Notes to Accounts of Makers Laboratories Ltd.

Mar 31, 2025

x. Provisions, contingent liabilities and contingent assets
Provision

A Provision is recognised if, as a result of a past event, the Company has a present
legal or constructive obligation that can be estimated reliably, and it is probable that
an outflow of economic benefits will be required to settle the obligation.

Contingent liabilities

A disclosure for a contingent liability is made when there is a possible obligation or
a present obligation that may, but probably will not, require an outflow of resources.
Where there is a possible obligation or a present obligation in respect of which the
likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets

Contingent assets are not recognised in the financial statements. However, contingent
assets are assessed continually and if it is virtually certain that an inflow of economic
benefits will arise, the asset and related income are recognised in the period in which
the change occurs.

xi. Retirement and other employee benefits
Provident fund

Retirement benefit in the form of provident fund is a defined contribution scheme.
The Company has no obligation, other than the contribution payable to the provident
fund. The Company recognizes contribution payable to the provident fund scheme as
an expense when an employee renders the related service.

Gratuity

Gratuity, a post-employment defined benefit obligation is provided on the basis of
an actuarial valuation made at the end of each year/period on projected unit credit
method.

The cost of providing benefits under the defined benefit plan is determined using
the projected unit credit method. Remeasurements, comprising of actuarial gains
and losses, the effect of the asset ceiling, excluding amounts included in net
interest on the net defined benefit liability and the return on plan assets (excluding
amounts included in net interest on the net defined benefit liability), are recognised
immediately in the balance sheet with a corresponding debit or credit to retained
earnings through OCI in the period in which they occur. Remeasurements are not
reclassified to profit or loss in subsequent periods.

Net interest is calculated by applying the discount rate to the net defined benefit
liability or asset.

Compensated absences

The Company has a policy on compensated absences which are both accumulating
and non-accumulating in nature. The expected cost of accumulating compensated
absences is determined by actuarial valuation performed by an independent actuary
at each balance sheet date using Projected Unit Credit method on the additional
amount expected to be paid/ availed as a result of the unused entitlement that has
accumulated at the balance sheet date. Expense on non-accumulating compensated
absences is recognized in the period in which the absences occur.

Short-term employee benefits

All employee benefits payable wholly within twelve months of rendering the service
are classified as short-term employee benefits. Benefits such as salaries, wages etc.
and the expected cost of ex-gratia, bonus and performance incentive are recognised in
the period in which the employee renders the related service. A liability is recognised
for the amount expected to be paid when there is a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee
and the obligation can be estimated reliably.

xii. Foreign currencies
Transactions and balances:

i. The functional currency of the Company is the Indian rupee. These financial
statements are presented in Indian rupees.

ii. Transactions denominated in foreign currency are recorded at the exchange rate
on the date of transaction where the settlement of such transactions are taking
place at a later date. The exchange gain/loss on settlement / negotiation during
the year is recognised in the statement of profit and loss. In case of advance
payment for purchase of assets/ goods/services and advance receipt against
sales of products/services, all such purchase/sales transaction are recorded at
the rate at which such advances are paid/received.

iii. Foreign currency monetary transactions remaining unsettled at the end of the
year are converted at year-end rates. The resultant gain or loss is accounted for
in the statement of profit and loss.

iv. Non-monetary items that are measured at historical cost denominated in foreign
currency are translated using exchange rate at the date of transaction.

xiii. Fair Value Measurement

The Company measures financial instruments, such as, derivatives at fair value at
each balance sheet date. Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the
asset or liability

The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market

participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest.

xiv. Financial instruments

a. Financial assets & financial liabilities

Initial recognition and measurement

All financial assets and liabilities are recognised initially at fair value.

In the case of financial assets not recorded at fair value through profit or loss,
transaction costs that are attributable to the acquisition of the financial asset is
treated as cost of acquisition. Purchases or sales of financial assets that require
delivery of assets within a time frame established by regulation or convention in
the market place (regular way trades) are recognised on the trade date, i.e., the
date that the Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four
categories:

• Debt instruments at amortised cost

• Debt instruments at fair value through other comprehensive income
(FVTOCI)

• Debt instruments, derivatives and equity instruments at fair value through
profit or loss (FVTPL)

• Equity instruments measured at fair value through other comprehensive
income (FVTOCI)

Financial liabilities are subsequently carried at amortized cost using the effective
interest method, except for contingent consideration recognized in a business
combination which is subsequently measured at fair value through profit and
loss. For trade and other payables maturing within one year from the Balance
Sheet date, the carrying amounts approximate fair value due to the short maturity
of these instruments.

