Ranbaxy Australia Pty Limited ABN 17 110 871 826

FINANCIAL REPORT FOR THE YEAR ENDED 31 MARCH 2015

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Ranbaxy Australia Pty Limited ABN 17 110 871826 Contents

Page Directors' report

3

Auditor's independence declaration

5

Statement of profit or loss & other comprehensive income

6

Statement of financial position

7

Statement of changes in equity

8

Statement of cashflows

9

Notes to the financial statements

10

Directors' declaration

22

Independent auditor's report

23

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Ranbaxy Australia Pty Limited ABN 17 110 871 826

Directors' rep01·t Your directors present their report together with the financial report of Ranbaxy Australia Pty Limited ("the Company") for the year ended 31March 2015. Directors The names of the directors of the Company at any time during or since the end of the financial period are: Alexander Nicholas Evans Akshay Sethi (appointed 2 May 2014) Rajiv Gulati (resigned 28 April 2014) Rajeev Sharma (resigned 2 April2014) Sanjeev lndravadan Danl (resigned 28 April2014) Directors have been in office since the start of the financial period to the date of this report unless otherwise Review of Operations The profit of the Company for the year ended 31March 2015 was $866,685 (2014[15 months] loss: $2,378,394)

Significant Changes in the State of Affairs No significant changes in the company's state of affairs occurred during the financial year. Principal Activities The principal activity of the Company during the financial period was the supply of pharmaceutical products. No significant change in the nature of these activities occurred during the period. Events Subsequent to the End of the Reporting Period No matters or circumstances have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the company, the results of those operations, or the state of affairs of the company In future financial years. Likely Developments and Expected Results of Operations likely developments in the operations of the company and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the company. Environmental Regulation The company's operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a state or territory. Dividends There were no dividends paid or declared since the start of the financial year. Indemnification and Insurance of Officers and Auditors No indemnities have been given or insurance premiums paid, during or since the end of the financial period, for any person who is or has been an officer or auditor of the company. Proceedings on Behalf of the Company No person has applied for leave of court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings. The company was not a party to any such proceedings during the period. 3

Ranbaxy Australia Pty Limited ABN 17110 871826

Directors' report

Auditor's Independence Declaration A copy of the auditor's independence declaration as required under s 307C of the Corporations Act 200lls set out on page 5.

Signed in accordance with a resolution of directors: Dated this '2-4 ay of April 2015.

Alexander Evans Director Sydney

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CHARTERED ACCOUNTANTS ABN 42 178 198 610

Level6, 77 Castlereagh Street Sydney NSW 2000, Australia DX 232, Sydney T +51 2 9930 7700 F +61 2 9930 7777 [email protected] www.boroughs.net.au

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF RANBAXY AUSTRALIA PTY LIMITED In relation to our audit of the financial report of Ranbaxy Australia Pty Limited for the year ended 31 March 2015, to the best of my knowledge and belief, there have been:

•

no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

•

no contraventions of any applicable code of professional conduct in relation to the audit.

BOROUG ASSURANCE Shane Chadwick Partner Sydney 1

Dated 29 h April 2015

Liability limited by a Scheme approved under the Professional Standards legislation

Ranbaxy Australia Pty Limited ABN 17 110 871826 STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2015 2015

2014

$

$

(12 Months)

(15 Months)

35,175,022 . (23,044,993) 12,130,029

26,159,832 (1/',6!)6,497} 8,503,335

(3,391,948) (3,869,718) (384,627) (927,677) (677,434) (85,552) (1,026,347) (155,825) (252,227)

(3,169,337} (4,323,548) (461,894) (903,286) (1,102,303) (76,630) (198,433) (250,543) (270,897)

Results from operating activities

1,358,675

(2,253,534)

Finance income

4,235 (496,225) (491,990)

7,153 (132,012) (124,859)

866,685

(2,378,394}

866,685

(2,378,394)

866,685

(2,378,394)

Note

Revenue Cost of sales Gross profit Distribution expenses Personnel expenses Marketing expenses Pharmaceutical license expenses Administration expenses Depreciation expense

2(a)

Legal and professional expenses Occupancy expenses Other expenses

Finance costs Net finance costs

Profit/(loss) before income tax Income tax expense Profit/(loss) for the period

3

Other comprehensive income Total comprehensive income for the period

The accompanying notes form part of these financial statements.

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Ranbaxy Australia Pty Limited ABN 17 110 871826

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2015

Note

2015

2014

$

$

CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other assets

4 5 6 7

TOTAL CURRENT ASSETS

1,685,149 4,473,953 4,432,327 94,831

2,103,806 5,128,630 7,858,140 164,836

10,686,259

15,255,412

127,956

207,759

127,956

207,759

10,814,215

15,463,171

5,770,144 22,845,538 381,415

19,224,649 16,775,000 189,292

28,997,097

36,188,941

NON-CURRENT ASSETS Property, plant and equipment

8

TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Borrowings Provisions

9 10 11

TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Provisions

11

TOTAL NON-CURRENT LIABILITIES

73,399 73,399

TOTAL LIABILITIES NET LIABILITY

29,070,496

36,188,941

(18,256,281)

(20,725,770)

9,200,000 (27,456,281)

9,200,000 (28,322,966)

(18,256,281)

(19,122,966)

EQUITY Share capital Accumulated losses

12

TOTAL DEFICIENCY

The accompanying notes form part of these financial statements,

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Ranbaxy Australia Pty Limited ABN 17 110 871826 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2015

Share capital

$ Balance at 1January 2013

9,200,000

Comprehensive income Loss for the period Other comprehensive income for the period

Accumulated losses $

Total equity $

(25,944,572)

(16,744,572)

(2,378,394)

(2,378,394)

Total comprehensive income for the period

9,200,000

(28,322,966)

