures applied to identify registered enterprises, and evaluated whether the enquiries made were sufficient;
	• Enquired into the statement that no due dates of payment are specified, examined the arrangements with the principal suppliers, and evaluated the effect on the maturity analysis presented in the liquidity risk disclosure;
	• Assessed the Companys ability to settle the payables as they fall due by reference to the receivable balances, the cash and cash equivalents of ? 1,058.23 lakhs held at the year end, and the correspondence between the settlement of receivables and the settlement of payables after the year end; and
	• Assessed the adequacy of the disclosures relating to trade payables, including the ageing schedule required by Schedule III and the MSMED disclosure required by Note 34.

 

Key Audit Matter	How our audit addressed the Key Audit Matter
Commencement of Operations and the Continued Appropriateness of the Going Concern Basis (Refer Note 1 - Corporate Information; Note 2 - Material Accounting Policies	Our audit procedures in relation to the commencement of operations and the going concern basis included, among others:
The Company reported a profit before tax of m 572.07 lakhs for the year ended March 31, 2026, against a loss before tax of m 108.51 lakhs in the preceding year and a loss in the year before that. The turnaround arises entirely from manufacturing with trading activity commenced during the year.	• Obtained managements assessment of the Companys ability to continue as a going concern for a period of at least twelve months from the balance sheet date, and evaluated whether the assessment covered the period required and took account of all relevant information of which we were aware;
The transformation in the scale and nature of the Companys operations is material to an understanding of the financial statements. Total assets rose from m 2,522.90 lakhs to m 8,631.56 lakhs, cash and cash equivalents reduced from m 2,129.93 lakhs to m 1,058.23 lakhs, and cash flows from operating activities were negative at m 946.09 lakhs notwithstanding the profit reported, the difference being explained principally by the increase in trade receivables of 7,017.55 lakhs offset by the increase in trade payables of m 5,487.98 lakhs.	• Evaluated the cash flow forecast supporting the assessment, tested the arithmetical accuracy of the underlying calculations, and assessed the reasonableness of the principal assumptions, including those relating to the realisation of trade receivables, the settlement of trade payables, the margin expected to be earned and the continuation of the Manufacturing with trading activity;
The generation of an accounting profit accompanied by a negative operating cash flow, in the first year of a new activity conducted at a narrow margin, requires evaluation of whether the going concern basis of accounting remains appropriate and of whether any material uncertainty exists that requires disclosure.	• Compared the forecast for the period since the balance sheet date with the results actually achieved, and enquired into significant variances;
The comparatives presented are those of an entity with no revenue, so they afford the reader little assistance in evaluating the current year, and the absence of any comparative for the principal items increases the importance of the current year disclosures.	• Performed sensitivity analyses on the forecast to determine the extent to which the assumptions would have to deteriorate before a liquidity shortfall arose, having particular regard to a delay in the realisation of trade receivables;
Having regard to the scale of the change, the negative operating cash flow and the consequent bearing on the going concern assessment, this matter has been determined to be a key audit matter.	• Analysed the reconciliation between the profit before tax of m 572.07 lakhs and the negative operating cash flow of 946.09 lakhs, and corroborated the working capital movements against the underlying balances;
	• Verified the cash and cash equivalents and the fixed deposits held at the balance sheet date by reference to bank confirmations, and established whether any balance is subject to a lien or restriction;
	• Enquired into the availability of undrawn borrowing facilities and other sources of finance, and examined the terms of the unsecured loan from a director outstanding at the year end;
	• Read the minutes of the meetings of the Board of Directors and of the audit committee for indications of matters bearing on the going concern assessment, and obtained written representations from management as to their plans for future action; and
	• Evaluated the adequacy of the disclosures made in respect of the commencement of operations, the change in the nature and scale of the business, and the basis on which the going concern assumption has been adopted.

Other Information

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

Responsibilities of Management and Those Charged with Governance for the Standalone 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 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 IND AS specified 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors 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 the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditors Responsibility 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 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 these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism 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 financial controls 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 the 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 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 financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

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 financial controls 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.