Impairment of financial assets

The Company assesses on a forward looking basis the expected credit
losses associated with its assets carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. Note 9 details how the entity determines whether there has been
a significant increase in credit risk. For trade receivables only, the Company
applies the simplified approach permitted by Ind AS 109 Financial Instruments,
which requires expected lifetime losses to be recognised from initial recognition
of the receivables.

De-recognition of financial instruments

A financial asset is de-recognised only when

• The Company has transferred the rights to receive cash flows from the
financial asset or

• Retains the contractual rights to receive the cash flows of the financial asset
but assumes a contractual obligation to pay the cash flows to one or more
recipients.

Where the entity has transferred an asset, the Company evaluates whether it
has transferred substantially all risks and rewards of ownership of the financial
asset. In such cases, the financial asset is de-recognised. Where the entity has
not transferred substantially all risks and rewards of ownership of the financial
asset, the financial asset is not de-recognised.

Where the entity has neither transferred a financial asset nor retains substantially
all risks and rewards of ownership of the financial asset, the financial asset is de¬
recognised if the Company has not retained control of the financial asset. Where
the Company retains control of the financial asset, the asset is continued to be
recognised to the extent of continuing involvement in the financial asset.

A financial liability (or a part of a financial liability) is de-recognized from the
Company’s Balance Sheet when the obligation specified in the contract is
discharged or cancelled or expires.

b. Derivative financial instruments and hedge accounting

Initial recognition and subsequent measurement

The Company uses derivative financial instruments such as forward currency
contracts, interest rate swaps to hedge its foreign currency risks, interest rate
risks, respectively.

Such derivative financial instruments are initially recognised at fair value on the
date on which a derivative contract is entered into and are subsequently re¬
measured at fair value. Derivatives are carried as financial assets when the fair
value is positive and as financial liabilities when the fair value is negative.

The purchase contracts that meet the definition of a derivative under Ind AS 109
are recognised in the statement of profit and loss.

xv. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before
extraordinary items and tax is adjusted for the effects of transactions of non-cash
nature and any deferrals or accruals of past or future cash receipts or payments.
The cash flows from operating, investing and financing activities of the Company are
segregated based on the available information.

xvi. Goods and service tax input credit

Input tax credit is accounted for in the books in the period in which the underlying
service received is accounted and when there is reasonable certainty in availing /
utilising the credits.

xvii. Taxes

Tax expenses comprise Current Tax and Deferred Tax :
a. Current tax

The income tax expense or credit for the period is the tax payable on the current
period’s taxable income based on the applicable income tax rate for each
jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses. The current income tax
charge is calculated on the basis of the tax laws enacted or substantively enacted
at the end of the reporting period in the countries where the company and its
subsidiaries and associates operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.

b. Deferred tax

Deferred income tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the standalone financial statements. However, deferred tax
liabilities are not recognised if they arise from the initial recognition of goodwill.
Deferred income tax is also not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting profit nor taxable profit
(tax loss). Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the end of the reporting period and are
expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled. Deferred tax assets are recognised for all
deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences
and losses. Current and deferred tax is recognised in profit or loss, except to
the extent that it relates to items recognised in other comprehensive income or
directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.

For items recognised in OCI or equity, deferred / current tax is also recognised in
OCI or equity.

c. MAT credit

Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit
and loss as current tax. The Company recognises MAT credit available as an
asset only to the extent that there is reasonable certainty that the Company will
pay normal income tax during the specified period, i.e., the period for which
MAT credit is allowed to be carried forward. The MAT credit to the extent there is
reasonable certainty that the Company will utilize the credit is recognised in the
statement of profit and loss and corresponding debit is done to the deferred tax
asset as unused tax credit.

xviii. Earnings per share

Earnings per share is calculated by dividing the net profit or loss before OCI for
the year by the weighted average number of equity shares outstanding during the
period. For the purpose of calculating diluted earnings per share, the net profit or
loss before OCI for the period attributable to equity shareholders and the weighted
average number of shares outstanding during the period are adjusted for the effects
of all dilutive potential equity shares.

b) During the previous year, the company had received ICD from Kaygee Investments Pvt Ltd of Rs.600 lacs
for a period of 2 years and the same carried interest @ 8% .

During the current period company has received additional ICD of Rs.150 lacs on the same terms. The
total ICD of Rs.750 lacs has been repaid during the current period.

c) Details of securities and repayment terms of secured loans stated above

i) March 31, 2024- Secured by way of exclusive charge on plant and machinery located at new ophthalmic
products manufacturing facility at Naroda, Ahmedabad. Equitable mortgage on the plot no. 30/4, Phase III
GIDC, Naroda, Ahmedabad.

ii) Term loan - Secured by way of 100% Credit Guarantee by National Credit Guarantee Trust Companies Limited
(NCGTC) and Extension of Charge on present & Current Assets of the Company and Fixed assets charged for
YBL Term Loan taken earlier.

