Notes to Accounts of Mangalam Drugs and Organics Ltd.

Mar 31, 2024

Terms and conditions

The Company has only one class of equity shares having face value of '' 10 per share. Each holder of equity shares is entitled to one vote per equity share. Dividend is recommended by the Board of directors and is subject to the approval of the members at the ensuing Annual General Meeting except interim dividend. The Board of Directors have a right to deduct from the dividend payable to any member, any sum due from him to the Company.

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

The shareholders have all other rights available to equity shareholders as per the provision of the Companies Act applicable in India read together with Memoranum of Association and Articles of Association of the Company, as applicable.

The Company does not have any holding Company.

Working capital facilities from State Bank of India, Bank of Baroda and Bank of Maharashtra are secured by

a) First Pari Passu charge on the entire current assets of the company (both present & future).

b) Second Pari Passu charge on the entire Property, Plant & Equipment of the company (both present & future)

c) The secured loans are against the personal guarantee given by the Managing director of the company

d) The company has availed unsecured Term Loan from NBFC which are guaranteed by the Directors. These loans are availed at the interest rate of 25 to 27 % p.a

Standalone

Note : 36

Note: :Financial Risk Management

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.

A) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investments in debt securities.The carrying amount of following financial assets represents the maximum credit exposure:

a) Trade and Other Receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However credit risk with regards to trade receivable is almost negligible in case of its residential sale and lease rental business as the same is due to the fact that in case of its residential sell business it does not handover possession till entire outstanding is received. No impairment is observed on the carrying value of trade receivables..

b) Cash and Cash Equivalents

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Board. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

Liquidity risk

Liquidity risk is 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 Company’s approach to managing liquidity is to ensure as far as possible that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed condition, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of surplus funds, bank overdrafts, bank loans, debentures and inter-corporate loans.

The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding.

Note : 38 Capital Management

The company’s objectives when managing capital are to:

Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital. The Company monitors capital on the basis of the carrying amount of debt less cash and cash equivalents as presented on the face of the financial statements. The Company’s objective for capital management is to maintain an optimum overall financial structure. Consistent with others in the industry, the company monitors capital on the basis of the following gearing ratio:

Note: 42 - Earnings per Share (Basic and Diluted)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent (after adjusting for dividend on the preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

Note: 45

The Balance Sheet, Statement of Profit and Loss, Cash Flow Statement, Statement of Changes in Equity, Statement of Significant Accounting Policies and the Other Explanatory Notes forms an integral part of the standalone financial statements of the Company for the year ended March 31, 2024.

REASONS

* EBIT = Earnings before finance costs, tax expenses, exceptional items and other income

** Interest costs include interest on borrowings, interest on lease liabilities and other financial charges, including interest capitalised and disclosed in exceptional

NOTES TO STANDALONE FINANCIAL STATEMENTS Note 47 : Other Statutory information

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

(ii) The Company do not have any transactions with companies struck off under section 248 of Companies Act, 2013 or section 560 of Companies Act 1956

(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

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

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

(a) 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

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

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

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

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

Note 48 :

As on september 30,2023 the Company has acquired the 3010 shares of Mangalam Laboratories Private Limited of '' 100 each. Mangalam Laboratories Private Limited became wholly owned subsidiary of the Comapny.The wholly owned subsidiary consequently is not a material subsidiary of the Company.

Olcu lUdUlie

Note 49 :

The Board of Directors of the Company at its meeting held on March 15, 2024 had considered and approved the scheme of Merger by Absorption of Mangalam Laboratories Private Limited ("First Transferor Company") and Shri JB Pharma Private Limited (Formerly known as Shri JB Pharma LLP) ("Second Transferor Company") with Mangalam Drugs and Organics Limited ("Transferee Company") and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The Scheme is subject to the necessary statutory and regulatory approvals including the approvals of Hon’ble National Company Law Tribunal, the shareholders and creditors of each of the companies. As on date, the Scheme is pending for disposal at both Stock Exchanges who shall issue No Objection Certificate under Regulation 37 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Note 50 :

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

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Mar 31, 2023

9. Provisions, Contingent Liabilities and Contingent Assets

Provision is recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that there will be an outflow of resources that will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimate.

