1. We have audited the accompanying standalone financial
statements of Cohance Lifesciences Limited ('the
Company'), which comprise the Standalone Balance Sheet
as at 31 March 2026, the Standalone Statement of Profit
and Loss (including Other Comprehensive Income), the
Standalone Statement of Cash Flow and the Standalone
Statement of Changes in Equity for the year then ended,
and notes to the Standalone financial statements,
including material accounting policy information and
other explanatory information.
2. 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 ('Ind
AS') specified under section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules, 2015 and
other accounting principles generally accepted in India, of
the state of affairs of the Company as at 31 March 2026,
and its profit (including other comprehensive income), its
cash flows and the changes in equity for the year ended
on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards
on Auditing specified under section 143(10) of the Act.
Our responsibilities under those standards are further
described in the Auditor's Responsibilities for the Audit of
the Standalone Financial Statements section of our report.
We are independent of the Company in accordance with
the Code of Ethics issued by the Institute of Chartered
Accountants of India ('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 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.
Emphasis of Matter - Amalgamation of CohanceLifesciences Limited with the Company
4. We draw attention to Note 58 to the accompanying
standalone financial statements, which describes
that pursuant to the Scheme of Amalgamation (the
"Cohance Scheme") between the Company and Cohance
Lifesciences Limited ('Transferor Company"), as approved
by the Hon'ble National Company Law Tribunal vide its
order dated 27 March 2025, the Transferor Company has
been amalgamated with the Company. The amalgamation
has been accounted for in the manner as prescribed under
the Cohance Scheme and in accordance with the Appendix
C of Ind AS 103 - Business Combinations, applicable to
business combination of entities under common control as
also prescribed in the Cohance Scheme. Accordingly, the
comparative financial information for the year ended on
31 March 2025 presented in accompanying standalone
financial statements, have been adjusted to reflect the
aforesaid amalgamation, as described further in the said
note. Our opinion is not modified in respect of this matter.
Key Audit Matters
5. 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.
6. We have determined the matters described below to be the kev audit matters to be communicated in our reoort.
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Key audit matters
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How our audit addressed the key audit matters
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Revenue Recognition
Refer note 2.11 to the accompanying Standalone Financial
Statements for material accounting policy information on
revenue recognition and note 26 for the related disclosure
made during the year)
The Company derives revenues primarily from manufacture
and sale of Active Pharma Ingredients (API) including
intermediates. The Company recognises the revenue from
contracts with customers in accordance with Ind AS 115
"Revenue from Contracts with Customers" ('Ind AS 115')
when the performance obligation is satisfied, which in
case of sale of goods is determined to be at the point of
time, when the customer obtains controls of the goods and
services. The revenue towards a performance obligation
is measured based on the transaction price specified in
the contract, net of discounts, returns and goods and
services tax.
Revenue is a key performance indicator and with the diverse
terms of contracts with customers, revenue is determined
to be an area involving significant risk in line with the
requirements of Standards on Auditing, and hence, requires
significant auditor attention. Further, the application of Ind
AS 115 requires management to make certain significant
judgements/ estimates, such as determining the timing of
revenue recognition and transaction price, including the
impact of variable consideration in the form of profit shares
as per the terms of contracts with the customers.
Considering the diverse terms of contracts with customers,
volume of the transactions, materiality of the amount
involved, and significant attention required by the auditor
as mentioned above, revenue recognition has been
identified as a key audit matter for the current year audit.
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Our audit procedures included, but were not limited to, the
following:
a) Obtained an understanding of the management's process for
revenue recognition and assessed the appropriateness of the
accounting policy on revenue recognition in accordance with
Ind AS 115;
b) Evaluated the design and tested the operating effectiveness of
key controls over the recognition and measurement of revenue;
c) Performed substantive analytical procedures on revenue such
as ratio analysis, region-wise sale analysis, etc to identify any
unusual and/or material variances;
d) Performed substantive testing on a selected samples of revenue
transactions recorded during the year, and transactions recorded
during a specific period before and after year end, by inspecting
supporting documents such as invoices, agreements, dispatch
memos, etc., to ensure revenue is recognised in the correct
period and with correct amounts;
e) Evaluated the appropriateness of the management's assessment
that the performance obligations arising from the contract
research satisfy the criteria for revenue recognition over time,
in accordance with Ind AS 115;
f) Tested the calculations of the profit share accounted on expected
value method to underlying arrangements with customers and
other supporting documents;
g) Tested all the manual sales-related adjustments made to revenue
to ensure the appropriateness of revenue recognition during the
year; and
h) Assessed the adequacy and appropriateness of related
disclosures made in the standalone financial statements with
respect to revenue recognized during the year in accordance
with the applicable accounting standards.
