Notes to Accounts of Hester Biosciences Ltd.

Mar 31, 2025

13.02 Rights, preferences and restriction attached to shares:

The Company has only one class of equity shares having par value of INR 10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company’s residual assets. The equity shares are entitled to receive dividend as declared from time to time. Each equity shareholder 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 Interim Dividend declared during the year and Company pays the same in Indian Rupees. In the event of liquidation of the Company, the equity Shareholders are eligible to receive the remaining asset of the Company, after distribution of all preferential amounts, in proportion to the number of equity shares held.

The Board has further recommended final dividend of INR 7 (Seven) per equity share (70%) for year 2024-25, subject to the approval of the shareholders.

a Capital reserve: This is mainly used to record the reserves created on receipt of state/central subsidies and amounts forfeited towards the forfeiture of Equity warrants issued. This reserve is available for utilisation in accordance with the provisions of the Companies Act, 2013.

b Securities premium: This represents the premium received on issue of shares over and above the face value of equity shares.

The reserve is available for utilisation in accordance with the provisions of the Companies Act, 2013.

c General Reserve: Under the erstwhile Companies Act, 1956, general reserves was created through an annual transfer of net income at specified percentage in accordance with applicable regulation. Consequent to the introduction of Companies Act, 2013, the requirement of mandatorily transfer a specified percentage of the net profit to general reserves has been withdrawn. The reserve is available for utilisation in accordance with the provisions of the Companies Act, 2013.

a. The security details for the borrowing balances:

Term Loans from Banks aggregating to INR 222.94 million (Previous year: INR 327.64 million) and External Commercial borrowing from Banks aggregating to INR 533.32 million (Previous year: INR 709.69 million) are secured by first charge on all immovable, movable assets and freehold land of the Company along with the personal guarantee of the directors.

Hire Purchase Loans from Banks aggregating to INR Nil (Previous year: INR 0.42 million) were secured by hypothecation of specific vehicle/car on paripassu basis.

b. Repayment schedule for the borrowing balances:

The secured term loans from banks aggregating to INR 21.66 million (Previous year: INR 37.50 million) are repayable over a period of 5 years in quarterly instalments upto FY 2026-27.

The secured term loans from banks aggregating to INR 17.89 million (Previous year: INR 45.17 million) are repayable over a period of 5 years in monthly instalments upto FY 2025-26.

The secured term loans from banks aggregating to INR 136.30 million (Previous year: INR 185.52 million) are repayable over a period of 5 years in quarterly instalments upto FY 2027-28.

The secured term loans from banks aggregating to INR 47.09 million (Previous year: INR 59.45 million) are repayable over a period of 4 years in monthly instalments upto FY 2028-29.

External Commercial Borrowing from banks aggregating to INR 533.32 million (Previous year: INR 709.69 million) are repayable over a period of 6 years in 21 quarterly instalments upto FY 2027-28.

The hire purchase loan from banks aggregating to INR Nil (Previous year: INR 0.42 million) has been repaid.

c. Interest rates on borrowings:

Interest rates on Term loan is varying, which is linked to MCLR of bank, from time to time.

Interest rates on Hire purchase loan was fixed at 9.26% p.a.

Interest rates on External Commercial Borrowing is varying, which is linked to 3 Months SOFR.

The company has been sanctioned Government Grant of INR 600 million by BIRAC (Biotechnology Industry Research Assistance Council), Government of India enterprise to support the project “Proposal for Facility Augmentation to support Covid Vaccine Manufacturing” under the Mission Covid Suraksha Scheme of Government of India. The Company has received INR Nil during the year (Previous year: INR 260 million) towards the capital equipment and INR Nil during the year (Previous Year: INR 49.80 million) towards the operating expense which is netted off with respective expenses.

a. Cash Credit accounts are secured by first and exclusive hypothecation charge on all the current assets of the company. It is also collaterally secured by Equitable Mortgage of Ahmedabad Office and hypothecation of unencumbered plant and machinery, stocks and trade receivable of the Company and personal guarantee of three directors.

b. Interest Rate on cash credit facilities is varying, which is linked to base rate of Bank, from time to time.

31	COMMITMENTS:
	Particulars	Year ended 31 March 2025	Year ended 31 March 2024
Capital Commitments
	Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advance)	124.56	129.05
	Export Commitments	1,046.57	1,306.64
32	CONTINGENT LIABILITIES NOT PROVIDED FOR:
	Particulars	Year ended 31 March 2025	Year ended 31 March 2024
Claims against the company not acknowledged as debts:
	Income Tax*	-	-
	Corporate Guarantee given against credit facilities availed by Subsidiary**	1,196.65	1,167.67

* includes demand from Income Tax Authorities based on assessment/appeal orders and the Company is in appeal with higher authorities, and the Company has been advised that the decision will be in favour of the Company, and hence no provision has been made in the Financial Statements. The matters are pending before respective appellate authorities and not yet settled.

** In respect of Corporate Guarantee of USD 14 Million (INR 1,196.65 Million) issued in favour of Gates Foundation, U.S.A. on behalf of Hester Biosciences Africa Limited, Tanzania (Wholly Owned Subsidiary Company) for setting up of an animal vaccine manufacturing plant.

33 DETAILS OF CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENDITURE:_

Pursuant to Section 135 of the Companies Act, 2013, a Company, meeting the applicability of threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility (CSR) activities identified by the Company and monitored by CSR Committee.

36 DEFINED BENEFIT OBLIGATIONS:_

a) Defined Contribution Plans:

The Company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the Company required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefit.

The Company recognised INR 20.68 million (2023-24: INR 22.01 million) for provident and other fund contribution in the Statement of Profit and Loss. The contributions payable to this plan by the Company are at rates specified in the rules of the scheme. The Company has no further obligations under the plan beyond its monthly contributions.

b) Defined Benefit Plan:

The Company made annual contribution to the Employees’ Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following table sets out the funded status of the gratuity plan and the amount recognised by the Company’s financial statement as at 31 March 2025.

(b) Category-wise Classification of Financial Instruments:

The financial instruments are categorised in to three levels, based on the inputs used to arrive at fair value measurement as described bellow:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 - Inputs based on unobservable market data.

There are no financial assets and liabilities which are measured at Fair value through Profit and Loss or Fair value through OCI and all the financial assets and liabilities are carried at amortised cost. Therefore, disclosure with respect to fair value measurement hierarchy of financial instrument is not required.

(II) Financial risk management:

The Company’s activities are exposed to variety of financial risks. These risks include market risk (including foreign exchange risk and interest rate risks), credit risks and liquidity risk. The Company’s’ overall risk management program seeks to minimise potential adverse effects on the financial performance of the Company through established policies and processes which are laid down to ascertain the extent of risks, setting appropriate limits, controls, continuous monitoring and its compliance.

(a) Market risk:

Market risk refers to the possibility that changes in the market rates may have impact on the Company’s profits or the value of its holding of financial instruments. The Company is exposed to market risks on account of foreign exchange rates and interest rates.

(i) Foreign currency exchange rate risk:

The Company’s foreign currency risk arises from its foreign operations, investments in foreign subsidiaries, foreign currency transactions. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.

The major foreign currency exposure for the company is denominated in USD. Additionally, transactions entered into in other currencies are not significant in relation to the total volume of the foreign currency exposures.

(b) Credit Risk:

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The customers are categorised based on the nature of transaction and the credit risk associated with them is managed through credit approvals, establishing credit limits and continuously monitoring of the creditworthiness of the counterparty to which the company grant credit terms in the normal course of business. The Company uses publicly available financial information and its own trading records to rate its major customers.

The Company has used expected credit loss (ECL) model for assessing the impairment loss. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount. The provision matrix takes into account external and internal risk factors and historical data of credit losses from various customers.

Other receivables consist primarily of security deposits, loans and other receivables. The risk of default is assessed as low.

(c) Liquidity Risk:

Liquidity risk refers to the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company generates cash flows from operations to meet its financial obligations, maintains adequate liquid assets in the form of cash & cash equivalents and has undrawn short term line of credits from banks to ensure necessary liquidity.

(iii) Capital management

The capital structure of the Company consists of equity, debt, cash and cash equivalents. The Company’s objective for capital management is to maintain the capital structure which will support the Company’s strategy to maximise shareholders’ value, safeguarding the business continuity and help in supporting the growth of the Company.

As at 31 March 2025, the Company meets its capital requirement through equity and borrowings from banks. The Company monitors its capital and debt on basis of debt to equity ratio.

