Sr.
No.
Key Audit Matter
Auditor's Response
1
Revenue recognition — Refer to note 2.2(c) and 20of the Standalone Financial Statements:
The Company recognises revenue from sale ofpharmaceutical products based on the shippingterms which varies with different customers whichdefines the timing of the transfer of control tothe customer.
For revenue recognized during the period near to theBalance Sheet date, it is essential to ensure that thecontrol of goods have transferred to the customers.
Dispatch of goods to the customer's locationhappens from multiple locations including factories,warehouses, and third-party locations.
Principal audit procedures performed:
• Evaluated the Company's revenue recognition policyand assessed compliance with the Indian AccountingStandard (Ind AS).
• Obtained an understanding of the revenue recognitionprocess and evaluated the design and tested theimplementation and operating effectiveness of theCompany's Internal controls around the timely andaccurate recording of sales transactions includingcontrols around the identification and reversal ofcut-off sales.
• The Company recognises the revenue upon thetransfer of control of goods to the customer in theERP system. Accordingly, we have tested the Generalinformation technology controls around the systemincluding access and change management controlsof such ERP system.
We consider Cut-off of Revenue recognition
•
Basis of the sales recorded during the year,
from sale of pharmaceutical products as a key
performed a lead time analysis to arrive at the
audit matter due to the varied shipping terms,
average lead time taken for transfer of control to
which define the timing of transfer of control and
the customers from the date of dispatch, against the
satisfaction of performance obligation.
various shipping terms.
We selected samples from invoices recorded duringsuch lead sales time immediately before the balancesheet date and obtained evidence of delivery tosupport the revenue recognition/reversal of revenueas applicable
2
Assessment of impairment of investments in
and unsecured loans given to subsidiaries —Refer to note 2.1(d)(v), 4 and 5 of the StandaloneFinancial Statements.
Evaluated the design, tested the implementationand operating effectiveness of the internal controlsover impairment assessment process, including
The carrying value of investments in and unsecured
those over the forecasts and the selection of the
loans given to certain subsidiaries is ' 37,213 million.
appropriate discount rate.
The Company performs annual assessment to
Evaluated the impairment indicator assessment
identify any indicators of impairment. Based
performed by the Company considering quantitative
on internal and external factors considered,
and qualitative factors.
where such evidence exists, impairment loss isdetermined and recognised in accordance with note2.1(d)(v) of accounting policies to the StandaloneFinancial Statements.
Evaluated and challenged management'sassumptions such as growth rates forming basisof forecasted financials, terminal growth rate, anddiscount rate for their appropriateness based on
The Company's evaluation of impairment of
our understanding of the business of the respective
its investments involves comparison of their
investments including past results and external
recoverable value to their corresponding carrying
factors such as industry trends and forecasts.
values. The Company used the discounted cashflow model to estimate recoverable values, whichrequires management to make estimates andassumptions related to forecasts of future Revenues,operating margins, and discount rates. Changes inthese assumptions could have a significant impact
Performed sensitivity analysis around these keyestimates to ascertain the extent of change in thoseassumptions that either individually or collectivelywould be required for the investments and loanstested were to be impaired.
on either the recoverable value, the amount of any
Tested the mathematical accuracy of the model to
impairment charge, or both.
conclude that the model is accurately calculating the
We have considered this as a Key Audit Matter due
value in use.
to the materiality of the investment, and because the
Evaluated the adequacy of disclosures made in the
Company's assessment of the recoverable valuesinvolves judgements around the future resultsof the business and the discount rates applied tofuture cash flow forecasts.
Standalone Financial Statements.
We have audited the accompanying StandaloneFinancial Statements of Aurobindo Pharma Limited (the"Company"), which comprise the Balance Sheet as atMarch 31, 2025, and the Statement of Profit and Loss(including Other Comprehensive Income), the Statementof Cash Flows and the Statement of Changes in Equityfor the year ended on that date, and notes to the financialstatements, including a summary of material accountingpolicies and other explanatory information.
In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidStandalone Financial Statements give the informationrequired by the Companies Act, 2013 (the "Act") inthe manner so required and give a true and fair viewin conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act, ("Ind AS") andother accounting principles generally accepted in India, ofthe state of affairs of the Company as at March 31, 2025,and its profit, total comprehensive income, its cash flowsand the changes in equity for the year ended on that date.
