Notes to Accounts of Gufic BioSciences Ltd.

Mar 31, 2025

2.18 Provisions, Contingent Liabilities, Contingent Assets and Commitments

Provisions (legal and constructive) are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present
value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of
the receivable can be measured reliably.

Contingent liability is disclosed in the case of:

• a present obligation arising from past events, when it is not probable that an outflow of resources will be required to
settle the obligation;

• a present obligation arising from past events, when no reliable estimates is possible;

• a possible obligation arising from past events, unless the probability of outflow of resources is remote.

Contingent liabilities are not recognised but disclosed in the financial statements. Contingent assets are neither
recognised nor disclosed in the financial statements.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets and
non cancellable operating lease.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

2.19 Application of New Revised Ind AS

Ministry of Corporate Affairs ("MCA”) notifies new standard or amendments to the existing standards. There is no such
notification which would have been applicable from April 1,2024.

2.20 Critical Estimates and Judgements

In the course of applying the policies outlined in all notes under section 2 above, the Company is required to make
judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on historical experience and other factors that
are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future period, if the revision affects current and future period.

2.21 Key sources of estimation uncertainty

i. Useful lives of property, plant and equipment and intangible assets

Management reviews the useful lives of property, plant and equipment and intangible assets at least once a year. Such
lives are dependent upon an assessment of both the technical lives of the assets and also their likely economic lives based
on various internal and external factors including relative efficiency and operating costs. Accordingly depreciable lives
are reviewed annually using the best information available to the management.

ii. Provisions and liabilities

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of

funds resulting from past operations or events that can reasonably be estimated. The timing of recognition requires
application of j udgement to existing facts and circumstances, which may be subject to change. The amounts are
determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of
the time value of money and the risks specific to the liability.

iii. Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company.
Potential liabilities that are possible but not probable of crystallising or are very difficult to quantify reliably are treated as
contingent liabilities. Such liabilities are disclosed in the notes but are not recognized.

iv. Fair value measurements

When the fair values of financial assets or financial liabilities recorded or disclosed in the financial statements cannot be
measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the
DCF model. The inputs to these models are taken from observable markets where possible, but where this is not
feasible, a degree of judgment is required in establishing fair values. Judgements include consideration of inputs such as
liquidity risk, credit risk and volatility.

v. Income Taxes

The Company''s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the
purpose of paying advance tax, determining the provision for income taxes, including amount expected to be
paid/recovered for uncertain tax positions. A tax assessement can involve complex issues, which can only be resolved
over extended time periods. The recognisation of taxes that are subject to certain legal or economic limits or
uncertainties is assessed j ndividually by the managment based on the specific facts and circumstances.

vi. Defined benefit obligations

The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in
accordance with Ind AS 19 ‘Employee benefits'' over the period during which benefit is derived from the employees''
services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include
salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in
Note 40, ‘Employee benefits''.

vii. Allowance for uncollected accounts receivable and advances

Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for
estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not
collectible. Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the
expected life of the financial assets.

The impairment provisions for financial assets are based on assumption about risk of default and expected loss rates.
Judgement in making these assumption and selecting the inputs to the impairment calculation are based on past history,
existing market condition as well as forward looking estimates at the end of each reporting period.

viii. Impairment reviews

An impairment exists when the carrying value of an asset or cash generating unit (‘CGU'') exceeds its recoverable
amount. Recoverable amount is the higher of its fair value less costs to sell and its value in use. The value in use calculation
is based on a discounted cash flow model. In calculating the value in use, certain assumptions are required to be made in
respect of highly uncertain matters, including management''s expectations of growth in EBITDA, long term growth rates;
and the selection of discount rates to reflect the risks involved.

ix. Inventories

The Company estimates the net realisable value (NRV) of its inventories by taking into account their estimated selling
price, estimated cost of completion, estimated costs necessary to make the sale, obsolescence by applying certain
percentages over different age category of such inventories, expected loss rate considering the past trend and future
outlook.Inventories are written down to NRV where such NRV is lower than their cost.

x. Sales Return

For Information about judgements made in applying the accounting policies for sales return that have the most significant
effects on the amounts recognised in the financial statements is included in notes 2.11 above.

3.1 : Impairment Losses Recognised in the Year

There are no impairment losses recognised during the year.

3.2 : Assets Pledged as Security

3.2.1 : Factory Buildings, Plant and Equipments, Plant and Equipments (R & D), Furniture and Fixture, Office Equipments,

Electrical Installations and Computers having carrying value of W 46,182.55 lakhs (as at March 31st, 2024: W 12,254.72
lakhs) have been pledged to secure borrowings of the Company (Refer Note 19 and 24). The Company is not allowed to
pledge these assets as security for other borrowings or to sell them to another entity, except items specifically pledged to
other.

3.2.2 : Vehicles having carrying value of W 233.85 lakhs (as at March 31st, 2024: W 94.27 lakhs) have been hypothecated by way

of first charge on the vehicles acquired under the specific facility granted.

3.3 : The Company has not revalued its Property, Plant and Equipment during the year ended March 31st, 2025.

3.4 : Lease Hold Land having carrying value of W 1009.20 lakhs (as at March 31st, 2024: W 968.92 lakhs) have been pledged to

secure borrowings of the Company (Refer Note 19). The Company is not allowed to pledge these assets as security for
other borrowings or to sell them to another entity, except items specifically pledged to other.

3.5 : The Company has incurred total Research & Development expenses of Capital nature are W 486.03 Lakhs during the

year ended March 31st, 2025 out of which W 440.62 belongs to Plant & Machinery and W 45.41 Lakhs belongs to
Furniture & Fixtures and Computer.

18.1 The Capital reserve is created on receipts of government grants for setting up of tissue culture division in the earlier
years and on account of business combination.

18.2 The General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As
the general reserve is created by a transfer from one component of equity to another and is not an item of other
comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

18.3 Security Premium is created through premium received on issue of shares. The reserve is to be utilised in accordance
with provisions of the Companies Act, 2013.

18.4 The company has paid dividend of W 0.10 per share on September 25th, 2024 totalling to W 100.28 lakhs for the year
ended March 31st, 2024 (Previous year : W 0.10 per share totalling to W 96.94 lakhs) was paid to the holders of fully paid
equity shares.

18.5 Employee stock options is used to record the share based payments, expense under the various schemes as per SEBI
regulations. The reserve is used for the settlement of ESOP (refer note 49).

19.1 Summary of Borrowing Arrangements

The terms of repayment of term loans and other loans are stated below:

(a) Term Loans from Saraswat Bank
Collateral Security

1) Factory Land and Building bearing gram panchayat house no. 140 to 140/5 and 141 to 141/5 with all building and
structure on land survey no. 171 and 195/3, situated at national highway no. 8, near GEB grid and Tisco Village,
Kabilpore, Dist : Navsari - 396424 in the name of M/s Gufic Pvt. Ltd.

2) Movable Fixed Assets at Navsari.

3) Factory Land and Building Plot No. 48, Smart Industrial Park, Near NATRIP Pithampur, Dhar, Madhya Pradesh -
454774.

4) Movable Fixed Assets at Indore, Madhya Pradesh.

5) Movable Fixed Assets at Arisia, 6th Floor, S.M. House, 11, Sahakar Road, Vile Parle East, Mumbai 400057.

Guarantees

It is also secured by Personal guarantee of Managing Director and Chief Executive Officer and a corporate guarantee
(restricted to the exposure of '' 3,640/- Lakhs) from Gufic Private Limited ( Company in which directors are interested).

Terms of Repayment

Amount disbursed under the term loan shall be repaid in monthly installements varying from '' 18,00,000/- to ''
86,90,000/- (March 31st, 2024 : '' 18,00,000/- to '' 32,14,000/-)(excluding interest) over a period of 1 to 84 months.

Rate of Interest

The Rate of Interest is PLR- 7.25% p.a. i.e subject to minimum 8.65% p.a. for Term Loan and shall be payable on monthly
basis. (Effective Interest rate as on March 31st, 2025 was 8.65%)

(b) Term Loans from HDFC Bank

Security

(i) The loans are secured by first pari passu charge on all Movable Fixed Assets (Plant & Machinery) of the group, both
Navsari and Pithampur, Indore.

(ii) Second Pari passu charge on entire present and future current asset of the Company, both at Navsari and Pithampur,
Indore.

(iii) First pari passu charges on all Immovable assets property situated at Plot No - 48, Smart Industrial Park, Near Natrip,
Pithampur, Indore, District: Dhar - 454775 owned by Gufic Biosciences Limited. "

Terms of Repayment

Amount disbursed under the term loan shall be repaid in monthly installements varying from '' 3,52,561/- to '' 21,55,494/-
(March 2024''3,52,561/- to '' 21,16,092/-) (excluding interest), over a period of 1 to 84 months starting from October

2024 i.e. after morotorium period of 18 months.

Rate of Interest

The Rate of Interest is 3M T Bill 1.57 % and shall be payable on monthly basis. (Effective Interest rate as on March 31st,

2025 was 7.69% to 8.00%)

(c) Vehical Loans from Saraswat Bank
Security

(i) Are secured by first charge by way of hypothecation of vehicles acquired under the specific facility granted.

(ii) Carrying value of the fixed assets pledged is '' 233.85 lakhs. ( March 31st, 2024 : '' 94.27 lakhs).

Terms of Repayment

Amount disbursed under the term loan shall be repaid in monthly installements varying from '' 31,614/- to '' 3,10,528/-
(March 31st, 2024''34,701/ to '' 1,57,505/-) (including Interest), over a period of 1 to 36 months.

Rate of Interest

The Rate of Interest is between 6.75 % to 8.60 % p.a. (March 31st, 2024 : 6.75% to 8.65% p.a.) and shall be payable on
monthly basis.

There are no breach of contractual terms of the borrowings during the year ended March 31st, 2025 and March 31st, 2024.

24.1 Working Capital facilties from Saraswat Bank
Collateral Security

For Collateral Security Refer Note 19.1(a).

Guarantees

For Guarantees Refer Note 19.1(a).

Terms of Repayment
Repayable on Demand.

Rate of Interest

The Rate of Interest is PLR- 7.25 % p.a. i.e subject to minimum 8.25% p.a. for Cash Credit limit and PLR- 7.50 % p.a. i.e
subject to minimum 8.00% p.a. for Working Capital Demand Loan. (Effective Interest rate as on March 31st, 2025 was
8.50%)

24.2 Working Capital facilties from HDFC Bank
Collateral Security

(I) The loans are secured by second pari passu charge on all Movable Fixed Assets (Plant and Machinery) of the
Company, both Navsari and Pithampur, Indore.

(ii) First Pari passu charge on entire present and future current asset of the group, both at Navsari and Pithampur, Indore
and Arisia-Mumbai

(iii) Second pari passu charges on all Immovable assets property situated at Plot No - 48, Smart Industrial Park, Near
Natrip, Pithampur, Indore, District: Dhar - 454775 owned by Gufic Biosciences Limited. L&B bearing gram
panchayat house no. 140 to 141/5, plot area admeasuring about 3,22,218.96 sq. feet. More or less together with all
buidling and structure on land survey no. 171 and 195/3, situated at national highway no. 8, Near GEB grid and Tisco
Village, Kobilpore, Dist : Navsari - 396424 owned by Gufic Private Limited.

Guarantees

It is also secured by Personal guarantee of Managing Director and Chief Executive Officer and a corporate guarantee
from Gufic Private Limited ( Company in which directors are interested).

Terms of Repayment

Repayable on Demand.

Rate of Interest

The Rate of Interest is 3M T Bill 1.61 % and shall be payable on monthly basis. (Effective Interest rate as on March 31st,
2025 was 8.25% to 8.35%)

24.3 Working Capital facilties from Axis Bank

Collateral Security

(I) The loans are secured by second pari passu charge on all Movable Fixed Assets of the company.

(ii) First Pari passu charge on entire present and future current asset of the company, both at Navsari and Pithampur,
Indore and Arisia - Mumbai.

(iii) Second pari passu charges on all Immovable assets (Land and Building) property situated at Plot No - 48, Smart
Industrial Park, Near Natrip, Pithampur, Indore, District: Dhar - 454775 owned by Gufic Biosciences Limited. L&B
bearing gram panchayat house no. 140 to 141/5, plot area admeasuring about 3,22,218.96 sq. feet. More or less
together with all buidling and structure on land survey no. 171 and 195/3, situated at national highway no. 8, Near
GEB grid and Tisco Village, Kabilpore, Dist : Navsari - 396424 owned by Gufic Private Limited.

Guarantees

It is also secured by Personal guarantee of Managing Director and Chief Executive Officer and a corporate guarantee

from Gufic Private Limited ( Company in which directors are interested).

Terms of Repayment

Repayable on Demand.

Rate of Interest

The Rate of Interest is Repo rate 2% and shall be payable on monthly basis. (Effective Interest rate as on March 31st,

2025 was 8.50%)

There are no unrecognized deferred tax assets and liabilities as at March 31st, 2025 and March 31st, 2024. Further significant
management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and
recoverability of deferred income tax assets.

Note 37. Segment Information

37.1 Basis for segmentation

Based on the "Management approach" as defined in IND AS 108, the Chief Operating Decision Maker (CODM) does not
evaluate the Group Performance", separately and hence the total business needs to be treated as one segment,
"Pharmaceutical and related products". The products being sold under this segment are of similar nature and comprise of
pharmaceutical products only.

The Chief Operating Decision Maker (CODM) monitors the geographic segment of its business separately for the purpose of
making decisions about resource allocation and performance assessment.

Geographical segments

Revenue is segregated into two segments namely India (sales to customer within India) and other countries (sales to customer
outside India) on the basis of geographical location of customers for the purpose of reporting geographical segments. Segment
asset are based on the geographical location of the asset.

Information about Major Customers

No Single Customer Account for 10% or More than 10% of Revenue from operation during the year ended March 31st, 2025.
and March 31st, 2024

Note. 38 Lease

The Group have taken various premises under operating lease. These are generally cancellable and ranges from 11 months to 5
years and are renewable by mutual consent on mutually agreeable terms. Some of these lease agreements have price escalation
clauses. There are no restrictions imposed by these lease arrangements and there are no sub leases. There are no contingent
rents.

The interest rate applied to lease liabilities is 10.00%.

Level 1 - Level 1 Hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have
declared buyback NAV The mutual funds are valued using the closing NAV

Level 2 -The fair value of financial instruments that are not traded in an active market (like Mark to Market Derivative) is
determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-
specific estimates. If all significant inputs required to fair value as instrument are observable, the instrument is included in level 2.

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

42.3 Financial Risk Management

Group has exposure to following risks arising from financial instruments:

• Credit Risk

• Liquidity Risk

• Market Risk

• Currency Risk

• Commodity Risk

Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk
management framework. Management is responsible for developing and monitoring the Company''s risk management policies,
under the guidance of the Audit Committee.