39 SEGMENT INFORMATION:_

(i) Identification of Segments:

The Company’s operating segments are established on the basis of those components of the Company that are evaluated regularly by the Management Committee (the ‘Chief Operating Decision Maker’ as defined in Ind AS 108 Operating Segments), in deciding how to allocate resources and in assessing performance. The Company is principally engaged in manufacturing of Poultry vaccines and Large Animal Vaccines and trading of Poultry, Large animal and Pet health products. The CEO and Managing Director(CMD) and senior management of the Company constitutes the CODM of the Company.

The Company has two principal operating and reporting segments viz. Poultry healthcare and Animal healthcare (Ruminant and Pet). The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

41 OTHER STATUTORY INFORMATION:_

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

b) Title deeds of all the immovable properties comprising of land/ buildings as disclosed in standalone financial statements, are held in the name of the Company.

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

d) The Company does not have any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

e) The Company has utilised the borrowings from banks and financial institutions for the specific purpose for which it was taken.

f) The Company was not declared wilful defaulter by any bank or financial Institution or other lender.

g) The Company has not advanced or loaned or invested funds (either borrowed funds or security premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

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

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

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

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

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

i) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

j) The monthly Stock Statements as submitted to the Banks are materially in agreement with the books of account of the Company.

k) The Company has not entered into any scheme of arrangement which has an accounting impact on current year or previous year.

42 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE:_

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the Financial Statements. As of 9 May 2025 there were no subsequent event to be recognised or reported that are not already disclosed elsewhere in these Financial Statements.

43 RECENT PRONOUNCEMENTS_

The Ministry of Corporate Affairs (MCA), through notification dated 7 May 2025, amended Ind AS 21 “The Effects of Changes in Foreign Exchange Rates” to provide guidance on determining the spot exchange rate when exchangeability between two currencies is lacking. The amendment also introduces related disclosure requirements:

• New guidance on assessing when a currency is not exchangeable into another and how to estimate the spot exchange rate in such cases.

• Additional paragraphs on recognition, measurement, and disclosure to address these scenarios, including new application guidance and disclosure requirements.

These amendments are effective for annual reporting periods beginning on or after 1 April 2025. The Company is evaluating the potential impact of the application of this amendment on its financial statements.

44 _Previous year figures have been regrouped / reclassified, where necessary, to conform to this year’s classification._

---

Mar 31, 2024

t PROVISIONS AND CONTINGENT LIABILITIES:

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A Contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation.

u SEGMENT REPORTING:

The Company’s Chief Operating Decision Maker (CODM) examines the Company’s performance from business and geographic perspective. In accordance with Ind AS-108 - Operating Segments, evaluation by the CODM and based on the nature of activities performed by the Company, which primarily relate to poultry healthcare, animal healthcare and pet health care.

3 SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS:

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for India.

Further details about gratuity obligations are given in note 36.

b Useful life of Property, Plant and Equipment and Intangible assets

Property, Plant and Equipment and Intangible Assets are depreciated/amortised over their estimated useful life, after taking into account estimated residual value.

Management reviews the estimated useful life and residual values of the assets annually in order to determine the amount of depreciation/amortisation to be recorded during any reporting period.The useful life and residual values are based on the Company’s historical experience with similar assets and take into account anticipated technological changes.

The depreciation/amortisation for future periods is revised if there are significant changes from previous estimates.

c Expected Credit Loss

The Company uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography, customer relationship, customer type and rating).

For the purpose of measuring lifetime expected credit loss allowance of trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which considers historical credit loss experience and adjusted for forward-looking information.

13.02 Rights, preferences and restriction attached to shares:

The Company has only one class of equity shares having par value of ? 10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. Each equity shareholder 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 Interim Dividend declared during the year and Company pays the same in Indian Rupees. In the event of liquidation of the Company, the equity Shareholders are eligible to receive the remaining asset of the Company, after distribution of all preferential amounts, in proportion to the number of equity shares held.

a. The security details for the borrowing balances:

Term Loans from Banks aggregating to ? 327.64 million (Previous year: ? 182.62 million) and External Commercial borrowing from Banks aggregating to ? 709.69 million (Previous year: ? 885.53 million) are secured by first charge on all immovable, movable assets and freehold land of the Company along with the personal guarantee of the directors.

Hire Purchase Loans from Banks aggregating to ? 0.42 million (Previous year: ? 1.70 million) are secured by hypothecation of specific vehicle/car on paripassu basis.

b. Repayment schedule for the borrowing balances:

The secured term loans from banks aggregating to ? 37.50 million (Previous year: ? 54.48 million) are repayable over a period of 5 years in quarterly instalments upto FY 2026-27.

The secured term loans from banks aggregating to ? 45.17 million (Previous year: ? 68.80 million) are repayable over a period of 5 years in monthly instalments upto FY 2025-26.

The secured term loans from banks aggregating to ? 185.52 million (Previous year: Nil ) are repayable over a period of 5 years in Quarterly instalments from FY 2023-24 to FY 2027-28.

The secured term loans from banks aggregating to ? 59.45 million (Previous year: ? 59.34 million) are repayable over a period of 4 years in monthly instalments from FY 2024-25 to FY 2028-29.

External Commercial Borrowing from banks aggregating to ? 709.69 million (Previous year: ? 885.53 million) are repayable over a period of 6 years in 21 quarterly instalments upto FY 2027-28.

The hire purchase loan from banks aggregating to ? 0.42 million (Previous year: ? 1.70 million) are repayable over a period of 5 years in monthly instalments upto FY 2024-25.

c. Interest rates on borrowings:

Interest rates on Term loan is varying, which is linked to MCLR of bank, from time to time.

Interest rates on Hire purchase loan is fixed at 9.26% p.a.

Interest rates on External Commercial Borrowing is varying, which is linked to 3 Months SOFR.

36 EMPLOYEE BENEFITS EXPENSES:_

a) Defined Contribution Plans:

The Company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the Company required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefit.

The Company recognised ? 22.01 million (2022-23: ? 16.73 million) for provident and other fund contribution in the Statement of Profit and Loss. The contributions payable to this plan by the Company are at rates specified in the rules of the scheme. The Company has no further obligations under the plan beyond its monthly contributions.

b) Defined Benefit Plan:

The Company made annual contribution to the Employees’ Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following table sets out the funded status of the gratuity plan and the amount recognised by the Company’s financial statement as at 31 March 2024.

(b) Category-wise Classification of Financial Instruments:

The financial instruments are categorised in to three levels, based on the inputs used to arrive at fair value measurement as described below:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 - Inputs based on unobservable market data.

There are no financial assets and liabilities which are measured at Fair value through Profit and Loss or Fair value through OCI and all the financial assets and liabilities are carried at amortised cost. Therefore, disclosure with respect to fair value measurement hierarchy of financial instrument is not required.

(ii) Financial risk management:

The Company’s activities are exposed to variety of financial risks. These risks include market risk (including foreign exchange risk and interest rate risks), credit risks and liquidity risk. The Company’s’ overall risk management program seeks to minimise potential adverse effects on the financial performance of the Company through established policies and processes which are laid down to ascertain the extent of risks, setting appropriate limits, controls, continuous monitoring and its compliance.

(a) Market risk:

Market risk refers to the possibility that changes in the market rates may have impact on the Company’s profits or the value of its holding of financial instruments. The Company is exposed to market risks on account of foreign exchange rates and interest rates.

(b) Credit Risk:

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The customers are categorised based on the nature of transaction and the credit risk associated with them is managed through credit approvals, establishing credit limits and continuously monitoring of the creditworthiness of the counterparty to which the company grant credit terms in the normal course of business.

The Company uses publicly available financial information and its own trading records to rate its major customers.

The Company has used expected credit loss (ECL) model for assessing the impairment loss. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount. The provision matrix takes into account external and internal risk factors and historical data of credit losses from various customers.

41 OTHER STATUTORY INFORMATION:_

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

b) Title deeds of all the immovable properties comprising of land/ buildings as disclosed in standalone financial statements, are held in the name of the Company.

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

d) The Company does not have any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

e) The Company has utilised the borrowings from banks and financial institutions for the specific purpose for which it was taken.

f) The Company was not declared wilful defaulter by any bank or financial Institution or other lender.

g) The Company has not advanced or loaned or invested funds (either borrowed funds or security premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

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

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

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

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

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

i) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

j) The monthly Stock Statements as submitted to the Banks/Financial Institutions are in agreement with the books of account of the Company.

k) The Company has not entered into any scheme of arrangement which has an accounting impact on current year or previous year.

42 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE:

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the Financial Statements. As of 10 May 2024 there was no subsequent event to be recognised or reported that are not already disclosed elsewhere in these Financial Statements.

In terms of our report attached For and on behalf of Board of Directors

For Chandulal M. Shah & Co.