Contingent Liabilities are disclosed unless the possibility of outflow of resources is remote.

Contingent Assets are neither recognized nor disclosed in the financial statements.

10. Revenue Recognition

Revenue from sale of goods and services:

Revenue from sale of products and services are recognised at a time on which the performance obligation is satisfied over time or at a point in time. The period over which revenue is recognised is based on right to payment for performance completed. In determining whether an entity has right to payment, the entity shall consider whether it would have an enforceable right to demand or retain payment for performance completed to date if the contract were to be terminated before completion for reasons other than entity’s failure to perform as per the terms of the contract. An asset is transferred when (or as) the customer obtains control of that asset.

Transaction price is the amount of consideration to which an company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of the transaction prices for the time value of money

Interest and Dividend Income: Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income is recognized when the Company’s right to receive dividend is established, which is generally when shareholders approve the dividend.

Export Incentive: Incentive on Export Income is recognized when certainty of receipts is established.

Insurance Claim: Claims receivable are accounted at the time when such income has been earned by the Company depending on the certainty of receipts.

11. Depreciation

Depreciation on PPE is provided to the extent of depreciable amount on the Straight Line Method (SLM). Depreciation is provided based on useful life of the assets as prescribed in Schedule II of The Companies Act, 2013.

The estimated useful lives are as follows:-

12. Foreign currency reinstatement and translation:

Transactions in foreign currencies are initially recorded by the Company at rates prevailing at the date of the transaction. Subsequently monetary items are translated at closing exchange rates as on balance sheet date and the resulting exchange difference recognised in statement of profit and loss. Differences arising on settlement of monetary items are also recognised in statement of profit and loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the transaction. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the exchange rates prevailing at the date when the fair value was determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively). Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss, within finance costs. All other finance gains / losses are presented in the statement of profit and loss on a net basis.

In case of items which are covered by foreign exchange contracts the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and premium paid on forward contracts if any is recognised over the life of the contract.

13. Borrowing Costs

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

14. Earnings per equity share

Basic earnings per equity share is computed by dividing the net profit or loss attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit or loss attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period present.

15. Cash Flow statement

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

16. Employee Benefits

Short Term Employment 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 are recognized in the period in which the employee renders the related service. A liability is recognised for the amount expected to be paid if the Company has 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.

Post Employment Employee Benefits

Retirement benefits to employees comprise payments to government provident funds, gratuity fund and Employees State Insurance.

Defined Contribution Plans

The Company’s contribution to defined contributions plans such as Provident Fund, Employee State Insurance are recognised in the Statement of Profit and Loss in the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective Funds.

Defined Benefit Plans

Gratuity liability is defined benefit obligation. The Company’s net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value.

The present value of the obligation under such defined benefit plan is determined based on actuarial valuation by an independent actuary, using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government securities as at the Balance Sheet date.

Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income. Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognised in Statement of Profit and Loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in Statement of Profit and Loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Actuarial gains/losses are recognized in the other comprehensive income.

17. Income Taxes Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

Minimum alternative tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay income tax higher than that computed under MAT, during the year that MAT is permitted to be set off under the Income Tax Act, 1961 (specified year). In the year, in which the MAT credit becomes eligible to be recognized as an asset the said asset is created by way of a credit to the Statement of profit and loss and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay income tax higher than MAT during the specified year.

Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full financial year.

18. Fair value measurement

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.

For cash and other liquid assets, the fair value is assumed to approximate to book value, given the short term nature of these instruments. For those items with a stated maturity exceeding twelve months, fair value is calculated using a discounted cash flow methodology.

A fair value measurement of a non-financial asset considers a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

• 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 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the company has determined classes of assets and liabilities based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

19. Government grants

Government grants/ subsidies are recognised when there is a reasonable assurance that the Company will comply with all the conditions attached to them and that the grant/ subsidy will be received. The Company has determined that reasonable assurance is established upon receipt of sanction letter approving the incentive amount in accordance with the respective state industrial promotion subsidy.

20. Cash and cash equivalents

Cash and cash equivalents in the Balance sheet comprises Cash at bank and on hand.