Company''s risk management policies are established to identify and analyse the risks faced by it, to set appropriate risk limits
and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to

reflect changes in market conditions and the Company''s activities. Company, through its training and procedures aims to
maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

Company''s Audit committee oversees how management monitors compliance with the Company''s risk management policies
and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.
The Audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews
of risk management controls and procedures, the results of which are reported to the Audit committee.

42.3.ICredit risk

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group.
Before accepting any new customer, the company evaluates the credit worthiness of the potentional customers based on past
history and other external inquiries as deemed appropriate. The Group also obtains the necessary KYC documents from all the
customer for assessing the credit quality and defines the credit limits accordingly. Limits and scoring attributed to customers are
reviewed once a year.

Customer credit risk is managed by each business unit subject to the Group established policy, procedures and control relating
to customer credit risk management. Trade receivables, which are no interest bearing, are mainly from stockists, distributors
and customers and are generally on 30 days to 180 days credit. To manage the credit risk from trade receivables, the Group
periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and
analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Group considers
the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an
ongoing basis through each reporting period.

As at March 31st, 2025, The Group had - 10 customers, (March 31st, 2024: 10 customers) that owed the group more than
? 19,816.80 lakhs (March 31st, 2024: ? 15,924.78 Lakhs) and accounted for approximately - 62.99 % and 48.27 %
respectively of the total outstanding as at March 31st, 2025 and March 31st, 2024.

42.3.2 Liquidity risk management

Liquidity risk is the risk that the Group may not be able to meet its present and future cash and collateral obligations without
incurring unacceptable losses. The Group objective is to, at all times maintain optimum levels of liquidity to meet its cash and
collateral requirements. The Group 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.

42.4 Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market
rates and prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-
sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-
sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Group
is exposed to market risk primarily related to foreign exchange rate risk and interest rate risk. Thus, the Group exposure to
market risk is a function of borrowing activities and revenue generating and operating activities in foreign currencies.

42.4.1 Interest Rate Risk Management

The Group is exposed to interest rate risk because it borrows funds from banks and institutions at both fixed and floating
interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings.
The Group exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management
section of this note.

42.4.1.1 Interest Rate Sensitivity Analysis

The sensitivity analyses below have been determined based on the exposure to interest rates at the end of the reporting period.
A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and
represents management''s assessment of the reasonably possible change in interest rates.

If interest rates had been 1% higher/lower and all other variables were held constant, the company''s (Contracted Interest Rate
on all the borrowing) profit for the year ended March 31,2025 would decrease/increase by W 323.81 Lakhs. (for the year ended
March 31st, 2024 decrease/increase by W 288.06 Lakhs). This is mainly attributable to the company''s exposure to interest rates
on its variable rate borrowings

42.4.2 Currency risk

The Group is also exposed to foreign currency risk on certain transactions that are denominated in a currency other than the
Group functional currency; hence exposures to exchange rate fluctuations arise. The risk is that the functional currency value of
cash flows will vary as a result of movements in exchange rates. The Group foreign exchange risk arises from foreign currency
revenues and expenses, (primarily in US Dollars, Euros and GBP). As a result, if the value of the Indian rupee appreciates
relative to these foreign currencies, the Group revenues and expenses measured in Indian rupees may decrease or increase and
vice-versa. The exchange rate between the Indian rupee and these foreign currencies have changed substantially in recent
periods and may continue to fluctuate substantially in the future.

The following table analyses foreign currency risk as at the year end that have not been mitigated by a derivative instrument or
otherwise are as below:

42.5 Commodity Rate Risk

Exposure to market risk with respect to commodity prices primarily arises from the Group''s purchases and sales of active
pharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These are
commodity products, whose prices may fluctuate significantly over short periods of time. The prices of the Group''s raw
materials generally fluctuate in line with commodity cycles, although the prices of raw materials used in the Group''s active
pharmaceutical ingredients business are generally more volatile. Cost of raw materials forms the largest portion of the Group''s
cost of revenues. Commodity price risk exposure is evaluated and managed through operating procedures and sourcing
policies. As of March 31st, 2025, the Group had not entered into any material derivative contracts to hedge exposure to
fluctuations in commodity prices.

42.6 Fair value measurements

The investment of the company are not readily marketable. Further the company has invested in the securities for the purpose
of obtaining the credit facilities. Thus in this case the cost of the security represents the fair value.

Employee Stock Plan (‘ESOP’)

The Group has implemented Employee Stock Option Plan 2023 (‘ESOP 2023'') as approved by the shareholders on 29th
September, 2023. The ESOP 2023 covers all present and future permanent employees of the Group working in India or outside
India, Employees of present and future Group Companies including Subsidiary or Associate Company(ies) in India or outside
India and/or directors whether a whole-time director or not and/or such other persons, as may be permitted from time to time,
under applicable Laws, rules and regulations and/or amendments thereto from time to time, are eligible to participate in this
ESOP 2023 [collectively "eligible employees"]. The nomination and remuneration committee of the Board of Gufic Biosciences
Limited administers the ESOP 2023 and grants stock options to eligible employees.

Note 50 . Disclosure Of Transactions With Struck Off Companies .......... V

The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013
or Section 560 of Companies Act, 1956 during the financial year.

Note 51. No transactions to report against the following disclosure requirements as notified by MCA pursuant
to amended

Schedule III:

(a) Crypto Currency or Virtual Currency

(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

(c) Registration of Charges or Satisfaction with Registrar of Companies

(d) Relating to Borrowed funds:

i. Wilful Defaulter

ii. Utilisation of Borrowed Funds and Share Premium

iii. Discrepancy in Utilisation of Borrowings

(e) The Group does not have 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.

(f) The Group is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act,
2013, read with Companies (restriction on number of layers) Rules, 2017.

Note 52.

IIn the opinion of the management inventories of '' 21,686.90 Lakhs (as at March 31st, 2024: '' 20,048.21 Lakhs) shown in
Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material
and depletion in its value, if any. In the opinion of the management, all the current assets including inventories, loans and
advances have a value on a realisation in the ordinary course of business at least equal to the amount at which they are stated in
the Balance Sheet.

Note 53.

"The group has given security deposit of '' 350 Lakhs (as at March 31st, 2024: '' 350 Lakhs) to Gufic Private Limited towards the
use of its factory premises at Navsari for its manufacturing activities. Accordingly an amount of '' 350 Lakhs has been shown
under the head Security deposit with related parties.

Group has also given Security Deposit to Gufic Chem Private Limited of '' 36 Lakhs (as at March 31st, 2024: '' 36 Lakhs) towards
supply of products at concessional rate to the group and the same has been show under the head Security deposit with related
parties.

Note 54. Provision of anticipated Return of Goods subsequent to Sale:

Provision has been made towards probable return of goods from customers, as per Indian Accounting Standard (Ind AS) 37
estimated by management based on past trends.

Note 55

Declaration of Dividend

The Board of Directors at its meeting held on May 30th, 2025 has recommended a final dividend of '' 0.10 per equity share i.e.,
@ 10% on the face value of '' 1/- each, for the financial year 2024 - 25, subject to the approval of the shareholders at the ensuing
Annual General Meeting.

Note 56

The Company has incorporated Gufic UK Limited ("GUL") in United Kingdom on March 15, 2022, Gufic Ireland Limited ("GIL")
in Ireland on March 02, 2023, Veira Life FZE ("VLF") in Dubai, UAE on March 25, 2024 and Gufic Prime Private Limited ("GPPL”)
in India on November 18, 2023, with the intention of making GUL, GIL and VLF its Wholly Owned Subsidiaries and GPPL as its
Subsidiary Company. As of March 31,2025, neither investment have been made in GIL nor they have begun their business
operations. Consequently, there was no need to consolidate the accounts of GIL with the Company. Whereas the Company
have been invested in GUL, VLF and GPPL by subscribing to its shares. Consequently, the consolidated financial Statement of
financial year ended March 31st, 2025, have been prepared by the Company considering the financials of GUL, VLF and GPPL.

Note 57

Authorisation of Financial Statements

The financial statements for the year ended March 31st, 2025 were approved by the Board of Directors on May 30th, 2025 and
are subject to approval of the shareholders at the Annual General Meeting.

Note 58

"With effect from April 1,2023, the Ministry of Corporate Affairs (MCA) has made it mandatory for every company, which uses
accounting software for maintaining its books of account, to use only such accounting software which has a feature of recording
audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when
such changes were made and ensuring that the audit trail cannot be disabled.

The Company used software SAP to maintain its books of accounts. SAP software records the audit trail of each and every
transaction created in books of account along with the date when such changes were made.

With a view to address the above challenges while ensuring compliance with the MCA notification and mitigate the risks
involved therein, the Company has appropriately designed and implemented alternate mitigating controls over direct change at
database level.

Note 59

Figures for the previous year have been rearranged/recompanyed as and when necessary in terms of current year''s
companying.

As per our Report of even date

For Mittal Agarwal & Company For and on behalf of the Board

Chartered Accountants
Registration No. 131025W

Sd/- Sd/- Sd/-

Deepesh Mittal Jayesh P. Choksi (DIN 00001729) Pranav J. Choksi (DIN 00001731)

Partner Chairman & Managing Director Chief Executive Officer &

M. No. 539486 Whole Time Director

Sd/- Sd/-

Place: Mumbai D. B. Roonghta Ami Shah (A39579)

Date - 30^t May, 2025 Chief Financial Officer Company Secretary

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Mar 31, 2024

2.18 Provisions, Contingent Liabilities, Contingent Assets and Commitments

Provisions (legal and constructive) are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Contingent liability is disclosed in the case of:

• a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

• a present obligation arising from past events, when no reliable estimates is possible;

• a possible obligation arising from past events, unless the probability of outflow of resources is remote.

Contingent liabilities are not recognised but disclosed in the financial statements. Contingent assets are neither recognised nordisclosed in the financial statements.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets and non cancellable operating lease.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

2.19 Application of New Revised Ind AS

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards. There is no such notification which would have been applicable from April 1,2024.

2.20 Critical Estimates and Judgements

In the course of applying the policies outlined in all notes under section 2 above, the Company is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period, if the revision affects current and future period.

2.21 Key sources of estimation uncertainty

i. Useful lives of property, plant and equipment and intangible assets

Management reviews the useful lives of property, plant and equipment and intangible assets at least once a year. Such lives are dependent upon an assessment of both the technical lives of the assets and also their likely economic lives based on various internal and external factors including relative efficiency and operating costs. Accordingly depreciable lives are reviewed annually using the best information available to the management.

ii. Provisions and liabilities

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events that can reasonably be estimated. The timing of recognition requires application of j udgement to existing facts and circumstances, which may be subject to change. The amounts are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

iii. Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that are possible but not probable of crystallising or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not recognized.

iv. Fair value measurements

When the fair values of financial assets or financial liabilities recorded or disclosed in the financial statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include consideration of inputs such as liquidity risk, credit risk and volatility.

v. Income Taxes

The Company''s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. A tax assessement can involve complex issues, which can only be resolved over extended time periods. The recognisation of taxes that are subject to certain legal or economic limits or uncertainties is assessed j ndividually by the managment based on the specific facts and circumstances.

vi. Defined benefit obligations

The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 ‘Employee benefits'' over the period during which benefit is derived from the employees'' services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in Note 40, ‘Employee benefits''.

vii. Allowance for uncollected accounts receivable and advances

Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not collectible. Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.

The impairment provisions for financial assets are based on assumption about risk of default and expected loss rates. Judgement in making these assumption and selecting the inputs to the impairment calculation are based on past history, existing market condition as well as forward looking estimates at the end of each reporting period.

viii. Impairment reviews

An impairment exists when the carrying value of an asset or cash generating unit (‘CGU'') exceeds its recoverable amount. Recoverable amount is the higher of its fair value less costs to sell and its value in use. The value in use calculation is based on a discounted cash flow model. In calculating the value in use, certain assumptions are required to be made in respect of highly uncertain matters, including management''s expectations of growth in EBITDA, long term growth rates; and the selection of discount rates to reflect the risks involved.

ix. Inventories

The Company estimates the net realisable value (NRV) of its inventories by taking into account their estimated selling price, estimated cost of completion, estimated costs necessary to make the sale, obsolescence by applying certain percentages over different age category of such inventories, expected loss rate considering the past trend and future outlook.Inventories are written down to NRV where such NRV is lower than their cost.

x. Sales Return

For Information about judgements made in applying the accounting policies for sales return that have the most significant effects on the amounts recognised in the financial statements is included in notes 2.11 above.

19.1 Summary of Borrowing Arrangements

The terms of repayment of term loans and other loans are stated below:

(a) Term Loans from Saraswat Bank Collateral Security

1) Factory Land and Building bearing gram panchayat house no. 140 to 140/5 and 141 to 141/5 with all building and structure on land survey no. 171 and 195/3, situated at national highway no. 8, near GEB grid and Tisco Village, Kabilpore, Dist : Navsari - 396424 in the name of M/s Gufic Pvt. Ltd.

2) Movable Fixed Assets at Navsari.

3) Factory Land and Building Plot No. 48, Smart Industrial Park, Near NATRIP Pithampur, Dhar, Madhya Pradesh -454774.

4) Movable Fixed Assets at Indore, Madhya Pradesh.

5) Movable Fixed Assets at Arisia, 6th Floor, S.M. House, 11, Sahakar Road, Vile Parle East, Mumbai 400057.

Guarantees

It is also secured by Personal guarantee of Managing Director and Chief Executive Officer and a corporate guarantee (restricted to the exposure of 3,640/- Lakhs) from Gufic Private Limited ( Company in which directors are interested).

Terms of Repayment

Amount disbursed under the term loan shall be repaid in monthly installements varying from W 18,00,000/- to W 32,14,000/- (March 31st, 2023 : W 3,49,000/- to W 33,30,000/-)(excluding interest), over a period of 1 to 84 months.

Rate of Interest

The Rate of Interest is PLR- 7.25% p.a. i.e subject to minimum 8.25% p.a. for Term Loan and shall be payable on monthly basis. (Effective Interest rate as on March 31st, 2024 was 8.25%)

(b) Term Loans from HDFC Bank Security

(i) The loans are secured by first pari passu charge on all Movable Fixed Assets (Plant & Machinery) of the company, both Navsari and Pithampur, Indore.

(ii) Second Pari passu charge on entire present and future current asset of the company, both at Navsari and Pithampur, Indore.

(iii) First pari passu charges on all Immovable assets property situated at Plot No - 48, Smart Industrial Park, Near Natrip, Pithampur, Indore, District: Dhar - 454775 owned by Gufic Biosciences Limited. "

Terms of Repayment

Amount disbursed under the term loan shall be repaid in monthly installements varying from W 3,52,561/- to W 21,16,092/-(March 2023 W 6,40,960/- to W 21,16,092/-) (excluding interest), over a period of 1 to 84 months starting from October 2024 i.e. after morotorium period of 18 months.