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Impairment assessment of investment in subsidiaries
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Our audit procedures included, but were not limited to, the
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Refer Note 2.19(i)(c) of the accompanying standalone
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following:
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financial statements for material accounting policy
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a.
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Obtained an understanding of the management's process for
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information and note 9(a) for the related financial
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identification of impairment indicators and process followed
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disclosures.
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by the management for impairment testing and evaluated the
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design and tested the operating effectiveness of key controls
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As at 31 March 2026, the Company has investments in
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over such identification and impairment assessment;
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subsidiaries amounting to C547.96 crores in NJ Bio Inc
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and C258 crores in Sapala Organics Private Limited, which
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b.
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Assessed the appropriateness of the accounting policy adopted
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are carried at cost in accordance with Ind AS 27, Separate
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by the management in accordance with Ind AS 36;
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Financial Statements ('Ind AS 27').
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c.
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Obtained the impairment assessment workings prepared by the
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At each period end, the management reviews whether
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management and valuation report provided by management's
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any impairment indicators exist in the carrying amounts
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external valuation experts and assessed the competence,
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of investments in subsidiaries, in accordance with the
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capability, and objectivity of the management's experts;
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requirements of Ind AS 36, "Impairment of Assets" ('Ind AS
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36'). The Company assesses the recoverable amounts of
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each investment when impairment indicators exist.
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Key audit matters
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How our audit addressed the key audit matters
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Management's assessment for determination of the
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d.
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Involved auditor's valuation experts to assess the appropriateness
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recoverable amounts using discounted cash flow valuation
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of the valuation methodologies, the reasonableness of the
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method requires significant management judgment and
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assumptions used by the management's expert to determine
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estimates due to high estimation uncertainty involved.
The key assumptions used in management's assessment
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the recoverable amounts;
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of the recoverable amounts include, but are not limited
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e.
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Evaluated and challenged management's assumptions such as
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to, projections of future cash flows, growth rates, discount
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implied growth rates during explicit period, terminal growth
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rates, estimated future operating and capital expenditure.
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rate, future operating and capital expenditure and discount
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Changes to these assumptions could lead to material
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rates for their appropriateness based on our understanding of
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changes in estimated recoverable amounts, resulting in
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the business of these subsidiaries and traced the future cash flow
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impairment.
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projections to approved business plans of such subsidiaries;
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Based on assessment made by the management, no
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f.
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Tested the mathematical accuracy of the management
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adjustments are required to the carrying amounts of the
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computations;
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investment in such subsidiaries as at 31 March 2026.
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g.
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Obtained sensitivity analysis performed by the management
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Considering the materiality of the amounts and inherent
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on key assumptions such as terminal growth rates and discount
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subjectivity involved in auditing significant management
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rates and performed independent sensitivity analysis of aforesaid
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judgment and estimates as mentioned above, impairment
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key assumptions to assess the effect of reasonably possible
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assessment of investment in subsidiaries has been
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variations on the current estimated recoverable amount to
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identified as a key audit matter for the current year audit.
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evaluate sufficiency of headroom between recoverable amount
and carrying amount; and
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h.
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Evaluated the appropriateness and adequacy of disclosures
given in the standalone financial statements in accordance with
applicable accounting standards.
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Impairment assessment of Goodwill
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Our audit procedures included, but were not limited to, the
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Refer Note 2.18 of the accompanying standalone financial
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following:
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statements for material accounting policy information
and note 6 for the related disclosure on goodwill and its
impairment.
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a.
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Obtained an understanding of the management's process for
identification of CGU and impairment testing, and evaluated the
design and tested the operating effectiveness of key controls
over such identification and impairment assessment;
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As at 31 March 2026, the Company has goodwill aggregating
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to C644.11 crores relating to API and formulation Cash
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b.
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Assessed the appropriateness of the Company's accounting
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Generating Unit ('CGU').
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policy for impairment of goodwill in accordance with Ind AS 36;
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The management has performed an annual impairment
test of goodwill as required under Ind AS 36 "Impairment
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c.
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Evaluated management's identification of CGU;
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of Assets" ('Ind AS 36') by determining the recoverable
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d.
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Obtained the impairment assessment workings prepared by the
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amount of the Cash Generated Unit (CGU) to which the
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management and valuation report provided by management's
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goodwill is allocated, using the discounted cash flow
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external valuation experts and assessed the competence,
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method.
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capability, and objectivity of the management's experts;
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The carrying amount of goodwill will be recovered through
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e.