(viii) Risk Characteristics of the Defined Benefit Plan

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such
company is exposed to various risks as follow

(i) Investment Risk : For funded plans that rely on insurers for managing the assets, the value of assets certified
by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value
of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability
or the funded status if there are significant changes in the discount rate during the inter-valuation period.

(ii) Market Risk (Discount Rate) : Market risk is a collective term for risks that are related to the changes
and fluctuations of the financial markets. The discount rate reflects the time value of money. An increase
in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This
assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is
exposed to fluctuations in the yields as at the valuation date.

(iii) Longevity Risk : The impact of longevity risk will depend on whether the benefits are paid before retirement
age or after . Typically for the benefits paid on or before the retirement age , the longevity risk is not very
material.

(iv) Actuarial Risk :

Salary Increase Assumption: Actual Salary increase that are higher than the assumed salary escalation , will
result in increase to the Obligation at a rate that is higher than expected

Attrition / Withdrawal Assumption: If actual withdrawal rates are higher than assumed withdrawal rate
assumption, than the benefits will be paid earlier than expected. The impact of this will depend on whether
the benefits are vested as at the resignation date.

(a) As at March 31, 2024- Secured Borrowing - Exclusive charge on present and future current asset of
the Company and Negative Lien on immovable property, plant and equipment of the company for there
registered office located at 54-D, Kandivali Industrial Estate, Charkop, Kandivali (W), Mumbai, Maharashtra.
As at March 31, 2025- Secured Borrowing - Exclusive charge on present and future current asset of the
Company

(b) The rate of interest on short term borrowings ranges between 8% and 9%.

(c) Disclosure for borrowings from banks or finanacial institutions on the basis of security of current assets
- Refer Statement 3

The Company has a sanctioned working capital facilities from bank for Rs 400.00 Lacs . The details of
statement filed is given in Statement 2. The Company has been advised by its bankers to exclude stocks
maintained with the Consignee Sales Distributors (CSDs). These stocks form part of the Company''s inventory
as per books. It is for this reason that there is a difference in the Company''s inventory as per its books and
the stock statements submitted to its bank. The company is also not availing any drawing power against
these stocks.

The management assessed that fair value of cash and short-term deposits, trade receivables, trade payables,
cash credit and other current financial assets and liabilities approximate their carrying amounts largely due
to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

40. Fair Value Hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial
instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for
which fair values are disclosed in the financial statements. To provide an indication about the reliability of the
inputs used in determining fair value, the group has classified its financial instruments into the three levels
prescribed under the accounting standard. An explanation of each level follows underneath the table.

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

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable
inputs).

41. Financial Risk Factors

The Company''s business activities are exposed to a variety of financial risks: Market/Business risk, credit
risk, Exchange risk, etc. The Company''s focus is to foresee the unpredictability of financial and business
risks and seek to minimize potential adverse effects of these risks on its business and financial performance.

(i) Business/Market Risk

The primary business/market risk to the company is the price risk on account of the drug pricing regime in
the country. The Indian generic formulations market is currently in the growth phase. It is expected that use
of generic formulations will gradually increase in India. However, cut throat competition, quality issues of
generics manufactured in the country and non existence of organised generic formulations distribution and
retailing system are a cause of concern and is hampering the growth of generic formulations market.

(ii) Credit Risk

The Company has exposure to credit risks associated with sales to various Customers. To mitigate these
credit risks arising out of this, the Company on a regular basis evaluates the credit risk associated with a
customer. Customer where no credit insurance is available, the Company monitors such risk by continuously
monitoring its exposure to such customer. Based on the historical data, the Company has made adequate
provisions for expected loss because of credit risk, which is neither significant nor material.

42. Capital Management

For the purpose of the Company’s capital management, capital includes paid-up equity share capital, share
premium and all other equity reserves attributable to the equity holders. The primary objective of the
Company’s capital management is to maximize the shareholders'' value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and
the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust
its dividend payment ratio to shareholders, return capital to shareholders or issue fresh shares. The Company
monitors capital using a gearing ratio, which is net debt divided by its total capital. The Company includes within its
net debt the cash credit facilities, trade , lease and other payables less cash and cash equivalents.

43. Relationship with Struck off Companies

The information about transaction with struck off Companies (defined under section 248 of the Companies
Act, 2013 or section 560 of Companies Act, 1956) has been determined to the extent such parties have been
identified on the basis of the information available with the Company.