Rate of Interest

The Rate of Interest is 3M T Bill 1.57 % and shall be payable on monthly basis. (Effective Interest rate as on March 31st, 2024 was 8.45%)

(c) Vehical Loan from Bank Security

(i) Are secured by first charge by way of hypothecation of vehicles acquired under the specific facility granted.

(ii) Carrying value of the fixed assets pledged is W 94.27 lakhs. ( March 31st, 2023 : W 95.95 lakhs)."

Terms of Repayment

Amount disbursed under the term loan shall be repaid in monthly installements varying from W 34,701/- to W 1,57,505/-(March 31st, 2023 W 34,701/ to W 1,57,505/-) (including Interest), over a period of 1 to 36 months.

Rate of Interest

The Rate of Interest is between 6.75 % to 8.65 % p.a. (March 31st, 2023 : 6.75% to 8.65% p.a.) and shall be payable on monthly basis.

(d) Property Loan Security

(i) Legal Mortgage of Property having carrying value NIL (March 31st, 2023 : W 953.30 Lakhs) acquired under the specific facility granted.

Terms of Repayment

Property Loans has been fully repaid during the financial year 2023-24.

There are no beanch of contractual terms of the borrowings during the year ended March 31st, 2024 and March 31st, 2023.

23.1 Working Capital facilties from Saraswat Bank Collateral Security

For Collateral Security Refer Note 19.1(a).

Guarantees

For Guarantees Refer Note 19.1(a).

Terms of Repayment Repayable on Demand.

Rate of Interest

The Rate of Interest is PLR- 7.25 % p.a. i.e subject to minimum 8.25% p.a. for Cash Credit limit and PLR- 7.50 % p.a. i.e subject to minimum 8.00% p.a. for Working Capital Demand Loan. (Effective Interest rate as on March 31st, 2024 was 8.00%)

23.2 Working Capital facilties from HDFC Bank Collateral Security

(i) The loans are secured by second pari passu charge on all Movable Fixed Assets (Plant & Machinery) of the company, both Navsari and Pithampur, Indore.

(ii) First Pari passu charge on entire present and future current asset of the company, both at Navsari and Pithampur, Indore & Arisia-Mumbai.

(iii) Second pari passu charges on all Immovable assets property situated at Plot No - 48, Smart Industrial Park, Near Natrip, Pithampur, Indore, District: Dhar - 454775 owned by Gufic Biosciences Limited. L&B bearing gram panchayat house no. 140 to 141/5, plot area admeasuring about 3,22,218.96 sq. feet. More or less together with all buidling and structure on land survey no. 171 and 195/3, situated at national highway no. 8, Near GEB grid and Tisco Village, Kobilpore, Dist : Navsari - 396424 owned by Gufic Private Limited.

Guarantees

It is also secured by Personal guarantee of Managing Director and Chief Executive Officer and a corporate guarantee from Gufic Private Limited ( Company in which directors are interested).

Terms of Repayment

Repayable on Demand.

Rate of Interest

The Rate of Interest is 3M T Bill 1.61 % and shall be payable on monthly basis. (Effective Interest rate as on March 31st, 2024 was 8.20%)

23.3 Working Capital facilties from Axis Bank Collateral Security

i) The loans are secured by second pari passu charge on all Movable Fixed Assets of the company.

ii) First Pari passu charge on entire present and future current asset of the company, both at Navsari and Pithampur Indore & Arisia-Mumbai.

iii) Second pari passu charges on all Immovable assets (Land and Building) property situated at Plot No - 48, Smart Industrial Park, Near Natrip, Pithampur, Indore, District: Dhar - 454775 owned by Gufic Biosciences Limited. L&B bearing gram panchayat house no. 140 to 141/5, plot area admeasuring about 3,22,218.96 sq. feet. More or less together with all buidling and structure on land survey no. 171 and 195/3, situated at national highway no. 8, Near GEB grid and Tisco Village, Kobilpore, Dist : Navsari - 396424 owned by Gufic Private Limited

Guarantees

It is also secured by Personal guarantee of Managing Director and Chief Executive Officer and a corporate guarantee from Gufic Private Limited ( Company in which directors are interested).

Terms of Repayment Repayable on Demand.

Rate of Interest

The Rate of Interest is Repo rate 2 % and shall be payable on monthly basis. (Effective Interest rate as on March 31st, 2024 was 8.50%)

There are no unrecognized deferred tax assets and liabilities as at March 3 I st, 2024 and March 3 I st, 2023. Further significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets.

Note 37. Segment Information

37.1 Basis for segmentation

Based on the "Management approach" as defined in IND AS 108, the Chief Operating Decision Maker (CODM) does not evaluate the Company''s Performance", separately and hence the total business needs to be treated as one segment, "Pharmaceutical and related products". The products being sold under this segment are of similar nature and comprise of pharmaceutical products only.

The Chief Operating Decision Maker (CODM) monitors the geographic segment of its business separately for the purpose of making decisions about resource allocation and performance assessment.

Geographical Segments

Revenue is segregated into two segments namely India (sales to customer within India) and other countries (sales to customer outside India) on the basis of geographical location of customers for the purpose of reporting geographical segments. Segment asset are based on the geographical location of the asset.

Information about Major Customers

No Single Customer Account for 10% or More than 10% of Revenue from operation during the year ended March 3 1st, 2024 and March 3 I st, 2023.

Note. 38 .ease

The Group have taken various premises under operating lease. These are generally cancellable and ranges from I I monthsto 5 years and are renewable by mutual consent on mutually agreeable terms. Some of these lease agreements have price escalation clauses. There are no restrictions imposed by these lease arrangements and there are no sub leases. There are no contingent rents.

The interest rate applied to lease liabilities is 10.00%.

Level I - Level I Hierarchy includes financial instruments measured using quoted prices. This includes mutual funds that have declared buyback NAV. The mutual funds are valued using the closing NAV

Level 2 -The fair value of financial instruments that are not traded in an active market (like Mark to Market Derivative) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value as instrument are observable, the instrument is included in level 2.

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

42.3 Financial Risk Management

Company has exposure to following risks arising from financial instruments:

• Credit Risk

• Liquidity Risk

• Market Risk

• Currency Risk

• Commodity Risk

Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. Management is responsible for developing and monitoring the Company''s risk management policies, under the guidance ofthe Audit Committee.

Company''s risk management policies are established to identify and analyse the risks faced by it, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. Company, through its training and procedures aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

Company''s Audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit committee.

42.3.ICredit risk

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. Before accepting any new customer, the company evaluates the credit worthiness of the potentional customers based on past history and other external inquiries as deemed appropriate. The company also obtains the necessary KYC documents from all the customer for assessing the credit quality and defines the credit limits accordingly. Limits and scoring attributed to customers are reviewed once a year.

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Trade receivables, which are no interest bearing, are mainly from stockists, distributors and customers and are generally on 30 days to 180 days credit. To manage the credit risk from trade receivables, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period.

As at March 31st, 2024, Company had 10 customers, (March 31st, 2023: 10 customers) that owed the company more than ? 15,924.78 lakhs (March 31st, 2023: ? 10,007.41 Lakhs) and accounted for approximately - 48.27 % and 48.71 % respectively of the total outstanding as at March 31st, 2024 and March 31st, 2023.

42.3.2 Liquidity risk management

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.

42.3.2.1 Exposure to liquidity risk

The following tables detail the company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the company may be required to pay.

42.4 Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk and interest rate risk. Thus, the Company''s exposure to market risk is a function of borrowing activities and revenue generating and operating activities in foreign currencies.

42.4.1 Interest Rate Risk Management

The company is exposed to interest rate risk because it borrows funds from banks and institutions at both fixed and floating interest rates. The risk is managed by the company by maintaining an appropriate mix between fixed and floating rate borrowings. The companies exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

42.4.1.1 Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates at the end of the reporting period. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

If interest rates had been I % higher/lower and all other variables were held constant, the company''s (Contracted Interest Rate on all the borrowing) profit for the year ended March 3 1,2024 would decrease/increase byT 288.06 Lakhs (for the year ended March 3 1st, 2023 decrease/increase byT 159.50 lakhs). This is mainly attributable to the company''s exposure to interest rates on its variable rate borrowings

42.4.2 Currency risk

The Company is also exposed to foreign currency risk on certain transactions that are denominated in a currency other than the Company''s functional currency; hence exposures to exchange rate fluctuations arise. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates. The Company''s foreign exchange risk arises from foreign currency revenues and expenses, (primarily in US Dollars, Euros and GBP). As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Company''s revenues and expenses measured in Indian rupees may decrease or increase and vice-versa. The exchange rate between the Indian rupee and these foreign currencies have changed substantially in recent periods and may continue to fluctuate substantially in the future.

The following table analyses foreign currency risk as at the year end that have not been mitigated by a derivative instrument or otherwise are as below:

42.5 Commodity Rate Risk

Exposure to market risk with respect to commodity prices primarily arises from the Company''s purchases and sales of active pharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These are commodity products, whose prices may fluctuate significantly over short periods of time. The prices of the Company''s raw materials generally fluctuate in line with commodity cycles, although the prices of raw materials used in the Company''s active pharmaceutical ingredients business are generally more volatile. Cost of raw materials forms the largest portion of the Company''s cost of revenues. Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies. As of March 31st, 2024, the Company had not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.

42.6 Fair value measurements

The investment of the company are not readily marketable. Further the company has invested in the securities for the purpose of obtaining the credit facilities. Thus in this case the cost of the security represents the fair value.

Note 49. Disclosure Of Transactions With Struck Off Companies

The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the financial year.

Note 50. No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended

Schedule III:

(a) Crypto Currency or Virtual Currency

(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

(c) Registration of Charges or Satisfaction with Registrar of Companies

(d) Relating to Borrowed funds:

i. Wilful Defaulter

ii. Utilisation of Borrowed Funds & Share Premium

iii. Discrepancy in Utilisation of Borrowings

(e) The Company does not have 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.

(f) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013, read with Companies (restriction on numberof layers) Rules, 2017.

Note 51.

In the opinion of the management inventories of T20,048.21 Lakhs (as at March 31st, 2023: T 18,345.75 Lakhs) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories, loans and advances have a value on a realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

Note 52.

The company has given security deposit of T 350 Lakhs (as at March 3 I st, 2023: T 350 Lakhs) to Gufic Private Limited towards the use of its factory premises at Navsari for its manufacturing activities. Accordingly an amount of T 350 Lakhs has been shown under the head Security depositwith related parties.

Company has also given Security Deposit to Gufic Chem Private Limited of T36 Lakhs (as at March 3 I st, 2023: T 120 Lakhs) towards supply of products at concessional rate to the company and the same has been show under Security deposit with related parties.

Note 53. Provision of anticipated Return of Goods subsequent to Sale:

Provision has been made towards probable return of goods from customers, as per Indian Accounting Standard (Ind AS) 37 estimated by management based on past trends.

Note 54

Declaration of Dividend

The Board of Directors at its meeting held on May 29th, 2024 has recommended a final dividend of '' 0.10 per equity share i.e., @ 10% on the face value of '' I/- each, for the financial year 2023 - 24, subject to the approval of the shareholders at the ensuing Annual General Meeting.

Note 55

The Company has incorporated Gufic UK Limited ("GUL") in United Kingdom on March 15, 2022, Gufic Ireland Limited ("GIL") in Ireland on March 02, 2023, Veira Life FZE ("VLF") in Dubai, UAE on March 25, 2024 and Gufic Prime Private Limited (“GPPL”) in India on November 18, 2023, with the intention of making GUL, GIL and VLF its Wholly Owned Subsidiaries and GPPL as its Subsidiary Company. As of March 31,2024, neither investment have been made in GIL, VLF and GPPL nor they have begun their business operations. Consequently, there was no need to consolidate the accounts of GIL, VLF and GPPL with the Company. Whereas, on September 13, 2023, the Company invested in GUL by subscribing to its shares. Consequently, the consolidated financial Statement of financial year ended March 31,2024, have been prepared by the Company considering the financials of GUL.

Note 56

Authorisation of Financial Statements

The financial statements for the year ended March 31st, 2024 were approved by the Board of Directors on May 29th, 2024 and are subject to approval of the shareholders at the Annual General Meeting.

Note 57

With effect from April 1,2023, the Ministry of Corporate Affairs (MCA) has made it mandatory for every company, which uses accounting software for maintaining its books of account, to use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

Note 58

The Company used accounting software Tally Edit Log software to maintain its books of accounts from 1 April 2023 till 30 November 2023 and migrated into SAP software w.e.f. 1 December 2023. Both the software records the audit trail of each and every transaction created in books of account along with the date when such changes were made.

With a view to address the above challenges while ensuring compliance with the MCA notification and mitigate the risks involved therein, the Company has appropriately designed and implemented alternate mitigating controls over direct change at database level.

Note 59

Figures for the previous year have been rearranged/recompanyed as and when necessary in terms of current year’s companying.

As per our report of even date

For Mittal Agarwal & Company For and on behalf of the Board

Chartered Accountants Registration No. I3I025W

Sd/- Sd/- Sd/-

Piyush Agarwal Jayesh P. Choksi (DIN 00001729) Pranav J. Choksi (DIN 00001731)

Partner Chairman & Managing Director Chief Executive Officer & Whole Time Director

M. No. 135505 Sd/- Sd/-

Place: Mumbai D. B. Roonghta Ami Shah

Date - 29^th May, 2024 Chief Financial Officer Company Secretary

---

Mar 31, 2023

Provisions, Contingent Liabilities, Contingent Assets and Commitments

Provisions (legal and constructive) are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a
provision i s measured using the cash flows estimated to settle the present obligation, its carrying amount is the present
value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of
the receivable can be measured reliably.

Contingent liability is disclosed in the case of:

• a present obligation arising from past events, when it is not probable that an outflow of resources will be required to
settle the obligation;

• a present obligation arising from past events, when no reliable estimates is possible;

• a possible obligation arising from past events, unless the probability of outflow of resources is remote.

Contingent liabilities are not recognised but disclosed in the financial statements. Contingent assets are neither
recognised nor disclosed in the financial statements.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets and
non cancellable operating lease.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

3 Application of New Revised Ind AS

Ministry of Corporate Affairs ("MCA”) notifies new standard or amendments to the existing standards. There is no such
notification which would have been applicable from April 1,2023.

4 Critical Estimates and Judgements

In the course of applying the policies outlined in all notes under section 2 above, the Company is required to make
judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on historical experience and other factors that
are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future period, if the revision affects current and future period.

