We have audited the accompanying standalone financialstatements of Neuland Laboratories Limited ("theCompany”), which comprise the Balance Sheet as at March31,2026, the Statement of Profit and Loss including OtherComprehensive Income, the Statement of Changes inEquity and the Statement of Cash Flows for the year thenended and notes to the standalone financial statements,including material accounting policy information and otherexplanatory information (hereinafter referred to as the"standalone financial statements”).
In our opinion and to the best of our information and accordingto the explanations given to us, the aforesaid standalonefinancial statements give the information required by theCompanies Act, 2013 ("the Act”) in the manner so requiredand give a true and fair view in conformity with the IndianAccounting Standards prescribed under section 133 of theAct, read with Companies (Indian Accounting Standards)Rules, 2015, as amended ("Ind AS”) and other accountingprinciples generally accepted in India, of the state of affairsof the Company as at March 31, 2026, and it's profitincluding (other comprehensive income), changes in equityand its cash flows for the year ended on that date.
BASIS FOR OPINION
We conducted our audit of the standalone financialstatements in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Ourresponsibilities under those SAs are further described inthe 'Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We areindependent of the Company in accordance with the Codeof Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevantto our audit of the standalone financial statements underthe provisions of the Act and the Rules thereunder, and wehave fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
KEY AUDIT MATTER
Key audit matter is the matter that, in our professionaljudgment, was of most significance in our audit of thestandalone financial statements of the current period.This matter was addressed in the context of our audit
of the standalone financial statements as a whole, andin forming our opinion thereon, and we do not provide aseparate opinion on this matter. We have determined thematter described below to be the key audit matter to becommunicated in our report.
Impairment of Goodwill (Refer Note 37 of standalonefinancial statements):
The goodwill balance as of March 31,2026, of ' 27,946.10lakhs pertains to merger of Neuland Health Sciences PrivateLimited ("NHSPL") and Neuland Pharma Research PrivateLimited ("NPRPL") with the Company with appointed dateof April 01, 2016.
As at March 31, 2026, Goodwill represents 9.54% of theCompany's total assets and 14.98% of the Company's totalshareholder's equity. The Company has tested goodwillfor impairment on an annual basis as required by "IND AS36 - Impairment of Asset". In determining the fair value /value in use of business reporting units, the Company hasapplied judgment in estimating future revenues, operatingprofit margins, long-term growth rate and discount rates.
Due to significance of the above matter and involvementof the significant management judgement in estimation offair value / value in use, the assessment of recoverability ofcarrying value of goodwill is considered as key audit matter.
HOW THE KEY AUDIT MATTER WAS ADDRESSEDIN OUR AUDIT:
Our audit procedures in respect of this area included, butare not limited to, following:
1. Obtained an understanding from the managementof the Company with respect to process followedand assessed the design, implementation and testedthe operating effectiveness of internal controls overimpairment testing related to goodwill;
2. Assessed the Company's internal control overspreparation of annual budgets and future forecasts forthe business as a whole and the approach followed forannual impairment test and key assumptions applied;
3. Evaluated the reasonableness of the assumptions usedand appropriateness of the valuation methodologyapplied and tested the discount rate and terminal growthrates used in the forecast including comparison toeconomic data, industry report, data from competitorsand historic performances wherever appropriate tocompare and corroborate;
4. Assessed reasonableness and appropriateness of thefuture revenue and margin projections, the historicalaccuracy of the Company's estimates and its ability toproduce accurate long-term forecasts;
5. Compared the reasonableness of future operating cashflow forecasts with the business plan and budgetsapproved by the Board; and tested the mathematicalaccuracy of management's calculations;
6. Assessed the adequacy and appropriateness ofthe disclosures made in the Standalone FinancialStatements in compliance with the requirements ofapplicable Indian Accounting Standards and applicablefinancial reporting framework.
INFORMATION OTHER THAN THE STANDALONEFINANCIAL STATEMENTS AND AUDITOR'S REPORTTHEREON
The Company's Board of Directors is responsible for theother information. The other information comprises theinformation included in the Chairman's statement andDirector's report but does not include the standalonefinancial statements and our auditor's report thereon,and the Management Discussion and analysis, BusinessResponsibility and Sustainability Report etc. which isexpected to be made available to us after that date.
Our opinion on the standalone financial statements doesnot cover the other information and we do not and will notexpress any form of assurance conclusion thereon.
In connection with our audit of the standalone financialstatements, our responsibility is to read the other informationidentified above and, in doing so, consider whether the otherinformation is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit,or otherwise appears to be materially misstated.
If, based on the work we have performed on the otherinformation that we obtained prior to the date of this auditor'sreport, we conclude that there is a material misstatement ofthis other information, we are required to report that fact.We have nothing to report in this regard.
When we read the Management Discussion and analysis,Business Responsibility and Sustainability Report etc., if weconclude that there is a material misstatement therein, weare required to communicate the matter to those chargedwith governance.