Firm Registration No.: 101698W Rajiv Gandhi Priya Gandhi Df^ Ah^d 2024

Chartered Accountants CEO & Managing Director Executive Director ^{ace me a a}

DIN: 00438037 DIN: 06998979

. ^Shah Nikhil Jhanwar Vinod Mali

Membership No.: 135188 ^{Chief Financial Officer Company Secretary}

---

Mar 31, 2023

u) Provisions and Contingent Liabilities:

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A Contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation.

A Contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation.

v) Segment Reporting:

The Company’s Chief Operating Decision Maker (CODM) examines the Company’s performance from business and geographic perspective. In accordance with Ind AS-108 - Operating Segments, evaluation by the CODM and based on the nature of activities performed by the Company, which primarily relate to poultry healthcare, animal healthcare and petcare.

2.3 SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS:

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a) Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for India.

Further details about gratuity obligations are given in note 36.

b) Useful life of Property, Plant and Equipment and Intangible assets

Property, Plant and Equipment and Intangible Assets are depreciated/amortised over their estimated useful life, after taking into account estimated residual value.

Management reviews the estimated useful life and residual values of the assets annually in order to determine the amount of depreciation/amortisation to be recorded during any reporting period. The useful life and residual values are based on the Company’s historical experience with similar assets and take into account anticipated technological changes.

The depreciation/amortisation for future periods is revised if there are significant changes from previous estimates.

13.02 Rights, preferences and restriction attached to shares:

The Company has only one class of equity shares having par value of ? 10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. Each equity shareholder 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 Interim Dividend declared during the year and Company pays the same in Indian Rupees. In the event of liquidation of the Company, the equity Shareholders are eligible to receive the remaining asset of the Company, after distribution of all preferential amounts, in proportion to the number of equity shares held.

The board has further recommended final dividend of ? 8 (eight) per equity share (80%) for year 2022-23, subject to the approval of the shareholders.

Notes:

a. The security details for the borrowing balances:

Term Loans from Banks aggregating to ? 182.62 million (Previous year: ? 206.64 million) and External Commercial borrowing from Banks aggregating to ? 885.53 million (Previous year: ? 676.74 million) are secured by first charge on all immovable, movable assets and freehold land of the Company along with the personal guarantee of the directors.

Hire Purchase Loans from Banks aggregating to ? 1.70 million (Previous year: ? 2.87 million) are secured by hypothecation of specific vehicle/car on paripassu basis.

b. Repayment schedule for the borrowing balances:

The secured term loans from banks aggregating to ? 54.48 million (Previous year: ? 70.58 million) are repayable over a period of 5 years in quarterly instalments upto FY 2026-27.

The secured term loans from banks aggregating to ? 68.80 million (Previous year: ? 106.15 million) are repayable over a period of 5 years in monthly instalments upto FY 2025-26.

The secured term loans from banks aggregating to ? 59.34 million (Previous year: NIL) are repayable over a period of 4 years in monthly instalments from FY 2024-25 to FY 2028-29.

The secured term loan from banks aggregating to ? 29.91 million outstanding as on 31 March 2022 was fully repaid during the year.

External Commercial Borrowing from banks aggregating to ? 885.53 million (Previous year: ? 676.74 million) are repayable over a period of 6 years in 21 quarterly instalments upto FY 2027-28.

The hire purchase loan from banks aggregating to ? 1.70 million (Previous year: ? 2.87 million) are repayable over a period of 5 years in monthly instalments upto FY 2024-25.

c. Interest rates on borrowings:

Interest rates on Term loan is varying, which is linked to MCLR of bank, from time to time.

Interest rates on Hire purchase loan is fixed at 9.26% p.a.

Interest rates on External Commercial Borrowing is varying, which is linked to 3 Months USD Libor.

35 RELATED PARTY DISCLOSURE:_

As per Ind AS 24, the disclosures of transactions with the Related Parties are given below:

(i) List of Related Parties

(a) Subsidiary Companies

1. Hester Biosciences Nepal Private Limited

2. Texas Lifesciences Private Limited

3. Hester Biosciences Africa Limited

4. Hester Biosciences Kenya Limited

(b) Step-down Subsidiary Company

1. Hester Biosciences Tanzania Limited (Wholly-owned Subsidiary of Hester Biosciences Kenya Limited)

(c) Joint Venture entity

1. Thrishool Exim Limited

(d) Key Management Personnel

1. Mr. Rajiv Gandhi - CEO & Managing Director

2. Ms. Priya Gandhi - Executive Director

3. Mr. Nikhil Jhanwar - Chief Financial Officer

4. Mr. Vinod Mali - Company Secretary & Compliance Officer

(e) Independent Directors

1. Mr. Naman Patel (up to 31 March 2023)

2. Mr. Amit Shukla (up to 31 March 2023)

3. Ms. Sandhya Patel

4. Mr. Ashok Bhadakal

5. Mr. Ameet Desai

(f) Relatives of key management personnel

1. Dr. Bhupendra Gandhi (Non-Executive Chairman)

2. Mr. Sanjiv Gandhi (Non-Executive Director)

3. Mr. Ravin Gandhi (Non-Executive Director)

4. Ms. Nina Gandhi (Non-Executive Alternate Director of Mr. Ravin Gandhi)

(g) Enterprises owned or significantly influenced by key management personnel or their relatives

1. Hester Coatings LLP

2. Biolink Healthcare Limited

3. Hester Diagnostics Private Limited

4. Gujarat Polyplast Private Limited

5. Blue Ray Aviation Private Limited

6. Hester Aviation Services Private Limited

7. Gujarat Airconnect Private Limited

8. Aerotrans Services Private Limited

9. Corella Air LLP

10. NetLink India

11. Sourcepro Infotech Private Limited

Notes:

1. The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave encashment, as it is determined on an actuarial basis for the company as a whole.

2. Bank Facilities (Working capital limit, Term loans and External Commercial Borrowings) are secured by guarantee of Mr. Rajiv Gandhi, Mr. Sanjiv Gandhi and Dr. Bhupendra Gandhi, Directors of the Company.

3. Corporate Guarantee of USD 14 Million issued in favour of Bill & Melinda Gates Foundation, U.S.A on behalf of Hester Biosciences Africa Limited, Tanzania (Wholly Owned Subsidiary Company) for setting up of an animal vaccine manufacturing plant.

36 EMPLOYEE BENEFITS EXPENSES:

a) Defined Contribution Plans:

The Company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the Company required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefit.

The Company recognised ? 16.73 million (2021-22: ? 13.13 million) for provident and other fund contribution in the Statement of Profit and Loss. The contributions payable to this plan by the Company are at rates specified in the rules of the scheme. The Company has no further obligations under the plan beyond its monthly contributions.

b) Defined Benefit Plan:

The Company made annual contribution to the Employee''s Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following table sets out the funded status of the gratuity plan and the amount recognised by the Company''s financial statement as at 31 March 2023.

(b) Category-wise Classification of Financial Instruments:

The financial instruments are categorised into three levels, based on the inputs used to arrive at fair value measurement as Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 - Inputs based on unobservable market data.

There are no financial assets and liabilities which are measured at Fair value through Profit and Loss or Fair value through OCI and all the financial assets and liabilities are carried at amortised cost. Therefore, disclosure with respect to fair value measurement hierarchy of financial instrument is not required.

(ii) Financial risk management:

The Company''s activities are exposed to variety of financial risks. These risks include market risk (including foreign exchange risk and interest rate risks), credit risks and liquidity risk. The Company''s overall risk management program seeks to minimise potential adverse effects on the financial performance of the Company through established policies and processes which are laid down to ascertain the extent of risks, setting appropriate limits, controls, continuous monitoring and its compliance.

(a) Market risk:

Market risk refers to the possibility that changes in the market rates may have impact on the Company''s profits or the value of its holding of financial instruments. The Company is exposed to market risks on account of foreign exchange rates and interest rates.

(i) Foreign currency exchange rate risk:

The Company''s foreign currency risk arises from its foreign operations, investments in foreign subsidiaries, foreign currency transactions. The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.

The major foreign currency exposure for the company is denominated in USD. Additionally, transactions entered into in other currencies are not significant in relation to the total volume of the foreign currency exposures.

(b) Credit Risk:

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company uses publicly available financial information and its own trading records to rate its major customers.

All trade receivables are reviewed and assessed for default on a quarterly basis. Our historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be a single class of financial assets. Refer Note 10 for movement in impairment allowance.

(c) Liquidity Risk:

Liquidity risk refers to the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company generates cash flows from operations to meet its financial obligations, maintains adequate liquid assets in the form of cash & cash equivalents and has undrawn short term line of credits from banks to ensure necessary liquidity.