4.1 Key sources of estimation uncertainty

i. Useful lives of property, plant and equipment and intangible assets

Management reviews the useful lives of property, plant and equipment and intangible assets at least once a year. Such
lives are dependent upon an assessment of both the technical lives of the assets and also their likely economic lives based
on various internal and external factors including relative efficiency and operating costs. Accordingly depreciable lives
are reviewed annually using the best information available to the management.

ii. Provisions and liabilities

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of
funds resulting from past operations or events that can reasonably be estimated. The timing of recognition requires
application of j udgement to existing facts and circumstances, which may be subject to change. The amounts are
determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of
the time value of money and the risks specific to the liability.

iii. Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company.
Potential liabilities that are possible but not probable of crystallising or are very difficult to quantify reliably are treated as
contingent liabilities. Such liabilities are disclosed in the notes but are not recognized.

iv. Fair value measurements

When the fair values of financial assets or financial liabilities recorded or disclosed in the financial statements cannot be
measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the
DCF model. The inputs to these models are taken from observable markets where possible, but where this is not
feasible, a degree of judgment is required in establishing fair values. Judgements include consideration of inputs such as
liquidity risk, credit risk and volatility.

v. Income Taxes

The Company''s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the
purpose of paying advance tax, determining the provision for income taxes, including amount expected to be
paid/recovered for uncertain tax positions. A tax assessement can involve complex issues, which can only be resolved
over extended time periods. The recognisation of taxes that are subject to certain legal or economic limits or
uncertainties is assessed j ndividually by the managment based on the specific facts and circumstances.

vi. Defined benefit obligations

The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in
accordance with Ind AS 19 ‘Employee benefits'' over the period during which benefit is derived from the employees''
services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include
salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in
Note 40, ‘Employee benefits''.

vii. Allowance for uncollected accounts receivable and advances

Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for
estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not
collectible. Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the
expected life of the financial assets.

The impairment provisions for financial assets are based on assumption about risk of default and expected loss rates.
Judgement in making these assumption and selecting the inputs to the impairment calculation are based on past history,
existing market condition as well as forward looking estimates at the end of each reporting period.

viii. Impairment reviews

An impairment exists when the carrying value of an asset or cash generating unit (‘CGU'') exceeds its recoverable
amount. Recoverable amount is the higher of its fair value less costs to sell and its value in use. The value in use calculation
is based on a discounted cash flow model. In calculating the value in use, certain assumptions are required to be made in
respect of highly uncertain matters, including management''s expectations of growth in EBITDA, long term growth rates;
and the selection of discount rates to reflect the risks involved.

ix. Inventories

The Company estimates the net realisable value (NRV) of its inventories by taking into account their estimated selling
price, estimated cost of completion, estimated costs necessary to make the sale, obsolescence by applying certain
percentages over different age category of such inventories, expected loss rate considering the past trend and future
outlook.Inventories are written down to NRV where such NRV is lower than their cost.

x. Sales Return

For Information about judgements made in applying the accounting policies for sales return that have the most significant
effects on the amounts recognised in the financial statements is included in notes 2.11 above.

---

Mar 31, 2018

NOTE 1 Corporate Information

The Standalone financial statements comprise financial statements of Gufic Biosciences Limited (the company) for the year ended March 3l, 20l8. The company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office ofthe company is located at 37, lst Floor, Kamala Bhavan II, Swami Nityanand Road, Andheri (East), Mumbai - 400 069 and the corporate office is located at lst to 4th Floor, S.M. House,ll Sahakar Road, Vile Parle (East),Mumbai - 400 057.

The Company is principally engaged in manufacturing and marketing of active pharmaceutical ingredients, generic pharmaceuticals and related services. These financial statements were authorized for issue in accordance with the resolution of the Directors on May 29, 20l8 and are subject to the approval of the shareholders at the Annual General Meeting.

NOTE 2 Application of new Revised Ind AS

2.1 Ind AS 115- Revenue from Contract with Customers:

On March 28, 20I8, Ministry of Corporate Affairs (“MCA”) has notified the Ind AS II5, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers.

The standard permits two possible methods of transition:

-Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors.

-Retrospectively with cumulative effect of initially applying, the standard recognized at the date of initial application (Cumulative catch - up approach).

The effective date for adoption of Ind AS II5 is financial periods beginning on or after April I, 20I8. The Company will adopt the standard on April I, 20I8. The Company is under the process of evaluating the impact of Ind AS II5.

2.2 Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

On March 28, 20I8, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) Amendment Rules, 20I8 containing Appendix B to Ind AS 2I, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April I, 20I8. The Company has evaluated the effect of this on the financial statements and the impact is not material.

NOTE 3 Critical estimates and judgements

In the course of applying the policies outlined in all notes under section 2 above, the Company is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period, if the revision affects current and future period.

3.1 Key sources of estimation uncertainty

i. Useful lives of property, plant and equipment and intangible assets

Management reviews the useful lives of property, plant and equipment and intangible assets at least once a year. Such lives are dependent upon an assessment of both the technical lives of the assets and also their likely economic lives based on various internal and external factors including relative efficiency and operating costs. Accordingly depreciable lives are reviewed annually using the best information available to the management.

ii. Provisions and liabilities

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events that can reasonably be estimated. The timing of recognition requires application of judgement to existing facts and circumstances, which may be subject to change. The amounts are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

iii. Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that are possible but not probable of crystallising or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not recognized.

iv. Fair value measurements

When the fair values of financial assets or financial liabilities recorded or disclosed in the financial statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include consideration of inputs such as liquidity risk, credit risk and volatility.

v. Income Taxes

The Company’s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. A tax assessement can involve complex issues, which can only be resolved over extended time periods. The recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed individually by the management based on the specific facts and circumstances

vi. Defined Benefit Obligations

The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS I9 ‘Employee benefits’ over the period during which benefit is derived from the employees’ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates. The same is disclosed in Note 40, ‘Employee benefits?

vii. Allowance for uncollected accounts receivable and advances

Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management seems them not collectible. Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.

The impairment provisions for financial assets are based on assumption about risk of default and expected loss rates. Judgement in making these assumption and selecting the inputs to the impairment calculation are based on past history, existing market condition as well as forward looking estimates at the end of each reporting period.

viii. Impairment reviews

An impairment exists when the carrying value of an asset or cash generating unit (‘CGU’) exceeds its recoverable amount. Recoverable amount is the higher of its fair value less costs to sell and its value in use. The value in use calculation is based on a discounted cash flow model. In calculating the value in use, certain assumptions are required to be made in respect of highly uncertain matters, including management’s expectations of growth in EBITDA, long term growth rates; and the selection of discount rates to reflect the risks involved.

NOTE 4 First-time adoption - mandatory exceptions, optional exemptions

The Company has prepared the opening balance sheet as per Ind AS as of April l, 20l6 (the transition date) by, -recognising all assets and liabilities whose recognition is required by Ind AS, -not recognising items of assets or liabilities which are not permitted by Ind AS, -by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and - applying Ind AS in measurement of recognised assets and liabilities.

However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below. Since, the financial statements are the first financial statements, the first time adoption -mandatory exceptions and optional exemptions have been explained in detail.

4.1 Derecognition of financial assets and financial liabilities:

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April l, 20l6 (the transition date).

4.2 Designation of previously recognised financial instruments

The Company has designated financial liabilities and financial assets at fair value through profit or loss on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

4.3 Impairment of financial assets

The Company has applied the impairment requirements of Ind AS l09 retrospectively; however, as permitted by Ind AS l0l, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS l0l.

4.4 Deemed cost for property, plant and equipment, investment property and intangible assets

The Company has elected to continue with the carrying value of all of its property, plant and equipment, investment property and intangible assets recognised as of April l, 20l6 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

4.5 Determining whether an arrangement contains a lease

The Company has applied Appendix C of Ind AS l7 Determining whether an Arrangement contains a Lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.

4.6 Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind Ass shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

5.1 Impairment losses recognised in the year

There are no impairment losses recognised during the year.

5.2 Assets pledged as security

5.2.1 : Plant and Equipments, Plant & Equipments (R & D), Furniture and Fixture, office equipments, Electrical Installations and Computers having carrying value of Rs. I974.84 lakhs (as at March 3I, 20I7: Rs. I864.25 lakhs and as at April I, 20I6: Rs. I985.57 lakhs) have been pledged to secure borrowings of the Company (see note 20). The Company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity, except items specifically pledged to others.

5.2.2 : Vehicles having carrying value of Rs. I22.I6 lakhs (as at March 3I, 20I7: Rs. 80.27 lakhs and as at April I, 20I6: Rs. 88.4I lakhs) have been hypothecation by way of first charge on the vehicles acquired under the specific facility granted.

5.2.3 : Computers having carrying value of Rs. 4.I5 lakhs (as at March 3I, 20I7: Rs. I3.0I lakhs and as at April I, 20I6: Rs. 2I.23 lakhs) have been obtained on Finance Lease and hypothecated accordingly.

The cost of inventories recognised as an expense during the year was Rs.14222.64 lakhs (20I6 - 20I7: Rs.12079.02 lakhs). This is included as part of Cost of Materials Consumed and Changes in Inventories of Finished Goods, Work-in-Process and Stock-in-Trade in the Statement of Profit and Loss.

The mode of valuation of inventories has been stated in note 2.II.

6.1 Trade receivables

The Company considers the probability of default upon initial recognition of assets and whether there has been a significant increase in credit risks on an ongoing basis throughout each reporting period. The average credit period allowed to the customers is in the range of 30-90 days.

The company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period as follows.

NOTE 7. Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the balance sheet as follows:

Other Bank Balances - Earmarked Balances with Banks includes deposit Rs.5.00 lakhs (20I6 - 20I7 : Rs.Nil, April I, 20I6 : Rs.Nil) which have an original maturity of more than I2 months.

8.1 : The Company has only one class of equity shares having a par value of Re. I per shares. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. 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 the shareholder.

Nature of Reserves

Note 9.l: The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

Note 9.2: The Capital reserve is created on receipts of government grants for setting up of tissue culture division in the earlier years.

Note 9.3: The company has paid dividend of Rs.0.05 per share on September 5, 20l7 (totalling to Rs.38.68 lakhs) was paid to the holders of fully paid equity shares. Further on September 28, 20l6 the company had paid dividend of Rs.0.05 per share (totalling to Rs.38.68 lakhs)

In respect of the year ended March 3l, 20l8, the directors propose that a dividend of Rs.0.05 per share be paid on the fully paid equity shares. The equity dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these standalone financial statements. The proposed equity dividend is payable to all the holders of fully paid equity shares. The total estimated dividend to be paid is Rs.38.68 lakhs)

Note 9.4: Others Includes the notional interest charged to the Statement of Profit & Loss account on account of interest free loan given by the directors of the company.

V. The company has received unsecured and interest free loan from the directors of the company. The loans are repayable onIst August, 2023 .The company has provided interest on the loan @ II % p.a. (20I6 - I7 and April I, 20I6: I3% p.a.). Thus the company during the year has accounted the interest expenses of Rs.65.34 lakhs (20I6 - 20I7 : Rs.0.82 lakhs) and shown the same under the head “Other equity excluding non controlling interests” as owners contribution towards equity.

10.1 There are no breach of contractual terms of the borrowing during the year ended March 3I, 20I8, March 3I, 20I7 and April I, 20I6.

10.2 Reconciliation of liabilities arising from financing activities

The table below details changes in the Company’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be, classified in the Company’s consolidated of cash flows as cash flows from financing activities.

Note I Secured loans comprise of Bank Overdraft, and are secured by hypothecation of all stocks and book debts. The facilities granted to the company are further secured by Equitable / Legal mortgage of land and factory building of Gufic Private Limited to the extent of Rs.2000 lakhs (Company in which directors are interested), situated at Navsari, against the credit facilities sanctioned to the company. The loans are secured by personal guarantee of Managing Director and Chief Executive Officer and the loan are secured by a corporate guarantee (restricted to the exposure of Rs.3640 lakhs) of Gufic Private Limited.

Rate of Interest @ 9.70% and repayable on demand.

Note 2 Unsecured Loan comprises of Foreign Currency Loan (Buyers Credit) of Rs.435.35 lakhs (March 3I, 20I7 Rs.293.89 lakhs and April I, 20I6 Rs.173.07 lakhs)

Foreign Currency loans carry interest rate at 3 months LIBOR plus 0.48 %

The average credit period on purchases is 45 to 90 days. No interest is charged by the trade payables. Sundry Creditors - Dues to Micro and Small Enterprises

Pursuant to disclosure of amount due to Micro, Small and Medium Enterprises as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” (MSMED ACT) included under the head “Trade Payable”, the Company has initiated process of seeking necessary information from its suppliers. Based on the information available with the company regarding the total amount due to supplier as covered under MSMED Act is given below. The company is generally regular in making payment of dues to such enterprise. There are no overdues beyond the credit period extended to the company which is less than 45 days hence liability for payment of interest or premium thereof and related disclosure under the said Act does not arise. This has been relied upon by the auditors.

I. During the year ended March 3I, 20I8 and March 3I, 20I7 the Company has paid dividend to share holders, this has resulted in payment of dividend distribution tax to the taxation authorities. The Company believes that dividend distribution tax represents additional payment to tax authorities on behalf of shareholders. Hence, dividend distribution tax paid is charged to equity,

ii. There are no unrecognized deferred tax assets and liabilities as at March 3I, 20I8 and March 3I, 20I7.

NOTE 11. Segment information

11.1 Products and services from which reportable segments derive their revenues

Based on the “management approach” as defined in IND AS I08, the Chief Operating Decision Maker (CODM) evaluate the company’s performance.” The company has two reportable operating segment i.e Pharma and Bulk Drugs.First Pharma segment include manufacturing and trading of Tablets, capsules, ointment , Syrups/suspension,powder,injection and Lotion etc. and second Bulk Drugs segment is Chemical manufacturing segment.

Specifically, the Company’s reportable segments under lnd AS I08 are as follows:

11.2 Segment revenues and results

The following is an analysis of the Company’s revenue and results from operations by reportable segment.

Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sates in the current year (20I6-20I7: Nil).

The accounting policies of the reportable segments are the same as the Company’s accounting policies described in note 2. Segment profit represents the profit before tax earned by each segment without allocation of unallocated expenses and income. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

11.3 Information about geographical areas

The Company presently caters to only domestic market i.e. India and hence there is no revenue from external customers outside India nor any of its non-current asset is located outside India.

11.4 Information about major customers

Inculded in revenue arising from direct sales of trading goods ofRs. 12,896.79 Lakhs (year ended 31 March, 2017: Rs. 11,846.30 Lakhs) which arose from sales to its fifteen (fifteen) major customers which accounts for 42.41 percent (year ended 31 March, 2017: 44.87 percent) of the total revenue from trading operation. No other single customer contributed 10% or more to the company’s revenue for year ended 31 March, 2018 and year ended 31 March, 2017.

NOTE 12. Operating lease arrangements

12.1 The Company as lessee

12.1.1 Leasing arrangements

The Company’s significant leasing arrangementa are in respect of operating lease for premises. The period of agreement is generally from one year to five year and is renewable by mutual consent. The Company does not have an option to purchase the leased assets at the expiry of the lease periods.

Sales of goods to related parties were made at the usual list prices. Purchases were made at market price discounted to reflect the quantity of goods purchased and the relationships between the parties.

The amount outstanding are unsecured and will be settled in cash. No guarantee have been given or received. No expense has been recognized in the current period or prior years for bad or doubtful debts in respect of the amounts owed by related parties.