21. Segmental reporting

As the Company''s business activity falls within a single primary Business Segment Viz. “Manufacturing of Bulk Drugs” and hence does not have any additional disclosure to be made under Ind AS-108 on “Operating Segments”.

22. Current and non-current classification

The Company presents assets and liabilities in statement of financial position based on current/non-current classification.

The Company has presented non-current assets and current assets before equity, non-current liabilities and current liabilities in accordance with Schedule III, Division II of Companies Act, 2013 notified by MCA.

An asset is classified as current when it is:

a) Expected to be realised or intended to be sold or consumed in normal operating cycle,

b) Held primarily for the purpose of trading,

c) Expected to be realised within twelve months after the reporting period, or

d) 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 classified as current when it is:

a) Expected to be settled in normal operating cycle,

b) Held primarily for the purpose of trading,

c) Due to be settled within twelve months after the reporting period, or

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

All other liabilities are classified as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. Deferred tax assets and liabilities are classified as non-current assets and liabilities. The Company has identified twelve months as its normal operating cycle.

Note: :Financial Risk Management

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.

A) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers and investments in debt securities.The carrying amount of following financial assets represents the maximum credit exposure:

a) Trade and Other Receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However credit risk with regards to trade receivable is almost negligible in case of its residential sale and lease rental business as the same is due to the fact that in case of its residential sell business it does not handover possession till entire outstanding is received. No impairment is observed on the carrying value of trade receivables.

b) Cash and Cash Equivalents

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Board. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

Liquidity risk

Liquidity risk is 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 Company’s approach to managing liquidity is to ensure as far as possible that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed condition, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of surplus funds, bank overdrafts, bank loans, debentures and inter-corporate loans. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding.

Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-sensitive instruments as a result of Such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to commodity prices and the market value of its investments.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates.

Securities and Exchange Board of India (SEBI) conducted an investigation in the matter of trading activities of certain entities in the script of Mangalam Drugs and Organics Limited (“the Company”) for the period March 17, 2015 to December 31,2015. On the basis of above investigation, the SEBI had issued a Show Cause Notice (SCN) dated December 31,2019 to the Company and the certain entities / individuals part of the promoter and promoter group for inter-alia, alleging certain compliance / disclosure lapses on the part of the Company in relation to preferential allotment of warrants to one of the promoter group entities which were undertaken in September 2015. The Company had suitably replied to the SCN and also attended the personal hearing scheduled by the SEBI. SEBI through its whole-time member, had passed an order dated September 22, 2020 (SEBI Order) for violation of Regulation 77(2) and 77(3) of SEBI (ICDR) Regulations, 2009 r/w Regulation 169(2) of SEBI (ICDR) Regulations 2018 and Section 12A(a),(b),(c) of SEBI Act, 1992 r/w Regulations 3(a), (b),(c),(d) and 4(1) of SEBI (PFUTP) Regulation, 2003 and through SEBI Order, the Company and the certain entities / individuals part of the promoter and promoter group have been restrained from accessing the securities market through issue of securities or subscription to securities, directly or indirectly, for a period 6 months and certain monetary penalties have been imposed on each of them. The Company and certain entities / individuals part of the promoter and promoter group had filed an Appeal before the Securities Appellate Tribunal (SAT) on November 6, 2020 against SEBI Order and prayed for suitable reliefs and /or stay orders. The Hon’ble SAT granted the interim reliefs vide its Order dated December 10, 2020 (SAT Interim Order) by directing that the effect and operation of the order passed by the SEBI shall remain stayed provided the Company and entities / individuals part of the promoter and promoter group (Appellants) deposit an amount mentioned by the SAT before the SEBI within 4 (four) weeks from the date of SAT Interim Order. The amount so deposited shall be subject to the result of the appeal. The application for stay filed by appellants was accordingly disposed of. Appellants had deposited Rs. 25 Lakhs with SEBI as per Hon’ble SAT Interim Order and the final order in the matter is awaited.