44. Audit Trail

The Ministry of Corporate Affairs (MCA) by the Companies (Accounts) Amendment Rules 2021 and vide
notification dated 24 March 2021 has issued the “Companies (Audit and Auditors) Amendment Rules, 2021
has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts)
Rules, 2014 inserted requiring companies, which uses accounting software for maintaining its books of
account, shall use only such accounting software which has a feature of recording audit trail of each and
every transaction, creating an edit log of each change made in the books of account along with the date when
such changes were made and ensuring that the audit trail cannot be disabled.

As required under above rules, the company uses in-house developed software for its financial accounting and
MIS which works along with Database - Oracle as accounting software for maintaining its books of account
which has a feature of recording audit trail (edit log) facility and the same has been operated throughout
the year for all transactions recorded and the audit trail feature has not been tampered with except that the
software due to the resources constraint did not save the details about the opening balance transfers and
retransfers while it kept a log of the changes in the audit trail. The Company since the Balance Sheet date
enabled audit trail for tracking the details of such opening balance transfer and retransfers.

Further, the audit trail feature was not enabled at the database level for Database - Oracle to log any direct
data changes, used for maintenance of all accounting records by the Company.

As regards the preservation of the audit trail as per the statutory requirements, the same are retained as part
of backups except that in the absence of audit trail relating to direct access to database, there are no trails
available and therefore the same cannot be retained.

45. Figures of the previous year have been regrouped to conform to the requirements of Schedule III.

46. The balance sheet, statement of profit and loss, cash flow statement, statement of changes in equity,
statement of material accounting policy information and the other explanatory notes forms an integral part of
the financial statements of the Company for the year ended March 31,2025.

As per our report of even date attached For and on behalf of the Board of Directors

For Natvarlal Vepari & Co. LLP

(formerly known as Natvarlal Vepari & Co)

Chartered Accountants Saahil Parikh Nilesh Jain

Firm Registration No. 106971W / W101085 (DIN 00400079) (DIN 05263110)

Wholetime Director & CEO Wholetime Director

Nuzhat Khan

Partner Piyush Ajmera Sandeep Kadam

M.No. 124960 ACS No : 58712 Chief Financial Officer

Mumbai May 26, 2025 Company Secretary

---

Mar 31, 2024

x. Provisions, contingent liabilities and contingent assets Provision

A Provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Contingent liabilities

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets

Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.

xi. Retirement and other employee benefits Provident fund

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense when an employee renders the related service.

Gratuity

Gratuity, a post-employment defined benefit obligation is provided on the basis of an actuarial valuation made at the end of each year/period on projected unit credit method.

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.

Compensated absences

The Company has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using Projected Unit Credit method on the additional amount expected to be paid/ availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

Short-term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages etc. and the expected cost of ex-gratia, bonus and performance incentive are recognised in the period in which the employee renders the related service. A liability is recognised for the amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

xii. Foreign currencies Transactions and balances:

i. The functional currency of the Company is the Indian rupee. These financial statements are presented in Indian rupees.

ii. Transactions denominated in foreign currency are recorded at the exchange rate on the date of transaction where the settlement of such transactions are taking place at a later date. The exchange gain/loss on settlement / negotiation during the year is recognised in the statement of profit and loss. In case of advance payment for purchase of assets/ goods/services and advance receipt against sales of products/services, all such purchase/sales transaction are recorded at the rate at which such advances are paid/received.

iii. Foreign currency monetary transactions remaining unsettled at the end of the year are converted at year-end rates. The resultant gain or loss is accounted for in the statement of profit and loss.

iv. Non-monetary items that are measured at historical cost denominated in foreign currency are translated using exchange rate at the date of transaction.

xiii. Fair Value Measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

xiv. Financial instruments

a. Financial assets & financial liabilities Initial recognition and measurement

All financial assets and liabilities are recognised initially at fair value.

In the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset is treated as cost of acquisition. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

• Debt instruments at amortised cost

• Debt instruments at fair value through other comprehensive income (FVTOCI)

• Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

• Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 9 details how the entity determines whether there has been a significant increase in credit risk. For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

De-recognition of financial instruments

A financial asset is de-recognised only when

• The Company has transferred the rights to receive cash flows from the financial asset or

• Retains the contractual rights to receive the cash flows of the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is de-recognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not de-recognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.

A financial liability (or a part of a financial liability) is de-recognized from the Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

b. Derivative financial instruments and hedge accounting

Initial recognition and subsequent measurement

The Company uses derivative financial instruments such as forward currency contracts, interest rate swaps to hedge its foreign currency risks, interest rate risks, respectively.

Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in the statement of profit and loss.

xv. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

xvi. Goods and service tax input credit

Input tax credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilising the credits.

xvii. Taxes

Tax expenses comprise Current Tax and Deferred Tax :

a. Current tax

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

b. Deferred tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

For items recognised in OCI or equity, deferred / current tax is also recognised in OCI or equity.

c. MAT credit

Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognises MAT credit available as an asset only to the extent that there is reasonable certainty that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. The MAT credit to the extent there is reasonable certainty that the Company will utilize the credit is recognised in the statement of profit and loss and corresponding debit is done to the deferred tax asset as unused tax credit.

xviii. Earnings per share

Earnings per share is calculated by dividing the net profit or loss before OCI for the year by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss before OCI for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(viii) Risk Characteristics of the Defined Benefit Plan

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks as follow

(i) Investment Risk : For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

(ii) Market Risk (Discount Rate) : Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

(iii) Longevity Risk : The impact of longevity risk will depend on whether the benefits are paid before retirement age or after . Typically for the benefits paid on or before the retirement age , the longevity risk is not very material.

(iv) Actuarial Risk :

Salary Increase Assumption: Actual Salary increase that are higher than the assumed salary escalation, will result in increase to the Obligation at a rate that is higher than expected.

Attrition / Withdrawal Assumption: If actual withdrawal rates are higher than assumed withdrawal rate assumption, than the benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

40. Fair Value Hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

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

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

41. Financial Risk Factors

The Company''s business activities are exposed to a variety of financial risks: Market/Business risk, credit risk, Exchange risk, etc. The Company''s focus is to foresee the unpredictability of financial and business risks and seek to minimize potential adverse effects of these risks on its business and financial performance.

(i) Business/Market Risk

The primary business/market risk to the company is the price risk on account of the drug pricing regime in the country. The Indian generic formulations market is currently in the growth phase. It is expected that use of generic formulations will gradually increase in India. However, cut throat competition, quality issues of generics manufactured in the country and non existence of organised generic formulations distribution and retailing system are a cause of concern and is hampering the growth of generic formulations market.

(ii) Credit Risk

The Company has exposure to credit risks associated with sales to various Customers. To mitigate these credit risks arising out of this, the Company on a regular basis evaluates the credit risk associated with a customer. Customer where no credit insurance is available, the Company monitors such risk by continuously monitoring its exposure to such customer. Based on the historical data, the Company has made adequate provisions for expected loss because of credit risk, which is neither significant nor material.

42. Capital Management

For the purpose of the Company’s capital management, capital includes paid-up equity share capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximize the shareholders'' value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust its dividend payment ratio to shareholders, return capital to shareholders or issue fresh shares. The Company monitors capital using a gearing ratio, which is net debt divided by its total capital. The Company includes within its net debt the cash credit facilities, trade , lease and other payables less cash and cash equivalents.

43. Relationship with Struck off Companies

The information about transaction with struck off Companies (defined under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956) has been determined to the extent such parties have been identified on the basis of the information available with the Company and the same is relied upon by the auditors.

44. Audit Trail

The Ministry of Corporate Affairs (MCA) by the Companies (Accounts) Amendment Rules 2021 and vide notification dated 24 March 2021 has issued the “Companies (Audit and Auditors) Amendment Rules, 2021 has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

As required under above rules, the company uses in-house developed software for its financial accounting and MIS which works along with Database - Oracle as accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all transactions recorded and the audit trail feature has not been tampered with except that the software due to the resources constraint did not save the details about the opening balance transfers and retransfers while it kept a log of the changes in the audit trail. The Company since the Balance Sheet date enabled audit trail for tracking the details of such opening balance transfer and retransfers.

Further, the audit trail feature was not enabled at the database level for Database - Oracle to log any direct data changes, used for maintenance of all accounting records by the Company.

45. Figures of the previous year have been regrouped to conform to the requirements of Schedule III

46. The balance sheet, statement of profit and loss, cash flow statement, statement of changes in equity, statement of material accounting policy information and the other explanatory notes forms an integral part of the financial statements of the Company for the year ended March 31, 2024

As per our report of even date attached For and on behalf of the Board of Directors

For Natvarlal Vepari & Co.

Chartered Accountants Saahil Parikh Nilesh Jain

Firm Registration No. 106971W (DIN 00400079) (DIN 05263110)

Wholetime Director & CEO Wholetime Director

Nuzhat Khan

Partner Piyush Ajmera Sandeep Kadam

M.No. 124960 ACS No : 58712 Chief Financial Officer

Mumbai May 23, 2024 Company Secretary

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Mar 31, 2017

1 Disclosure as required by Accounting Standard - AS 17 “Segment Reporting”, issued by the Institute of Chartered Accountants of India.