12.2 Compensation of key management personnel

The remuneration of directors and other members of key management personnel during the year was as follows:

NOTE 13.Employee benefit plans

13.1 Defined contribution plans

The Company operates defined contribution retirement benefit plans for all qualifying employees of its Company. The assets of the plans are held of the company in funds under the control of trustees. Where employees leave the plans prior to full vesting of the contributions, the contributions payable by the company are reduced by the amount of forfeited contributions.

The company has recognised the following amounts in the profit and loss accounts.

13.2 Defined benefit plans

The Company sponsors funded defined benefit plans for qualifying employees. The defined benefit plans are administered by a separate Fund that is legally separated from the entity. The board of the Fund is composed of an equal number of representatives from both employers and (former) employees. The board of the Fund is required by law and by its articles of association to act in the interest of the Fund and of all relevant stakeholders in the scheme, i.e. active employees, inactive employees, retirees, employers. The board of the Fund is responsible for the investment policy with regard to the assets of the Fund.

These plans typically expose the Company to acturial risks such as: investment risk, interest rate risk, longevity risk and salary risk

The risk relating to benefits to be paid to the dependents of plan members (widow and orphan benefits) is re-insured by an external insurance company. No other post-retirement benefits are provided to these employees.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at March 3l, 20l8. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The principal assumptions used for the purposes of the actuarial valuations were as follows.

The current service cost and the net interest expense for the year are included in the ‘Employee benefits expense’ line item in the statement of profit and loss.

The remeasurement of the net defined benefit liability is included in other comprehensive income.

The amount included in the balance sheet arising from the entity’s obligation in respect of its defined benefit plans is as follows.

13.2. Diluted Earnings Per Share

The diluted earnings per share has been computed by dividing the Net profit after tax available for equity shareholders by the weighted average number of equity shares, after giving the effect of the dilutive potential ordinary shares for the respective periods.

NOTE 14. Financial instruments

14.1 Capital management

The company manages its capital to ensure that entities in the company will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the company consists of net debt offset by cash and bank balances and total equity of the company. The company is not subject to any externally imposed capital requirements.

14.1.1 Gearing ratio

The gearing ratio at end of the reporting period was as follows.

14.3 Financial risk management objectives

The company has a board approved policy to manage the various risks that arise from its business activities.

The objective of the risk management policy document is to ensure that the company has proper and continuous risk identification and management process. This process will generally involve the following steps:

- Identifying, ranking risks inherent in the Organisation’s strategy (including its overall goals and appetite for risk);

- Selecting the appropriate risk management approaches and transferring or avoiding those risks that the business is not willing or competent to manage;

- Implementing controls to manage the remaining risks;

- Monitoring the effectiveness of risk management approaches and controls;

- Learning from experiences and making improvements.

The various Risks to which the company is exposed and the steps taken to mitigate or minimise the same are given below:

14.4 Market risk

The Companies activities primarily expose it to the interest rates risk as discussed below:

14.5 Interest rate risk management

The company is exposed to interest rate risk because it borrows funds from banks and institutions at both fixed and floating interest rates. The risk is managed by the company by maintaining an appropriate mix between fixed and floating rate borrowings. The companies exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

14.5.1 Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A I00 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been I00 basis points higher/lower and all other variables were held constant, the company’s (Contracted Interest Rate on all the borrowing)i) profit for the year ended March 3I, 20I8 would decrease/increase by Rs.59.62 lakhs (20I6 - 20I7: decrease/increase by Rs.4I.84 lakhs). This is mainly attributable to the company’s exposure to interest rates on its variable rate borrowings; and

14.6 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Before accepting any new customer, the company evaluates the credit worthiness of the potentional customers based on past history and other external inquiries as deemed appropriate. The company also obtains the necessary KYC documents from all the customer for assessing the credit quality and defines the credit limits accordingly. Limits and scoring attributed to customers are reviewed once a year. As at 3I March 20I7, the carrying amount of the companies largest customer was I449.84 lakhs (3I.03.20I6 - 429.64 lakhs, 0I.04.20I5 - I60I.0I lakhs)

14.7 Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company’s short-term, medium-term, and long-term funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Note 42.7.2 below sets out details of additional undrawn facilities that the company has at its disposal to further reduce liquidity risk.

14.7.1 Liquidity and interest risk tables

The following tables detail the company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the company may be required to pay.

Commentary:

The tables below include the weighted average effective interest rate and the carrying amount of the respective financial liabilities as reflected in the standalone balance sheet as an example of summary quantitative data about exposure to interest rates at the end of the reporting period that an entity may provide internally to key management personnel.

14.8 Fair value measurements

The investment of the company are not readily marketable. Further the company has invested in the securities for the purpose of obtaining the credit facilities. The company has to returned the securities back to the lender in the event the credit facilities are repaid / closed by the company. Thus in the case the cost of the security represents the fair value.

Except as stated above the carrying amount of all other financial assets approximate their fair values as indicated below.

(I) The above claims are pending before various Authorities / court. The Company is confident that the cases will be successfully contested.

(ii) These represent demands raised by Income-tax department on various matters for which disputes are pending before various Appellate authorities. The Company is confident that all these cases can be successfully contested.

NOTE 15. Events after the reporting period

In respect of the year ended March 3I, 20I8, the directors propose that a dividend of ‘0.05 per share be paid on the fully paid equity shares. The equity dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these standalone financial statements. The proposed equity dividend is payable to all the holders of fully paid equity shares. The total estimated dividend to be paid is Rs.38.68 lakhs and Dividend Distribution Tax of Rs. 7.87 lakhs.

NOTE 16.

The company had obtained an approval under sec. 35(2AB) in the F.Y. 2014-15 for inhouse scientific research, which has been renewed in the FY 17 - 18. During the year it has incurred expenditure of Rs.853.21 lakhs (including fixed assets of Rs.324.39 lakhs) (Previous Year : Rs.206.67 lakhs (including fixed assets of Rs.53.8llakhs) and the same has been shown under the head other expenses.

NOTE 17. CSR Expenditure

(a)Gross amount required to be spent by the company during the Financial Year 17 - 18: Rs.20.22 lakhs (2016-17: Rs.6.80 Lakhs)

(b) Amount spent during the year

NOTE 18.

The Company has appointed an internal auditor, an independent firm of Chartered Accountants to carry out the audit of stock records maintained by the company. The audit inter alia includes physical verification and valuation of inventories of all its locations and accordingly the same has been incorporated in accounts. Certificate issued in this regard be relied upon.

NOTE 19.

In the opinion of the management inventories of Rs.9388.28 Lakhs (2016 - 2017: Rs.6301.52 Lakhs and April ll, 2016 Rs.5026.31 Lakhs) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories, loans and advances have a value on a realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

NOTE 20

Balance of sundry debtors, loans & advances, sundry creditors and Security and Trade Deposits from Agents and Stockists balances are subject to confirmations, verification and adjustments necessary upon reconciliation thereof. Pending adjustments on confirmations, if any, it is shown as good in nature.

NOTE 21.

The company has given security deposit of Rs.300 Lakhs to Gufic Private Limited towards the use of its factory premises at Navsari for its manufacturing activities. Accordingly an amount of Rs.300 Lakhs has been shown under the head Long Term Loans to related parties.

Company has also given Security Deposit to Gufic Chem Private Limited of Rs.120 Lakhs towards supply of products at concessional rate to the company and the same has been show under the head Long Term Loan to related parties.

NOTE 22.

The company has entered into strategic arrangement with one of its group company for increasing its additional production capicity of manufacturing injectiable vials, having a better quality and low cost of production to fulfill the demand. The company has granted advances of Rs.322.88 Lakhs (2016 - 2017: Rs.1708 Lakhs and April 1, 2016 : Rs.262.79 Lakhs) under the said arrangement. The production under the said arrangement have already been commenced subsequent to the Balance Sheet date and company is expected to reap the benefit of the same in subsequent year. Accordingly the same has been shown as Advances other than Capital Advances under the head other assets.

NOTE 23.

The company had in the earlier year unearthed fraud committed by one of its marketing employee who has misappropriated amount of Rs.124.04 lakhs (20I6 - 20I7: Rs.124.04 lakhs April I, 20I6 : Rs.124.04 lakhs). The management has taken necessary steps including leagl action and is hopeful of recovering the said amount. Accordingly it has been shown the amount of Rs.124.04 lakhs under the head other Assets [other (non Current)].

NOTE 24.

The company is in process of implementing ERP system in a phased manner for integration of its various functions and it could implement only some of its modules. Company has also continued with the old accounting system. Pending implementation of complete ERP system, the management confirms that it has taken enough care/diligence to ensure that the data / accounts, so presented, are materially correct and that the books of accounts have been duly reconciled with the various systems.

NOTE 25. First Time Adoption Indian Accounting Standards

The company has adopted Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate Affairs with effect from April, I, 20I7,with a transition date of April I, 20I6. Ind AS I0I-First-time Adoption of Indian Accounting Standards requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements which is for the year ended March 3I, 20I8 for the company, be applied retrospectively and consistently for all financial years presented.

Consequently, in preparing these Ind AS financial statements, the company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS I0I, as explained below. The resulting difference of Rs.757.95 lakhs in March 3I , 20I7 (Rs. 5I8.47 lakhs in April I, 20I6), in the carrying values of the assets and liabilities as at the transition date between the Ind AS and Previous GAAP have been recognised directly in other equity.

(A) Set out below are the Ind AS 101 optional exemptions availed as applicable and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

(i) Deemed cost

The company has opted para D7 AA and accordingly considered the carrying value of property, plant and equipments and Intangible assets as deemed cost as at transition date.

(ii) Leases

Appendix C to Ind AS I7, Leases, requires an entity to assess whether a contract or arrangement contains a lease. As per Ind AS I7, this assessment should be carried out at inception of the contract or arrangement. However, the company has used Ind AS I0I exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

(iii) De-recognition of financial assets and liabilities

De-recognition of financial assets and liabilities The company has elected to apply de-recognition requirements for financial assets and liabilities under Ind AS I09 prospectively for transactions occurring on or after the date of transition to Ind AS.

(iv) Classification and measurement of financial assets

The company has classified the financial assets in accordance with Ind AS I09 on the basis of facts and circumstances that exist on the date of transition to Ind AS.

(v) Estimates

In preparing opening Ind AS balance sheet, the Company has adjusted amounts reported in financial statements prepared in accordance with previous GAAP On transition, the Company did not revise estimates previously made under previous GAAP except where required by Ind AS.

Note: Under previous GAAP total comprehensive income was not reported. Therefore, the above reconciliation starts with profit under the previous GAAP.

(D) Effect of Ind AS adoption on the statement of cash flows

The Ind AS adjustments are either non cash adjustments or are recompanying among the cash flow from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 3Ist March, 20I7 as compared with the previous GAAP

Notes to reconciliation

a. Trade and other Receivables

Under Previous GAAP the Company has created provision for impairment of receivables only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Credit Loss model (ECL).

b. Revenue Recognition - Measurement of Revenue

As per Ind As 18 revenue needs to be measured at fair value and accordingly provision for estiamted returns is adjsuted up front against revenue as against the practice of recording them on occurrence of the returns under the earlier GAAP

c. Finance cost on interest free borrowing

Ind AS-109 requires all financial liabities to be measured at fair value as agaisnt cost in the previous GAAP Accordingly the differnce between the fair value and the previous GAAP carrying value is accounted for as a finance cost over the period of the loan with a corresponding credit being shown as an equity contribution.

d. Incremental finace cost under EIR method

Under Previous GAAP the Company accounted for long term borrowings at transaction value. Under Ind AS, the Company has recognised these long term borrowings initial at fair value less transaction cost and subsequently measured at amortised cost using effective interest rate (EIR).

This has resulted to an impact on equity as on 31st March, 2017 of Rs.2.31 Lakhs and on 1st April, 2016 of Rs.13.48 Lakhs.

e. Fair valuation of non-current security deposits

Under Previous GAAP security deposits are carried at their book values. Under Ind AS, non cancellable deposits (other than statutory in nature) are required to be measured at their fair values at inception using an appropriate discounting rate.

f. Proposed dividend

Under previous GAAP dividends on equity shares recommended by the board of directors after the end of the reporting period but before the financial statements were approved by shareholders were recognised in the financial statements as a liability. Under Ind AS, such dividends are recognised when declared by the members in a general meeting. In the case of the company, the declaration of dividend has occurred after period end. Therefore, the liability recorded for this dividend and tax thereon, has been derecognised against retained earnings.

g. 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 recognised in other comprehensive income instead of Statement of Profit and Loss. Under the previous GAAP these remeasurements were forming part of the Statement of Profit and Loss for the year.

h. 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 3Ist March, 20I7. The total comprehensive income for the year ended and equity as at 3Ist March, 20I7 has remained unchanged.

NOTE 26. Authorisation of Financial Statements

The financial statements for the year ended March 3I, 20I8 were approved by the Board of Directors onMay 29,20I8.

NOTE 27.

Figures for the previous year have been rearranged/recompanyed as and when necessary in terms of current year’s companying.

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Mar 31, 2017

NOTE 1: RELATED PARTY DISCLOSURES UNDER ACCOUNTING STANDARD 18

Related party transactions

A. Details of related parties

Description of relationship Names of related parties

Key Management Personnel (KMP) Jayesh P. Choksi (Chairman & Managing Director)

Pranav J. Choksi (Whole-time Director & CEO)

Pankaj Gandhi (Whole-time Director)

Hemal Desai (Chief Financial Officer & Whole-time Director)

Relatives of KMP Vipula J. Choksi

Parth Gandhi Khushboo Desai Pooja Choksi

Company in which KMP / Relatives of KMP can exercise Comfrey Pharmaceuticals Private Limited influence

Gufic Private Limited

Gufic Chem Private Limited

Gufic Lifesciences Private Limited

Gufic Stridden Bio-Pharma Private Limited

Jal Private Limited

Motif Hotels Private Limited

Zircon Finance and Leasing Private Limited

Zire Realty Limited

Zire Rushi Construction

Manshi Gandhi Enterprises

Parth Gandhi Enterprises

viraj Enterprise

Shraddha Enterprise

There are no write offs/write back of any amounts for any of the above parties.

NOTE 2 : LEASE TRANSACTIONS

The Company''s significant leasing arrangements are in respect of operating lease for premises. The period of agreement is generally for one year and is renewable by mutual consent. The aggregate lease rental expense are Rs, ll7.80 Lacs (Previous year Rs, ll4.00 Lacs)

NOTE 3

In compliance with Accounting Standard-2 (AS-2) revised, excise Duty liability estimated at Rs, 42.l5 lakhs (Previous year Rs, 42.30 lakhs) on finished goods lying in factory premises has been loaded on the valuation of Finished goods. However, it has no impact on the Profit and Loss Account. The Excise duty of Rs, l3.5l lakhs related to the difference between the closing stock and opening stock is given effect in the Profit & Loss Account.

