Notes to Accounts of Aarti Drugs Ltd.

Mar 31, 2025

10) Provisions and Contingent Liabilities and Contingent
Assets

Provisions:

Provisions for legal claims, chargeback and sales
returns are recognised when the Company has a
present legal or constructive obligation as a result of
past events, it is probable that an outflow of resources
embodying economic benefits will be required to
settle the obligation and the amount can be reliably
estimated. Provisions are not recognised for future
operating losses.

Provisions are measured at the present value of
management''s best estimate of the expenditure
required to settle the present obligation at the end of
the reporting period.

Contingent Liabilities:

Contingent liabilities are disclosed when there is
a possible obligation arising from past events,
the existence of which will be confirmed only by
the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control
of the Company or a present obligation that arises
from past events where it is either not probable that
an outflow of resources will be required to settle or a
reliable estimate of the amount cannot be made.

Contingent Assets

Contingent Assets are not recognised in the financial
statements. Contingent Assets if any, are disclosed in
the notes to the financial statements

11) Financial assets, financial liabilities, equity

instruments and impairment of financial assets

Financial assets and liabilities are recognised when
the Company becomes a party to the contractual
provisions of the instrument. Financial assets
and liabilities are initially measured at fair value.
Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added
to or deducted from the fair value measured on initial
recognition of financial asset or financial liability.

The Company derecognises a financial asset only
when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial
asset and substantially all the risks and rewards of
ownership of the asset to another entity. The Company
derecognises financial liabilities when, and only when,
the Company''s obligations are discharged, cancelled
or have expired.

Financial assets at amortised cost
Financial assets are subsequently measured at
amortised cost if these financial assets are held within
a business whose objective is to hold these assets
in order to collect contractual cash flows and the
contractual terms of the financial assets give rise on
specified dates to cash flows that are solely payments
of principal and interest on the principal amount
outstanding.

Financial assets at fair value through other
comprehensive income

Financial assets are measured at fair value through
other comprehensive income if these financial
assets are held within a business whose objective is
achieved by both collecting contractual cash flows on
specified dates that are solely payments of principal
and interest on the principal amount outstanding and
selling financial assets. The Company has made an
irrevocable election to present subsequent changes in
the fair value of equity investments not held for trading
in other comprehensive income.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through
profit or loss unless they are measured at amortised
cost or at fair value through other comprehensive
income on initial recognition. The transaction costs
directly attributable to the acquisition of financial
assets and liabilities at fair value through profit or loss
are immediately recognised in statement of profit and
loss.

Equity Investments

All equity investments (excluding the investments in
Subsidiaries) in the scope of Ind AS 109 are measured
at fair value. Equity instruments which are held for
trading are classified as at FVTPL. For all other equity
instruments, the Company may make an irrevocable
election to present in other comprehensive income
subsequent changes in the fair value. The company
makes such election on an instrument-by-instrument
basis. The classification is made on initial recognition
and is irrevocable. If the Company decides to classify

an equity instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends, are
recognised in the OCI. There is no recycling of the
amounts from OCI to the statement of profit and loss,
even on sale of investment. However, the Company
may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category
are measured at fair value with all changes recognised
in the statement of profit and loss.

Investment in subsidiaries

Investment in subsidiaries are measured at cost less
impairment loss, if any.

Financial liabilities

Financial liabilities are measured at amortised
cost using the effective interest method. Other
financial liabilities (including loans and borrowings,
bank overdrafts and trade and other payables) are
subsequently measured at amortised cost using the
effective interest method.

The effective interest rate is the rate that exactly
discounts estimated future cash payments (including
all fees and amounts paid or received that form an
integral part of the effective interest rate, transaction
costs and other premiums or discounts) through
the expected life of the financial liability, or (where
appropriate) a shorter period, to the amortised cost on
initial recognition.

Interest expense (based on the effective interest
method), foreign exchange gains and losses, and
any gain or loss on derecognition is recognised in the
Statement of Profit and Loss.

For trade and other payables maturing within one year
from the Balance Sheet date, the carrying amounts
approximate fair value due to the short maturity of
these instruments

De-recognition of Financial Instruments:

The Company derecognises a Financial Asset when
the contractual rights to the cash flows from the
Financial Asset expire or it transfers the Financial
Asset and the transfer qualifies for de-recognition
under Ind AS 109. In cases where Company has
neither transferred nor retained substantially all of the
risks and rewards of the financial asset, but retains
control of the financial asset, the Company continues
to recognise such financial asset to the extent of its
continuing involvement in the financial asset. In that
case, the Company also recognises an associated
liability. The financial asset and the associated liability

are measured on a basis that reflects the rights and
obligations that the Company has retained.

A Financial liability (or a part of a financial liability) is
derecognised from the Company''s Balance Sheet when
the obligation specified in the contract is discharged
or cancelled or expires. When an existing financial
liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange
or modification is treated as the derecognition of the
original liability and the recognition of a new liability.
The difference between the carrying amount of the
financial liability de-recognised and the consideration
paid and payable is recognised in the Statement of
Profit and Loss

Equity instruments

An equity instrument is a contract that evidences
residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments
issued by the Company are recognised at the proceeds
received net of direct issue cost.

Impairment of Financial Assets:

In accordance with Ind AS 109, the Company uses
''Expected Credit Loss'' (ECL) model, for evaluating
impairment of all Financial Assets subsequent to initial
recognition other than financial assets measured
at fair value through profit and loss (FVTPL). The
Company uses historical default rates to determine
impairment loss on the portfolio of trade receivables.
At every reporting date these historical default rates
are reviewed and changes in the forward-looking
estimates are analysed. For other financial assets, the
Company uses 12 month ECL to provide for impairment
loss where there is no significant increase in credit
risk since its initial recognition. If there is significant
increase in credit risk since its initial recognition full
lifetime ECL is used. The impairment losses and
reversals are recognised in Statement of Profit and
Loss. ECL is the difference between all contractual
cash flows that are due to the Company in accordance
with the contract and all the cash flows that the entity
expects to receive (i.e., all cash shortfalls), discounted
at the original EIR.

12) Events after the reporting period

Events after the reporting period are those events,
favourable and unfavourable, that occur between
the end of the reporting period and the date when
the financial statements are approved by the Board
of Directors in case of a company, and, by the

corresponding approving authority in case of any other
entity for issue.

Two types of events can be identified:

(a) those that provide evidence of conditions
that existed at the end of the reporting period
(adjusting events after the reporting period); and

(b) those that are indicative of conditions that arose
after the reporting period (non-adjusting events
after the reporting period).

13) Cash and cash equivalents

For the purpose of presentation in the Balance
sheet, Cash and Cash equivalents comprises cash at
bank and on hand and other short-term, highly liquid
investments with an original maturity (or with an
option to or can be readily converted or liquidated into
cash) of three months or less, which are subject to an
insignificant risk of changes in value. Cash and Cash

Equivalents consist of balances with banks which are
unrestricted for withdrawals and usages.

For the purpose of presentation in the statement of
cash flows, cash and cash equivalents includes cash
at bank and on hand and other short-term highly
liquid investments that are readily convertible to
known amounts of cash and which are subject to an
insignificant risk of changes in value.

14) Recent Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. During the year
ended March 31, 2025, MCA has not notified any new
standards or amendments to the existing standards
applicable to the Company.

37. FINANCIAL RISK MANAGEMENT:

The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial
liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other
receivables, and cash and cash equivalents that derive directly from its operations. The Company is exposed to credit
risk, market risk and liquidity risk. The Company''s senior management oversees the management of these risks.

Company has exposure to following risks arising from financial instruments:

• Credit risk

• Liquidity risk

• Market risk

I. Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily
trade receivables) and from its financing activities, including deposits with banks and mutual funds, foreign
exchange transactions and other financial instruments.

Credit risk management.

To manage the credit risk, the Company follows an adequate credit control policy and also has an external credit
insurance cover with ECGC policy & HDFC ERGO General Insurance Company Limited. The requirement of assessing
the impairment loss on trade receivables does not arise, since the collectability risk is mitigated. Bank balances are
held with banks and majority of other security deposits are placed majorly with government/statutory agencies.

The financial instruments are categorised into two levels based on the inputs used to arrive at fair value measurements
are described below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; and

Level 2: Inputs other than the quoted prices included within Level 1 that are observed for the asset or liability, either
directly or indirectly.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
36. CAPITAL MANAGEMENT:

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity
reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise
the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and
the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the
dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital
using a gearing ratio, which is debt divided by total capital. Debt is calculated as loans and borrowings plus lease
liabilities

II. Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral
obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum
levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position
and deploys a robust cash management system. It maintains adequate sources of financing including bilateral
loans, debt, and overdraft from banks at an optimised cost. Working capital requirements are adequately addressed
by internally generated funds. Trade receivables are kept within manageable levels.

Liquidity Risk Management

The Company''s corporate treasury department is responsible for liquidity and funding as well as settlement.
Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash
flows.

III. Market Risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity
prices- will affect the Company''s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return. Financial instruments affected by market risk include loans and borrowings, deposits,
investments, and derivative financial instruments.

The Company''s activities are expose to a variety of financial risks, including the effects of changes in foreign
currency exchange rates and interest rates.