1. As required by Section 143(3) of the Act, based on our audit, 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 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 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 March 31, 2026 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2026 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 standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls with reference to standalone financial statements.

g) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended, 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, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has pending litigations on its financial position in its standalone financial statements - Refer note no: 32 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.

1i. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Group.

iv. (a) The Management has represented that, to the best of its knowledge and belief, 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 / entities, including foreign entities (Intermediaries), 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 ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) The Management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, as on the date of this audit report, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures performed that have been 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 (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The Company has neither declared nor paid any dividend during the year. Hence reporting under Rule 11(f) of the Companies (Audit and Auditors) Rules, 2014, as amended, is not applicable

vi. Based on our examination, which included test checks, the Company has used accounting softwares for maintaining its books of account for the financial year ended March 31, 2026 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the softwares. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2026.

2. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

For P P N AND COMPANYChartered AccountantsICAI Firm Registration Number: 013623SPeer Review Certificate No.020690

Sd/- D. Hitesh Partner MRN: 231991 UDIN: 26231991NYDMJY6818 Date: 29- 05- 2026 Place: Chennai

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

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that,

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

B. The Company has maintained proper records showing full particulars of intangible assets.

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

(c) With respect to immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the standalone financial statements included in property, plant and equipment, according to the information and explanations given to us and based on the examination of the registered sale deed / title deed provided to us, we report that, the title deeds of such immovable properties are held in the name of the Company as at the balance sheet date.

(d) The Company has not revalued any of its property, plant and equipment and intangible assets during the year.

(e) No proceedings have been initiated during the year or are pending against the Company as at March 31, 2026 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

(ii) (a) The inventories were physically verified by the Management at reasonable intervals. In our opinion and according to the information and explanations given to us, the coverage and procedure of such verification by the Management is appropriate having regard to the size of the Company and the nature of its operation. No discrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physical verification of inventories when compared with books of account. The company does not have any inventories at the end of the year.

(b) According to the information and explanations given to us, the Company has not been sanctioned working capital limits in excess of ?5 crores, in aggregate, at points of time during the year, from banks or financial institutions on the basis of security of current assets.

1 In respect of investments in, or provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured to any company, firm, LLP, or other parties, the company has not made investments in, or provided any guarantee or security or granted any loans or advances in the nature of loans secured or unsecured to any company, firm, LLP, or other parties during the period, and hence reporting under clause 3(iii)(a) to (f) of the Order is not applicable.

(iv) In our opinion and according to the information obtained and explanations given to us, the Company has complied with the provisions of Section 185 and Section 186 of the Act, with respect to the loans granted, investments made, guarantees and securities provided, as applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit and does not have any unclaimed deposits within the meaning of Section 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Hence, the provisions of the clause 3 (v) of the Order are not applicable.

(vi) The Central Government has not specified maintenance of cost records under subsection (1) of section 148 of the Act, in respect of Companys products/business activity. Accordingly, reporting under clause 3(vi) of the Order is not applicable.

(vii) (a) In respect of statutory dues: Undisputed statutory dues, including Goods and Services Tax, Provident Fund, Employees State Insurance, Income-tax, duty of Custom, CESS, and other material statutory dues applicable to the Company have generally been regularly deposited by it with the appropriate authorities.

There were no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Goods and Service Tax, Cess and other material statutory dues in arrears as at March 31, 2026 for a period of more than six months from the date they became payable.

According to the information and explanations given to us, following disputed amounts.

S.no Name of the statue	Nature of dues	Amount in Lakhs	Forum where dispute is pending
1 The Central Excise Act	Excise Duty	47.5	High Court MP

(viii) According to the information and explanations given to us, no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961) which have not been recorded in the books of accounts. Accordingly, paragraph 3 (viii) of the Order is not applicable.

(ix) (a) According to the information and explanations given to us, the Company has not defaulted in repayment of its loans or borrowings or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us including representation received from the management of the Company, and on the basis of our audit procedures, we report that the Company has not been declared a wilful defaulter by any bank or financial institution or other lender.