NOTE 4

The company had obtained an approval under sec. 35(2AB) in the F.Y. 20l4-l5 for inhouse scientific research. During the year it has incurred expenditure of Rs, 206.67 lakhs (including fixed assets of Rs, 53.8l lakhs) (Previous Year : Rs, l0l.45 lakhs) and the same has been shown under the head other expenses.

NOTE 5

CSR Expenditure

(a) Gross amount required to be spent by the company during the Financial Year 20l6-l7: Rs, 6.80 Lakhs

NOTE 6

The Company has appointed an internal auditor ,an independent firm of Chartered Accountants to carry out the audit of stock records maintained by the company. The audit inter alia includes physical verification and valuation of inventories of all its locations and accordingly the same has been incorporated in accounts. Certificate issued in this regard be relied upon.

NOTE 51

In the opinion of the management inventories of Rs, 630l.52 lakhs (Previous year Rs, 5026.3l lakhs) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories, loans and advances have a value on a realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

NOTE 7

Balance of sundry debtors, loans & advances, sundry creditors and Security and Trade Deposits from Agents and Stockiest balances are subject to confirmations, verification and adjustments necessary upon reconciliation thereof. Pending adjustments on confirmations, if any, it is shown as good in nature.

NOTE 8

The company has given security deposit of Rs, 300 lakhs to Gufic Private Limited towards the use of its factory premises at Navsari for its manufacturing activities. Accordingly an amount of Rs, 300 lakhs has been shown under the head long term loans and advances.

Company has also given Security Deposit to Gufic Chem Private Limited of Rs, l20 lakhs towards supply of products at concessional rate to the company and the same has been show under the head Long Term Loan and Advance to related parties.

NOTE 9

The company has entered into strategic arrangement with one of its group company for increasing its additional production capacity of manufacturing inject able vials, having a better quality and low cost of production to fulfill the demand. The company has granted advances of Rs, l708 lakhs (20l5 - 20l6 : Rs, 262.79 lakhs) under the said arrangement. The production under the said arrangement have already been commenced. Accordingly the same has been shown as loans and advance under the head short term loans and advance.

NOTE10

In view of management debts of Rs, 209.08 lakhs (Previous Year : l85.45) and advances of Rs, 68.37 lakhs (Previous Year : 68.46) outstanding for more than one year are good and recoverable in nature. Management is taking necessary steps for recovery of the said amount.

NOTE 11.

The company had in the earlier year unearthed fraud committed by one of its marketing employee who has misappropriated amount of Rs, l24.04 lakhs (Previous Year : Rs, l24.04 lakhs). The management has taken necessary steps including legal action and is hopeful of recovering the said amount. Accordingly it has been shown the amount of Rs, l24.04 lakhs under the head other non-Current Assets (other).

NOTE 12.

The company is in process of implementing ERP system in a phased manner for integration of its various functions and it could implement only some of its modules. Company has also continued with the old accounting system. Pending implementation of complete ERP system, the management confirms that it has taken enough care/diligence to ensure that the data / accounts, so presented, are materially correct and that the books of accounts have been duly reconciled with the various systems.

NOTE 13

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2016

1: TERMS / RIGHTS ATTACHED TO SHARES : The Company has only one class of equity shares having a par value of '' 1 per shares. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. 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 the shareholder.

The Board of Directors at its meeting held on May 30, 20l6 has recommended a final dividend of Rs. 0.05 per equity shares. This proposal is subject to approval of shareholders at the ensuing Annual General Meeting

Notes forming part of the Financial Statements for the year ended on March 3l, 20l6

2 : Additional information to secured / unsecured

The long term portion of term loans are shown under long term borrowings and current maturities (payable within twelve months) of long term borrowings are shown under the current liabilities as per disclosure requirement of the Schedule III.

3. Unsecured Loans :

Unsecured loans from Directors & Related Parties are interest free and repayable after March 2016 or any period there after as mutually decided.

4: Details of Security: For Rupee Loan

(I) Hypothecation of stocks and book debts. The facilities granted to the company are further secured by Equitable / Legal mortgage of land and factory building of Gufic Private Limited - company in which directors are interested, situated at Navsari, against the credit facilities sanctioned to the company. The loans are secured by personal guarantee of Managing Director and Executive Director and the loan are

The Rupee Loan Carries interest @ l4.00% and Foreign Currency Loan Secured by issue of LOU from The Saraswat Co-operative Bank Limited Carries interest @ 2M LIBOR 0.55 %

Sundry Creditors - Dues to Micro and Small Enterprises

Pursuant to disclosure of amount due to Micro, Small and Medium Enterprises as defined under the ”Micro, Small and Medium Enterprises Development Act, 2006” (MSMED ACT) included under the head “Trade Payable”, the Company has initiated process of seeking necessary information from its suppliers. Based on the information available with the company regarding total amount due to supplier as at March 31, 2016 covered under MSMED Act, amounts to Rs. 8.94 lacs (2014 - 15 : Rs. 28.08 lacs). The company is generally regular in making payment of dues to such enterprise. There are no overdues beyond the credit period extended to the company which is less than 45 days hence liability for payment of interest or premium thereof and related disclosure under the said Act does not arise.

In compliance with Accounting Standard-2 (AS-2) revised, excise Duty liability estimated at Rs. 42.30 lakhs (Previous year Rs. 22.42 lakhs) on finished goods lying in factory premises has been loaded on the valuation of Finished goods. However, it has no impact on the Profit and Loss Account. The Excise duty of Rs. 13.51 lakhs related to the difference between the closing stock and opening stock is given effect in the Profit & Loss Account.

NOTE 5

The company had obtained an approval under sec. 35(2AB) in the F.Y. 2014-15 for inhouse scientific research. During the year it has incurred expenditure of Rs. I0I.45 lakhs (including fixed assets of Rs. 33.69 lakhs) (Previous Year : Rs. 25.81 lakhs) and the same has been shown under the head other expenses.

NOTE 6

CSR Expenditure

(a) Gross amount required to be spent by the company during the Financial Year 20I5-I6: Rs.I8.83 Lakhs

(b) Amount spent during the year

NOTE 7

Capital expenditure incurred on the building constructed in leasehold land by the company are capitalized in the books of accounts and are amortized over a period of 5 years

NOTE 8

The Company has appointed an internal auditor ,an independent firm of Chartered Accountants to carry out the audit of stock records maintained by the company. The audit inter alia includes physical verification and valuation of inventories of all its locations and accordingly the same has been incorporated in accounts. Certificate issued in this regard be relied upon.

NOTE 9

In the opinion of the management inventories of Rs.5026.2I lakhs (Previous year Rs. 3680.I4 lakhs) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories, loans and advances have a value on a realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

NOTE 10

Balance of Trade Receivable, loans & advances, Trade Payable and security and Trade Deposits from Agents and Stockiest balance are subject to confirmations, verification and adjustments necessary upon reconciliation thereof. Pending adjustments on confirmation, if any, it is shown as good in nature.

NOTE 11

The company has given security deposit of Rs. 300 lakhs to Gufic Private Limited towards the use of its factory premises at Navsari for its manufacturing activities. Accordingly an amount of Rs.300 lakhs has been shown under the head long term loans and advances.

Company has also given Security Deposit to Gufic Chem Private Limited of Rs. 120 lakhs towards supply of products at concessional rate to the company and the same has been show under the head Long Term Loan and Advance to related parties.

NOTE 12

The company has entered into strategic arrangement with one of its group company for increasing its additional production capacity of manufacturing inject able vials, having a better quality and low cost of production to fulfill the demand. The company has granted advances of Rs. 250 lakhs (2013 - 2014 : Rs 1100 lakhs) under the said arrangement. The production under the said arrangement have already been commenced. Accordingly the same has been shown as loans and advance under the head short term loans and advance.

NOTE 13

In view of management debts of Rs. 185.45 lakhs (Previous Year : 151.48) and advances of Rs. 68.46 lakhs (Previous Year : 52.26) outstanding for more than one year are good and recoverable in nature. Management is taking necessary steps for recovery of the said amount.

NOTE 14

The company had in the earlier year unearthed fraud committed by one of its marketing employee who has misappropriated amount of Rs. 124.04 lakhs (Previous Year : Rs. 123.80 lakhs). The management has taken necessary steps including legal action and is hopeful of recovering the said amount. Accordingly it has been shown the amount of Rs. 124.04 lakhs under the head other non-Current Assets (other).

NOTE 15

The company is in process of implementing ERP system in a phased manner for integration of its various functions and it could implement only some of its modules. Company has also continued with the old accounting system. Pending implementation of complete ERP system, the management confirms that it has taken enough care/diligence to ensure that the data / accounts, so presented, are materially correct and that the books of accounts have been duly reconciled with the various systems.

NOTE 16

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2015

I. Unsecured Loans :

Unsecured loans from Directors & Related Parties are interest free and repayable after March 2015 or any period there after as mutually decided.

NOTE 1 : BORROWING COST

Borrowing costs of Rs. Nil (2013 - 2014: Rs. 37.74 Lacs) that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets.

NOTE 2 : LEASE TRANSACTIONS

The Company's significant leasing arrangements are in respect of operating lease for premises and Vehicles. The period of agreement is generally for one year and is renewable by mutual consent. The aggregate lease rental expense are Rs. 114.00 Lacs (Previous year Rs. 95.28 Lacs)

NOTE 3

(a) Gross amount required to be spent by the company during the year: Rs.. 9.68 lacs

(b) Amount spent during the year on: NIL

NOTE 4

As per the requirement of the Companies Act, 2013 (Act), the company has reassessed the remaining useful life of the fixed assets taking into consideration the useful life prescribed in Schedule II of the Act. The written down value of Rs.. 280.07 Lacs as on April 1, 2014 (net of deferred tax of Rs.. 98.12 Lacs) of the assets, whose residual life is exhausted has been adjusted against the opening balance of Reserves and Surplus.

NOTE 5

In compliance with Accounting Standard-2 (AS-2) revised, excise Duty liability estimated at Rs.. 22.42 Lacs (Previous year Rs.. 8.91 Lacs) on finished goods lying in factory premises has been loaded on the valuation of Finished goods. However, it has no impact on the Profit and Loss Account. The Excise duty of Rs.. 13.51 lacs related to the difference between the closing stock and opening stock is given effect in the Profit & Loss Account.

NOTE 6

The Company has appointed an internal auditor ,an independent firm of Chartered Accountants to carry out the audit of stock records maintained by the company. The audit inter alia includes physical verification and valuation of inventories of all its locations and accordingly the same has been incorporated in accounts. Certificate issued in this regard be relied upon.

NOTE 7

In the opinion of the management inventories of Rs.. 3680.14 Lacs (Previous year Rs.. 2611.54 Lacs) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories, loans and advances have a value on a realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

NOTE 8

Balance of Trade Receivable, loans & advances, Trade Payable and security and Trade Deposits from Agents and Stockists balance are subject to confirmations, verification and adjustments necessary upon reconciliation thereof. Pending adjustments on confirmation, if any, it is shown as good in nature.

Company has already initiated process of identifying Trade Receivable, Advances and Trade creditors which are non-recoverable in nature and will make necessary provision upon completion of process. However during the financial year 2014-15 it has made necessary provision/or transferred amount to bad debts in respect of debtors which are not recoverable in nature.

NOTE 9

The company has given security deposit of Rs. 300 lacs to Gufic Private Limited towards the use of its factory premises at Navsari for its manufacturing activities. Accordingly an amount of Rs. 300 lacs has been shown under the head long term loans and advances.

Company has also given Security Deposit to Gufic Chem Private Limited of Rs. 120 lacs towards supply of products at concessional rate to the company and the same has been show under the head Long Term Loan and Advance to related parties.

NOTE 10

The company has unearthed the fraud committed by one of its marketing employee who has misappropriated amount of Rs.. 123.80 Lacs (gross Rs.. 146.30 Lacs less recovered Rs.. 22.50 Lacs). The management has taken necessary steps including legal action and is hopeful of recovering the said amount. Accordingly it has been shown the amount of Rs.. 123.80 Lacs under the head other non-Current Assets (other).

NOTE 11

The company is in process of implementing ERP system in a phased manner for integration of its various functions and it could implement only some of its modules. Company has also continued with the old accounting system. Pending implementation of complete ERP system, the management confirms that it has taken enough care/diligence to ensure that the data / accounts, so presented, are materially correct and that the books of accounts have been duly reconciled with the various systems.

NOTE 12

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

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Mar 31, 2014

LONG TERM BORROWINGS

Additional information to secured / unsecured

The long term portion of term loans are shown under long term borrowings and current maturities (payable within twelve months) of long term borrowings are shown under the current liabilities as per disclosure requirement of the Revised Schedule VI.

Details of securities and Terms of payment

(i) Secured by way of hypothecation of plant & machineries to the Bank.

(ii) The facilities granted to the company are further secured by Equitable / Legal mortgage of land and factory building of Gufic Private Limited - company in which directors are interested, situated at Navsari, against the credit facilities sanctioned to the company.

(iii) The loans are guaranteed personal guarantte of Managing Director and Executive Director.

(iv) Further the loan are secured by a corporate guarantee of Gufic Private Limited.

TERMS / RIGHTS ATTACHED TO SHARES : The Company has only one class of equity shares having a par value of Rs. 1 per shares. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. 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 the shareholder.

Details of Security: For Rupee Loan

Hypothecation of stocks and book debts. The facilities granted to the company are further secured by Equitable / Legal mortgage of land and factory building of Gufic Private Limited - company in which directors are interested, situated at Navsari, against the credit facilities sanctioned to the company. The loans are secuered by personal guarantee of Managing Director and Executive Director and the loan are secured by a corporate guarantee of Gufic Private Limited.

Sundry Creditors - Dues to Micro and Small Enterprises

Pursuant to disclosure of amount due to Micro, Small and Medium Enterprises as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" (MSMED ACT) included under the head "Trade Payable", the Company has initiated process of seeking necessary information from its suppliers. Based on the information available with the company regarding total amount due to supplier as at March 31, 2014 covered under MSMED Act, amounts to Rs. 22.38 lacs (2012 - 13 : Rs. 0.76 lacs). The company is generally regular in making payment of dues to such enterprise. There are no overdues beyond the credit period extended to the company which is less than 45 days hence liability for payment of interest or premium thereof and related disclosure under the said Act does not arise.

CONTINGENT LIABILITIES & COMMITMENTS NOT PROVIDED FOR

As at As at 31.3.2014 31.3.2013 Rs. in Lacs Rs. in Lacs

(a) Other money for which the Company is contingently liable

(i) Letter of Credit 631.55 131.55 (ii) Bank Guarantee 5.90 7.35 (iii) Excise Duty 108.86 110.49 (iv) Income Tax 128.03 - (v) Labor Cases 0.76 2.50 (b) Estimated amount of contracts remaining 149.01 219.51 to be executed on capital account and not provided for

Consequent to discontinuation of providing marketing support services by Gufic Private Limited to the company w.e.f. October 2013, company has decided to set up its own marketing divison and to appoint its marketing staff for the purpose of its business. As a result company has acquired experienced staff of Gufic Private Limited handling marketing activities of the company, alongwith the gratuity and leave encashment liabilitiies of Rs. 44.35 Lacs and Rs. 16.13 Lacs respectively and has made necessary provision in the accounts.