Foreign currency risk

The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s
operating activities in exports and imports which is majorly in US dollars. Hence, to combat the foreign currency
exposure, the Company follows a policy wherein the net sales are hedged By forward Contract.

b. Loans from Scheduled Banks Payable on Demand of '' 17,481.75 lakhs (Previous Year '' 13,097.02 lakhs) are
secured by pari-passu first charge by way of hypothecation of Company''s raw materials stock, stock-in-process,
finished goods, packing materials, stores & spares, book debts, and all other current assets including goods in transit
governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties
and hypothecation of movable fixed assets. both present and future situated at MIDC Boisar, Maharashtra viz. Plot
No N-198, G-60, E21, E22, E-1, K-40, K-41 E120, E9/3, E9/4, W-60(B), W61 (B), W62(A), W71 (B), W72(B)W73(B), T-150
and MIDC Turbhe Plot No. D-277 & D-278. GIDC, Bhilad, Sarigam- Gujarat viz. Plot No. 2902, 2904, 211, 213, 2601,
2602, 2603.

39. CAPITAL MANAGEMENT:

The Company has foreign exchange exposure because of its trade related (export/import) fund related function.
The Company uses forward contracts, Options and Swaps to hedge against its foreign exchange exposures
relating to underlying transactions. The Company does not enter into any derivatives instruments for trading or
speculation purposes. During the year ended March 31, 2025, the Company had hedge in aggregate an amount of
'' 33,341.09/- lakhs (previous year '' 43,076.23/-lakhs) out of its annual trade related operations (export& import)
aggregating to '' 1,41,502.68/- lakhs (previous year ?1,51,282.69/-lakhs) after considering natural hedge.

44. EMPLOYEE BENEFITS:
a) Defined Benefit Plan

The employee''s gratuity fund scheme managed by Life Insurance of India and Aditya Birla Sun Life Insurance
Company Ltd is a defined benefit plan. The present value of obligation is determined based on actuarial valuation
using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build up the final obligation.

Note:

1. The Debt Service Coverage Ratio has declined compared to expectations, mainly because of lower margin
realisation stemming from reduced market pricing and subdued demand conditions.

2. There is no significant change (i.e. change of 25% more as compared to the FY 2023-24) in the other key
financial ratios.

3. Debit-Equity ratio for FY 2024-25 stood 0.41 x largely owing to ongoing capex.

b. The quarterly returns of statement file by the Company during the year with bank are in agreement with books of
accounts of the Company.

c. The Company do not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

d. The Company do not have any transactions with companies struck off.

e. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.

f. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

g. The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:

i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Company (Ultimate Beneficiaries), or

ii. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

h. The Company has not granted any loans and advances in the nature of loans to promoters, directors, KMP, or related
parties

i. The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

i. 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

ii. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

j. The Company have not any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

k. The Company has not been declared willful defaulter by any bank or financial institution or government or any
government authority.

l. The Company has complied with the number of layers prescribed under clause(87) of section 2 of the Act read with
the Companies (Restriction on number of Layers) Rules, 2017.

48. Figures of the previous year have been regrouped and rearranged wherever necessary.

AS PER OUR REPORT OF EVEN DATE
For GOKHALE & SATHE

Chartered Accountants

Firm Registration No.: 103264W FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sd/- Sd/- Sd/-

CA Ravindra More Prakash M. Patil Harshit M. Savla

(Partner) (Chairman, Managing Director & CEO) (Jt.Managing Director)

Membership No. 153666 DIN : 00005618 DIN : 00005340

Place: Mumbai Sd/- Sd/-

Date: May 06, 2025 Adhish P Patil CS Rushikesh Deole

(Chief Finanacial Officer) (Company Secretary)

ICSI M.NO.F12932

---

Mar 31, 2024

10) Provisions and Contingent Liabilities and Contingent Assets

Provisions:

Provisions for legal claims, chargeback and sales returns are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

Contingent Liabilities:

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

Contingent Assets

Contingent Assets are not recognised in the financial statements. Contingent Assets if any, are disclosed in the notes to the financial statements

H) Financial assets, financial liabilities, equity

instruments and impairment of financial assets

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired.

Financial assets at amortised cost Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets. The Company has made an irrevocable election to present subsequent changes in the fair value of equity investments not held for trading in other comprehensive income.

Financial assets at fair value through profit or loss Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss.

Equity Investments

All equity investments (excluding the investments in Subsidiaries) in the scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to the statement of profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss.

Investment in subsidiaries

Investment in subsidiaries are measured at cost less impairment loss, if any.

Financial liabilities

Financial liabilities are measured at amortised cost using the effective interest method. Other financial liabilities (including loans and borrowings, bank overdrafts and trade and other payables) are subsequently measured at amortised cost using the effective interest method.

The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and amounts paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost on initial recognition.

Interest expense (based on the effective interest method), foreign exchange gains and losses, and any gain or loss on derecognition is recognised in the Statement of Profit and Loss.

For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments

De-recognition of Financial Instruments:

The Company derecognises a Financial Asset when the contractual rights to the cash flows from the Financial Asset expire or it transfers the Financial Asset and the transfer qualifies for de-recognition under Ind AS 109. In cases where Company has neither transferred nor retained substantially all of the risks and rewards of the f inancial asset, but retains control of the financial asset, the Company continues to recognise such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognises an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

A Financial liability (or a part of a financial liability) is derecognised from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the

original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability de-recognised and the consideration paid and payable is recognised in the Statement of Profit and Loss Equity instruments

An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received net of direct issue cost.

Impairment of Financial Assets:

In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of all Financial Assets subsequent to initial recognition other than financial assets measured at fair value through profit and loss (FVTPL). The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward-looking estimates are analysed. For other financial assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk since its initial recognition. If there is significant increase in credit risk since its initial recognition full lifetime ECL is used. The impairment losses and reversals are recognised in Statement of Profit and Loss. ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR.

12) Events after the reporting period

Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are approved by the Board of Directors in case of a company, and, by the corresponding approving authority in case of any other entity for issue.

Two types of events can be identified:

(a) those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after the reporting period); and

(b) those that are indicative of conditions that arose after the reporting period (non-adjusting events after the reporting period).

13) Cash and cash equivalents

For the purpose of presentation in the Balance sheet, Cash and Cash equivalents comprises cash at bank and on hand and other short-term, highly liquid investments with an original maturity (or with an option to or can be readily converted or liquidated into cash) of three months or less, which are subject to an insignificant risk of changes in value. Cash and Cash Equivalents consist of balances with banks which are unrestricted for withdrawals and usages.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash

at bank and on hand and other short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

14) Recent Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

EM CAPITAL MANAGEMENT:

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximizise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is debt divided by total capital. Debt is calculated as loans and borrowings plus lease liabilities

E9 FINANCIAL RISK MANAGEMENT:

The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company is exposed to credit risk, market risk and liquidity risk. The Company''s senior management oversees the management of these risks.

Company has exposure to following risks arising from financial instruments:

• Credit risk

• Liquidity risk

• Market risk

I. Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and mutual funds, foreign exchange transactions and other financial instruments.

Credit risk management.

To manage the credit risk, the Company follows an adequate credit control policy and also has an external credit insurance cover with ECGC policy & HDFC ERGO General Insurance Company Limited .The requirement of assessing the impairment loss on trade receivables does not arise, since the collectability risk is mitigated. Bank balances are held with banks and majority of other security deposits are placed majorly with government/statutory agencies.

II. Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including bilateral loans, debt, and overdraft from banks at an optimizised cost. Working capital requirements are adequately addressed by internally generated funds. Trade receivables are kept within manageable levels.

III. Market Risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices- will affect the companythe Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizising the return. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments.

The Company''s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates.

Foreign currency risk

The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities in exports and imports which is majorly in US dollars. Hence, to combat the foreign currency exposure, the Company follows a policy wherein the net sales are hedged By forward Contract.

Note:

(ai) Above term loans are secured by pari-passu first charge by way of mortgage of immovable properties and hypothecation of moveable fixed assets, both present and future situated at MIDC Boisar, viz Plot No N-198, G-60, E21,E22,E-1, K-40, K-41 E120 ,E9/3, E9/4, W-60(B), W61(B),W62(A),W71(B),W72(B)W73(B) ,T-150 and MIDC Turbhe Plot No D-277 & D-278 in Maharashtra and at GIDC, Sarigam, Bhilad- Gujarat Viz. Plot No 2902, 2904,211,213,2601,2602,2603.

(aii) Term Loan from HDFC Bank Ltd and SVC Co-op Bank Ltd is also secured by way of pari-passu second charge on current assets of the companythe Company both present and future.

b. Loans from Scheduled Banks Payable on Demand of '' 13,097.02 lakhs ( Previous Year '' 28,292.14 lakhs) are secured by pari-passu first charge by way of hypothecation of Company''s raw materials stock, stock-in-process, finished goods, packing materials, stores & spares, book debts, and all other current assets including goods in transit governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties and hypothecation of movable fixed assets. both present and future situated at MIDC Boisar, Maharashtra viz. Plot No N-198, G-60, E21,E22,E-1, K-40, K-41 E120 ,E9/3,E9/4, W-60(B), W61(B),W62(A),W71(B),W72(B)W73(B), T-150 and MIDC Turbhe Plot No. D-277 & D-278.GIDC, Bhilad, Sarigam- Gujarat viz. Plot No. 2902, 2904, 211,213, 2601,2602,2603.