We conducted our audit of the Standalone FinancialStatements in accordance with the Standards onAuditing ("SA"s) specified under Section 143(10) of theAct. Our responsibilities under those Standards arefurther described in the Auditor's Responsibility for theAudit of the Standalone Financial Statements sectionof our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India ("ICAI") together withthe ethical requirements that are relevant to our audit ofthe Standalone Financial Statements under the provisionsof the Act and the Rules made thereunder, and we havefulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficientand appropriate to provide a basis for our audit opinionon the Standalone Financial Statements.
Key audit matters are those matters that, in our professionaljudgment, were of most significance in our audit of theStandalone Financial Statements of the current period.These matters were addressed in the context of our auditof the Standalone Financial Statements as a whole, andin forming our opinion thereon, and we do not provide aseparate opinion on these matters. We have determinedthe matters described below to be the key audit mattersto be communicated in our report.
• The Company's Board of Directors is responsiblefor the other information. The other informationcomprises the information included in theManagement discussion & analysis, Board's Report,Business Responsibility and Sustainability report andReport on Corporate Governance including annexure,but does not include the consolidated financialstatements, Standalone Financial Statements andour auditor's report thereon.
• Our opinion on the Standalone Financial Statementsdoes not cover the other information and we do notexpress any form of assurance conclusion thereon.
• In connection with our audit of the StandaloneFinancial Statements, our responsibility is to read theother information and, in doing so, consider whetherthe other information is materially inconsistentwith the Standalone Financial Statements or ourknowledge obtained during the course of our auditor otherwise appears to be materially misstated.
• I f, based on the work we have performed, we conclude
that there is a material misstatement of this otherinformation, we are required to report that fact. Wehave nothing to report in this regard.
The Company's Board of Directors is responsiblefor the matters stated in Section 134(5) of the Actwith respect to the preparation of these StandaloneFinancial Statements that give a true and fair view ofthe financial position, financial performance includingother comprehensive income, cash flows and changes inequity of the Company in accordance with the accountingprinciples generally accepted in India, including Ind ASspecified under Section 133 of the Act.This responsibilityalso includes maintenance of adequate accountingrecords in accordance with the provisions of the Actfor safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities;selection and application of appropriate accountingpolicies; making judgments and estimates that arereasonable and prudent; and design, implementation andmaintenance of adequate internal financial controls, thatwere operating effectively for ensuring the accuracy andcompleteness of the accounting records, relevant to thepreparation and presentation of the financial statementsthat give a true and fair view and are free from materialmisstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements,management and Board of Directors are responsible forassessing the Company's ability to continue as a goingconcern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accountingunless the Board of Directors either intend to liquidatethe Company or to cease operations, or has no realisticalternative but to do so.
The Company's Board of Directors is also responsible foroverseeing the Company's financial reporting process.
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 includesour opinion. Reasonable assurance is a high level ofassurance, but is not a guarantee that an audit conductedin accordance with SAs will always detect a materialmisstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individuallyor in the aggregate, they could reasonably be expectedto influence the economic decisions of users taken on thebasis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exerciseprofessional judgment and maintain professionalskepticism throughout the audit. We also:
• Identify and assess the risks of material misstatementof the Standalone Financial Statements, whetherdue to fraud or error, design and perform auditprocedures responsive to those risks, and obtainaudit evidence that is sufficient and appropriateto provide a basis for our opinion. The risk of notdetecting a material misstatement resulting fromfraud is higher than for one resulting from error,as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override ofinternal control.
• Obtain an understanding of internal financialcontrols relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.Under Section 143(3)(i) of the Act, we are alsoresponsible for expressing our opinion on whetherthe Company has adequate internal financial controlswith reference to Standalone Financial Statements inplace and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policiesused and the reasonableness of accounting estimatesand related disclosures made by the management.
• Conclude on the appropriateness of management'suse of the going concern basis of accounting and,based on the audit evidence obtained, whethera material uncertainty exists related to events orconditions that may cast significant doubt on theCompany's ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we arerequired to draw attention in our auditor's report tothe related disclosures in the Standalone FinancialStatements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based onthe audit evidence obtained up to the date of ourauditor's report. However, future events or conditionsmay cause the Company to cease to continue as agoing concern.
• Evaluate the overall presentation, structure andcontent of the Standalone Financial Statements,including the disclosures, and whether the StandaloneFinancial Statements represent the underlyingtransactions and events in a manner that achievesfair presentation.
Materiality is the magnitude of misstatements in theStandalone Financial Statements that, individuallyor in aggregate, makes it probable that the economicdecisions of a reasonably knowledgeable user of theStandalone Financial Statements may be influenced.We consider quantitative materiality and qualitativefactors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate theeffect of any identified misstatements in the StandaloneFinancial Statements.
We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, includingany significant deficiencies in internal financial controlsthat we identify during our audit.