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

(a) 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

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

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

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

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

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Mar 31, 2018

Note:

Working capital facilities from State Bank of India. Indian Bank. Central Bank of India and Punjab and Maharashtra Co. op. Bank Ltd is secured by

a) First Pari Passu charge on the entire current assets of the company(both present & future).

b) Second Pari Passu charge on the entire fixed assets of the company(both present & future)

Note: 1 - 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, it 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: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.

The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximates the fair value because there is wide range of possible fair value measurements and the costs represents estimate of fair value within that range.

The Management considers that the carrying amount of financials assets and financial liabilities carried at amortised cost approximates their fair values.

NOTE : 2

Note: :Financial Risk Management

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.

A) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investments in debt securities.

The carrying amount of following financial assets represents the maximum credit exposure:

a) Trade and Other Receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However credit risk with regards to trade receivable is almost negligible in case of its residential sale and lease rental business as the same is due to the fact that in case of its residential sell business it does not handover possession till entire outstanding is received. No impairment is observed on the carrying value of trade receivables.

b) Cash and Cash Equivalents

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Board. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

Liquidity risk

Liquidity risk is 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 Company’s approach to managing liquidity is to ensure as far as possible that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed condition, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of surplus funds, bank overdrafts, bank loans, debentures and inter-corporate loans.

The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding.

Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to commodity prices and the market value of its investments.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates.

Note: 3 - Capital management

The company’s objectives when managing capital are to:

- Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

The Company monitors capital on the basis of the carrying amount of debt less cash and cash equivalents as presented on the face of the financial statements. The Company’s objective for capital management is to maintain an optimum overall financial structure.

Consistent with others in the industry, the company monitors capital on the basis of the following gearing ratio:

Note: 4 - Earnings per Share (Basic and Diluted)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

Note: 5 - First time adoption of IND AS

Explanation to transition to Ind AS

Ind AS 101 -“First-time Adoption of Indian Accounting Standards” requires that all Ind AS and interpretations that are issued and effective for the first Ind AS financial statements which is for the year ended March 31, 2018 for the Company, be applied retrospectively and consistently for all financial years presented, except the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as described below. The Company has recognised all assets and liabilities whose recognition is required by Ind AS and has not recognised items of assets or liabilities which are not permitted by Ind AS, reclassified items from previous GAAP to Ind AS as required under Ind AS and applied Ind AS in measurement of recognised assets and liabilities.

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

Derecognition of financial assets and financial liabilities

The Company has applied the de-recognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after the transition date.

Classification and measurement of financial assets

The Company has assessed conditions for classification of the financial assets on the basis of the facts and circumstances that were exist on the date of transition to Ind AS.

Deemed cost of property. plant and equipment and intangible assets

On transition to Ind AS, the Company has elected to continue with the carrying value of all assets recognised as at April 01, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment and intangible assets.

Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances as at the date of transition to Ind AS. The Company has elected to apply this exemption for its investments in certain equity instruments.

Fair value measurement of financial assets and financial liabilities at initial recognition

The Company has applied the requirements in paragraph B5.1.2A (b) of Ind AS 109 prospectively to transactions entered into on or after the date of transition to Ind AS. This exemption has been availed by the Company.

Notes on reconciliations between previous GAAP and Ind AS

a) Investments at fair value through profit or loss

Under Indian GAAP, the company recognised current investments in quoted equity shares at lower of cost or fair market and non-current investments at cost less provisions for diminution in the fair value of investments, if any. Under Ind AS, gains on investments have been measured at fair value through profit or loss and gains or losses are recognised in the statement of profit and loss.

b) Employee benefits

Under previous GAAP, actuarial gains and losses were recognised in statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of net defined benefit liability / asset which is recognised in other comprehensive income in the respective periods.

c) Effect of transition to Ind AS on Standalone Cash Flow Statement for the year ended March 31, 2017

Net increase in cash and cash equivalents represents movement in cash credit facilities considered as a component of cash and cash equivalents under Ind AS which as per previous GAAP, was considered as financing activity. Other Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities and has no impact on the net cash flow for the year ended 31st March, 2017 as compared with the previous GAAP.