During the year, the company has received compensation of Rs. 105.09 lacs from the Insurance Company towards reinstatement value of the fixed assets, which were destroyed in the fire during the last year. The company has acquired or constructed new assets as against the assets destroyed by fire which has been shown as addition to respective block of assets and money received from insurance company to the extent of Rs. 105.09 lacs has been shown as deduction from the respective block of assets.

In compliance with Accounting Standard-2 (AS-2) revised, excise Duty liability estimated at Rs. 8.91 Lacs (Previous year Rs. 10.75 Lacs) on finished goods lying in factory premises has been loaded on the valuation of Finished goods. However, it has no impact on the Profit and Loss Account. The Excise duty of Rs. 1.84 lakhs related to the difference between the closing stock and opening stock is given effect in the Profit & Loss Account.

The Company has appointed an internal auditor ,an independent firm of Chartered Accountants to carry out the audit of stock records maintained by the company. The audit inter alia includes physical verification and valuation of inventories of all its locations and accordingly the same has been incorporated in accounts. Certificate issued in this regard be relied upon.

In the opinion of the management inventories of Rs. 2611.54 Lacs (Previous year Rs. 1999.59 Lacs) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories, loans and advances have a value on a realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

Balance of sundry debtors, loans & advances, sundry creditors and Security and Trade Deposits from Agents and Stockists balances are subject to confirmations, verification and adjustments necessary upon reconciliation thereof. Pending adjustments on confirmations, if any, it is shown as good in nature.

The company has given security deposit of Rs. 791.91 lacs to Gufic Private Limited towards the use of its factory premises at Navsari for its manufacturing activities. Accordingly an amount of Rs. 300 lacs has been shown under the head long term loans and advances and Rs. 491.91 lacs under the head short term loans and advances to related parties.

Company has also given Security Deposit to Gufic Chem Private Limited of Rs. 120 lacs towards supply of products at concessional rate to the company and the same has been show under the head Long Term Loan and Advance to related parties.

In view of management debts of Rs. 326.69 lacs outstanding for more than year and advances of Rs. 40.14 lacs outstanding for more than two years are good and recoverable in nature. Management is taking necessary steps for recovery of the said amount.

The company has obtained approval of the Central Government u/s. 297 of the Companies Act, 1956, with respect to transaction entered by the company with certain private companies in which directors are interested. However such approval is for lesser amount and the company has decided to comply with the provision of law and to make necessary application for increase its limits.

The company is in process of implementing ERP system in a phased manner for integration of its various functions and could implement only some of its modules. Company has also continued with the old accounting system. Pending implementation of complete ERP system, the management confirms that it has taken enough care/diligence to ensure that the presented data / accounts, so presented, are materially correct and that the books of accounts have been duly reconciled with the various systems.

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure

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Mar 31, 2013

1.1 During the earlier year, the Company introduced different modules of an ERP System integrating few of its operations at different points of time. Consequently, the Company discontinued its legacy system. Subsequently, it was found that various accounts / data could not be reconciled and as a result, the Company decided to defer further implementation until the deficiencies are resolved. Consequently, the Company reverted to legacy financial accounting systems to record transactions of the earlier as well as of the current year and draw up its books of accounts and is continuing on its dual accounting system.

As a result, some data, particularly quantitative information, has been compiled based on limited information available including from the new ERP Modules, which itself has not been tested for its accuracy. Management represents and confirms that it has taken enough care/diligence to ensure that the presented data / accounts, so computed, are materially correct and that the books of accounts shall be duly reconciled and necessary entries arising therefrom, which in the opinion of the Board will not be material, shall be given effect to in the subsequent year.

1.2 The Company has appointed internal auditor, an independent Chartered Accountant to carry out the audit of stock records maintained by the Company. The Audit inter-alia includes physical verification and valuation of inventory, summary of quantitative data with its value lying at all its factories and branches including inventory lying with the third parties and has issued a certificate dt. 10th May, 2013 valuing the inventory at Rs.. 1999.59 Lacs as at 31.03.2013 and accordingly the same has been incorporated in accounts.

1.3 In compliance with Accounting Standard-2 (AS-2) revised, Excise Duty liability estimated at Rs. 10.75 Lacs (Previous year Rs. 9.72 Lacs) on Finished goods lying in factory premises has been loaded on the valuation of Finished goods. However, it has no impact on the Profit and Loss Account.

1.4 Confirmations have not been obtained with respect to balances of Other Long Term Liabilities, Trade Payables, Advances from Customers, Long Term Loans and Advances, Trade Receivables, Others Short Term Loans and Advances. These balances are subject to confirmations from the respective parties and consequential reconciliations and adjustments arising there from, if any. The management, however, does not expect any material variation.

1.5 Capital Advances of Rs. 9.11 Lacs (Prev Year Rs. 8.53 Lacs), Advances to Suppliers Rs. 21.08 Lacs (Prev Year Rs. 25.06 Lacs) and Advances to others Rs. 5.20 Lacs (Prev Year Rs. 4.17 Lacs) are old receivable due for more than three years and Trade Receivables of Rs. 191.52 Lacs (Prev Year Rs. 174.48 Lacs) due for more than one year which in the opinion of auditors may not be recoverable and not been provided for. The Management is of the opinion that these are good and realisable and thus no provision is required.

1.6 In the opinion of the management inventories of Rs. 1999.59 Lacs (Previous year Rs. 1690.94 Lacs) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories, loans and advances have a value on a realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

1.7 (a) The Company had entered into various transactions with companies in which directors are interested without prior approval of the Central Government. u/s 297 of the Companies Act, 1956. The same has been compounded by the Authority vide its order dated 14 Dec, 2012.

(b) Thecompany had also made an application during July, 2012 u/s 297 for approval of the future transactions with few of the companies In which directors are interested. Though the same has been approved for by the Authority, it is for the lesser amount. Accordingly, the Company has exceeded the limit specified in the said Order. The Company has decided to reapply and get the limit increased so as to cover these transactions.

(c) The Company has also into some other transactions with few other parties in which directors are interested without the prior approval of the central Government u/s 297 of the Companies Act, 1956. The Company has yet to apply for compounding of offence of inadvertent non-compliance for the said transactions and get the same approved and regularising.

1.8 CONTINGENT LIABILITIES: As At As At 31.3.2013 31.3.2012 (Rs. in Lacs) (Rs. in Lacs)

A Estimated amount of contract remaining to be executed

On capital account and not provided for 219.51 292.22

B Letter of Credit 131.55 239.13

C Bank Guarantee 7.35 17.00

D Claims against company not acknowledge as Debts, Being disputed 110.49 108.86

E Labor Cases 2.50 0.70

F Other Commitments

Details of other commitments arising out of major Contracts entered into by the Company

The Company has entered into an agreement revising earlier arrangement for availing marketing services with Gufic Private Limited, a company in which directors are interested. In terms of the said agreement, consideration committed is 13.5 % of the turnover of the company and in future it shall be additional 10% on increased sales over and above the sales for financial year ended 2011-12. The company is also required to pay an additional interest free deposit equivalent to three months of expected monetary expenses.

1.9 Gratuity benefit plans:

The Company''s Provision for Gratuity as at the close of the year has been computed by the Actuary appointed for the purpose as per the AS 15(Revised), adopting the "Projected Unit Credit Method". The Company has also taken the Policy to partly fund the liability.

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The following tables summarise the components of net benefit expense recognised in the profit and loss account and amounts recognised in the balance sheet.

1.10 Borrowing Cost capitalised as Fixed Assets in F. Y. 2012-2013 Rs. 12.30 Lacs (Prev Year NIL)

1.11 The amount of lease payments in respect of operating leases recognised in the profit and loss account was

Rs. 87.44 Lacs ( Previous year Rs. 77.18 Lacs) The minimum future payments during non-cancellable periods under the foregoing arrangements in the aggregate for each of the following periods is as follows :

a) Not later than one year Rs. 1.20 Lacs (Previous year Rs. 1.20 Lacs)

b) Later than one year but not later than five years Rs. 3.90 Lacs (Previous year Rs. 4.80 Lacs)

c) Later than five years Rs. Nil (Previous year Rs. 0.30 Lacs)

During the current year ended March 31, 2013 the lease payments recognised in the Profit and Loss Account for the aforesaid arrangements amounts to Rs. 97.44 Lacs (Previous year Rs. 77.18 Lacs)

1.12 Considering the nature, existing and projected sales and profitability, the Board is of the opinion that no impairment of assets is required. Being too technical, Auditors have relied upon the same and hence impairment, If any, has not been recognised

1.13 Previous year''s figures have been regrouped and rearranged, reclassified wherever necessary to correspond with the current year''s classification/disclosure.

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Mar 31, 2012

From a Bank:

Term Loans:

Secured by hypothecation and / or Equitable Mortgage of assets purchased under the term loans, other specific assets, together with hypothecation of Plant and Machinery and other movable assets situated at Navsari Unit and are further secured by Registered Mortgage of land, Corporate Guarantee and Cash collateral in the form of TDRs of Rs. 500 Lacs, all of an associate company and guaranteed by the Managing Director of Company.

The loans are repayable in 60 monthly installments of Rs. 5 lacs starting from April 2010 and ending on March 2015. The rate of interest is 3.00% above SBAR, payable at monthly rest.

Vehicle Loans:

Secured by charge on specific vehicles purchased.

These loans are repayable in 36 to 60 EMI of Rs. 19.73 Lacs (Incl Interest) starting from the date of the respective contract. The effective rate of interest ranges from 8.90 % to I3.50 %.

Unsecured Loans:

Of the above unsecured loans,

As a part of condition laid down by the Bank, Rs. 327 Lacs is to be converted into equity by 3I.03.20I3.

Sundry Creditors - Dues to Micro and Small Enterprises

In terms of the notification issued by the Department of Company affairs, the Company is required to make certain disclosure under the head " Sundry Creditors" in respect of dues to Micro Enterprises and Small Enterprises as defined under the "The Micro, Small and Medium Enterprises Development Act,2006" (MSMED ACT) . The Company has not yet started process of inviting information from its vendors regarding their status under MSMED Act. The Company has also not received any memorandum by such suppliers (as required to be filed with the notified authority under the MSMED Act, 2006) claiming their status as micro or small or medium enterprises. Therefore, bifurcation between Total Outstanding Dues of Micro Enterprises and Small Enterprises and other dues are not disclosed under the head ''Sundry Creditors" under the head Current Liabilities and Provision. 26

Security Deposits were given to Gufic Private Ltd for use of it's factory premises at Navsari for the company's manufacturing activities under an operating lease for a period of 10 years. Gufic Private Ltd. has created an Equitable Mortgage on the said factory premises in favour of the Bank for availing the credit facilities to the company. Hence, the said deposits are secured and considered good. The company has also paid lease rentals of Rs. 1.20 Lacs during the year for use of the factory premises.

Security deposits to Gufic Chem Private Ltd was given for supply of products and usage of its facilities at concessional rate to the Company. Such deposits are unsecured and considered good.

1.1 During the earlier year, the Company introduced different modules of an ERP System integrating few of its operations at different points of time. Consequently, the Company discontinued its legacy system. Subsequently, it was found that various accounts / data could not be reconciled and as a result, the Company decided to defer further implementation until the deficiencies are resolved. Consequently, the Company reverted to legacy financial accounting systems to record transactions of the earlier as well as of the current year and draw up its books of accounts and is continuing on its dual accounting system.

As a result, some data, particularly quantitative information, has been compiled based on limited information available including from the new ERP Modules, which itself has not been tested for its accuracy. Management represents and confirms that it has taken enough care/diligence to ensure that the presented data / accounts, so computed, are materially correct and that the books of accounts shall be duly reconciled and necessary entries arising therefrom, which in the opinion of the Board will not be material, shall be given effect to in the subsequent year.

1.2 The Company has appointed internal auditor, an independent Chartered Accountant to carry out the audit of stock records maintained by the Company. The Audit inter-alia includes physical verification and valuation of inventory, summary of quantitative data with its value lying at all its factories and branches including inventory lying with the third parties and has issued a certificate dt. 20th May, 2012 valuing the inventory at Rs.. 1690.94 Lacs as at 31.03.2012 and accordingly the same has been incorporated in accounts.

1.3 In compliance with Accounting Standard-2 (AS-2) revised, Excise Duty liability estimated at Rs. 9.72 Lacs (Previous year Rs. 8.09 Lacs) on Finished goods lying in factory premises has been loaded on the valuation of Finished goods. However, it has no impact on the Profit and Loss Account.

1.4 Confirmations have not been obtained with respect to balances of Other Long Term Liabilities, Trade Payables, Advances from Customers, Long Term Loans and Advances, Trade Receivables, Others Short Term Loans and Advances. These balances are subject to confirmations from the respective parties and consequential reconciliations and adjustments arising there from, if any. The management, however, does not expect any material variation.

1.5 Capital Advances of Rs. 8.53 Lacs (Prev Year Rs. 8.40 Lacs), Advances to Suppliers Rs. 25.06 Lacs (Prev Year Rs. 29.09 Lacs) and Advances to others Rs. 4.I7 Lacs (Prev Year Rs. 3.50 Lacs) are old receivable due for more than three years and Trade Receivables of Rs. I74.48 Lacs (Prev Year Rs. I04.69 Lacs) due for more than one year which in the opinion of auditors may not be recoverable and not been provided for. The Management is of the opinion that these are good and realisable and thus no provision is required.

1.6 In the opinion of the management inventories of Rs. I690.94 Lacs (Previous year Rs. I276.67 Lacs) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories, loans and advances have a value on a realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

1.7 The Company has entered into various transactions on an Arm's-Length basis in the ordinary course of business with Companies in which Directors are interested which requires the prior approval of the Central Government u/s 297 of the Companies Act, I956. The Company has yet to apply for compounding of offence of inadvertent non-compliance with the provisions of Sec 297 of the Act in respect of the past transactions and regularising the future transactions.

1.8 CONTINGENT LIABILITIES: As At As At 31.3.2012 31.3.2011 (Rs.in Lacs) (Rs.in Lacs)

A Estimated amount of contract remaining to be executed On capital account and not provided for 292.22 42.51

B Letter of Credit 239.13 10.15

C Bank Guarantee 17.00 17.49

D Claims against company not acknowledge as Debts, Being disputed 108.86 108.86

E Labor Cases 0.70 34.11

F Other Commitments

Details of other commitments arising out of major Contracts entered into by the Company

The Company has entered into contract during December 2007 to avail Marketing Services with erstwhile Placer Mercantile and Investments Private Limited, now amalgamed with Gufic Private Limited, a company in which Managing Director and other Director are Directors and are member of the said amalgamated company. As per the Terms of Contract, the present Minimum Fees is Rs. 650 Lacs per year Plus I0% of the increase in sales turnover of products over the 2009-I0, The Company is required to pay an interest free deposit, equivalent to three months of monetary expenses, to be settled on a yearly basis.