(19,122,966)

Balance at 31March 2014

9,200,000

(28,322,966)

(19,122,966)

Comprehensive income Profit for the year Other comprehensive income for the year Total comprehensive income for the year

9,200,000

{27,456,281)

{18,256,281)

Balance at 31March 2015

9,200,000

{27,456,281}

{18,256,281

866,685

The accompanying notes form part of these financial statements. 8

866,685

Ranbaxy Australia Pty Limited ABN 17 110 871 826 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2015

Note

2015

2014

$

$

(12 Months)

(15 Months)

40,457,025 (47,454,002) 4,235 (231,000)

19,107,361 (29,827,543) 7,153 (132,012)

(7,223,742)

(10,845,041)

(5,749) (5,749)

(211,677) (211,677)

6,077,149

12,500,000

6,077,149

12,500,000

(1,152,341) 2,103,807 951,466

1,443,282 660,525 2,103,807

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Finance costs Net cash used in operating activities

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CASH FLOWS FROM INVESTING ACTIVITIES Payment for property, plant and equipment Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Loan from related party Net cash provided by financing activities Net increase/( decrease) in cash held Cash at beginning of financial year Cash at end of financial year

The accompanying notes form part of these financial statements. 9

Ranbaxy Australia Pty Limited ABN 17 110 871 826 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POliCIES Ranbaxy Australia Pty Limited (the Company) is a company Incorporated and domiciled in Australia. The parent company is Ranbaxy Netherlands(RNBV), a company incorporated in Netherlands. The financial statements are as at and for the year ended 31 March 2015. The Company Is primarily involved in the supply of pharmaceutical products.

Basis of Preparation The directors have prepared the financials statements on the basis that the Company is a non-reporting entity because there are no users dependent on general purpose financial statements. The financial statements are therefore special purpose financial statements that have been prepared in order to meet the requirements of the Corporations Act 2001. The company is a for-profit entity for financial reporting purposes under Australian Accounting Standards. The financial statements have been prepared in accordance with the mandatory Australian Accounting Standards applicable to entities reporting under the Corporations Act 2001 and the significant accounting policies disclosed below, which the directors have determined are appropriate to meet the needs of members. Such accounting policies are consistent with the previous period unless stated otherwise, The financial statements, except for the cash flow information, have been prepared in Australian dollars on an accruals basis and are based on historical costs unless otherwise stated in the notes. The amounts presented In the financial statements have been rounded to the nearest dollar.

a Use of estimates and judgements The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and In any future periods affected. b Going concern The financial statements have been prepared on a going concern basis, notwithstanding as at 31 March 2015 the Company had a deficiency of net assets of $18,256,281 (2014: $19,122,966). The ability of the Company to continue as a going concern is dependent upon the ongoing financial support from its parent entity to the level required by the Company to allow It to fulfil all obligations as and when they fall due for a period of no less than twelve months from the date of signing these financial statements. The reliance on the parent entity support gives rise to a material uncertainty which may affect the company's ability to continue as a going concern. The parent entity has confirmed In writing that it will provide ongoing financial support, including that it will not call for repayment outstanding balances at 31 March 2015, unless the Company is able to financially make such repayments without impairing its ability to conduct its normal business operations and pay other liabilities.

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Ranbaxy Australia Pty Limited ABN 17 110 871826 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

b Going concern (Continued) The directors therefore believe that the Company will continue to fulfil all obligations as and when they fall due for the foreseeable future, being at least twelve months from the date of signing these financial statements, and accordingly consider that the Company's financial statements shoLild be prepared on a going concern basis. Accordingly, no adjustments have been made to the financial report relating to the recoverability and classification of recorded asset amounts, or to amounts and classification of liabilities that might be necessary should the Company not continue as a going concern. c

Foreign currency transactions and balances Transactions in foreign currencies are translated to the respective functional currency of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary Items is the difference between amortised cost In the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the year. Foreign currency differences arising on retranslation are recognised in profit or loss.

d Financial instruments (I)

Financial assets are recognised initially on the date at which the Company becomes a party to the contractual provisions of the instrument. The Company derecog11ises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction In which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability. The Company has the following non-derivative financial assets: trade and other receivables and cash and cash equivalents. Trade and other receivables

Trade and other receivables are recognised initially at fair value plus any directly attributable transaction costs, and are subsequently measured at amortised cost using the effective interest method, less any impairment losses. Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. (ii) Non-derivative financial liabilities Financial liabilities are recognised initially on the date at which the Company becomes a party to the contractual provisions of the instrument. The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Company has the following non-derivative financial liabilities: loans and borrowings and trade and other payables. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective

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Ranbaxy Australia Pty Limited ABN 17 110 871 826 NOTES TO TIIE FINANCIAL STATEMENTS FOR TIIE YEAR ENDED 31 MARCH 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES d Financial instruments (continued) (Iii) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects. e Income Tax

Income tax expense comprises current tax and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive Income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects either accounting r1or taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basts or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. f

Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the firstin first-out principle, and includes expenditure incurred in acquiring the Inventories and other costs incurred in bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

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Ranbaxy Australia Pty Lilnited ABN 17 110 871826 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2015 NOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

g Property, Plant and Equipment (i)

Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that Is directly attributable to the acquisition of the asset. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of the property, plant and equipment and is recognised net within other income/other expenses in profit or loss. (ii) Subsequent costs The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. (iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of Individual assets are assessed and if a component has a useful life that is different from the remainder of that asset. That component is depreciated separately. Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an Item of property, plant and equipment. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Furniture and fittings 33% 33% Office equipment Depreciation methods, depreciation rates and residual values are reviewed at each financial year-end and adjusted If appropriate.

h Leases payments

Leases of fixed assets, where substantially all the risl