EM CAPITAL MANAGEMENT:

The Company has foreign exchange exposure because of its trade related (export/import) fund related function. The companyThe Company uses forward contracts, Options and Swaps to hedge against its foreign exchange exposures relating to underlying transactions. The Company does not enter into any derivatives instruments for trading or speculation purposes. During the year ended March 31, 2024, the companythe Company had hedge in aggregate an amount of '' 43,076.23/- lakhs (previous year '' 36,652.06/- lakhs) out of its annual trade related operations (export& import) aggregating to '' 1,51,282.69/- lakhs (previous year ''1,78,003.16/- lakhs) after considering natural hedge.

40 Sales /Income from Operation include export benefits amounting to '' 475.05/- lakhs (As at March 31, 2023 '' 384.82/- lakhs)

c. The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

d. The Company do not have any transactions with companies struck off.

e. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

f. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

g. The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign

entities (Intermediaries) with the understanding that the Intermediary shall:

i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries), or

ii. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

h. The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

i. 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

ii. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

i. The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

j. The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

47. Figures of the previous year have been regrouped and rearranged wherever necessary.

AS PER OUR REPORT OF EVEN DATE

For GOKHALE & SATHE FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

CHARTERED ACCOUNTANTS Firm Registration No: 103264W

Sd/- Sd/-

Sd/- PRAKASH M. PATIL HARIT P SHAH

CA TEJAS PARIKH (Chairman, Managing Director &CEO) (Whole Time Director)

PARTNER DIN: 00005618 DIN: 00005501

M NO: 123215

Sd/- Sd/-

Place: Mumbai ADHISH P.PATIL CS RUSHIKESH DEOLE

Date : May 03, 2024 (Chief Financial Officer) (Company Secretary & Compliance Officer)

ICSI M.No. F12932

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Mar 31, 2023

RIGHT ATTACHED TO EQUITY SHARES

The Company has only one class of equity shares with voting rights having a par value of ''10/- per share . The Company declares and pays dividends in Indian Rupees. Any Interim dividend paid is recognised on the approval by the Board of Directors.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by shareholders.

NOTES ON ISSUED, SUBSCRIBED AND PAID UP EQUITY SHARE CAPITAL

(a) During the Financial 2021-22 , the Company has completed buyback of 6,00,000/- Equity Shares of face value ''10/-each at a price of ''1000/- per share settlement of buyback bids was completed on May 19,2021. The number of shares post buyback stands reduced to 9,26,00,000 of ''10/- each. Accordingly the paid up capital also stands reduced to ?9,260 lakhs.

(b) During the Financial 2020-21 ,the Company has allotted 6,99,00,000 Bonus Equity Shares of ''10/- each fully paid up on October 05, 2020 in the proportion of 3 Equity Shares for every 1 Equity Share held by the Equity Shareholders of the Company as on the record date of October 01, 2020

(c) During the Financial 2019-20 , the Company has completed buyback of 2,82,100/- equity shaes of face value ''10/-each at a price of ''900/- per share on May 27, 2019.the number of shares post buyback stands reduced to 2,33,00,000 of ''10/- each. Accordingly the paid up capital also stands reduced to ''2,330 lakhs.

28*| SEGMENT REPORTING ( IND-AS 108)

Ind AS 108 establishes standards for the way that company reports information about operating segment and related disclosure about products and geographical areas.

I. BASIS FOR SEGMENTATION

The operations of the Company are limited to one segment i.e Manufacturing of API (Active Pharmaceutical Ingredients).The products being sold under this segment are of similar nature and comprises of pharmaceutical intermediary products only. The Company''s Chief Operating Decision Maker (CODM) reviews the internal management reports prepared based on an aggregation of financial information adjustments, etc.) on a periodic basis.

The financial instruments are categorised into two levels based on the inputs used to arrive at fair value measurements are described below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; and

Level 2: Inputs other than the quoted prices included within Level 1 that are observed for the asset or liability, either directly or indirectly.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. ~| CAPITAL MANAGEMENT:

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is debt divided by total capital. Debt is calculated as loans and borrowings plus lease liabilities

33| FINANCIAL RISK MANAGEMENT:

The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company is exposed to credit risk, market risk and liquidity risk. The Company''s senior management oversees the management of these risks.

Company has exposure to following risks arising from financial instruments:

• Credit risk

• Liquidity risk

• Market risk

I. Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and mutual funds, foreign exchange transactions and other financial instruments.

Credit risk management.

To manage the credit risk, the Company follows an adequate credit control policy and also has an external credit insurance cover with ECGC policy & HDFC ERGO General Insurance Company Limited .The requirement of assessing the impairment loss on trade receivables does not arise, since the collectability risk is mitigated. Bank balances are held with banks and majority of other security deposits are placed majorly with government/statutory agencies.

II. Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including bilateral loans, debt, and overdraft from banks at an optimised cost. Working capital requirements are adequately addressed by internally generated funds. Trade receivables are kept within manageable levels.

Liquidity Risk Management

The Company''s corporate treasury team from finance department is responsible for liquidity and funding as well as settlement. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

III. Market Risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices- will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments.

The Company''s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates.

Foreign currency risk

The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities in exports and imports which is majorly in US dollars. Hence, to combat the foreign currency exposure, the Company follows a policy wherein the net sales are hedged By forward Contract.

(ai) Above term loans are secured by pari-passu first charge by way of mortgage of immovable properties and hypothecation of moveable fixed assets, both present and future situated at MIDC Boisar, viz Plot No N-198, G-60, E21, E22, E-1, K-40, K-41 E120, E9/3, E9/4, W-60(B), W61(B), W62(A),W71(B), W72(B)W73(B), T-150 and MIDC Turbhe Plot No D-277 & D-278 in Maharashtra and at GIDC, Sarigam, Bhilad- Gujarat Viz. Plot No 2902, 2904, 211,213, 2601, 2602, 2603.

(aii) Term Loan from HDFC Bank Limited and SVC Co-op Bank Limited is also secured by way of pari-passu second charge on current assets of the Company both present and future.

b. Loans from Scheduled Banks Payable on Demand of '' 28,292.14 lakhs (Previous Year '' 33,935.03 lakhs) are secured by pari-passu first charge by way of hypothecation of Company''s raw materials stock, stock-in-process, finished goods, packing materials, stores & spares, book debts, and all other current assets including goods in transit governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties and hypothecation of movable fixed assets. both present and future situated at MIDC Boisar, Maharashtra viz. Plot No N-198, G-60, E21,E22,E-1, K-40, K-41 E120 ,E9/3,E9/4, W-60(B), W61(B),W62(A),W71(B),W72(B)W73(B), T-150 and MIDC Turbhe Plot No. D-277 & D-278.GIDC, Bhilad, Sarigam- Gujarat viz. Plot No. 2902, 2904, 211,213, 2601,2602,2603.

35| CAPITAL MANAGEMENT:

The Company has foreign exchange exposure because of its trade related (export/import) fund related function. The Company uses forward contracts, Options and Swaps to hedge against its foreign exchange exposures relating to underlying transactions. The Company does not enter into any derivatives instruments for trading or speculation purposes. During the year ended March 31,2023, the Company had hedge in aggregate an amount of '' 36,652.06/-lakhs (previous year '' 23,597.02) out of its annual trade related operations (export & import) aggregating to '' 1,78,003.16/-lakhs (previous year '' 1,62,749.21/-lakhs) after considering natural hedge.

36 Sales/Income from Operation include export benefits amounting to '' 384.82/- lakhs (previous year '' 1184.09 /- lakhs)

1CT EMPLOYEE BENEFITS: a) Defined Benefit Plan

The employee''s gratuity fund scheme managed by Life Insurance of India and Aditya Birla Sun Life Insurance Company Limited is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

c. The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

d. The Company do not have any transactions with companies struck off.

e. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

f. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

g. The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

i directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries), or

ii provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

h. The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

i. 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

ii. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

i. The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

j. The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

43 Figures of the previous year have been regrouped and rearranged wherever necessary.

---

Mar 31, 2018

Note No. 10.1 :Rights attached to equity shares

The Company has only one class of equity shares with voting rights having a par value of '' 10/- per share. The Company declares and pays dividends in Indian Rupees. Any interim dividend paid is recognized on the approval by Board of Directors.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the numbers of equity shares held by shareholders.

Note No. 10.3 : Notes on Issued, Subscribed and Paid up Equity Share Capital

(a) During the Fiancial Year 2017-18 , the Company has completed buyback of 2,75,000/- equity shaes of face value Rs, 10/- each at a price of Rs, 875/- per share on 14^th March, 2018. The number of shares post buyback stands reduced to 2,35,82,100 of Rs, 10/- each. Accordingly the paid up capital also stands reduced to Rs, 2,358.21 lakhs.

(b) During the Fiancial Year 2016-17, the Company has completed buyback of 3,60,000/- equity shaes of face value Rs, 10/- each at a price of Rs, 750/- per share on 26^th December, 2016. The number of shares post buyback stands reduced to 2,38,57,100 of Rs, 10/- each. Accordingly the paid up capital also stands reduced to Rs, 2,385.71 lakhs.