The entire operations of the Company relate to only one segment viz. “Pharmaceuticals”. As such, there is no separate reportable segment under Accounting Standard-AS 17 on Segment Reporting.

2 Disclosure as required by Accounting Standard - AS 20 “Earning Per Share”, issued by the Institute of Chartered Accountants of India.

The Company has not issued any potential diluted equity share and therefore the Basic and Diluted earning per Share will be the same. The earning per share is calculated by dividing the profit after tax by weighted average number of shares outstanding.

3 In the opinion of the Board of Directors, all the assets other than fixed assets and non current investments have value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

4 The Balance Sheet, Statement of Profit & Loss, Cash Flow Statement, Statement of significant accounting policy and other explanatory notes form an integral part of the financial statements of the Company for the year ended on 31^st March, 2017

5 Previous year’s figures have been regrouped and re-arranged wherever necessary to make them comparable.

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Mar 31, 2016

1. contingent asset is neither recognized nor disclosed in the financial statements.

Note: 2) Employer’s contribution includes payments made by the Company directly to its past employees.

3. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

4. The Company’s Gratuity fund is managed by Life Insurance Corporation of India. The plan assets under the fund are deposited under approved securities.

5. Disclosure as required by Accounting Standard - AS 20 “Earning Per Share”, issued by the Institute of Chartered Accountants of India

The Company has not issued any potential diluted equity share and therefore the Basic and Diluted earnings per Share will be the same. The earnings per share is calculated by dividing the profit after tax by weighted average number of shares outstanding.

6. In the opinion of the Board of Directors, all the assets other than fixed assets and noncurrent investments have value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

7. The Balance Sheet, Statement of Profit & Loss, Cash Flow Statement, Statement of significant accounting policy and other explanatory notes form an integral part of the financial statements of the Company for the year ended on 31^st March, 2016

8. Previous year’s figures have been regrouped and re-arranged wherever necessary to make them comparable.

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Mar 31, 2015

1 Disclosure as required by Accounting Standard - AS 17 "Segment Reporting", issued by the Institute of Chartered Accountants of India.

The entire operations of the Company relate to only one segment viz. "Pharmaceuticals". As such, there is no separate reportable segment under Accounting Standard-AS 17 on Segment Reporting.

2 Contingent Liabilities not provided for in respect of :

Particulars 2014-15 2013-14

i Counter Guarantees given to AXIS Bank in respect of guarantees given by the 2,70,175 2,40,885 bank on behalf of the Company to Government Authorities.

ii Estimated amount of contracts remaining to be executed on capital account.(Net 39,51,258 - of Capital Advances)

iii Other moneys for which the Company is contingently liable for tax, excise, - - customs and other matters not accepted by the Company

3 In the opinion of the Board of Directors, all the assets other than fixed assets and non current investments have value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

4 The Balance Sheet, Statement of Profit & Loss, Cash Flow Statement, Statement of significant accounting policy and other explanatory notes form an integral part of the financial statements of the Company for the year ended on 31st March, 2015

5 Previous year's figures have been regrouped and re-arranged wherever necessary to make them comparable.

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Mar 31, 2013

1 Disclosure as required by Accounting Standard - AS 17 "Segment Reporting", issued by the Institute of Chartered Accountants of India The entire operations of the Company relate to only one segment viz. "Pharmaceuticals". As such, there is no separate reportable segment under Accounting Standard-AS 17 on Segment Reporting.

2 Contingent liabilities not provided for in respect of :

Particulars 2012-13 2011-12 (Rs) (Rs)

i Counter Guarantees given to AXIS Bank in 2,22,729 1,58,676 respect of guarantees given by the Bank on behalf of the Company to Government Authorities.

ii Estimated amount of contracts remaining - - to be executed on capital account.(Net of Capital Advances)

iii Other moneys for which the Company is - 11,96,426 contingently liable for tax, excise, customs and other matters not accepted by the Company

3 In the opinion of the Board of Directors, all the assets other than fixed assets and noncurrent investments have value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

4 The Balance Sheet, Statement of Profit & Loss, Cash Flow Statement, Statement of significant accounting policy and other explanatory notes form an integral part of the financial statements of the Company for the year ended on 31st March, 2013.

5 Previous year''s figures have been regrouped and re-arranged wherever necessary to make them parable.

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Mar 31, 2012

1 Disclosure as required by Accounting Standard - AS 17 "Segment "Reporting', issued by the Institute of Chartered Accountants of India

The entire operations of the Company relate to only one segment viz. 'Pharmaceuticals. As such, there is no separate reportable segment under Accounting Standard-AS 17 on Segment Reporting.