39 SEGMENT INFORMATION:_

(i) Identification of Segments:

The Company’s operating segments are established on the basis of those components of the Company that are evaluated regularly by the Management Committee (the ‘Chief Operating Decision Maker’ as defined in Ind AS 108 Operating Segments), in deciding how to allocate resources and in assessing performance. The Company is principally engaged in manufacturing of Poultry vaccines and Large Animal Vaccines and trading of Poultry, Large animal and Pet health products. The CEO and Managing Director(CMD) and senior management of the Company constitutes the CODM of the Company.

The Company has three principal operating and reporting segments viz. Poultry healthcare, Animal health care and Petcare.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

41 OTHER STATUTORY INFORMATION:_

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

b) Title deeds of all the immovable properties comprising of land/ buildings as disclosed in standalone financial statements, are held in the name of the Company.

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

d) The Company does not have any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

e) The Company has utilised the borrowings from banks and financial institutions for the specific purpose for which it was taken.

f) The Company was not declared wilful defaulter by any bank or financial Institution or other lender.

g) The Company has not advanced or loaned or invested funds (either borrowed funds or security premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

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

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

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

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

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

i) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

j) The monthly Stock Statements as submitted to the Banks/Financial Institutions are in agreement with the books of account of the Company.

k) The Company has not entered into any scheme of arrangement which has an accounting impact on current year or previous year.

42 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE:

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the Financial Statements. As of 17 May 2023 there was no subsequent event to be recognised or reported that are not already disclosed elsewhere in these Financial Statements.

In terms of our report attached For and on behalf of Board of Directors

For Chandulal M. Shah & Co.

Firm Registration No.: 101698W Rajiv Gandhi Priya Gandhi D^ Ahrihri

Chartered Accountants CEO & Managing Director Executive Director ^{ace me a a}

DIN: 00438037 DIN: 06998979

^irtne*. ^Shah Nikhil Jhanwar Vinod Mali

MeXrship No.: 135188 ^{Chief Financial Officer Company Secretary}

---

Mar 31, 2018

s. PROVISIONS AND CONTINGENT LIABLITIES:

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. A Contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A Contingent Liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.

t. OPERATING CYCLE AND CURRENT/NON-CURRENT CLASSIFICATION:

All the assets and liabilities have been classified as current or non current as per the Companys' normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013.

An asset is current when it is:

Expected to be realised or intended to be sold or consumed in normal operating cycle.

Held primarily for the purpose of trading.

Expected to be realised within twelve months after the reporting period, or Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

It is expected to be settled in normal operating cycle.

It is held primarily for the purpose of trading.

It is due to be settled within twelve months after the reporting period, or

There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities

u. BIOLOGICAL ASSETS:

Biological assets are measured at fair value less costs to sell, with any change therein recognised in Statement of Profit and Loss.

v. STANDARDS ISSUED BUT NOT EFFECTIVE:

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On 28 March 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, 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 1 April 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.

Ind AS 115- Revenue from Contract with Customers: On 28 March 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from

Contract with Customers. The core principle of the new standard is that an entity should recognise 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 entitys' 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 recognised at the date of initial application (Cumulative catch-up approach).

The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1 April 2018. The effect on adoption of Ind AS 115 is expected to be insignificant.

RECONCILIATIONS BETWEEN PREVIOUS GAAP AND Ind AS

Ind AS 101 requires an entity to reconcile Equity, Total Comprehensive Income and Cash Flows for the Prior Period.

The Following tables represent the Reconciliation from Previous GAAP to Ind AS:-

   Total Equity as per Previous GAAP 1,112,298,910

Reconciliation of Equity as at 31 March 2017 and 1 April 2016		(Figures in Rs.)
1	Particulars	Foot note	As at 31 March 2017	As at 1 April 2016
Â	918,135,973
Add	Proposed dividend including dividend distribution tax	A	23,548,915	11,262,527
	Reserves as per Ind AS	Â	1,135,847,825	929,398,500

Reconciliation of Total Comprehensive Income for the year ended 31 March 2017		Â	(Figures in Rs)
2	Particulars	Foot note	As at 31 March 2017
.........................	Net Profit as per Previous GAAP	Â	248,427,840
	Net Profit after Tax as per Ind AS	Â	249,399,954
Â	Other Comprehensive Income	Â	Â
Add	Actuarial (Iosses)/Gain reclassified to other comprehensive income	B	(1,486,641)
Add	Current Tax on above Adjustment	Â	514,526
Â	Total Comprehensive Income as per Ind AS	Â	248,427,840

 

Reconciliation of Cash Flow Statement for the year ended 31 March 2017			(Figures in Rs)
3	Particulars	Previous GAAP	Effects of Transition to Ind AS	Ind AS
Â	Net Cash Generated by Operating Activities	270,974,105	(4,556,863)	275,530,968
Â	Net Cash Used in Investing Activities	(154,916,154)	15,950	(154,932,104)
Â	Net Cash Used in Financing Activities	(51,402,840)	4,556,865	(55,959,705)
Â	Net Increase in Cash & Cash Equivelants	64,655,111	Â	64,639,159
Â	Cash & Cash Equivelants at the beginning of the year	49,620,633	Â	47,098,314
Â	Cash & Cash Equivelants at the end of the year	114,275,744	Â	111,737,474

Notes to reconciliations between previous GAAP and Ind AS :

A. Proposed dividend including dividend distribution tax

Under Ind AS, dividend payable and dividend distribution tax is recognised as a liability in the period in which it is declared and approved by the shareholders. Under previous GAAP, dividend payable and dividend distribution tax was recorded as a liability in the period to which it relates. This difference has resulted in increase in equity under Ind AS by Rs. 23,548,915 as at 31 March 2017 (Rs. 11,262,517 as at 1 April 2016).

B. Remeasurement of gratuity recognised in other comprehensive income

Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset and are recognised in other comprehensive income. Under previous GAAP, actuarial gains and losses were recognised in statement of profit and loss. This difference has resulted in increase of profit by Rs. 1,486,641 for the year ended 31 March 2017. 

---

Mar 31, 2017

1. Rights, Preferences and Restriction attached to Shares:-

Share capital of the company consists of one class of equity shares having a Par value of Rs.10/- Per Share. Each holder of equity share is eligible for one vote per share held. The dividend proposed by the Board of Director is subject to the approval of the Shareholders in the ensuing Annual General Meeting except Interim Dividend.

In the event of liquidation, the equity Shareholders are eligible to receive the remaining Asset of the company after distribution of all preferential amounts, in proportion to their Shareholding.

2. Cash Credit accounts and credit card are secured by first and exclusive hypothecation charge on all the current assets of the company. It is also collaterally secured by Equitable Mortgage of Land and Building on Survey No. 1972 and 1973/p1 situated at Village Merda Adraj, Kadi Thol Road, Kadi, Mehsana, and hypothecation of unencumbered plant and machinery of the company and personal guarantee of some of the directors.

3. Interest Rates on Loans are varying, which are linked to base rate of Bank, from time to time.

4. Balances with banks in current account include Unclaimed Dividend Amount of Rs.2,538,269 (P.Y. Rs.2,522,319)

5. Balances with banks in fixed deposit account includes balances held as margin money or security against borrowing, guarantees and other commitments Rs.5,228,175 (P.Y. Rs.2,973, Rs.112)

6 Balances of receivables, payables, loans & advances and deposits are subject to confirmations. Any adjustments, if required would be made at the time of reconciliation of settlement of accounts.

7. Pursuant to the Scheme of Amalgamation and Arrangement u/s 391 to 394 of the Companies Act, 1956 dated 8 December 2015, the company has issued 1 Equity share of Rs.10 each fully paid-up in respect of every 33,537 equity share of Rs.10 each in the equity share capital of Innoves Animal Health Private Limited, aggregating 65 equity shares of the company.

8. Adjustment represents borrowing costs that are attributable to the acquisitions or constructions of qualifying assets for expansion/new project were needed to be capitalized to the respective fixed assets in the previous years and in the current year the amount is capitalized to fixed assets thereby increasing the reserves by Rs.9.27 million.

9. In the opinion of the Board of directors, loans and advances are of the value stated in the Balance Sheet, to be realized in the normal course of business and provision for all known liabilities have been made in the books of accounts which are adequate and not in excess of the amount reasonably required.

10 Trade Receivables outstanding for a period exceeding six months from the date they are due for payment includes trade receivable of Rs. NIL (P.Y. Rs. 4.87 million) for which management is pursuing for its recovery and is negotiating with each party. Based on the current negotiation with the respective parties, management is hopeful for its realization in full and consequently no provision has been made for such trade receivables.

11. Regulation 34(3) read with para E of Schedule V of SEBI (Listing Obligations & Disclosure Requirement Regulations, 2015

A. Loans and Advances given to subsidiaries, associates, firms or companies in which directors are interested

Note: Figures in Brackets relate to Previous Year

12. The management of the company has during the year carried out technical evaluation for identification of impairment of assets, if any in accordance with the Accounting Standard (AS) 28, issued by the Institute of Chartered Accountants of India. Based on the judgement of the management and as certified by the directors, no provision for impairment of the asset is considered necessary in respect of any of the assets of the company.