(c) During the Fiancial Year 2014-15, 12,108,550 Equity shares of Rs, 10/- have been allotted as fully paid bonus shares held on record date 25^th March, 2015.

1. There are no Micro and Small Enterprise, to whom the Company owes dues, which are outstanding for more than 45 days as at 31^st March 2018. This information required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

*Capital expenditure includes expenditure on development of new product of Rs, 44.42/- Lakhs #Capital expenditure includes expenditure on development of new product of Rs, 972.99/- Lakhs

2. Segment Reporting (Ind- AS 108)

Ind AS 108 establishes standards for the way that Company reports information about operating segment and related disclosure about products and geographical areas.

I. BASIS FOR SEGMENTATION

The operations of the Company are limited to one segment i.e. Manufacturing of API (Active Pharmaceutical Ingredients). The products being sold under this segment are of similar nature and comprises of pharmaceutical intermediary products only. The Company’s Chief Operating Decision Maker (CODM) reviews the internal management reports prepared based on an aggregation of financial information adjustments etc. on a periodic basis.

*Post the applicability of GST with effect from 1^st July, 2017, Sales are disclosed net of GST. Accordingly, the Gross Sales figures for the year ended 31^stMarch, 2018 are not comparable with the sales figures depicted for the previous years.

3 RELATED PARTY DISCLOSURE UNDER (Ind-AS 24) A. Name and Relationship of the Related Parties:

(1) Subsidiary - Wholly owned Pinnacle Life Science Private Ltd.

(2) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise and relatives of such individual.

- Individuals

Mr. Chandrakant V. Gogri Chairman Emeritus

Mr. Rajendra V. Gogri Non-Executive Director

- Relatives of Individuals

Mrs. Jaya C. Gogri Mr. Mirik R Gogri

Mrs. Dhanvanti V.Gogri Mr. Renil R. Gogri

Mrs. Aarti R. Gogri Mrs. Hetal Gogri Gala

(3) Key Management personnel along with their relatives have significant influence.

- Key Management Personel

Mr. Prakash M. Patil Chairman, Managing Director & Chief Executive Officer

Mr. Rashesh C. Gogri Managing Director

Mr. Harshit M. Savla Jt. Managing Director

Mr. Harit. P. Shah Whole-time Director

Mr. Uday M. Patil Whole-time Director

Mr. Adhish P. Patil Chief Financial Officer

Mr. Vibhav S. Ranade Company Secretary & Compliance Officer

- Relatives of Key Management Personel

Mrs. Priti P. Patil Mrs. Seema H. Savla

Mr. Arun M. Patil Ms. Bhoomi H. Savla

Dr. Vikas M. Patil Mr. Vishwa H. Savla

Mr. Sameer P. Shah Mrs. Jayashree H. Shah

Mrs. Arti T. Sankhe Mrs. Manisha R. Gogri

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; and

Level 2: Inputs other than the quoted prices included within Level 1 that are observed for the asset or liability, either directly or indirectly.

4 CAPITAL MANAGEMENT:

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as loans and borrowings less cash & marketable securities

5 FINANCIAL RISK MANAGEMENT:

The Company’s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company is exposed to credit risk, market risk and liquidity risk. The Company’s senior management oversees the management of these risks.

Company has exposure to following risks arising from financial instruments:

- Credit risk

- Liquidity risk

- Market risk

I. Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and mutual funds, foreign exchange transactions and other financial instruments.

Credit risk management.

To manage the credit risk, the Company follows a adequate credit control policy and also has an external credit insurance cover with ECGC policy .The requirement of assessing the impairment loss on trade receivables does not arise, since the collectability risk is mitigated. Bank balances are held with banks and majority of other security deposits are placed majorly with government/statutory agencies.

II. Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including bilateral loans, debt, and overdraft from banks at an optimized cost. Working capital requirements are adequately addressed by internally generated funds. Trade receivables are kept within manageable levels.

Liquidity Risk Management

The Company’s corporate treasury department is responsible for liquidity and funding as well as settlement. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

III. Market Risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices-will affect the company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.

The Company’s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates.

Foreign currency risk

The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities in exports and imports which is majorly in US dollars. Hence, to combat the foreign currency exposure, the Company follows a policy wherein the net sales are hedged By forward Contract.

Note:

(i) Above term loan are secured by pari-passu first charge by way of mortgage of immovable properties and hypothecation of moveable fixed assets, both present and future situated at MIDC Boisar, viz Plot No N-198, G-60, E21,E22,E-1, K-40, K-41 E120, E9/3, E9/4, W-60(B), W61(B), W62(A), W71(B), W72(B), W73(B) & T-150 and MIDC Turbhe Plot No D-277 & D-278 in Maharashtra and at GIDC, Sarigam, Bhilad - Gujarat Viz. Plot No 2902, 2904, 211, 213, 2601, 2602, 2603, 2520, 2522 and 3325.

(ii) Loan from Kotak Mahindra bank and The Shamrao Vithal Co-op Bank Ltd is also secured by second charge on current assets of the Company both present and future.

b. Loans from Scheduled Banks Payable on Demand of ''. 17829.64 lakhs ( Previous Year Rs, 13,079.42) are secured by hypothecation of Company’s raw materials stock, stock-in-process, finished goods, packing materials, stores & spares, book debts, and all other current assets including goods in transit governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties and hypothecation of movable fixed assets. both present and future situated at MIDC Boisar, Maharashtra viz. Plot No N-198, G-60, E21, E22, E-1, K-40, K-41, E-120, E9/3, E9/4, W-60(B), W61(B), W62(A), W71(B), W72(B), W73(B) & T-150 and MIDC Turbhe Plot No. D-277 & D-278.GIDC, Bhilad, Sarigam- Gujarat viz. Plot No. 2902, 2904, 211, 213, 2601, 2602, 2603, 2520, 2522 and 3325.

6. The Company has foreign exchange exposure because of its trade related (export/import) fund related function. The Company uses forward contracts, Options and Swaps to hedge against its foreign exchange exposures relating to underlying transactions. The Company does not enter into any derivatives instruments for trading or speculation purposes. During the year ended 31.03.2018, the company had hedge in aggregate an amount of Rs, 39,531.06/-Lakhs (previous year Rs, 34,800.84/- Lakhs) out of its annual trade related operations (export& import) aggregating to Rs, 81,729.69/-Lakhs (previous year 81,033.65/- Lakhs) after considering natural hedge.

7. Sales / Income from Operations include export benefits amounting to Rs, 1,409.43/- Lakhs (As at 31^st March, 2017 Rs, 2,263.86/- Lakhs)

b) Leave Encashment :

Leave Encashment liability amounting to Rs, 145.56 Lakhs previous year (Rs, 146.94 Lakhs) has been provided in the Accounts.

8. As per Sec 135 of the Companies Act 2013, details of amount to be spent on Corporate Social Responsibility are as below. Gross amount to be spent on the CSR activity during the year is Rs, 199.63 Lakhs. During the year company spent Rs, 199.83 Lakhs (previous year 185.07 Lakhs).

9. Disclosure for operating leases under Ind AS 17 - “Leases”:

During the year Company had entered in to lease transaction covering Lease term of 5 years. The Lease Transaction is covered as Operating Lease as per the Ind AS 17 and all lease payments are recognized as an expense in profit and loss account on straight line basis. Disclosures as per Ind AS 17, Lease Accounting are as below.

*The previous GAAP figures have been reclassified to confirm to Ind AS presentation requirements for the purpose of this note

Notes to First time adoption of Ind AS

a Property, Plant and Equipment:

The Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment as deemed cost at the date of the transition. The same election has been made in respect of intangible assets.

b Investment:

Investment in Subsidiary: The Company has opted to carry the investment in subsidiaries at the previous GAAP carrying amount at the transition date. Other Equity Instruments: All other equity instruments are classified as FVTOCI.

c Retained Earnings:

Retained earnings as at 1^st April, 2016 has been adjusted consequent to Ind AS transition adjustments.

d Deferred Tax:

“Deferred tax under Ind AS has been recognized for temporary differences between tax base and the book base of the relevant assets and liabilities. Under IGAAP the deferred tax was accounted based on timing differences impacting the profit or loss for the period. Deferred Tax on aforesaid Ind AS adjustments has been created for both periods - as on 31^st March, 2017 and 1^st April, 2016.”

e Revenue from Operations & Excise Duty:

“Under previous GAAP, revenue from sale of goods was presented net of excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as part of other expenses. This has resulted in an increase in the revenue from operations and expenses for the year ended 31^st March, 2017. The total comprehensive income for the year ended and equity as at 31^st March, 2017 has remained unchanged.”

f Re-measurements of Post Employment Benefit Obligation:

“Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit and loss. Under the previous GAAP, these re-measurements were forming part of the Statement of Profit and Loss for the year.”

10. Figures of the previous year have been regrouped and rearranged wherever necessary.

11. Accounting Judgments, Estimates and Assumptions:

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, asset and liabilities, and the disclosure of contingent

Liabilities, at the end of the reporting period However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the assets or liabilities in future periods.