2 Contingent liabilities not provided for in respect of :

2011-2012 2010-2011

Rupees Rupees Rupees Rupees

i Corporate Guarantee given to AXIS Bank 1,50,00,000 1,50,00,000 Ltd on behalf of M/s Hale wood Laboratories

Pvt. Ltd, under third party manufacturing arrangement for which the Company holds counter Guarantee.

ii Counter Guarantees given to AXIS Bank & 1,58,676 1,68,024 State Bank of India in respect of guarantees given by the bank on behalf of the Company to Government Authorities.

iii Estimated amount of contracts remaining to - 27,32,000 be executed on capital account.(Net of Capital Advances)

iv Other moneys for which the Company is 11,96,426 - contingently liable for tax, excise, customs and other matters not accepted by the Company

3 In the opinion of the Board of Directors, all the assets other than fixed assets and noncurrent investments have value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

4 Prior period comparatives

The Company has reclassified the published previous year figures to conform to the norms of the Revised Schedule VI. The adoption of the revised Schedule VI does not impact recognition and measurement principles followed for preparation of the financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of Balance Sheet.

5 The Balance Sheet, Statement of Profit & Loss, Cash Flow Statement, Statement of significant accounting policy and other explanatory notes form an integral part of the financial statements of the company for the year ended on 31st March, 2012.

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Mar 31, 2011

31.03.2011 31.03.2010 Rupees Rupees

1. Contingent liabilities not provided for in respect of:

a) Corporate Guarantee given to AXIS Bank Ltd on behalf of Halewood Laboratories 1,50,00,000 1,50,00,000 Pvt. Ltd, under third party manufacturing arrangement for which the Company holds counter Guarantee.

b) Counter Guarantees given to AXIS Bank & State Bank of India in respect 1,68,024 2,60,635 of guarantees given by the bank on behalf of the Company to Government Authorities.

2. Pursuant to scheme of amalgamation (the scheme) of the Harleystreet Pharmaceuticals Ltd. ( HPL) with the company Makers Laboratories Limited, (MLL) under Section 391 to 394 of the Companies Act, 1956 as sanctioned by the Honorable High Court of Judicature at Bombay vide its order dated 25th March, 2011, the assets and liabilities of the said HPL were transferred to and vested in the Company with effect from the appointed date i.e. 1st April, 2010. Accordingly, this scheme of amalgamation has been given effect to in these accounts.

HPL was engaged in the business of manufacturing of pharmaceutical formulations.

The accounting for this amalgamation has been done in accordance with the "Purchase Method "referred in Accounting Standard 14 - Accounting for Amalgamation (AS -14). Accordingly, MLL has accounted for the Scheme in its books of accounts with effect from the Appointed Date i.e. 1st April, 2010 as under :-

I With effect from the Appointed Date, all assets and liabilities appearing in the books of accounts of HPL have been transferred to and vested in MLL and have been recorded by MLL at their fair value.

II. MLL has credited to the Share Capital in its books of account, the aggregate face value of the New Equity Shares to be issued and allotted under the scheme to the equity share holders of HPL.

III. The difference of Rs. 2,85,59,499/- between the fair value of net assets of HPL transferred to MLL, pursuant to this scheme and the value of New Equity Shares to be issued and allotted by MLL to shareholders of HPL has been credited to capital reserve account.

IV. All inter - company balance(s) have been cancelled.

V. 571,440 Equity Shares of MLL of Rupees 10/- each fully paid up are to be issued to the shareholders of HPL under this amalgamation, in the ratio of 6 fully paid up equity shares of Rs. 10/- each of MLL for every 10 fully paid up equity shares of Rs. 10/- each of HPL. The record date fixed for this purpose is 13th May,2011.

VI. The Company shall proceed to issue these equity shares to the shareholders of HPL in due course of time upon receipt of necessary in principle listing and trading permissionsf rom stock exchanges where the Companys share are listed. The Company has already made necessary applications to these stock exchanges in this regard.

3. In view of the aforesaid amalgamation, the figures for the current year are not strictly comparable to those of the previous year.

4. Secured Loan from Axis Bank Ltd is secured by way of mortgage of immovable properties of the Company situated at Mumbai and Dombivli, hypothecation of all plant and machineries both present and future and hypothecation of stock- in-trade and book debts.