13. Disclosure as per As-15 (Revised) on “Employee Benefit” for the year ended 31 March 2017

a Defined Contribution Plans

The company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the company required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefit.

The company recognized Rs. 5.19 million (P.Y. ? 3.95 million) for provident fund contribution in the profit and loss account. The contributions payable to this plan by the Company are at rates specified in the rules of the scheme.

b Defined Benefit Plan

The company made annual contribution to the employee’s Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following table sets out the funded status of the gratuity plan and the amount recognized by the company’s financial statement as at 31 March 2017.

14. Previous year’s figures have been regrouped/reclassified wherever necessary to confirm to current year’s classification/ disclosure.

---

Mar 31, 2016

1. Rights, Preferences and Restriction Attached to Shares:-

Share capital of the Company consists of one class of equity shares having a par value of H10 Per Share. Each holder of equity share is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except Interim Dividend.

In the event of liquidation, the equity shareholders are eligible to receive the remaining asset of the Company after distribution of all preferential amounts, in proportion to their shareholding.

2. Cash Credit accounts are secured by first and exclusive hypothecation charge on all the current assets of the Company. It is also collaterally secured by equitable mortgage of Land and Building on Survey No. 1972 and 1973/p1 situated at Village Merda Adraj, Kadi Thol Road, Kadi, Mehsana, and hypothecation of unencumbered plant and machinery of the Company and personal guarantee of some of the directors.

3. Interest Rates on Loans are floating, which are linked to base rate of Bank, from time to time.

4. Balances with banks in current account include Unclaimed Dividend Amount of Rs.2,522,319 (P.Y. Rs.2,530,834 )

5. Balances with banks in fixed deposit account includes balances held as margin money or security against borrowing, guarantees and other commitments Rs.2,973,1 12 (P.Y. Rs.4,618,914)

6. Balances of receivables, payables, loans & advances and deposits are subject to confirmations. Any adjustments, if required would be made at the time of reconciliation of settlement of accounts.

7. Pursuant to the Scheme of Amalgamation and Arrangement u/s 391 to 394 of the Companies Act 1956 for amalgamation of erstwhile Gujarat Agrofarm Limited, Diavetra Life sciences Private Limited and Hester Biosciences (Mauritius) Limited (Wholly owned subsidiaries of the Company) and demerger of trading undertaking of Innoves Animal Health Private Limited with the Company as sanctioned by the Hon''ble High Court of Gujarat on 08 December, 2015 all the assets and liabilities of the erstwhile Gujarat Agrofarm Limited, Diavetra Life sciences Private Limited and Hester Biosciences (Mauritius) Limited and Trading under taking of Innoves Animal Health Private Limited were transferred to and vested in the Company with effect from the Appointed Date, 01 April, 2014. The Scheme has, accordingly, been given effect to in these Accounts.

The amalgamation has been accounted for under the "Pooling of Interest Method” as prescribed under Accounting Standard 14 "Accounting for Amalgamations” (AS 14) issued by the Institute of Chartered Accountants of India and as notified under section 133 of the Companies Act 2013 read with Rule 7 of the Companies Accountant Rules 2014.

In accordance to the Scheme Company has issued 1 Equity share of Rs.10 each fully paid-up in respect of every 33,537 equity share of Rs.10 each of Innove Animal Health Private Limited, aggregating 65 equity shares of the Company.

8. In order to give effect of Composite Scheme of Amalgamation and Arrangement as approved by Hon''ble High Court of Gujarat, the carrying value of Capital Assets of merged company Gujarat Agrofarm Limited (GAFL) has been taken over in books of Hester Biosciences Limited (HBL) w.e.f. 1 April 2014 being the appointed date in the order. GAFL was providing depreciation as per Written Down Value Method (WDV) and to align with the policy of providing depreciation of capital assets of Gujarat Agrofarm Limited with the Company, the method of depreciation is changed from WDV method to SLM and so the difference of carrying value of fixed assets as per SLM over WDV method as on 31 March 2014, being gain of Rs. 0.68 million is shown as exceptional item on the face of Statement of Profit & Loss for the year ended on 31 March 2015. The difference of carrying value of fixed assets as per SLM over WDV method as on 31 March 2015, being gain of Rs.3.92 million is reduced from total cost of depreciation for the year ended on 31 March 2015.

During the year ended on 31 March 2015, the Company has retrospectively changed the method of providing depreciation on fixed assets from the Written Down Value (WDV) method to Straight Line Method (SLM) at the rates higher than the rates prescribed in schedule XIV to the Companies Act, 1956 as duly certified by chartered engineer. The management believes that this change will result in a more appropriate presentation of the financial statements of the Company and will give as systematic basis of depreciation charge, more representative of the time pattern in which the economic benefits will be derived from the use of depreciation charge, more representative of the time pattern in which the economic benefits will be derived from the use of these assets. Accordingly Company has charged depreciation of Rs.52.91 million to statement of profit and loss for the year ended on 31 march 2015. The net credit of Rs.19.03 million being the difference of Written down value of assets as per WDV to SLM method as on 31 March 2014 has been shown as an ''exceptional item'' in the Statement of Profit & Loss for the year ended on 31 march 2015.

9. Pursuant to the enactment of the Companies Act, 2013 (the Act) and its applicability for the accounting period commencing after 01 April 2014, the Company has applied the estimated useful lives of the assets as specified in Schedule - II except in respect of certain assets as disclosed in accounting policy on Fixed Assets and Depreciation / Amortization. Accordingly the unamortized carrying value of tangible and non tangible assets is being depreciated / amortized over the remaining / revised useful life of each asset. Written down value of the fixed assets whose useful life has already exhausted on 01 April 2014 amounting to Rs.13.51 million has been charged to General Reserve in the financial year 2014-15.

10. Adjustment represents borrowing costs that are attributable to the acquisitions or constructions of qualifying assets for expansion / new project were needed to be capitalized to the respective fixed assets in the previous years and in the current year the amount is capitalized to fixed assets thereby increasing the reserves by Rs.10.50 Million.

11. The Company has started implementing component accounting as required under Schedule II to the Companies Act, 2013 in phased manner. Impact of this reassessment is not material for the phases which are completed and for the remaining phases, which are under process effect will be given on completion of verification process.

12. I n the opinion of the Board of Directors, loans and advances are of the value stated in the Balance Sheet, to be realized in the normal course of business and provision for all known liabilities have been made in the books of accounts which are adequate and not in excess of the amount reasonably required.

13. Trade Receivables outstanding for a period exceeding six months from the date they are due for payment includes trade receivable of H 4.87 million (P.Y. H6.74 million) for which management is persuing for its recovery and is negotiating with each party. Based on the current negotiation with the respective parties, management is hopeful for its realization in full and consequently no provision has been made for such trade receivables.

14. Disclosure as per Clause 32 of listing agreements with the Stock Exchanges:

A Loans and Advances given to subsidiaries, associates, firms or companies in which Directors are interested

15. The management of the Company has during the year carried out technical evaluation for identification of impairment of assets, if any in accordance with the Accounting Standard (AS) 28, issued by the Institute of Chartered Accountants of India. Based on the judgment of the management and as certified by the Directors, no provision for impairment of the asset is considered necessary in respect of any of the assets of the Company.

16. Disclosure as per As-15 (Revised) on "Employee Benefit" for the year ended 31 March 2016

a Defined Contribution Plans

The Company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the Company required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefit.

The Company recognized Rs.3.95 million (P.Y. Rs.2.62 million) for provident fund contribution in the profit and loss account. The contributions payable to this plan by the Company are at rates specified in the rules of the scheme.

b Defined benefit Plan

The Company made annual contribution to the employee''s Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lumpsum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following table sets out the funded status of the gratuity plan and the amount recognized by the Company''s financial statements as at 31 March 2016.

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

---

Mar 31, 2015

1. CORPORATE INFORMATION

Hester Biosciences Limited is a public limited company domiciled in india and listed on Bombay Stock Exchange (BSE) and National stock exchange (NSE). The company is engaged in manufacturing of Poultry vaccines and Large Animal Vaccines and trading of Large animal health products having its manufacturing set up at Merda Adraj village, Mehsana District, Gujarat.

2. Rights, Preferences and Restriction attached to Shares:-

Share capital of the company consists of one class of equity shares having a Par value of Rs.10 Per Share. Each holder of equity share is eligible for one vote per share held. The dividend proposed by the Board of Director is subject to the approval of the shareholders in the ensuing Annual General Meeting except interim dividend.