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Mar 31, 2016

1. Contingent Liabilities:

a. In respect of bank guarantees issued and L/C opened by the Company''s bankers Rs. 3,785.03/-Lakhs (As at 31st March, 2015 Rs. 4584.73 Lakhs)

b. Demand in respect of additional income tax disputed in appeal Rs. 351.44/-Lakhs (As at 31st March, 2015 Rs. 1,133.91/ Lakhs), sales tax demand Rs. 15.18/- Lakhs (As at 31st March, 2015 Rs. Nil) and demand in respect of additional Excise custom duty, fine & penalty in appeal Rs. 38.88/-Lakhs (As at 31st March, 2015 Rs. 78.51/- Lakhs)

c. Liability for duty on raw material imported under advance license benefit scheme against which export obligation remained to be fulfilled Rs. 259.45/-Lakhs (As at 31st March, 2015 Rs. 189.86/- Lakhs)

d. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances Rs. 303.49/- Lakhs. (As at 31st March, 2015 Rs. 1,212.67/- Lakhs)

e. The company has given corporate guarantee for borrowing facilities of Rs. 1,854/- Lakhs from The Saraswat Co-Op. Bank Limited for its only subsidiary Pinnacle Life Science Private Ltd.

Note:

1) Above term loan are secured by pari-passu first charge by way of mortgage of immovable properties and hypothecation of moveable fixed assets, both present and future situated at MIDC Boisar, viz Plot No. N-198, G-60, E21& E22, E-1, K-40, K-41, E120, E9/3 & E9/4, W-60(B), W61(B), W62(A), W71(B), W72(B), W73(B) and MIDC Turbhe Plot No. D-277 & D-278 in Maharashtra and at GIDC, Sarigam, Bhilad- Gujarat Viz. Plot No. 2902, 2904 & Plot No. 211, 213 & Plot No. 2601, 2602, 2603. The working directors of the company have personally guaranteed corporate loan of Rs. 1,516.40 Lakhs from State Bank of India.

2) Loan from Kotak Mahindra Bank, Standard Chartered Bank, The Shamrao Vithal Co-op Bank Ltd. is also secured by second charge on current assets of the company both present and future.

b. Loans from Scheduled Banks Payable on Demand of Rs. 15,004.37 lakhs (Previous Year Rs. 15,919.07) are secured by hypothecation of Company''s raw materials stock, stock-in-process, finished goods, packing materials, stores & spares, book debts, and all other current assets including goods in transit governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties and hypothecation of movable fixed assets. Both present and future situated at MIDC Boisar, viz. Plot No. N-198, G-60, E21& E22, E-1, K-40, K-41, E120, E9/3, & E9/4, W-60(B), W61(B), W62(A), W71(B), W72(B), W73(B) and at Turbhe Plot No. D-277 & D-278 in Maharashtra and in GIDC , Bhilad, Sarigam- Gujarat viz. Plot No. 2902, 2904, & 211, 213 & 2601, 2602, 2603.

2. The Company has foreign exchange exposure because of its trade related (export/import) fund related function. The company uses forward contracts, Options and Swaps to hedge against its foreign exchange exposures relating to underlying transactions. The Company does not enter into any derivatives instruments for trading or speculation purposes. During the year ended 31.03.2016, the company had hedge in aggregate an amount of Rs. 28,728.66/- Lakhs (previous year Rs. 12,374.71/- Lakhs) out of its annual trade related operations (export & import) aggregating to Rs. 80,179.21/- Lakhs (previous year Rs. 79,433.77/- Lakhs) after considering natural hedge. The company had hedge its outstanding foreign currency long term borrowing Rs. Nil (Previous year Rs. 732.20/- Lakhs).

3. There are no Micro and Small Enterprises, to whom the company owes dues, which are outstanding for more than 45 days as at 31st March, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

4. In the opinion of the Board, the Current Assets and Loans and Advances have a value on realization at least equal to the amounts at which they are stated in the Balance Sheet.

5. Segment-wise Disclosure as per Accounting Standard: 17.

I. BUSINESS SEGMENTS AS PRIMARY SEGMENTS

The Company is considered to be a single segment Company engaged in pharmaceuticals business, hence the disclosure requirement as per AS-17 ''Business Segments as Primary Segment'' is not attracted.

Note:

Segmental capital employed:

Fixed assets used in the Company''s business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. The Company believes that currently it is not practicable to provide segment disclosures relating to total assets and liabilities.

6. Related party transactions:

Related party transactions disclosure as required by Accounting Standard - 18. ''Related Party Disclosures'' issued by The Institute of Chartered Accountants of India are given below:

A. Name and Relationship of the Related Parties:

3(a) Subsidiary - Wholly owned

Pinnacle Life Science Private Ltd.

3(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of such individual.

7.As per Sec 135 of the Companies Act 2013, details of amount to be spent on Corporate Social Responsibility are as below. Gross amount to be spent on the CSR activity during the year is Rs. 167.14 Lakhs. During the year Company has spent Rs. 175.38 Lakhs.

8. Figures of the previous year have been regrouped and rearranged wherever necessary.

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Mar 31, 2014

1. Contingent Liabilities:

a. In respect of bank guarantees issued and L/C opened by the Company''s bankers Rs. 4,268.40 lakhs (as at 31st March, 2013 Rs. 2,689.84 lakhs)

b. Demand in respect of additional income tax disputed in appeal Rs. 784.66 lakhs (as at 31st March, 2013 Rs. 485.26 lakhs).

c. Demand/Rebate in respect of Excise duty in case of Ammonium Sulphate of Rs. 102.90 Lakhs (as at 31st March, 2013 Rs. 102.90 lakhs). The hon''ble high Court of Mumbai has decided the appeal in favour of the Company in February 2010 on the basis of its earlier judgment in a similar case. however, as per information available with the Company, the Department of Central Excise has filed an appeal in that precedent case in the Supreme Court, hence the Company has continued to disclose this matter. And Demand in respect of Excise duty of Niacin of Rs. 78.51 Lakhs (as at 31st March, 2013 Rs. 78.51 Lakhs) case is pending with CESTAT.

d. Liability for duty on raw material imported under advance licence benefit scheme against which export obligation remained to be fulfilled Rs. 155.53 lakhs (as at 31st March, 2013 Rs. 163.98 lakhs).

e. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 212.13 lakhs (as at 31st March, 2013 Rs. 731.39 lakhs).

Note:

1) Above term loan are secured by pari-pasu first charge by way of mortgage of immovable properties and hypothication of moveable fixed assets, both present and future situated at MIDC Boisar, viz Plot No. N-198, G-60, E21& E22, K-40, K-41 E120, E9/3, & E9/4, and MIDC Turbhe Plot No. D-277 & D-278 in Maharashtra and at GIDC, Sarigam, Bhilad – Gujarat viz. Plot No. 2902, 2904 & Plot No. 211, 213. The working directors of the Company have personally guaranteed Corporate Loan of Rs. 3,329.00 Lakhs from State Bank of India.

2) Kotak Mahindra Bank loan is also secured by second charge on current assets of the Company both present and future.

b. Loans from Scheduled Banks Rs. 17,186.80 lakhs are secured by hypothecation of Company''s raw materials stock, stock- in-process, finished goods, packing materials, stores & spares, book debts, and all other current assets including goods in transit governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties and hypothecation of movable fixed assets, both present and future situated at MIDC Boisar, Maharashtra viz. Plot No. N-198, G-60, E-21 & 22, K-40 & K-41, E-120 and E-9/3 & E-9/4, and at Turbhe Plot No. D-277 & D-278. GIDC, Bhilad, Sarigam – Gujarat viz. Plot No. 2902, 2904, & 211, 213.

c. Short term borrowing include Loans & advances from directors, relatives & corporates amounting of Rs. 1,800.83 Lakhs which is accepted as deposits in F.Y 2012-2013 for term of 3 years and will matured in F.Y. 2015-2016. As per Section 74 of Companies Act, 2013, deposits as on 31st March, 2014 will have to be repaid as and when such payments are due or within one year from such commencement of this section (i.e. 1st April, 2014) whichever is earlier. hence the same is classified as short term borrowings.

2. The Company has foreign exchange exposure because of its trade related (export/import) fund related function. The Company uses forward contracts, Options and Swaps to hedge against its foreign exchange exposures relating to underlying transactions. The Company does not enter into any derivatives instruments for trading or speculation purposes. During the year ended 31.03.2014, the Company had hedge in aggregate an amount of Rs. 10,021.24 Lakhs (previous year Rs. 6,570.92 Lakhs) out of its annual trade related operations (export & import) aggregating to Rs. 69,234.75 Lakhs (previous year Rs. 56,639.48 Lakhs) after considering natural hedge. The Company had hedge its outstanding foreign currency long term borrowing Rs. 2,424.10 Lakhs (previous year Rs. 4,114.60 Lakhs).

3. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2014. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

4. In the opinion of the Board, the Current Assets and Loans and Advances have a value on realisation at least equal to the amounts at which they are stated in the Balance Sheet.

5. Segment-wise Disclosure as per Accounting Standard: 17. I. BUSINESS SEGMENTS AS PRIMARY SEGMENTS

The Company is considered to be a single segment Company engaged in pharmaceuticals business, hence the disclosure requirement as per AS-17 ''Business Segments as Primary Segment'' is not attracted.

6. related party transactions:

Related party transactions disclosure as required by Accounting Standard – 18. ''Related Party Disclosures'' issued by The Institute of Chartered Accountants of India are given below:

A. Name and relationship of the related Parties:

3(b) Associates

huanggang Yinhe Aarti Pharmaceutical Co. Ltd.