Note: 6

The Balance Sheet, Statement of Profit and Loss, Cash Flow Statement, Statement of Changes in Equity, Statement of Significant Accounting Policies and the Other Explanatory Notes forms an integral part of the financial statements of the Company for the year ended March 31, 2018.

Note: 7 - Segment Information

Segment revenue

Sales between segments are carried out at arm’s length and are eliminated on consolidation. The segment revenue is measured in the same way as in the statement of profit or loss.

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Mar 31, 2016

Note No.1.

The balances in the accounts of Debtors and Creditors are as appeared in the books of account and subject to confirmation.

Note No.2.

In the opinion of the Director’s Current Assets, Loans and Advances, if realized in ordinary course of the business have on realization at least the value at which they are stated in the Balance Sheet.

Note No.3.

Number of employees in respect of remuneration of '' 60,00,000/-P. A. or more if employed throughout the financial year (or '' 5,00,000/-p.m. if employed for the part of the period) is NIL.

Note No.4.

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

Note No.5. Segment Information.

1. Company’s operations are predominantly related to the manufacture of bulk drugs, as such there is only one primary reportable segment. Secondary reportable segments are identified taking into account the geographical markets available to the products.

Note No. 6. Employee Benefits:-

Defined benefit plan as per actuarial valuation on March 31, 2016

Note No. 7.

Previous year figures have been regrouped/restated wherever necessary to confirm with this periods classification.

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Mar 31, 2015

1. Terms / Right attached to equity shares

The Company has one class of issued shares referred to as equity shares having a par value Rs 10/-each holder of equity shares is entitled to one vote per share. The dividend proposed by the board of directors, If any,is subjected to the approval of shareholders in Annual General Meeting.In the event of liqauidation of the Company the holder of the equity shares will be entitled to receive remaining assets of the Company after settlement of all preferential amount.

The distribution will be in proportion to the number of equity shares held by the equity shareholders.

2. CONTINGENT LIABILITIES:

PARTICULARS CURRENT PREVIOUS YEAR YEAR Amount in Rs Amount in Rs.

A) Performance Guarantees/ Bonds

(i) Guarantee executed in favor of Assistant Collector of Customs 17,68,867 -

(ii) Guarantee executed in favor of Export Parties. 68,300 68,300

(iii) Guarantee executed in favor of Central Excise 8,49,750 14,87,063

B) Others

(iv) Guarantee given to GSPC Gas 72,58,388 75,12,591 Co Ltd

(vi) Guarantee given to GPCB 2,00,000 7, 00,000

3. The balances in the accounts of Debtors and Creditors are as appeared in the books of account and subject to confirmation.

4. In the opinion of the Director's Current Assets, Loans and Advances, if realised in ordinary course of the business have on realisation at least the value at which they are stated in the Balance Sheet.

5. Number of employees in respect of remuneration of Rs. 60,00,000/-P. A. or more if employed throughout the financial year (or Rs. 5,00,000/- if employed for the part of the period) is NIL.

6. There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2015.This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

Related party disclosures as required by Accounting Standard - AS 18 "Related parties disclosures" issued by Institute of Chartered Accountants of India are given below:

A) Associate Companies and others.

* Raga Organics Private Ltd.

* Mangalam Laboratories Pvt. Ltd.

B) Key Management Personnel

* Shri Govardhan M. Dhoot

* Shri Subhash C.Khattar

* Shri Rajendraprasad K. Mimani (Resigned as Director w.e.f 02.02.2015)

* Smt Meenal Sukhani.(Appointed as Director w.e.f 21.10.2014)

* Shri Brijmohan M.Dhoot(Appointed as Director w.e.f 02.05.2015)

7. Previous year figures have been regrouped/restated wherever necessary to confirm with this periods classification.

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Mar 31, 2014

Note No.1. CONTINGENT LIABILITIES:

PARTICULARS CURRENT PREVIOUS YEAR YEAR Amount in Rs Amount in Rs.

A) Performance Guarantees/ Bonds

(i) Guarantee executed in favor of Assistant Collector of Customs - 19,85,000

(ii) Guarantee executed in favor of Export Parties. 68,300 68300

(iii) Guarantee executed in favor of Central Excise 14,87,063 15,21,053

B) Others

(iv) Guarantee given to GSPC Gas Co Ltd 75,12,591 67,28,843

(vi) Guarantee given to GPCB 7, 00,000 8,00,000

Note No.2.