In the event of liquidation the equity shareholders are eligible to receive the remaining Asset of the company after distribution of all preferential amounts, in proportion to their shareholding.

3. Aggregate number and class of shares alloted as fully paid up by way of bonus shares for the period of 5 years immediately preceeding the Balance sheet date:-

As per terms and conditions approved at the Annual General meeting of the company held on 14 september 2012, company had issued 2,835,600 fully paid equity shares with voting rights as bonus with face value of Rs.10 each by capitalising Reserves.

4. Cash Credit accounts are secured by first and exlusive hypothecation charge on all the current assets of the company. it is also collaterally secured by Equitable Mortgage of Land and Biulding on survey No. 1972 and 1973/p1 situated at Village Merda Adraj, Kadi Thol Road, Kadi, mehsana, and hypothecation of unencumbered plant and machinery of the company and personal guarantee of some of the directors.

5. interest Rates on Loans are varying, which are linked to base rate of Bank, from time to time.

6. Balances with banks in current account include Unclaimed Dividend Amount of Rs.2,530,834 (P.Y. Rs.2,376,614)

7. Balances with banks in fixed deposit account includes balances held as margin money or security against borrowing, guarantees and other commitments Rs.4,092,217 (P.Y. Rs.3,738,971)

8. a) Contingent Liabilities

Other money for which company is contingently liable in respect of income tax matters Rs.5,618,605 (P. Y. Nil)

b) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net-off advances): Rs.8.54 million (P.Y. 109.95 million)

9. Figures are rounded off to nearest rupee.

10. certain balances of receivables, payables, loans and advances and deposits are subject to confirmations. Any adjustments, if required would be made at the time of reconciliation or settlement of accounts

11. Disclosure of amount payable to enterprises defined under the Micro, small and Medium enterprises Development Act, 2006 is based on the information available with the company regarding the status of registration of such enterprises under this Act. Accordingly, disclosure in respect of the amounts payable to such enterprises outstanding as on 31 march 2015 has been made in the financial statements based on information received and such amount outstanding as on 31 march 2015 from micro and small enterprises is ML, which the auditors have relied upon. Further, in the view of the management, the impact of interest, if any, that may be payable in accordance with the provision of the Act is not expected to be material.

12. Pursuant to the enactment of the companies Act, 2013 (the Act) and its applicability for the accounting periods commencing after 01 April 2014, the company has applied the estimated lives of the assets as specified in Schedule - ii except in respect of certain assets of "New Project" as disclosed in accounting policy on Fixed Assets and Depreciation/Amortisation. Accordingly the unamortised carrying value of tangible and non tangible assets is being depreciated / amortised over the remaining / revised useful life of each asset. Written down value of the fixed assets whose useful life has already exhausted on 01 April 2014 amounting to Rs.13.51 million has been charged to General Reserve.

13. in order to simplify corporate structure, reduce multiplicity of legal and regulatory compliances, eliminate duplication in administrative costs and achieve operational efficiencies, during the year Board of Directors has approved a Composite Scheme of Amalgamation and Arrangement ('the Scheme') to merge Gujarat Agrofarm Limited, Diavetra Lifesciences Private Limited and Hester Biosciences (Mauritius) Limited with the company in addition to demerger of Trading undertaking of innoves Animal Health Private Limited into Hester Biosciences Limited pursuant to Sections 391 to 394 of the Companies Act, 1956 read with other applicable provisions of the Companies Act, 1956, the Companies Act, 2013 ('the Act') and Mauritius Companies Act, 2001.

The Appointed Date of the Scheme was 01 April 2014. The Scheme is subject to necessary approvals inter alia from Stock Exchanges, shareholders and creditors of the company and sanction from Hon'ble High Court of Gujarat, which is under process.

The Company, upon the scheme being effective, shall account for said amalgamation and arrangement in line with the provisions of the scheme as may be approved by the Gujarat High Court.

14. in-house Research and Development facility established by the company for "Manufacturing veternity vaccines for Poultry" was approved by Ministry of Science and Technology, Government of india under section 35(2AB) of the income Tax Act, 1961 in F.Y. 2013-14.

15. in the opinion of the Board of directors, loans and advances are of the value stated in the Balance Sheet, to be realised in the normal course of business and provision for all known liabilities have been made in the books of accounts which are adequate and not in excess of the amount reasonably required.

16. Trade Receivables outstanding for a period exceeding six months from the date they are due for payment includes trade receivable of Rs.6,739,623 (P.Y. Rs.8,834,135) for which management is pursuing for its recovery and is negotiating with each party. Based on the current negotiation with the respective parties, management is hopeful for its realisation in full and consequently no provision has been made for such trade receivables.

17. The management of the company has during the year carried out technical evaluation for identification of impairment of assets, if any in accordance with the Accounting standard (As) 28, issued by the institute of chartered Accountants of india. Based on the judgment of the management and as certified by the directors, no provision for impairment of the asset is considered necessary in respect of any of the assets of the company.

18. RELATED PARTY DISCLOSURES:

(i) List of Related Parties:

(a) Subsidiary Companies:

1. Hester Biosciences (Mauritius) Limited

2. Diavetra Lifesciences Private Limited

3. Gujarat Agrofarm Limited

(b) Group Companies / Associates:

1. Hester coatings Private Limited

2. sinsui (india) Private Limited

3. Biolink Healthcare Limited

4. Hester Diagnostic Private Limited

(c) Key Management Personnel:

1. Rajiv Gandhi - CEO & Managing Director

2. Jigar Shah - CFO

(d) Promoters and their relatives having control:

1. Dr. Bhupendra V. Gandhi (Non-Executive Chairman)

2. Mr. Sanjiv Gandhi (Non-Executive Director)

3. Mr. Ravin Gandhi (Non-Executive Director)

19. DISCLOSURE AS PER AS-15 (REVISED) ON " EMPLOYEE BENEFIT " FOR THE YEAR ENDED 31 MARCH 2015

a) Defined Contribution Plans

The company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. the provident fund plan is operated by the regional provident fund commissioner, the company required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefit.

The company recognised Rs.2.62 million (P.Y. Rs.2.15 million) for provident fund contribution in the profit and loss account. the contributions payable to this plan by the company are at rates specified in the rules of the scheme.

b) Defined benefit Plan

The company made annual contribution to the employee's Group Gratuity cash Accumulation scheme of the Life insurance corporation of india, a funded benefit plan for qualifying employees. the scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

20. The Ministry of Corporate Affairs, Government of india, vide General Circular No. 2 and 3 dated 8 February 2011 and 21 February 2011 respectively has granted a general exemption from compliance with section 212 of the companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. the company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. necessary information relating to the subsidiaries has been included in the consolidated Financial statements.

21. Previous year's figures have been regrouped/ reclassified wherever necessary to confirm to current year's classification/disclosure.

---

Mar 31, 2014

CORPORATE INFORMATION

Hester Biosciences Limited is a public limited company domiciled in India and listed on Bombay Stock Exchange (BSE). The company is engaged in manufacturing of Poultry vaccines having its manufacturing set up at Merda Adraj village, Mehsana District, Gujarat. Company is also engaged in trading of Poultry Vaccines and Large Animal health products.

1. CONTINGENT LIABILITIES & COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net-off advances): Rs. 109.95 million (P.Y. Rs. 119.82 million).

2. Figures are rounded off to nearest rupee.

3. Certain balances of receivables, payables, loans and advances and deposits are subject to confirmations. Any adjustments, if required would be made at the time of reconciliation or settlement of accounts.

4. Disclosure of amount payable to enterprises defined under the Micro, Small and Medium Enterprises Development Act, 2006 is based on the information available with the company regarding the status of registration of such enterprises under this Act. Accordingly, Disclosure in respect of the amounts payable to such enterprises outstanding as on 31st March, 2014 has been made in the financial statements based on information received and such amount outstanding as on 31st March, 2014 from Micro and Small Enterprises is NIL, which the auditors have relied upon. Further, in the view of the management, the impact of interest, if any, that may be payable in accordance with the provision of the Act is not expected to be material.

5. In the opinion of the Board of directors, loans and advances are of the value stated in the Balance Sheet, to be realized in the normal course of business and provision for all known liabilities have been made in the books of accounts which are adequate and not in excess of the amount reasonably required.

6. Trade Receivables outstanding for a period exceeding six months from the date they are due for payment includes trade receivable of Rs. 8,834,135/- (P.Y. Nil) for which management is pursuing for its recovery and is negotiating with each party. Based on the current negotiation with the respective parties, management is hopeful for its realization in full and consequently no provision has been made for such trade receivables.