RESPONSIBILITIES OF MANAGEMENT AND BOARDOF DIRECTORS FOR THE STANDALONE FINANCIALSTATEMENTS
The Company's Management and Board of Directors areresponsible for the matters stated in section 134(5) of theAct, with respect to the preparation of these standalonefinancial statements that give a true and fair view of thefinancial position, financial performance, changes in equityand cash flows of the Company in accordance with theaccounting principles generally accepted in India, includingthe Ind AS. This responsibility also includes maintenanceof adequate accounting records in accordance with theprovisions of the Act, for safeguarding of the assets ofthe Company and for preventing and detecting frauds andother irregularities; selection and application of appropriateaccounting policies; making judgments and estimates thatare reasonable and prudent; and design, implementationand maintenance of adequate internal financial controls,that were operating effectively for ensuring the accuracyand completeness of the accounting records, relevant tothe preparation and presentation of the standalone financialstatement that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Boardof Directors of the Company are responsible for assessingthe Company's ability to continue as a going concern,disclosing, as applicable, matters related to going concernand using the going concern basis of accounting unless theBoard of Directors either intends to liquidate the Companyor to cease operations, or has no realistic alternative butto do so.
The Board of Directors is also responsible for overseeingthe Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OFTHE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance aboutwhether the standalone financial statements as a wholeare free from material misstatement, whether due to fraudor error, and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, theycould reasonably be expected to influence the economicdecisions of users taken on the basis of these standalonefinancial statements.
We give in "Annexure A” a detailed description ofAuditor's responsibilities for Audit of the StandaloneFinancial Statements.
explanations provided to us by theManagement in this regard nothing hascome to our notice that has causedus to believe that the representationsunder sub-clause (i) and (ii) of Rule 11(e)contain any material mis-statement.
v. The final dividend paid by the Company duringthe year in respect of the same declaredfor the previous year is in accordance withsection 123 of the Act, to the extent it appliesto payment of dividend.
The Board of Directors of the Company haveproposed final dividend for the year which issubject to the approval of the members at theensuing Annual General Meeting. The dividenddeclared is in accordance with section 123 ofthe Act, to the extent it applies to declarationof dividend. (Refer Statement of Changes inEquity in the Standalone financial statements)
vi. Based on our examination, which includedtest checks, the Company has used anaccounting software for maintaining itsbooks of account which has a feature ofrecording audit trail (edit log) facility and
REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS
1. As required by the Companies (Auditor's Report) Order,2020 ("the Order”), issued by the Central Governmentof India in terms of sub-section (11) of section 143 ofthe Act, we give in "Annexure B” a statement on thematters 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 informationand explanations which to the best of ourknowledge and belief were necessary for thepurposes of our audit of the aforesaid standalonefinancial statements.
(b) In our opinion, proper books of account as requiredby law relating to preparation of the aforesaidstandalone financial statements have been keptby the Company so far as it appears from ourexamination of those books.
(c) The Balance Sheet, the Statement of Profit andLoss (including Other Comprehensive Income), theStatement of Changes in Equity and the Statementof Cash Flows dealt with by this Report are inagreement with the books of account maintainedfor the purpose of preparation of the standalonefinancial statements.
(d) In our opinion, the aforesaid standalone financialstatements comply with the Ind AS.
(e) On the basis of the written representationsreceived from the directors as on March 31,2026,taken on record by the Board of Directors, noneof the directors are disqualified as on March 31,2026, from being appointed as a director in termsof Section 164 (2) of the Act.
(f) With respect to the adequacy of the internalfinancial controls with reference to standalonefinancial statements of the Company and theoperating effectiveness of such controls, refer toour separate Report in "Annexure C”.
(g) With respect to the other matters to be included inthe Auditor's Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014,in our opinion and to the best of our informationand according to the explanations given to us:
i. The Company has disclosed the impact ofpending litigations on its financial position in itsstandalone financial statements - Refer Note40 to the standalone financial statements.
ii. The Company did not have any long-termcontracts including derivative contractsfor which there were any materialforeseeable losses.
iii. There are no amounts which were required tobe transferred to the Investor Education andProtection Fund by the Company during theyear ended March 31,2026.
iv. (1) The Management has represented that,
to the best of its knowledge and belief,no funds have been advanced or loanedor invested (either from borrowed fundsor share premium or any other sources orkind of funds) by the Company to or in anyother person(s) or entity(ies), includingforeign entities ("Intermediaries”), withthe understanding, whether recordedin writing or otherwise, that theIntermediary shall, directly or indirectlylend or invest in other persons or entitiesidentified in any manner whatsoever byor on behalf of the Company ("UltimateBeneficiaries”) or provide any guarantee,security or the like on behalf of theUltimate Beneficiaries.
(2) The Management has represented,that, to the best of its knowledge andbelief, no funds have been receivedby the Company from any person(s)or entity(ies), including foreignentities (Funding Parties), with theunderstanding, whether recorded inwriting or otherwise, that the Companyshall, directly or indirectly, lend or investin other persons or entities identifiedin any manner whatsoever by or onbehalf of the Funding Party ("UltimateBeneficiaries”) or provide any guarantee,security or the like on behalf of theUltimate Beneficiaries.
(3) Based on the audit procedures performedthat have been considered reasonableand appropriate in the circumstances,and according to the information and
the same has operated throughout the yearfor all relevant transactions recorded in thesoftware. Further, during the course of ouraudit, we did not come across any instanceof audit trail feature being tampered with.Additionally, the audit trail of prior years hasbeen preserved by the Company as per thestatutory requirements for record retention tothe extent it was enabled and recorded.
3. In our opinion, according to information, explanationsgiven to us, the remuneration paid or provided bythe Company to its directors is within the limits laidprescribed under Section 197 of the Act.
For M S K A & Associates LLP
(Formerly known as M S K A & Associates)
Chartered Accountants
ICAI Firm Registration No. 105047W/W101187
Prakash Chandra Bhutada
Partner
Membership No. 404621
UDIN: 26404621DQCKHM2767
Place: Hyderabad, India
Date: May 12, 2026