3(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of such individual.

3(e) Enterprise/firms over which controlling individuals have significant influence.

- Aarti Industries Ltd.

- Anushakti holdings Ltd.

- Rupal Drugs LLP

- Anushakti Chemical & Drugs Ltd.

- Gogri & Sons Investments Pvt. Ltd.

- Alchemie Gases & Chemicals Pvt. Ltd.

- Alchemie Leasing & Financing Pvt. Ltd.

- Alchemie Pharma chem Pvt. Ltd.

Note : Sr. 3(b),3(c),3(d),3(e) refer to the relevant Para''s of AS 18.

7. Employee Benefits:

a) Defined Benefit Plan

The employee''s gratuity fund scheme managed by Life Insurance of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

b) Leave Encashment :

Leave Encashment liability amounting to Rs. 95.35 lakhs (previous year Rs. 97.00 lakhs) has been provided in the Accounts.

8. Additional information pursuant to the provisions of paragraphs 3, 4CD, 4D and part II of Schedule VI of the Companies Act, 1956 (Figures in bracket relate to 31st March, 2013).

a. Licensed capacity, installed capacity and production (as certified by the Management and not verified by the Auditors, it being a technical matter.)

9. Figures of the previous year have been regrouped and rearranged wherever necessary.

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Mar 31, 2013

1.1 Fire incident occurred on 22.03.2013 at one of the Production block of the manufacturing unit located at Plot No. N - 198 Tarapur manufacturing MNI, an intermediate which is further processed to manufacture two APIs. Loss / damage caused to stock and fixed assets due to fire incident has been covered under insurance and accounted for appropriately.

1.2 Contingent Liabilities:

a. In respect of bank guarantees issued and L/C opened by the Company''s bankers Rs. 2689.84 lakhs (As at 31-March-2012 Rs.2257.87 lakhs)

b. Demand in respect of additional income tax disputed in appeal Rs. 485.26 lakhs (As at 31-March 2012 Rs. 250.64 lakhs).

c. Demand /Rebate in respect of Excise duty in case of Ammonium Sulphate of Rs.102.90 Lakhs (as at 31st March 2012 Rs.1 02.90 lakhs). The Hon''ble High Court of Mumbai has decided the appeal in favour of the Company in February 2010 on the basis of its earlier judgment in a similar case. However, as per information available with the Company, the Department of Central Excise has filed an appeal in that precedent case in the Supreme Court, hence the company has continued to disclose this matter.

d. Liability for duty on raw material imported under advance licence benefit scheme against which export obligation remained to be fulfilled Rs.163.98 lakhs (As at 31-March-2012 Rs.55.38 lakhs).

e. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 731.39 lakhs (As at 31-March-2012 Rs.412.72 lakhs).

Note:

1) Above term loan are secured by pari-pasu first charge by way of mortgage of immovable properties and hypothication of moveable fixed assets, both present and future situated at MIDC Boisar, viz Plot No. N-198, G-60, E21-22, K-40, K-41 E120, E9/3 & E9/4, and MIDC Turbhe Plot No. D-277 & D-278 in Maharashtra and at GIDC, Sarigam, Bhilad-Gujarat Viz. Plot No. 2902, 2904.

2) Kotak Mahindra bank loan is also secured by second charge on current assets of the company both present and future.

b. Loans from Scheduled Banks Rs. 1,346,968,836 are secured by hypothecation of Company''s raw materials stock, stock-in- process, finished goods, packing materials, stores & spares, book debts, and all other current assets including goods in transit governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties and hypothecation of movable fixed assets, both present and future situated at MIDC Boisar, Maharashtra viz. Plot No. N-198, G-60, E-21 & 22, K-40 & K-41, E-120 and E-9/3 & E-9/4, W-60(B) 61(B) 62(B) 71(B) 72(B). GIDC, Bhilad, Sarigam-Gujrat viz. Plot No. 2902, 2904 and at Turbhe Plot No. D-277 & D-278. The working Directors of the Company have personally guaranteed these loans.

1.3 There are no Micro and Small Enterprises, to whom the company owes dues, which are outstanding for more than 45 days as at 31st March, 201 3. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

1.4 In the opinion of the Board, the Current Assets and Loans and Advances have a value on realisation at least equal to the amounts at which they are stated in the Balance Sheet.

Note:

Segmental capital employed:

Fixed assets used in the Company''s business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. The Company believes that currently it is not practicable to provide segment disclosures relating to total assets and liabilities.

1.5 Related party transactions:

Related party transactions disclosure as required by Accounting Standard - 18. ''Related Party Disclosures'' issued by The Institute of Chartered Accountants of India are given below:

A. Name and Relationship of the Related Parties:

3(b) Associates

Huanggang Yinhe Aarti Pharmaceutical Co. Ltd.

3(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of such individual.

1. Individuals

3(e) Enterprise/firms over which controlling individuals have significant influence.

- Aarti Industries Ltd.

- Anushakti Holdings Ltd.

- Rupal Drugs LLP

- Anushakti Chemical & Drugs Ltd.

- Gogri & Sons Investments Pvt. Ltd.

- Alchemie Gases & Chemicals Pvt. Ltd.

- Alchemie Leasing & Financing Pvt. Ltd.

Note : Sr. 3(b),3(c),3(d),3(e) refer to the relevant Para''s of AS 18.

1.6 Figures of the previous year have been regrouped and rearranged wherever necessary.

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Mar 31, 2012

PART - A

The Board of Directors of the Company had approved Financial Statements for the year ended 31st March, 2012, at its meeting held on 25th May, 2012 without considering the effect of the proposed amalgamation of Suyash Laboratories Ltd (Amalgamating company) with the Aarti Drugs Ltd (Amalgamated company), pending approval of the scheme by the Hon'ble High Court of Mumbai . The said Financial Statements were approved mainly for compliance of the Listing Agreements of the Bombay Stock Exchange and National Stock Exchange.

Pursuant to the approval of the scheme of amalgamation by the Hon'ble High Court of Mumbai on 11th May, 2012, the amalgamation became effective with effect from 1st April, 2011, fresh Financial Statements as at 31st March, 2012 have been drawn up as per the decision taken by the Board of Directors of the Company.

1.1 Principles of Amalgamation & Disclosures:

a. In terms of the Scheme approved by the Hon'ble High Court, the entire business of Suyash Laboratories Ltd., stands transferred to and vested in the Company with effect from April 01, 2011, as a going concern.

b. As Suyash Laboratories Ltd. was a wholly owned subsidiary of the Company, no consideration was payable pursuant to amalgamation of Suyash Laboratories Ltd. with the Company.

c. The amalgamation of the financial statements of the Aarti Drugs Ltd. and Suyash Laboratories Ltd. is done on line by line basis by adding together like items of assets, liabilities, income and expenses. All intra group transactions, unrealized inter company profits and balances have been eliminated in the course of amalgamation.

d. The financial statements of Aarti Drugs Ltd. and Suyash Laboratories Ltd. have been amalgamated using uniform accounting policies for like transactions and other events in similar circumstances.

e. Amalgamation is carried out as per Accounting Standard 14, issued by the Institute of Chartered Accounts of India.

f. The difference, being the excess of the book value of the investment of the Company in the equity shares of Suyash Laboratories Ltd over the net assets of Suyash Laboratories Ltd. transferred to the Company has been adjusted in Reserves & Surplus of the Company.

g. Pending completion of the relevant formalities of transfer of certain assets and liabilities acquired pursuant to the scheme, such assets and liabilities remain in the name of the Amalgamating Company.

h. The merged company will continue to carry on the business of manufacturers, producers, processors, buyers, sellers, importers, exporters and/or otherwise dealers in pharmaceuticals, drugs, medicines, medicinal preparations, tabulating formulations, injections, alkalies, acids, chemicals and allied products including fine chemicals, perfumes, flavors, cosmetics and other pharmaceutical products as Aarti Drugs Limited.

1.2 Previous year's figures are of Aarti Drugs Ltd. stand alone and hence are not comparable with the current year.

1.3 Figures of previous year have been rearranged or regrouped wherever necessary.

1.4 On 27th February, 2012 fire occurred in Suyash Laboratories Ltd., loss on account of fire of Stock and fixed assets is debited to statement of Profit and Loss Rs. 1.16 crores.