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Involved auditor's valuation experts to assess the appropriateness
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future cash flows and there is a risk that the assets will be
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of the valuation methodologies and the reasonableness of the
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impaired if these cash flows do not meet the Company's
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assumptions used by the management's expert to determine
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expectations. The impairment assessment process
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the recoverable amounts;
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is complex as it involves significant judgements and
estimates in key assumptions used by the management to
determine the recoverable amounts, such as future cash
flows, budgeted revenue, operating margins, growth rates
and the discount rates.
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f.
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Evaluated and challenged management's assumptions such as
implied growth rates during explicit periods, terminal growth
rates and discount rates for their appropriateness, based on our
understanding of the business of such CGU and traced the future
cash flow projections to approved business plans of such CGU;
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g.
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Tested the mathematical accuracy of the management
computations;
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Key audit matters
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How our audit addressed the key audit matters
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Considering the materiality of amounts involved together
with the inherent subjectivity related to principal
assumptions, which are dependent on current and
future economic factors and trading conditions varying
for different economic and geographical territories,
impairment assessment of goodwill has been identified as
a key audit matter for the current year audit.
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h. Obtained sensitivity analysis performed by the management
on key assumptions such as terminal growth rates and discount
rates and performed independent sensitivity analysis of
aforesaid key assumptions to assess the effect of reasonably
possible variations on the estimated recoverable amounts to
evaluate sufficiency of headroom between recoverable amount
and carrying amount; and
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i. Evaluated the appropriateness and adequacy of disclosures
given in the standalone financial statements, in accordance with
applicable accounting standards.
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Information other than the Standalone Financial
Statements and Auditor's Report thereon
7. The Company's Board of Directors are responsible for
the other information. The other information comprises
the information included in the Annual Report, but does
not include the standalone financial statements and our
auditor's report thereon. The Annual report is expected to
be made available to us after the date of this audit's report.
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.
When we read the annual report, if concluded that there
is a material misstatement therein, we are required
to communicate the matter to those charged with
governance.
Responsibilities of Management and Those Charged
with Governance for the Standalone Financial
Statements
8. The accompanying standalone financial statements have
been approved by the Company's Board of Directors.
The Company's Board of Directors are responsible for the
matters stated in section 134(5) of the Act with respect
to the preparation and presentation of these standalone
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 Ind AS specified
under section 133 of the Act and other accounting
principles generally accepted in India. 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 financial statements
that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
9. In preparing the standalone financial statements, the Board
of Directors is responsible for assessing the Company's
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using
the going concern basis of accounting unless the Board
of Directors either intends to liquidate the Company
or to cease operations, or has no realistic alternative
but to do so.
10. The Board of Directors is also responsible for overseeing
the Company's financial reporting process.
Auditor's Responsibilities for the Audit of theStandalone Financial Statements
11. 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 auditor's 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 Standards on Auditing 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.
12. As part of an audit in accordance with Standards on
Auditing, specified under section 143(10) of the Act we
exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal control;
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances Under section 143(3)
(i) of the Act we are also responsible for expressing
our opinion on whether the Company has adequate
internal financial controls with reference to 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 Board of Directors'
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether
a material uncertainty exists related to events or
conditions that may cast significant doubt on the
Company's ability to continue as a going concern.
If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor's 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 auditor's
report. However, future events or conditions may
cause the Company to cease to continue as a going
concern; and
• 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.
13. 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.
14. 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.
15. From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the standalone financial
statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.
Other Matter
16. The Comparative financial information presented in
accompanying standalone financial statements includes
the financial information of Cohance Lifesciences Limited,
(hereinafter referred to as the "Transferor Company") for
the year ended 31 March 2025, pursuant to the scheme
of amalgamation between the Company and Transferor
Company as explained in Note 44 to the accompanying
standalone financial statements. The financial statement
of the Transferor Company has been audited by then
statutory auditor ('other auditor') of the Transferor
Company, who had issued unmodified opinion vide
their audit report dated 30 April 2025. We have relied
upon the aforesaid financial statements and the report
of the other auditor as aforementioned and as furnished
by the management for the purpose of our audit of
the accompanying standalone financial statements.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
17. As required by section 197(16) of the Act, based on our
audit, we report that the Company has paid remuneration
to its directors during the year in accordance with the
provisions of and limits laid down under section 197 read
with Schedule V to the Act.