We also provide those charged with governance witha statement that we have complied with relevantethical requirements regarding independence, and tocommunicate with them all relationships and othermatters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.
From the matters communicated with those charged withgovernance, we determine those matters that were ofmost significance in the audit of the Standalone FinancialStatements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances,we determine that a matter should not be communicatedin our report because the adverse consequences of doingso would reasonably be expected to outweigh the publicinterest benefits of such communication.
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 informationand explanations which to the best of ourknowledge and belief were necessary for thepurposes of our audit.
b) In our opinion, proper books of account asrequired by law have been kept by the Companyso far as it appears from our examination ofthose books.
c) The Balance Sheet, the Statement of Profit andLoss including Other Comprehensive Income,the Statement of Cash Flows and Statement ofChanges in Equity dealt with by this Report arein agreement with the books of account.
d) In our opinion, the aforesaid StandaloneFinancial Statements comply with the Ind ASspecified under Section 133 of the Act.
e) On the basis of the written representationsreceived from the directors as on March 31,2025taken on record by the Board of Directors, noneof the directors is disqualified as on March 31,
2025 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, referto our separate Report in "Annexure A'. Ourreport expresses an unmodified opinion onthe adequacy and operating effectiveness ofthe Company's internal financial controls withreference to Standalone Financial Statements.
g) With respect to the other matters to be includedin the Auditor's Report in accordance with therequirements of Section 197(16) of the Act, asamended, in our opinion and to the best of ourinformation and according to the explanationsgiven to us, the remuneration paid by theCompany to its directors during the year is inaccordance with the provisions of Section 197of the Act.
h) With respect to the other matters to be includedin the Auditor's Report in accordance with Rule11 of the Companies (Audit and Auditors) Rules,2014, as amended in our opinion and to thebest of our information and according to theexplanations given to us:
i. The Company has disclosed the impact ofpending litigations on its financial positionin its Standalone Financial Statements- Refer Note 30C to the StandaloneFinancial Statements;
ii. The Company did not have any long-termcontracts including derivative contractsfor which there were any materialforeseeable losses.
iii. There has been no delay in transferringamounts, required to be transferred, to theInvestor Education and Protection Fund bythe Company.
iv. (a) The Management has represented
that, to the best of its knowledge andbelief, as disclosed in the note 51(v) tothe financial statements no funds havebeen advanced or loaned or invested(either from borrowed funds or sharepremium or any other sources or kindof funds) by the Company to or in anyother person(s) or entity(ies), includingforeign entities ("Intermediaries"),with the understanding, whetherrecorded in writing or otherwise,that the Intermediary shall, directly
or indirectly lend or invest in otherpersons or entities identified inany manner whatsoever by or onbehalf of the Company ("UltimateBeneficiaries") or provide anyguarantee, security or the like onbehalf of the Ultimate Beneficiaries.
(b) The Management has represented,that, to the best of its knowledge andbelief, as disclosed in the note 51(vi)to the financial statements, no fundshave been received by the Companyfrom any person(s) or entity(ies),including foreign entities ("FundingParties"), with the understanding,whether recorded in writing orotherwise, that the Company shall,directly or indirectly, lend or investin other persons or entities identifiedin any manner whatsoever by oron behalf of the Funding Party("Ultimate Beneficiaries") or provideany guarantee, security or the like onbehalf of the Ultimate Beneficiaries.
(c) Based on the audit proceduresperformed that have been consideredreasonable and appropriate in thecircumstances, nothing has cometo our notice that has caused us tobelieve that the representations undersub-clause (i) and (ii) of Rule 11(e),as provided under (a) and (b) above,contain any material misstatement.
v. The Company has not declared or paidany dividend during the year and has notproposed final dividend for the year.
vi. Based on our examination, which includedtest checks, the Company has usedaccounting software for maintaining itsbooks of account for the financial year endedMarch 31, 2025 which have the feature ofrecording audit trail (edit log) facility andthe same has operated throughout theyear for all relevant transactions recordedin the software. Further, during the courseof our audit, we did not come across anyinstance of the audit trail feature beingtampered with.
Additionally audit trail has been preservedby the Company as per the statutoryrequirements for record retention.
2. As required by the Companies (Auditor's Report)Order, 2020 ("the Order") issued by the CentralGovernment in terms of Section 143(11) of the Act,we give in "Annexure B" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells
Chartered AccountantsFirm's Registration No. 008073S
C Manish Muralidhar
Partner
Place: Hyderabad Membership No. 213649
Date: May 26, 2025 UDIN: 25213649BMOENK1096