1.9 Gratuity benefit plans:

The Company's Provision for Gratuity as at the close of the year has been computed by the Actuary appointed for the purpose as per the AS I5(Revised), adopting the "Projected Unit Credit Method". The Company has also taken the Policy to partly fund the liability.

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The following tables summarise the components of net benefit expense recognised in the profit and loss account and amounts recognised in the balance sheet.

1.10 The amount of lease payments in respect of operating leases recognised in the profit and loss account was Rs. 77.18 Lacs ( Previous year Rs. 68.10 Lacs) The minimum future payments during non-cancellable periods under the foregoing arrangements in the aggregate for each of the following periods is as follows :

a) Not later than one year Rs. 1.20 Lacs (Previous year Rs. 1.20 Lacs)

b) Later than one year but not later than five years Rs. Nil

c) Later than five years Rs. Nil

During the current year ended March 31, 2012 the lease payments recognised in the Profit and Loss Account for the aforesaid arrangements amounts to Rs. 77.18 Lacs (Previous year Rs. 68.10 Lacs)

1.11 Considering the nature, existing and projected sales and profitability, the Board is of the opinion that no impairment of assets is required. Being too technical, Auditors have relied upon the same and hence impairment, If any, has not been recognised

1.12 The Revised Schedule VI has become effective from April 01, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped and rearranged reclassified wherever necessary to correspond with the current year's classification/disclosure.

---

Mar 31, 2011

1. During the earlier year, the Company introduced different modules of an ERP System integrating few of its operations at different points of time. Consequently, the Company discontinued its legacy system. Subsequently, it was found that various accounts / data could not be reconciled and as a result, the Company decided to defer further implementation until the deficiencies are resolved. Consequently, the Company reverted to legacy financial accounting systems to record transactions of the earlier as well as of the current year and draw up its books of accounts and is continuing on its dual accounting system.

As a result, some data, particularly quantitative information, has been compiled based on limited information available including from the new ERP Modules, which itself has not been tested for its accuracy. Management represents and confirms that it has taken enough care/diligence to ensure that the presented data / accounts, so computed, are materially correct and that the books of accounts shall be duly reconciled and necessary entries arising therefrom, which in the opinion of the Board will not be material, shall be given effect to in the subsequent year.

2. The Company has appointed internal auditor, an independent Chartered Accountant to carry out the audit of stock records maintained by the Company. The Audit inter-alia includes physical verification and valuation of inventory, summary of quantitative data with its value lying at all its factories and branches including inventory lying with the third parties and has issued a certificate dt. 15th May, 2011 valuing the inventory at Rs. 127667 thousand as at 31.03.2011 and accordingly the same has been incorporated in accounts.

3. In compliance with Accounting Standard-2 (AS-2) revised. Excise Duty liability estimated at Rs. 809 thousand (Previous year Rs. 233 thousand) on Finished goods lying in factory premises has been loaded on the valuation of Finished goods.

However, it has no impact on the Profit and Loss Account.

4. Confirmations have not been obtained with respect to balances of Unsecured Loans, Sundry Debtors, Deposits, Loans and Advances, Sundry Creditors and Other Liabilities. These balances are subject to confirmations from the respective parties and consequential reconciliations and adjustments arising therefrom, if any. The management, however, does not expect any material variation.

5. Previous year figures have been regrouped, reclassified and rearranged wherever necessary.

6. In the opinion of the management inventories of Rs. 127667 thousand ( Previous year 103553 thousand) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories , loans and advances have a value on a realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

7. Secured Loans are secured as under:

A) Cash Credit and Foreign Currency Working Capital Term Loan from a Bank:

Secured against hypothecation of entire current assets, Plant and Machinery at Navsari Unit of the Company.

B) Term Loans from a Bank:

Secured by hypothecation and / or Equitable Mortgage over assets purchased under the term loans, other specific assets, and further extension of charge created for the cash credit facilities.

(A) and (B) above are further secured by registered mortgage of certain intangible rights as well as immovable properties of an associate company, guaranteed by the Managing Director of Company, corporate guarantee of an associate company together with hypothecation of Plant and Machinery and other movable assets at Navsari Unit.

C) Vehicle Loans:

Secured by charge on specific vehicles purchased.

4. The amount of lease payments in respect of operating leases recognised in the profit and loss account was Rs. 6810 thousand ( Previous year Rs.7l 14 thousand) The minimum future payments during non-cancellable periods under the foregoing arrangements in the aggregate for each of the following periods is as follows:

a) Not later than one year Rs. 120 thousand (Previous year Rs. 120 thousand)

b) Later than one year but not later than five years Rs. Nil

c) Later than five years Rs. Nil

During the current year ended March 31,2011 the lease payments recognised in the Profit and Loss Account for the aforesaid arrangements amounts to Rs. 6810 thousand (Previous year Rs. 7114 thousand)

5. No Provision has been made for doubtful Debts amounting to Rs. 10469 thousand (Previous year Rs. 25560 thousand) which are outstanding for more than one year. The management is of the opinion that these debtors are good and realisable.

6. Sundry Creditors - Dues to Micro and Small Enterprises

In terms of the notification issued by the Department of Company affairs, the Company is required to make certain disclosure under the head " Sundry Creditors" in respect of dues to Micro Enterprises and Small Enterprises as defined under the "The Micro, Small and Medium Enterprises Development Act,2006" (MSMED ACT). The Company has not yet started process of inviting information from its vendors regarding their status under MSMED Act. The Company has also not received any memorandum by such suppliers (as required to be filed with the notified authority under the MSMED Act, 2006) claiming their status as micro or small or medium enterprises. Therefore, bifurcation between Total Outstanding Dues of Micro Enterprises and Small Enterprises and other dues are not disclosed under the head "Sundry Creditors" under the head Current Liabilities and Provision.

7. An amount of Rs. 2284 thousand (Previous year Rs. 1381 thousand) being accrued under the duty entitlement passbook and other scheme as per Import-Export policy, as detailed in significant accounting policies above has been included under the head export benefits.

8. Gratuity benefit plans: The Company's Provision for Gratuity as at the close of the year has been computed by the Actuary appointed for the purpose as per the AS l5(Revised), adopting the "Projected Unit Credit Method". The Company has also taken the Policy to partly fund the liability.

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The following tables summarise the components of net benefit expense recognised in the profit and loss account and amounts recognised in the balance sheet.

A) Security Deposits were given to Gufic Private. Ltd for use of it's factory premises at Navsari for the company's manufacturing activities under an operating lease for a period of 10 years . Gufic Private Ltd. has created an equitable mortgage on the said factory premises in favour of the Bank for availing the credit facilities to the company. Hence, the said deposits are secured and considered good. The company has also paid lease rentals of Rs. 120 thousands during the year for use of the factory premises.

B) Security deposits to Gufic Chem Private Ltd was given for supply of products at concessional rate to the Company. Such deposits are unsecured and considered good.

9. Borrowing Cost capitalised as Fixed Assets in FY. 2010-20 li Rs. 1128 thousand. (Previous Year Rs. 911)

10. The Company has entered into various transactions on an Arm's-Length basis in the ordinary course of business with Companies in which Directors are interested which requires the prior approval of the Central Government u/s 297 of the Companies Act, 1956. The Company has yet to apply for compounding of offence of inadvertent non-compliance with the provisions of Sec 297 of the Act in respect of the past transactions and regularising the future transactions.

11. Loans and Advances includes old receivable due for more than three yrs Rs.4099 thousand which in the auditors' opinion may not be recoverable and not been provided for.

12. i) Current Tax includes interest of Rs.240 Thousand for the delayed payment of income Tax Dues.

ii) Provision for Tax under Current Liabilities and Provisions

Provision for Income Tax under Current Liabilities and Provision is net of Advance Tax of Rs. 29598 thousand. Similarly, Fringe Benefit Tax Receivable under Loans, Advances and Deposits is net of Provision for Fringe Benefit Tax of Rs. 489 thousand

---

Mar 31, 2010

1. During the earlier year, the Company introduced different modules of an ERP System integrating few of its operations at different points of time. Consequently, the Company discontinued its legacy system. Subsequently, it was found that various accounts / data could not be reconciled and as a result, the Company decided to defer further implementation until the deficiencies are resolved. Consequently, the Company reverted to legacy financial accounting systems to record transactions of the earlier as well as of the current year and draw up its books of accounts and is continuing on its dual accounting system.

As a result, some data, particularly quantitative information, has been compiled based on limited information available including from the new ERP Modules, which itself has not been tested for its accuracy. Management represents and confirms that it has taken enough care/diligence to ensure that the presented data / accounts, so computed, are materially correct and that the books of accounts shall be duly reconciled and necessary entries arising therefrom, which in the opinion of the Board will not be material, shall be given effect to in the subsequent year.

2. The Company has appointed internal auditor, an independent Chartered Accountant to carry out the audit of stock records maintained by the Company. The Audit inter-alia includes physical verification and valuation of inventory, summary of quantitative data with its value lying at all its factories and branches including inventory lying with the third parties and has issued a certificate dt. 15th May, 2010 valuing the inventory at ` 103553 thousand as at 31.03.2010 and accordingly the same has been incorporated in accounts.

3. In compliance with Accounting Standard-2 (AS-2) revised, Excise Duty liability estimated at ` 233 thousand (2008-09: ` 277 thousand) on Finished goods lying in factory premises has been loaded on the valuation of Finished goods.

However, it has no impact on the Profit and Loss Account.

4. Confirmations have not been obtained with respect to balances of Unsecured Loans, Sundry Debtors, Deposits, Loans and Advances, Sundry Creditors and Other Liabilities. These balances are subject to confirmations from the respective parties and consequential reconciliations and adjustments arising therefrom, if any. The management, however, does not expect any material variation.

5. Previous year figures have been regrouped, reclassified and rearranged wherever necessary.

6. In the opinion of the management inventories of ` 103553 thousand ( 2008-09: 107065 thousand) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories , loans and advances have a value on a realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

7. Secured Loans are secured as under:

A) Cash Credit and Foreign Currency Working Capital Term Loan from a Bank:

Secured against hypothecation of entire current assets, Plant and Machinery at Navsari Unit of the Company.

B) Term Loans from a Bank:

Secured by hypothecation and / or Equitable Mortgage over assets purchased under the term loans, other specific assets, and further extension of charge created for the cash credit facilities.

(A) and (B) above are further secured by registered mortgage of certain intangible rights as well as immovable properties of an associate company, guaranteed by the Managing Director of Company, corporate guarantee of an associate company together with hypothecation of Plant and Machinery and

other movable assets at Navsari Unit.

C) Vehicle Loans:

Secured by charge on specific vehicles purchased.

8. The amount of lease payments in respect of operating leases recognised in the profit and loss account was ` 7114 thousand ( Previous year Rs. 5465 thousand) The minimum future payments during non-cancellable periods under the foregoing arrangements in the aggregate for each of the following periods is as follows :

a) Not later than one year ` 120 thousand (Previous year ` 4403 thousand)

b) Later than one year but not later than five years ` Nil

c) Later than five years ` Nil

During the current year ended March 31, 2010 the lease payments recognised in the Profit and Loss Account for the aforesaid arrangements amounts to ` 7114 thousand (Previous year ` 5465 thousand)

9. No Provision has been made for doubtful Debts amounting to ` 25560 thousand (2008-09 : ` 30701thousand) which are outstanding for more than one year. The management is of the opinion that these debtors are good and realisable.

10. Sundry Creditors - Dues to Micro and Small Enterprises

In terms of the notification issued by the Department of Company affairs, the Company is required to make certain disclosure under the head “ Sundry Creditors” in respect of dues to Micro Enterprises and Small Enterprises as defined under the "The Micro, Small and Medium Enterprises Development Act,2006" (MSMED ACT) . The Company has not yet started process of inviting information from its vendors regarding their status under MSMED Act. The Company has also not received any memorandum by such suppliers (as required to be filed with the notified authority under the MSMED Act, 2006) claiming their status as micro or small or medium enterprises. Therefore, bifurcation between Total Outstanding Dues of Micro Enterprises and Small Enterprises and other dues are not disclosed under the head "Sundry Creditors” under the head Current Liabilities and Provision.

11. An amount of ` 1381 thousand (2008-09: ` 191 thousand) being accrued under the duty entitlement passbook and other scheme as per Import-Export policy, as detailed in significant accounting policies above has been included under the head export benefits.

12. Gratuity benefit plans: The Companys Provision for Gratuity as at the close of the year was recomputed by the AS 15(Revised), adopting the" Projected Unit Credit Method " as mandated by the Standard, by an actuary appointed for the purpose. The Company has also taken the Policy to partly fund the liability.

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The following tables summarise the components of net benefit expense recognised in the profit and loss account and amounts recognised in the balance sheet .

Additional Note:

(13) Considering the nature, existing and projected sales and profitability, the Board is of the opinion that no impairment of assets is required. Being too technical, Auditors have relied upon the same and hence impairment, if any, has not been recognised.

A) Security Deposits were given to Gufic Private. Ltd for use of its factory premises at Navsari for the companys manufacturing activities under an operating lease for a period of 10 years . Gufic Private Ltd. has created an equitable mortgage on the said factory premises in favour of the Bank for availing the credit facilities to the company. Hence, the said deposits are secured and considered good. The company has also paid lease rentals of `120 thousands during the year for use of the factory premises.

B) Security deposits to Gufic Chem Private Ltd was given for supply of products at concessional rate to the Company. Such deposits are unsecured and considered good.

14. Borrowing Cost capitalised as Fixed Assets in F. Y. 2009-2010 ` 911 thousand. ( Previous Year ` Nil )

15. The Company has entered into various transactions on an Arm’s-Length basis in the ordinary course of business with Companies in which Directors are interested which requires the prior approval of the Central Government u/s 297 of the Companies Act, 1956. The Company has yet to apply for compounding of offence of inadvertent non-compliance with the provisions of Sec 297 of the Act in respect of the past transactions and regularising the future transactions.

16. Loans and Advances includes old receivable due for more than three yrs ` 2529 thousand which in the auditors opinion may not be recoverable and not been provided for .

17. i) Tax

a) Current Tax includes interest of ` 242 thousand for the delayed payment of Income Tax Dues.

b) Excess Provision Written Back is net of Excess Provision Written Back ` 4929 thousand and Short Provision Written off ` 3726 thousand towards Income Tax and ` 368 thousand towards Fringe Benefit Tax Written Back.

ii) Provision for Tax under Current Liabilities and Provisions

Provision for Income Tax under Current Liabilities and Provision is net of Advance Tax of ` 17192 thousand. Similarly , Fringe Benefit Tax Receivable under Loans, Advances and Deposits is net of Provision for Fringe Benefit Tax of ` 489 thousand