18. As required by the Companies (Auditor's Report) Order,
2020 ('the Order') issued by the Central Government of
India in terms of section 143(11) of the Act we give in
the Annexure A, a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
19. Further to our comments in Annexure A, as required by
section 143(3) of the Act based on our audit, we report, to
the extent applicable, that:
a) We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit of
the accompanying standalone financial statements;
b) Except for the matters stated in paragraph 19(h)
(vi) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014 (as
amended), in our opinion, proper books of account
as required by law have been kept by the Company
so far as it appears from our examination of
those books;
c) The standalone financial statements dealt with
by this report are in agreement with the books
of account;
d) In our opinion, the aforesaid standalone financial
statements comply with Ind AS specified under
section 133 of the Act;
e) On the basis of the written representations received
from the directors and taken on record by the Board
of Directors, none of the directors is disqualified as
on 31 March 2026 from being appointed as a director
in terms of section 164(2) of the Act;
f) The qualification relating to the maintenance of
accounts and other matters connected therewith
are as stated in paragraph 19(b), above on reporting
under section 143(3)(b) of the Act and paragraph
19(h)(vi) below on reporting under Rule 11(g) of
the Companies (Audit and Auditors) Rules, 2014
(as amended);
g) With respect to the adequacy of the internal financial
controls with reference to financial statements of the
Company as on 31 March 2026 and the operating
effectiveness of such controls, refer to our separate
report in Annexure B wherein we have expressed an
unmodified opinion; and
h) With respect to the other matters to be included
in the Auditor's 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, as detailed in Note 37 to the
standalone financial statements, has disclosed
the impact of pending litigations on its financial
position as at 31 March 2026;
ii. The Company did not have any long-term
contracts including derivative contracts for
which there were any material foreseeable
losses as at 31 March 2026;
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund
by the Company during the year ended 31
March 2026;
iv. a. The management has represented that,
to the best of its knowledge and belief as
disclosed in Note 57(i) to the standalone
financial statements, no funds have
been advanced or loaned or invested
(either from borrowed funds or securities
premium or any other sources or kind
of funds) by the Company to or in any
person(s) or entity(ies), including foreign
entities ('the intermediaries'), with the
understanding, whether recorded in
writing or otherwise, that the intermediary
shall, whether, directly or indirectly lend
or invest in other persons or entities
identified in any manner whatsoever by or
on behalf of the Company ('the Ultimate
Beneficiaries') or provide any guarantee,
security or the like on behalf the Ultimate
Beneficiaries;
b. The management has represented that,
to the best of its knowledge and belief, as
disclosed in Note 57(ii) to the standalone
financial statements, no funds have
been received by the Company from any
person(s) or entity(ies), including foreign
entities ('the Funding Parties'), with the
understanding, whether recorded in
writing or otherwise, that the Company
shall, whether 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; and
c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing
has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and
(b) above contain any material misstatement.
v. The Company has not declared or paid any dividend during the year ended 31 March 2026.
vi. As stated in Note 44 to the standalone financial statements and based on our examination which included test checks, except
for the instances / matters mentioned below, the Company, in respect of financial year commencing on or after 1 April 2025,
has used an accounting software(s) for maintaining its books of account which have a feature of recording audit trail (edit
log) facility and the same have been operated throughout the year for all relevant transactions recorded in the software.
Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with other
than the consequential impact of the exception given below. Furthermore except for instances/ matters mentioned below
the audit trail has been preserved by the Company as per the statutory requirements for record retention.
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Nature of exception noted
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Details of Exception
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Instances of accounting software for
maintaining books of account for
which the feature of recording audit
trail (edit log) facility was not operated
throughout the year for all relevant
transactions recorded in the software.
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The audit trail feature was not enabled at the database level for accounting
software (SAP S4 HANA) to log any direct data changes, used for maintenance of
accounting records.
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Instances of accounting software
maintained by a third party where we
are unable to comment on the audit
trail feature at database level.
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The accounting software (SAP Rise) used for maintenance of accounting record
is operated by a third-party software service provider. In the absence of any
information on existence of audit trail (edit logs) for any direct changes made at
the database level in the 'Independent Service Auditor's Assurance Report on the
Description of Controls, their Design and Operating Effectiveness' ('Type 2 report'
issued in accordance with SAE 3402, Assurance Reports on Controls at a Service
Organization), we are unable to comment on whether audit trail feature with
respect to the database of the said software was enabled and operated throughout
the year.
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Instances of accounting software
maintained by a third party where we
are unable to comment on the audit
trail feature at database level.
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The accounting software (Quick books) used for maintenance of accounting records
of Company is operated by a third-party software service provider. In absence of an
'Independent Service Auditor's Assurance Report on the Description of Controls,
their Design and Operating Effectiveness' ('Type 2 report' issued in accordance with
SAE 3402, Assurance Reports on Controls at a Service Organization), we are unable
to comment on whether audit trail feature with respect to the database of the said
software was enabled and operated throughout the year.
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For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Ashish Gupta
Partner
Place: Hyderabad Membership No.: 504662
Date: 12 May 2026 UDIN: 26504662YNPXSK1854
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