1.5 Contingent Liabilities :

a. In respect of bank guarantees issued and L/C opened by the Company's bankers Rs. 2257.87 lakhs (As at 31st March, 2011 Rs. 1512.17 lakhs)

b. Demand in respect of additional income tax disputed in appeal Rs. 250.64 lakhs. (As at 31st March, 2011 Rs. 34.95 lakhs)

c. Demand /Rebate in respect of Excise duty in case of Ammonium Sulphate of Rs. 102.90 Lakhs (as at 31st March, 2011 Rs. 102.90 lakhs). The Hon'ble High Court of Mumbai has decided the appeal in favour of the Company in February 2010 on the basis of its earlier judgement in a similar case. However, as per information available with the Company, the Department of Central Excise has filed an appeal in that precedent case in the Supreme Court, hence the company has continued to disclose this matter.

d. Liability for duty on raw material imported under advance licence benefit scheme against which export obligation remained to be fulfilled Rs. 55.38 lakhs (As at 31st March, 2011 Rs. 34.63 lakhs)

e. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 412.72 lakhs. (As at 31st March, 2011 Rs. 697.02 lakhs)

1.6 Securities for loans taken from Banks:

a. Balances in respect of outstanding term loan from The Industrial Development Bank of India Rs. 1083.33 lakhs (As at 31st March, 2011 Rs. 2055.56 lakhs), of which Rs. 750 repayable up to F.Y. end 2012-13 and balance Rs. 333.33 lakhs up to F.Y. end 2013-14,Out of the above the loan sanctioned by IDBI on 25th March, 2008 for Rs. 3000 lakhs also secured by second charge on the current assets of the company both present and future as a collateral security. The Export Import Bank of India Rs. 2847.62 lakhs (As at 31st March, 2011 Rs. 1663.87 lakhs), of which Rs. 1047.62 lakhs repayable up to F.Y. end 2014-15 and balance Rs. 1800 up to F.Y. end 2016-17 Standard Chartered Bank Rs. 3483.20 lakhs (As at 31st March, 2011 Rs. 4123.00 lakhs), of which Rs. 1820 lakhs repayable upto 2014-15 and balance Rs. 1663.20 is upto F.Y. end 2015-16. DBS Bank Ltd Rs. 1820.00 lakhs (As at 31st March, 2011 Rs. 1820.00 lakhs), will be repayable up to F.Y. end 2015-16, are secured by pari-passu first charge by way of mortgage of immovable properties and hypothecation of moveable fixed assets, both present and future situated at MIDC Boisar, Maharashtra viz. Plot No. N-198, G-60, E-21 & 22, K-40 & K-41, E-120 and E-9/3 & E-9/4, at GIDC, Bhilad, Sarigam, Gujarat viz. Plot No. 2902 & 2904 and at Turbhe Plot No. D-277 & D-278.

b. Loans from Scheduled Banks Rs. 9540.47 lakhs are secured by hypothecation of Company's raw materials stock, stock-in- process, finished goods, packing materials, stores & spares, book debts, and all other current assets including goods in transit governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties and hypothecation of moveable fixed assets. both present and future situated at MIDC Boisar, Maharashtra viz. Plot No. N-198, G-60, E-21 & 22, K-40 & K-41, E-120 and E-9/3 & E-9/4, GIDC , Bhilad, Sarigam- Gujarat viz. Plot No. 2902, 2904 and at Turbhe Plot No. D-277 & D-278. The working Directors of the Company have personally guaranteed these loans

c. Loan from IDBI Bank as Working Capital Lender to amalgamating company Rs. 930.74 lakhs is secured by way of Exclusive First Charge by way of hypothecation of raw material, stock in process, finish goods, packing material, stores & spares, book debts and all also second charge by way of hypothecation of moveable fixed assets, both present and future situated at MIDC Boisar, Maharashtra viz W-60(B) 61(B) 62(B) 71(B) 72(B).

1.7 There are no Micro and Small Enterprises, to whom the company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

1.8 In the opinion of the Board, the Current Assets and Loans and Advances have a value on realisation at least equal to the amounts at which they are stated in the Balance Sheet.

1.9 Segment-wise Disclosure as per Accounting Standard: 17.

I. BUSINESS SEGMENTS AS PRIMARY SEGMENTS

The Company is considered to be a single segment Company engaged in pharmaceuticals business, hence the disclosure requirement as per AS-17 'Business Segments as Primary Segment' is not attracted.

Segmental capital employed:

Fixed assets used in the Company's business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. The Company believes that currently it is not practicable to provide segment disclosures relating to total assets and liabilities.

1.10 Related party transactions:

Related party disclosure as required by Accounting Standard - 18. 'Related Party Disclosures' issued by The Institute of Chartered Accountants of India are given below :

A Name and Relationship of the Related Parties :

3(b) Associates

Huanggang Yinhe Aarti Pharmaceutical Co. Ltd.

3(e) Enterprise/firms over which controlling individuals have significant influence.

- Aarti Industries Ltd.

- Anushakti Holdings Ltd. (formerly known as Anushakti Chemical & Drugs Ltd.)

- Rupal Drugs LLP (formerly known as Rupal Drugs Ltd.)

- Anushakti Chemical & Drugs Ltd. (formerly known as Aarti Healthcare Ltd.) Note : Sr. 3(b),3(c),3(d),3(e) refer to the relevant paras of AS-18.

1.11 Sales and other sales income include export benefits amounting to Rs. 23,57,98,005/- (As at 31st March, 2011 Rs.18,13,12,308/-)

1.12. Employee Benefits:

Defined Benefit Plan

The employee's gratuity fund scheme managed by Life Insurance of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

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Mar 31, 2011

1. CONTINGENT LIABILITIES :

a) In respect of bank guarantees issued and L/C opened by the Company's bankers Rs.1512.57 lakhs (As at 31st March, 2010 Rs 1208.45 lakhs).

b) Demand in respect of additional income tax disputed in appeal Rs.34.95 lakhs (As at 31st March, 2010 Rs. 36.04 lakhs) refund effect in respect of appeals decided in favour of Company aggregating to Rs.37.62 lakhs are pending.

c) Demand /Rebate in respect of Excise duty in case of Ammonium Sulphate of Rs.102.90 Lakhs (as at 31st March, 2010 Rs.102.90 lakhs). The Hon'ble High Court of Mumbai has decided the appeal in favour of the Company in February 2010 on the basis of its earlier judgement in a similar case.

However, as per information available with the Company, the Department of Central Excise has filed an appeal in that precedent case in the Supreme Court, hence the company has continued to disclose this matter.

d) Liability for duty on raw material imported under advance licence benefit scheme against which export obligation remained to be fulfilled Rs.34.63 lakhs (As at 31st March, 2010 Rs.45.43 lakhs).

e) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs 697.02 lakhs (As at 31st March, 2010 Rs.16.21 lakhs).

2. SECURITIES FOR LOANS TAKEN FROM BANKS:

a) Balances in respect of outstanding term loan from The Industrial Development Bank of India Rs. 2055.56 lakhs (As at 31st March, 2010 Rs.3027.78 lakhs), The Export Import Bank of India Rs.1663.87 lakhs (As at 31st March, 2010 Rs 2515.41 lakhs), Standard Chartered Bank Rs.4123.00 lakhs (As at 31st March, 2010 Rs. 2275.00 lakhs), DBS Bank Ltd Rs.1820.00 lakhs (As at 31st March, 2010 NIL), are secured by pari-passu first charge by way of mortgage of immovable properties and hypothecation of moveable fixed assets, both present and future situated at Tarapur viz. Plot No. N-198, G-60, E-21 & 22, K-40 & K-41, E-120 and E-9/3 & E-9/4, at Sarigam viz. Plot No. 2902 & 2904 and at Turbhe Plot No. D-277 & D-278. Out of the above the working Directors of the Company have personally guaranteed loans sanctioned by EXIM Bank on 21st June, 2006 for Rs.2000 lakhs the balance in respect of these loan are Rs.235.29 lakhs (As at 31st March, 2010 Rs. 705.88 lakhs) out of the above the loan sanctioned by IDBI Bank on 25th March, 2008 for Rs.3000 lakhs also secured by second charge on the current assets of the Company both present & future alongwith existing term tender as a collateral security.

b) Loans from Scheduled Banks Rs.9555.74 lakhs (As at 31st March, 2010 Rs. 6047.94 lakhs) are secured by hypothecation of Company's raw materials stock, stock-in-process, finished goods, packing materials, stores & spares, book debts, foreign documentary bills and all other current assets including goods in transit governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties and hypothecation of moveable fixed assets. both present and future situated at Tarapur viz. Plot No. N-198, G-60, E-21 & 22, K-40 & K-41, E-120 and E-9/3 & E-9/4, at Sarigam viz. Plot No. 2902 & 2904 and at Turbhe Plot No. D-277 & D-278. The working Directors of the Company have personally guaranteed these loans.

3. There are no Micro and Small Enterprises, to whom the company owes dues, which are outstanding for more than 45 days as at 31st March, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

4. In the opinion of the Board, the Current Assets and Loans and Advances have a value on realisation at least equal to the amounts at which they are stated in the Balance Sheet.

5. SEGMENT-WISE DISCLOSURE AS PER ACCOUNTING STANDARD: 17.

I. Business Segments as Primary Segments

The Company is considered to be a single segment Company engaged in pharmaceuticals business, hence the disclosure requirement as per AS-17 'Business Segments as Primary Segment' is not attracted.

Notes:

Segmental capital employed:

Fixed assets used in the Company's business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. The Company believes that currently it is not practicable to provide segment disclosures relating to total assets and liabilities.

6. RELATED PARTY TRANSACTIONS:

Related party disclosure as required by Accounting Standard – 18. ‘ Related Party Disclosures' issued By The Institute of Chartered Accountants of India are given below :

A Name and Relationship of the Related Parties :

3(a) Subsidiary

Suyash Laboratories Ltd.

3(b) Associates

Huanggang Yinhe Aarti Pharmaceutical Co. Ltd.

3(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of such individual.

1. Individuals

Mr. Chandrakant V. Gogri Mr. Rajendra V. Gogri

2. Relatives of Individuals

Mrs.Jaya C. Gogri Mr.Rashesh C. Gogri

Mrs.Dhanvanti V. Gogri Mrs.Aarti R. Gogri

Mirik R. Gogri Mr.Renil R. Gogri

Mrs. Hetal Gogri Gala Mrs. Indira M. Dedhia

3(d) Key Management personnel alongwith their relatives have significant influence.