7. The management of the company has during the year carried out technical evaluation for identification of impairment of assets, if any in accordance with the Accounting Standard (AS) 28, issued by the Institute of Chartered Accountants of India. Based on the judgment of the management and as certified by the directors, no provision for impairment of the asset is considered necessary in respect of any of the assets of the company.

9. DISCLOSURE AS PER AS-15 (REVISED) ON " EMPLOYEE BENEFIT " FOR THE YEAR ENDED 31ST MARCH,2014

a) Defined Contribution Plans

The company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the company required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefit.

The company recognized Rs. 2.15 million (P.Y. 1.95 million) for provident fund contribution in the profit and loss account. The contributions payable to this plan by the company are at rates specified in the rules of the scheme.

b) Defined benefit Plan

The company made annual contribution to the employee''s Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

10. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements. The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

---

Mar 31, 2013

Note 1. CORPORATE INFORMATION

Hester Biosciences Limited is a public limited company domiciled in India and listed on Bombay Stock Exchange (BSE). The company is engaged in manufacturing of Poultry vaccines having its manufacturing set up at Village MerdaAdraj,TalukaKadi,District Mehsana,Gujarat. Company is also engaged in trading of Poultry Vaccines and Large Animal health products.

Note 2.CONTINGENT LIABILITIES& COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net-off advances): Rs.119.82Million(P.Y. Rs.28.81 Million).

Note 3.

Figures are rounded off to nearest rupee.

Note 4

Certain balances of receivables, payables, loans and advances and deposits are subject to confirmations. Any adjustments, if required would be made at the time of reconciliation or settlement of accounts.

Note 5

The Management has initiated the process of identifying enterprise which have provided goods & services to the Company and which qualify under the definition of Micro and Small Enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises outstanding as on 31st March, 2013 has been made in the financial statements based on information received and such amount outstanding as on 31st March, 2013 from Micro and Small Enterprises is NIL, which the auditors have relied upon. Further, in the view of the management, the impact of interest, if any, that may be payable in accordance with the provision of the Act is not expected to be material.

Note 6

As per terms & conditions approved at the Annual General Meeting of the Company held on 14th September, 2012, Company had issued 2,835,600 fully paid equity sharesas bonus with face value of Rs. 10 each to the existing shareholders of the company whose names appear in the Register of Members by capitalizing Reserves.

Note 7 BUSINESS TRANSFER AGREEMENT

During the year, company entered into a business transfer agreement with Innoves Animal Health Pvt. Ltd. By virtue of which, company has acquired its large animal Health Products business, computing of all its business assets and liabilities on slump sale basis.

Note 8

In the opinion of the Board of directors, loans and advances are of the value stated in the Balance Sheet, to be realized in the normal course of business and provision for all known liabilities have been made in the books of accounts which are adequate and not in excess of the amount reasonably required.

Note 9

The management of the company has during the year carried out technical evaluation for identification of impairment of assets, if any in accordance with the Accounting Standard (AS) 28, issued by the Institute of Chartered Accountants of India. Based on the judgment of the management and as certified by the directors, no provision for impairment of the asset is considered necessary in respect of any of the assets of the company.

Note 10 RELATED PARTY DISCLOSURES:

(i) List of Related Parties :

(a) Subsidiary Companies:-

1. Hester Biosciences (Mauritius) Limited

2. Diavetra Lifesciences Private Limited.

(b) Group Companies/ Associates:-

1. Hester Coatings Private Limited

2. Sinsui (India) Private Limited

3. Biolink Healthcare Private Limited

4. Hester Diagnostics Private Limited

(c) Key Management Personnel:

1. Rajiv Gandhi - CEO & Managing Director

2. Jigar Shah - CFO

(d) Promoters and their relatives having control:

1. Dr. Bhupendra V. Gandhi (Non-executive chairman)

2. Mr. Sanjiv Gandhi (Non-Executive Director)

3. Mr. Ravin Gandhi (Non-Executive Director)

Note 11 DISCLOSURE AS PER AS-15 (REVISED) ON " EMPLOYEE BENEFIT " FOR THE YEAR ENDED 31ST MARCH,2013

a) Defined Contribution Plans

The company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the company required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefit.

The company recognized Rs.1.95 Million (P.Y. 1.64 Million) for provident fund contribution in the profit and loss account. The contributions payable to this plan by the company are at rates specified in the rules of the scheme.

b) Defined benefit Plan

The company made annual contribution to the employee''s Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following table sets out the funded status of the gratuity plan and the amount recognized by the company''s financial statement as at 31st March 2013.

Note 12

The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

Note 13

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

---

Mar 31, 2012

Note CORPORATE INFORMATION

Hester Biosciences Limited (the 'Company') is a public limited company domiciled in India and listed on Bombay Stock Exchange (BSE). The Company is engaged in manufacturing of Poultry vaccines having its manufacturing set up at Merda Adraj village, Mehsana District, Gujarat. Company is also engaged in trading of Poultry Vaccines.

The Company has its subsidiary namely Hester Biosciences (Mauritius) Limited, Mauritius which is considered in these Consolidated Financial Statements.

Note 1.1 Rights, Preferences and Restriction attached to Shares:

Share capital of the Company consists of one class of equity shares having a Par value of Rs.10/- Per Share. Each holder of equity share is eligible for one vote per share held. The dividend proposed by the Board of Director is subject to the approval of the Shareholders in the ensuing Annual General Meeting except Interim Dividend.

In the event of liquidation the equity Shareholders are eligible to receive the remaining Asset of the Company after distribution of all preferential amounts, in proportion to their Shareholding.

Note 2.1

Each warrant carry option to be convertible into 1 number of equity share of Rs. 10/- each within 18 months from the date of allotment of warrants at a price of Rs. 137/-per share.

Note 3.1

BOI-CC 5102 and BOI- STAR Channel A/c are secured by hypothecation of stocks.

BOI-CC 5103 is secured by hypothecation of book debts.

Interest rates on Loans are varying, which are linked to base rate of Bank, from time to time.

4.1 Balance with banks include Unclaimed Dividend Amount of Rs.2,347,131/- (P.Y. Rs.2,350,585/-)

4.2 Following are the balances with bank held as margin money or security against borrowing, guarantees and other commitments Rs. 2,885,960/-(P.Y. 2,766,599/-)

4.3 Fixed deposits include Rs.2,231,120(P.Y. Rs.2,675,089) having maturity period of more than 12 months.

*Excise Duty shown under expenditure represents the aggregate of Excise Duty borne by the Company and difference between excise duty on opening & closing stock of finished goods.

Note 5 PROVISION AND CONTINGENCIES

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

CONTINGENT LIABILITIES & COMMITMENTS:

Estimated amount of contracts remaining to be executed on capital account and not provided for (net-off advances) Rs. 28.81 million (P.Y.Rs. 1.85 million).

Note 6

Figures are rounded off to nearest rupee.

Note 7

In the opinion of the Board of directors, loans and advances are of the value stated in the Balance Sheet, to be realised in the normal course of business and provision for all known liabilities have been made in the books of accounts which are adequate and not in excess of the amount reasonable required.

Note 8

The management of the Company has during the year carried out technical evaluation for identification of impairment of assets, if any in accordance with the Accounting Standard (AS) 28, issued by the Institute of Chartered Accountants of India. Based on the judgment of the management and as certified by the directors, no provision for impairment of the asset is considered necessary in respect of any of the assets of the Company.

Note 9

The amount of loans and advances include Rs. 2,036,444(P.Y. Rs. 1,069,829/-) loans to companies, Firms and persons as listed in the register maintained under Section 301 of the Companies act, 1956. Maximum outstanding during the year was Rs. 2,142,799/- (P.Y. Rs. 1,088,557/-)

Note 10

10.Balance of Trade Receivables, Trade Payables and Loans and Advances are as per books and subject to confirmation reconciliation from respective parties.

Note 11

The Management has initiated the process of identifying enterprise which have provided goods & services to the Company and which qualify under the definition of Micro and Small Enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises outstanding as on March 31, 2012 has been made in the financials statements based on information received and such amount outstanding as on March 31, 2012 from Micro and Small Enterprises is NIL, which the auditors have relied upon. Further, in the view of the management, the impact of interest, if any, that may be payable in accordance with the provision of the Act is not expected to be material.

Note 12

12.As per terms & conditions approved at the Annual General Meeting of the Company held on 28th July, 2010, Company had allotted 480,000 convertible warrants, to promoters group and non promoters on preferential basis on 12th August, 2010 on receipt of subscription amount of Rs.34.25/- per warrant.

Pursuant to the terms & conditions of Equity warrants, during the year 480,000 warrants were converted into 480,000 equity shares of Rs.10/- each fully paid at premium of Rs.127/- per share.