5. In the opinion of the Board of Directors, all the Current Assets, Loans & Advances have value on realisation at least equal to the amount at which they are stated in the Balance Sheet

6. Provision for Taxation includes provision for Wealth Tax of Rs. 5,000/- (previous year Rs.5,000/-).

7. Balances with Scheduled Banks include Rs. 2,47,157/- (previous year Rs. NIL) on account of Unclaimed Dividend.

8. The Company has obtained details from Sundry Creditors who are registered under the Micro,Small & Medium Enterprises Development Act, 2006. To the extent that the Company has received information it has evaluated that there are no amounts due to the Creditors who are Registered under the said Act beyond the period of 45 days.

9. Managerial Remuneration:

iii) Company has not recommended any commission to the Wholetime Directors.

10. Related Party Disclosure as required by Accounting Standard -18 issued by the Institute of Chartered Accountant of India: Relationships:

A. Entities where control exists:

Shareholders of Makers Laboratories Ltd.

Kaygee Investments Pvt. Ltd.

Exon Laboratories Pvt. Ltd.

Paschim Chemicals Pvt. Ltd.

Others

Halewood Laboratories Pvt.Ltd.

Ellora Organic Industries Pvt Ltd.

B. Key Management Personnel

Mr. Prashant Godha

Mrs. Purnima Jain

C. Associates

Ipca Laboratories Ltd.

D. Other Related Parties (Entities in which Directors or their Relatives have significant influence)

Nipra Industries Pvt. Ltd.

Kaygee Loparex Pvt. Ltd

Keymed

11. The Company has one segment of activity namely "Pharmaceuticals". As such there is no separate reportable segment under Accounting Standard -17 on Segment Reporting.

12. Previous years figures have been regrouped and re-arranged wherever necessary.

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Mar 31, 2010

1. Contingent liabilities not provided for in respect of:

(a) Corporate Guarantee given to AXIS Bank Ltd on behalf of Halewood Laboratories 1,50,00,000 1,50,00,000 Pvt. Ltd, under third party manufacturing arrangement for which the Company holds counter Guarantee.

(b) Counter Guarantees given to AXIS Bank & State Bank of India in respect 2,60,635 2,98,445 of guarantees given by the bank on behalf of the Company to Government Authorities.

2. Investments

The Company has made provision of Rs. 46,53,821/- towards dimunition in the value of investments in shares of Mangalam Drugs & Organics Ltd.

Notes :-

(a) As the industrial licensing in respect of drugs and pharmaceuticals produced by the Company has been abolished under the Industrial Policy, the particulars of licensed capacity are not stated.

(b) Installed capacity, being of a technical nature is not verified by the Auditors.

(c) Production includes production under contract manufacturing.

(d) Previous years figures are given in bracket.

i) Employers contribution includes payments made by the Company directly to its past employees.

ii) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

iii) The Companys Gratuity fund is managed by Life Insurance Corporation of India. The plan assets under the fund are deposited under approved securities.

3. Secured Loan from Axis Bank Ltd is secured by way of mortgage of immovable properties of the Company situated at Mumbai and Dombivli, hypothecation of all plant and machineries both present and future and hypothecation of stock-in-trade and book debts.

4. In the opinion of the Board of Directors, all the Current Assets, Loans & Advances have value on realisation at least equal to the amount at which they are stated in the Balance Sheet.

5. Provision for Taxation includes provision for Wealth Tax of Rs. 5,000/- (previous year Rs.5,000/-).

6. Balances with Scheduled Banks include Rs. NIL (previous year Rs. NIL) on account of Unclaimed Dividend.

7. The Company has obtained details from Sundry Creditors who are registered under the Micro, Small & Medium Enterprises Development Act, 2006. To the extent that the Company has received information it has evaluated that there are no amounts due to the Creditors who are Registered under the said Act beyond the period of 45 days.

iii) Company has not recommended any commission to the Wholetime Directors.

8. Related Party Disclosure as required by Accounting Standard - 18 issued by the Institute of Chartered Accountants of India: Relationships:

A. Entities where control exists: Shareholders of Makers Laboratories Ltd.

Kaygee Investments Pvt. Ltd. Exon Laboratories Pvt. Ltd. Paschim Chemicals Pvt. Ltd.

Others

Halewood Laboratories Pvt. Ltd. Ellora Organic Industries Pvt Ltd.

B. Key Management Personnel

Mr. Prashant Godha Mrs. Purnima Jain

C. Associates

Ipca Laboratories Ltd. Harleystreet Pharmaceuticals Ltd.

D. Other Related Parties (Entities in which Directors or their Relatives have significant influence)

Nipra Industries Pvt. Ltd. Kaygee Loparex Pvt. Ltd. Keymed

9. The Company has one segment of activity namely "Pharmaceuticals". As such there is no separate reportable segment under Accounting Standard -17 on Segment Reporting.

10. Previous years figures have been regrouped and re-arranged wherever necessary.