(c) In our opinion and according to the information and explanations given to us, money has not been raised by way of term loans. and hence reporting under clause 3(ix)(c) of the Order is not applicable.

(d) In our opinion and according to the information and explanations given to us, and on an overall examination of the financial statements of the Company, funds raised by the Company on short term basis have not been utilized for long term purposes.

(e) The Company has not taken funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

(f) The Company has not raised loans during the year on the pledge of securities held in its subsidiaries and hence reporting under clause 3(ix)(f) of the Order is not applicable.

(x) a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments), during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable to the Company.

b) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year. Accordingly, reporting under clause 3(x)(b) of the Order is not applicable to the Company.

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

(b) No report under section 143(12) of the Act has been filed with the Central Government for the period covered by our audit.

(c) According to the information and explanations given to us including the representation made to us by the management of the Company, there are no whistleblower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us, all transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act where applicable. Further, the details of such related party transactions have been disclosed in the financial statements, as required under Indian Accounting Standard (IND AS) 24, Related Party Disclosures specified 133 of the Act.

(xiv) (a) In our opinion and according to the information and explanations given to us, the Company has an inhouse internal audit system as required under section 138 of the Act which is commensurate with the size and nature of its business.

(b) We have considered, the internal audit reports issued to the Company during the year and covering the period up to March 31, 2026 for the period under audit.

(xv) According to the information and explanation given to us, the Company has not entered into any non- cash transactions with its directors or persons connected with them and accordingly, provisions of section 192 of the Act are not applicable to the Company.

(xvi) Company is not required to be registered under section 45- IA of the Reserve Bank of India Act 1934. Accordingly, paragraph 3(xvi) (a), & (b) of the Order is not applicable and Company is not a Core Investment Company and there is no core investment company within the group. Accordingly, paragraph 3(xvi) (c) & (d) of the Order is not applicable.

(xvii) The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xviii) There has been no resignation of the Statutory Auditors of the Company during the year.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the plans of the Board of Directors and management, we are of the opinion that no material uncertainty exists as on the date of the audit report that Company is capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the company.

We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the company as and when they fall due.

(xx) According to the information and explanations given to us, company is not liable to adhere Corporate social responsibility therefore compliance under section 135 of the Companies Act, 2013 is not applicable for the FY 25- 26.

(xxi) The company doesnt have subsidiaries or associate entities to prepare Consolidated Financial Statement. Accordingly, reporting under Paragraph 3(xxi) of the order is not applicable for the period.

For P P N AND COMPANY Chartered AccountantsICAI Firm Registration Number: 013623SPeer Review Certificate No.020690

Sd/- D. Hitesh Partner MRN: 231991 UDIN: 26231991NYDMJY6818 Date: 29- 05- 2026 Place: Chennai

Annexure "B" to the Independent Auditors Report (Referred to in paragraph 1(f) under Report on Other Legal and Regulatory Requirements section of our report of even date) Report on the Internal Financial Controls with reference to standalone 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 standalone financial statements of KABRA DRUGS LIMITED ("the Company") as at March 31, 2026 in conjunction with our audit of the standalone 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 with reference to standalone financial statements based on the internal control with reference to standalone 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. 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, 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.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls with reference to standalone 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 standalone 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 standalone financial statements and their operating effectiveness.

Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, 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 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 standalone financial statements.

Meaning of Internal Financial Controls with reference to standalone financial statements

A companys internal financial control with reference to standalone 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 standalone 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 standalone financial statements

Because of the inherent limitations of internal financial controls with reference to standalone 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 standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone 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, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial control with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2026, based on the criteria for internal financial control with reference to standalone financial statements 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.

For P P N AND COMPANYChartered AccountantsICAI Firm Registration Number: 013623SPeer Review Certificate No.020690

Sd/- D. Hitesh Partner MRN: 231991 UDIN: 26231991NYDMJY6818 Date: 29- 05- 2026 Place: Chennai