The balances in the accounts of Debtors and Creditors are as appeared in the books of account and subject to confirmation.

Note No.3

In the opinion of the Director''s Current Assets, Loans and Advances, if realised in ordinary course of the business have on realisation at least the value at which they are stated in the Balance Sheet.

Note No.4.

Number of employees in respect of remuneration of Rs. 60,00,000/-P. A. or more if employed throughout the financial year (or Rs. 5,00,000/- if employed for the part of the period) is NIL.

Note No.5.

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

Note No.6. Segment Information.

1. Company''s operations are predominantly related to the manufacture of bulk drugs, as such there is only one primary reportable segment. Secondary reportable segments are identified taking into account the geographical markets available to the products.

Secondary Segments – Geographical Segments

Certain assets of the company are used by different segments for different portion of the accounting period; hence the value of the assets cannot be allocated to the segments.

Note No. 7.

Related party disclosures as required by Accounting Standard – AS 18 "Related parties disclosures" issued by Institute of Chartered Accountants of India are given below:

A) Associate Companies and others.

Raga Organics Private Ltd. Mangalam Laboratories Pvt. Ltd.

B) Key Management Personnel

Shri Govardhan M. Dhoot

Shri Subhash C.Khattar

Shri Rajendraprasad K. Mimani

C) Relatives of Key Management Personnel

Shri Brijmohan M.Dhoot

Note No. 8.

Previous year figures have been regrouped/restated wherever necessary to confirm with this periods classification.

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Mar 31, 2013

Note No. 1

The balances in the accounts of Debtors and Creditors are as appeared in the books of account and subject to confrmation.

Note No. 2

In the opinion of the Director''s Current Assets, Loans and Advances, if realised in ordinary course of the business have on realisation at least the value at which they are stated in the Balance Sheet.

Note No. 3

Number of employees in respect of remuneration of Rs. 60,00,000/- p.a. or more if employed throughout the fnancial year (or Rs. 5,00,000/- if employed for the part of the period) is NIL.

Note No. 4

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identifed on the basis of information available with the Company.

Note No. 5 SEGMENT INFORMATION

1. Company''s operations are predominantly related to the manufacture of bulk drugs, as such there is only one primary reportable segment. Secondary reportable segments are identifed taking into account the geographical markets available to the products.

Secondary Segments – Geographical Segments

Certain assets of the company are used by different segments for different portion of the accounting period; hence the value of the assets cannot be allocated to the segments.

Note No. 6

Related party disclosures as required by Accounting Standard – AS 18 "Related parties disclosures" issued by Institute of Chartered Accountants of India are given below:

A) Associate Companies and others. Raga Organics Private Ltd. Mangalam Laboratories Pvt. Ltd.

B) Key Management Personnel Shri Govardhan M. Dhoot Shri Subhash C. Khattar

Shri Rajendraprasad K. Mimani

C) Relatives of Key Management Personnel Shri Brijmohan M. Dhoot

Note No. 7

Previous year fgures have been regrouped/restated wherever necessary to confrm with this periods classifcation.

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Mar 31, 2012

1. CONTINGENT LIABILITIES:



PARTICULARS CURRENT PREVIOUS YEAR YEAR Amount in Rs. Amount in Rs.

A) Performance Guarantees/ Bonds

(i) Guarantee executed in favor of Assistant Collector of Customs 19,85,000 19,85,000

(ii) Guarantee executed in favor of Export Parties. 68,300 -

(iii) Guarantee executed in favor of Central Excise 8, 83,740 8, 83,740

B) Others

(iv) Guarantee given to GSPC Gas Co Ltd_ 66,01,729 45,76,240

(v) Guarantee given to Corporate - 56,19,34,000

(vi) Guarantee given to GPCB 8,00,000 -

(vii) Guarantee given to Sale Tax (Gujarat) 2,70,869 -

2. The balances in the accounts of Debtors and Creditors are as appeared in the books of account and subject to confirmation.