Note 13 RELATED PARTY DISCLOSURES

i) List of Related Parties :

Related parties with whom transactions have taken place during the year.

a) Subsidiary Company

1. Hester Biosciences (Mauritius) Limited

b) Group Companies/Associates / Individual Relatives:

1. Hester Coatings Pvt. Ltd.

2. Sinsui (India) Pvt .Ltd.

3. Biolink Healthcare Pvt. Ltd.

c) Key Management Personnel:

1. Rajiv Gandhi - C.E.O & Managing Director.

2. Jigar Shah - C.F.O

Note 14

F.O.B. value of exports Rs. 29,208,328/- ( P.Y. Rs. 32,977,671/-)

Note 15

Disclosure as per As-15 (Revised) on " Employee Benefit " for the year ended 31st March,2012

a) Defined Contribution Plans

The Company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the Company required to contribute a specified percentage of payroll cost to the retirement befit scheme to fund the benefit.

The Company recognised Rs. 1.64 million (P.Y 1.29 million) for provident fund contribution in the profit and loss account. The contributions payable to this plan by the Company are at rates specified in the rules of the scheme.

b) Defined benefit Plan

The Company made annual contribution to the employee's Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following table sets out the funded status of the gratuity plan and the amount recognised by the Company's financial statement as at 31st March 2012.

Note 16

As the Company's business activity, in the opinion of the Management, falls within a single primary segment i.e. Veterinary ( Poultry) Vaccines, which are subject to same risks and returns, the disclosure requirements of Accounting Standard (AS) - 17 "Segment Reporting" issued by the Institute of chartered Accountants of India are, in the opinion of the management, not applicable.

Note 17

The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

Note 18

These financial statements have been prepared in format prescribed by the Revised Schedule VI notified under the companies Act, 1956.This has significantly impacted the presentations and disclosures made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to confirm to current year's classification/disclosure.

---

Mar 31, 2011

1. PROVISION AND CONTINGENCIES

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

CONTINGENT LIABILITIES & COMMITMENTS:

a. Claims against the Company not acknowledgement as debts. Rs. Nil (Previous year Nil)

b. (i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net-off advances) Rs.1.85 million (Previous year 4.62 million).

2. Figures are rounded off to nearest rupee and previous year’s figures have been regrouped wherever necessary.

3. In the opinion of the Board of directors, loans and advances are of the value stated in the Balance Sheet, to be realized in the normal course of business and provision for all known liabilities have been made in the books of accounts which are adequate and not in excess of the amount reasonably required.

4. The management of the company has during the year carried out technical evaluation for identification of impairment of assets, if any in accordance with the Accounting Standard (AS) 28, issued by the Institute of Chartered Accountants of India. Based on the judgment of the management and as certified by the directors, no provision for impairment of the asset is considered necessary in respect of any of the assets of the company.

5. The amount of loans and advances include Rs.1,069,829 (P.Y. Rs.693,015/-) loans to companies, Firms and persons as listed in the register maintained under Section 301 of the Companies act, 1956. Maximum outstanding during the year was Rs.1,088,557/- (P.Y. Rs. 3,878,015/-)

6. Balance of Debtors, Creditors and loans and advances are as per books and subject to confirmation from respective parties.

7. The Management has initiated the process of identifying enterprise which have provided goods & services to the Company and which qualify under the definition of Micro and Small Enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises outstanding as on 31st March, 2011 has been made in the financial statements based on information received and such amount outstanding as on 31st March, 2011 from Micro and Small Enterprises is NIL, which the auditors have relied upon. Further, in the view of the management, the impact of interest, if any, that may be payable in accordance with the provision of the Act is not expected to be material.

8. During the year, company has made preferential allotment of Equity Warrants of Rs. 16,440,000/- (P.Y. Nil) with an option to convert into Equity shares at a future date.

9. During the year Company has made investment of Rs.25.00 million in its wholly owned Subsidiary Company, Hester Biosciences (Mauritius) Limited formed on 17-02-2011 for the purpose of expanding its business activities on long term basis.

10. Related Party Disclosures:

(i) List of Related Parties :

Related parties with whom transactions have taken place during the year.

(a) Subsidiary Company:-

1. Hester Biosciences (Mauritius) Ltd.

(b) Group Companies/Associates / Individual Relatives :

1. Hester Coatings Pvt. Ltd.

2. Sinsui (India) Pvt .Ltd.

(c) Key Management Personnel:

1. Rajiv Gandhi – C.E.O & Managing Director.

2. Jigar Shah – C.F.O

11. F.O.B. value of exports Rs. 32,977,671/- (Previous Yr. Rs. 7,782,395/-)

12. Disclosure as per AS-15 (Revised) on " Employee Benefit " for the year ended 31st March, 2011

a) Defined Contribution Plans

The company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the company required to contribute a specified percentage of payroll cost to the retirement befit scheme to fund the benefit.

The company recognized Rs. 1.29 million. (P.Y 0.90 million) for provident fund contribution in the profit and loss account The contribution payable to this plan by the company are at rates specified in the rules of the scheme.

b) Defined benefit Plan

The company made annual contribution to the employee’s Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

13. Earnings per Share:

The Equity warrants being dilutive potential shares issued at a fair price during the year have not been considered as having diluting effect on earning per share in the current year.

14. As the company’s business activity, in the opinion of the Management, falls within a single primary segment i.e. Veterinary ( Poultry) Vaccines, which are subject to same risks and returns, the disclosure requirements of Accounting Standard (AS) – 17 "Segment Reporting" issued by the Institute of chartered Accountants of India are, in the opinion of the management, not applicable.

---

Mar 31, 2010

1. PROVISION AND CONTINGENCIES

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

CONTINGENT LIABILITIES & COMMITMENTS:

a. Claims against the Company not acknowledgement as debts. Rs. Nil (Previous year Nil)

b. (i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net-off advances) Rs.4.62 million (Previous year 3.49 million).

2. Figures are rounded off to nearest rupee and previous years figures have been regrouped wherever necessary.

3. In the opinion of the Board of directors, loans and advances are of the value stated in the Balance Sheet, to be realized in the normal course of business and provision for all known liabilities have been made in the books of accounts which are adequate and not in excess of the amount reasonably required.

4. The management of the company has during the year carried out technical evaluation for identification of impairment of assets, if any in accordance with the Accounting Standard (AS) 28, issued by the Institute of Chartered Accountants of India. Based on the judgment of the management and as certified by the directors, no provision for impairment of the asset is considered necessary in respect of any of the assets of the company.

5. The amount of loans and advances include Rs.693,015/-(P.Y. Rs. 3,865,015/-) loans to companies, Firms and persons as listed in the register maintained under Section 301 of the Companies act, 1956. Maximum outstanding during the year was Rs. 3,878,015/- (P.Y. Rs. 3,865,015/-)

6. Balance of Debtors, Creditors and loans and advances are as per books and subject to confirmation from respective parties.

7. The Management has initiated the process of identifying enterprise which have provided goods & services to the Company and which qualify under the definition of Micro and Small Enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises outstanding as on 31st March, 2010 has been made in the financiaLs statements based on information received and such amount outstanding as on 31st March, 2010 from Micro and Small Enterprises is NIL, which the auditors have relied upon. Further, in the view of the management, the impact of interest, if any, that may be payable in accordance with the provision of the Act is not expected to be material.

8. Related Party Disclosures :

(i) List of Related Parties :

Related parties with whom transactions have taken place during the year.

(a) Group Companies/Associates / Individual Relatives :

1. Hester Coatings Pvt. Ltd.

2. Sinsui (India) Pvt .Ltd.

(b) Key Management Personnel:

Rajiv Gandhi - CEO & Managing Director

Jigar Shah - CFO

9. F.O.B. value of exports Rs.7,782,395 /- (Previous Yr. Rs. 6,670,079 /-)

10. Disclosure as per As-15 (Revised) on " Employee Benefit " for the year ended 31st March,2010

a) Defined Contribution Plans

The company made contribution towards provident fund to defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner, the company required to contribute a specified percentage of payroll cost to the retirement befit scheme to fund the benefit.

The company recognized Rs. 0.99 million (P.Y 1.04 million) for provident fund contribution in the profit and loss account The contribution payable to this plan by the company are at rates specified in the rules of the scheme.

b) Defined benefit Plan

The company made annual contribution to the employees Group Gratuity Cash Accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or a part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of define benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

11. As the companys business activity, in the opinion of the Management, fa Lis within a single primary segment i.e. Veterinary (Poultry) Vaccines, which are subject to same risks and returns, the disclosure requirements of Accounting Standard (AS) - 17 "Segment Reporting" issued by the Institute of chartered Accountants of India are, in the opinion of the management, not applicable.

12. Schedule 1 to 15 are attached to and form part of accounts for the year ended on 31st March, 2010.