1. Key Management Personnel

Mr. Prakash M. Patil Mr. Harit. P. Shah

Mr. Harshit M. Savla Mr. Uday M. Patil

2. Relatives of Key Management Personnel Mrs. Priti P. Patil Mrs. Seema H. Savla

Mr. Arun M. Patil Ms. Bhoomi H. Savla

Dr. Vikas M. Patil Vishwa H. Savla

Mr. Adhish Patil Mrs. Jayashree H. Shah

Mrs. Aarti T. Sankhe Mr. Pragji M. Shah

Mrs. Kalika A. Mishra Mrs. Keserben P. Shah

Mr. Sameer P. Shah

3(e) Enterprise/firms over which controlling individuals have significant influence.

1. Aarti Industries Ltd.

2. Anushakti Chemical & Drugs Ltd.

3. Rupal Drugs Ltd

4. Aarti Healthcare Ltd

Note : Sr. 3(a),3(b),3(c),3(d),3(e) refer to the relevant paras of AS 18.

C Persons/Companies stated in para 7A form part of the "Group" as applicable for the purpose of SEBI (Substantial Acquisition of Shares & Takeover) Regulations, 1997 as amended upto date.

7. Sales and other sales income include export benefits amounting to Rs. 18,13,12,308/- (As at 31st March 2010 Rs.11,19,02,774/-)

8. FOREIGN EXCHANGE FLUCTUATION

Foreign exchange gain/(loss) included in Profit & Loss Account (Rs.3.91 lacs) [previous year (Rs.128.32 lacs)]

9. EMPLOYEE BENEFITS:

Defined Benefit Plan

The employee's gratuity fund scheme managed by Life Insurance of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

b. Reconciliation of opening and closing balances fair value of plan assets

The estimate of rate of escalation in salary considered in Actuarial valuation, take into account inflation, seniority,promotion, other relevant factors' including supply and Demand in the employment market. The above information is certified by the actuary.

Leave Encashment :

Leave Encashment liability amounting to Rs.73,65,845/- previous year (Rs.63,03,770/-) has been provided in the Accounts

10. Additional information pursuant to the provisions of paragraphs 3, 4CD, 4D and part II of Schedule VI of the Companies Act, 1956 (Figures in bracket relate to 31st March, 2010)

11. Figures of the previous year have been regrouped and rearranged wherever necessary.

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Mar 31, 2010

1. Contingent Liabilities :

a) In respect of bank guarantees issued and L/C opened by the Companys bankers Rs. 1208.45 lakhs (As at 31st March 2009 Rs 772.31 lakhs).

b) Demand in respect of additional income tax disputed in appeal Rs.36.04 lakhs (As at 31st March 2009 Rs. 573.39 lakhs) refund effect in respect of appeals decided in favour of Company aggregating to Rs.98.32 lakhs are pending.

c) The company has given Corporate Guarantee for Term loan & Working Capital of Rs.NIL lakhs (As at 31st March 2009 Rs.1600 Lakhs) in respect of Suyash Laboratories Ltd .

d) Demand /Rebate in respect of Excise duty in case of Ammonium Sulphate of Rs.102.90 Lakhs (as at 31st March 2009 Rs.102.90 lakhs). The Honble High Court of Mumbai has decided the appeal in favour of the Company in February 2010 on the basis of its earlier judgement in a similar case.

However, as per information available with the Company, the Department of Central Excise has filed an appeal in that precedent case in the Supreme Court, hence the company has continued to disclose this matter.

e) Liability for duty on raw material imported under advance licence benefit scheme against which export obligation remained to be fulfilled Rs.45.43 lakhs (As at 31st March 2009 Rs.4.97 lakhs).

f) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs 16.21 lakhs (As at 31st March 2009 Rs.37.12 lakhs).

2. Securities for loans taken from Banks:

a) Balances in respect of outstanding term loan from The Industrial Development Bank of India Rs. 3027.78 lakhs (As at 31st March 2009 Rs.4027.78 lakhs), The Export Import Bank of India Rs.2515.41 lakhs (As at 31st March 2009 Rs 3176.47 lakhs), Standard Chartered Bank Rs.2275 lakhs (As at 31s March 2009 Rs. NIL), are secured by pari-passu first charge by way of mortgage of immovable properties and hypothecation of moveable fixed assets, both present and future at Tarapur & Sarigam units. Out of the above the working Directors of the Company have personally guaranteed loans sanctioned by EXIM Bank on 21st June 2006 for Rs.2000 lakhs and IDBI Bank on 19th May 2004 for Rs. 500 lakhs the balance in respect of these loans are Rs.705.88 lakhs ( As at 31st March 2009 Rs. 1204.25 ) out of the above the loan sanctioned by IDBI Bank on 25lh March 2008 for Rs.3000 lakhs also secured by second charge on the current assets of the Company both present & future alongwith existing term tender as a collateral security.

b) Loans from Scheduled Banks Rs.6047.94 lakhs (As at 31st March 2009 Rs. 8070.95 lakhs) are secured by hypothecation of Companys raw materials stock, stock-in-process, finished goods, packing materials, stores & spares, book debts, foreign documentary bills and all other current assets including goods in transit governed by documents of title and also pari-passu second charge by way of mortgage of immovable properties and hypothecation of moveable fixed assets. The working Directors of the Company have personally guaranteed these loans.

3. There are no Micro and Small Enterprises, to whom the company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

4. In the opinion of the Board, the Current Assets and Loans and Advances have a value on realisation at least equal to the amounts at which they are stated in the Balance Sheet.

5. Segment-wise Disclosure as per Accounting Standard: 17.

I. BUSINESS SEGMENTS AS PRIMARY SEGMENTS

The Company is considered to be a single segment Company engaged in pharmaceuticals business, hence the disclosure requirement as per AS-17 Business Segments as Primary Segment is not attracted.

Notes:

a. Segmental capital employed:

Fixed assets used in the Companys business or liabilities contracted have not been identified to any of the reportable segments, as the fixed assets and services are used interchangeably between segments. The Company believes that currently it is not practicable to provide segment disclosures relating to total assets and liabilities.

6. Related party transactions:

Related party disclosure as required by Accounting Standard - 18. Related Party Disclosures issued By The Institute of Chartered Accountants of India are given below :

A Name and Relationship of the Related Parties :

3(a) Subsidiary

Suyash Laboratories Ltd.

3(b) Associates & Joint Ventures

Huanggang Yinhe Aarti Pharmaceutical Co.Ltd.

3(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of such individual.

1. Individuals

Mr. Chandrakant V. Gogri Mr. Rajendra V. Gogri

2. Relatives of Individuals

Mrs.Jaya C. Gogri Mr.Rashesh C. Gogri

Mrs.Dhanvanti V. Gogri Mrs.Aarti R. Gogri

Mirik R. Gogri Mr.Renil R. Gogri

Mrs. Hetal Gogri Gala Mrs. Indira M. Dedhia

3(d) Key Management personel alongwith their relatives have significant influence.

1. Key Management Personel

Mr. Prakash M. Patil Mr. Harit. P. Shah

Mr. Harshit M. Savla Mr. Uday M. Patil

1. Relatives of Key Management Personel

Mrs. Priti P. Patil Mrs. Seema H. Savla

Mr. Arun M. Patil Ms. Bhoomi S. Savla

Dr. Vikas M. Patil Vishwa H. Savla

Mr. Adhish P. Patil Mrs. Jayashree H. Shah

Mrs. Arati T. Sankhe Mr. Pragji M. Shah

Mrs. Kalika A. Mishra Mrs. Kesarben P. Shah

Mr. Sameer P. Shah

3(e) Enterprise/firms over which controlling individuals have significant influence.

1. Aarti Industries Ltd.

2. Aarti Healthcare Ltd.

3. Rupal Drugs Ltd.

Note : Sr. 3(a),3(b),3(c),3(d),3(e) refer to the relevant paras of AS 18.

c) The timing of the accrual and accounting of Directors Commission has been changed from the date of the approval of the financial statements for the year by the shareholders to the balance sheet date of the concerned financial year. The directors commission of Rs. 92,43,764/- for the year ended March 31, 2010 has been provided in the financial statements for the year ended on that date. These financial statements have also been charged with the directors commission of Rs.47,99,477/- for the year ended March 31, 2009, approved in the Annua) General Meeting held on August 1, 2009. Due to this, the Net Profit for the year and the Reserves are stated lower, and the Current Liabilities and Provisions higher, by Rs.92,43,764/-.

7. Foreign exchange fluctuation

Foreign exchange gain/(loss) included in Profit & Loss Account Rs.128.32 lakhs (previous year Rs.939.29 lakhs)

8. Employee Benefits:

Defined Benefit Plan

The employees gratuity fund scheme managed by Life Insurance of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

9. The company has received money through the conversion of 4,00,000 warrants issued on preferential basis into equity shares of Rs.2,10,40,000 during the year, and the money has been utilized for the purposes as stated in the "Objects of the issue" i.e." to augment the long term funds to meet on going capital expenditure and long term working capital requirements

10. Figures of the previous year have been regrouped and rearranged wherever necessary.