3. SECURED LOANS

I) Term loan from State Bank of India, IDBI Bank and Punjab and Maharashtra Co. Op. Bank Ltd bank are secured by the way of;

- First Pari-passu charge on entire fixed assets of the company.

- Second Pari-passu charge on entire current assets of the company.

II) Working Capital Facilities from State Bank of India, IDBI Bank Ltd and Punjab and Maharashtra Co-Op. Bank Ltd. is secured by

- First charge on the entire current assets of the company on pari-passu basis

- Second charge on the entire fixed assets of the company on pari-Passu basis.

4. In the opinion of the Director's Current Assets, Loans and Advances, if realized in ordinary course of the business have on realisation at least the value at which they are stated in the Balance Sheet. *

5. Number of employees in respect of remuneration of Rs. 24,00,000/-P. A. or more if employed throughout the financial year (or Rs. 2,00,000/- if employed for the part of the period) is NIL.

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

7. Related party disclosures as required by Accounting Standard - AS 18 " Related parties disclosures" issued by Institute of Chartered Accountants of India are given below :

A) Associate Companies and others Raga Organics Private Ltd.

Mangalam Laboratories Pvt. Ltd.

B) Key Management Personnel Shri Govardhan M. Dhoot Shri Subhash C.Khattar Shri Rajendraprasad K. Mimani

C) Relatives of Key Management Personnel Shri Brijmohan M. Dhoot

c) Terms / Right attached to equity shares

The Company has one class of issued shares referred to as equity shares having a par value Rs 10/-each holder of equity shares is entitled to one vote per share. The dividend proposed by the board of directors, If any, is subjected to the approval of shareholders in Annual General Meeting. In the event of liqauidation of the Company the holder of the equity shares will be entitled to receive remaining assets of the Company after settlement of all preferential amount The distribution will be in proportion to the number of equity shares held by the equity shareholders.

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Mar 31, 2010

1. CONTINGENT LIABILITIES:

PARTICULARS CURRENTYEAR PREVIOUS YEAR

Amount in Rs Amount in Rs.

A) Performance Guarantees/ Bonds

(i). Guarantee executed in favor of Assistant Collector of 20,53,300 33,04,936 Customs

(ii) Guarantee executed in favor of Export Parties. 6,26,824 7,41,500

(iii) Guarantee executed in favor of Central Excise 8,83,740 8,83,740

B) Others

(iv) Guarantee given to GSPC Gas Co Ltd 41,07,513 41,07,513

(v) Guarantee given to Corporate 56,19,34,000 56,19,34,000

2. The balances in the accounts of Debtors and Creditors are as appeared in the books of account and subject to confirmation.

3. SECURED LOANS

i) Term loan from State Bank of India and IDBI Bank are secured by the way of;

a) First Pari Passu charge on the entire fixed assets of the company.

b) Second Pari Passu charge on the entire current assets of the company.

ii) Working Capital Facilities from State Bank of India and l.D.B.I.Bank Ltd. is secured by

a) First hypothecation charge on the entire current assets of the company on pari passu basis.

b) Second charge on the entire fixed assets of the company on Pari Passu basis.

4. In the opinion of the Directors Current Assets, Loans and Advances, if realised in ordinary course of the business have on realisation at least the value at which they are stated in the Balance Sheet.

5. Number of employees in respect of remuneration of Rs. 24,00,000/-P. A. or more if employed throughout the financial year (or Rs. 2,00,000/- if employed for the part of the period) is NIL.

6. Secured Loans include Rs. 1,90,50,000/-repayable within one year.

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

8. Related party disclosures as required by Accounting Standard - AS 18 " Related parties disclosures" issued by Institute of Chartered Accountants of India are given below :

A) Associate Companies and others *

- Raga Organics Private Ltd.

- Mangalam Laboratories Pvt. Ltd.

B) Key Management Personnel

- Shri Govardhan M. Dhoot

- Shri Subhash C.Khattar

- Shri Rajendraprasad K. Mimani

C) Relatives of Key Management Personnel

- Shri Brijmohan M. Dhoot

9. Previous year figures have been regrouped/restated wherever necessary to confirm with this periods classification.