Notes to Accounts of Sunil Healthcare Ltd.

Mar 31, 2024

2 (ii) Leases

Company as a lessee

The Company has lease contracts for lands and buildings used In Its operations. The Company''s obligations under Its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased asset.

The Company also has certain leases with lease terms of 12 months or less and with low value of lease rent. The Company applies the shortterm lease'' and ''lease of low-value assets'' recognition exemptions for these leases.

The Company has single class of equity shares having a par value of Rs. 10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the company''s residual assets on winding up. The equity shares are entitled to receive dividend as declared from time to time. Dividend, if any, proposed by the Board of Directors is subject to approval of shareholders in an annual general meeting except in the case of interim dividend. The voting rights of equity shareholders on a poll (not on show of hands) are in proportion to their share of the paid-up equity share capital of the Company.

The Company has issued 5,82,500, 0.01°/o Redeemable non cumulative preference shares of Rs. 100 each at a premium of Rs. 100 each and are redeemable at a premium of Rs. 100 each upon expiry of 20 years from the date of allotement i.e. 4th July, 2019. These preference share holders have priority over equity share holders on dividend payment and capital repayment in case of winding up of the Company. The voting rights of the persons holding the Preference Shares shall be in accordance with the provisions of Section 47 and other applicable provisions, if any, of the Companies Act, 2013.

(a) Working capital facilities from bank is secured by first charge by way of hypothecation of inventories, receivables, bills, and other chargeable current assets of the Company (both present and future) and extension of first mortgage / hypothecation charge on the entire Property, Plant and Equipment of the Company except certain Property, Plant and Equipment financed by bodies corporate . The same is also personally guaranteed by Chairman cum Managing director and a relative and carries interest rate of 9.26% - 11.15% per annum linked with 1 year MCLR (previous year -11.15% per annum linked with 1 year MCLR).

(b) Unsecured loan of Rs. 100.00 Lakhs (31st March, 2023: Rs. Nil lakhs) from a body corporate is repayable in the year 2024-25 and carries interest rate 14.00% per annum.

As per the terms of the contract with its customers, all performance obligations are completed at point of time since the Company has a right to receive consideration from its customers for all completed performance obligations. Accordingly, the Company has availed the practical expedient available under paragraph 121 of Ind AS 115 and dispensed with the additional disclosures with respect to performance obligations that remained unsatisfied (or partially unsatisfied} at the balance sheet date. Further, since the terms of the contracts directly identify the transaction price for each of the completed performance obligations, in all material respects, there are no elements of transaction price which have not been included in the revenue recognised in the Financial Statement. Also, there is no difference between the contract price and the revenue from contract with customers.

a} For Unsatisfied performance obligation (contract liabilities}, refer note no.22.

b) The above revenues have been recongnised at point of time.

c) Payment terms with customers generally ranges between 0 to 150 days from the completion of performance obligation. Considering the same, the Company elects to use practical expedient as given in IND AS 115 "Revenue from contracts with customers”, hence there are no significant financing component in any transaction with the customers.

d) Sale of the products within india Rs. 7,231.26 lakhs (Previous Year Rs. 8,446.72 lakhs) and outside india Rs. 1,737.49 lakhs (Previous Year Rs. 2,736.23 lakhs) are mainly through intermediaries.

e) For contract assets and balances, refer note no. 7.

33 Earning per Share (EPS)

Basic EPS amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit/(loss) attributable to equity holders (after adjusting impact on profit of dilutive potential equity shares) by the aggregate of weighted average number of equity shares outstanding during the year and the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

34	Contingent liabilities, contingent assets and commitments
	Particulars	As at	As at
		31st March, 2024	31st March, 2023
A	Contingent liabilities in respect of: Claims against the Company not acknowledged as debts
(i)	Demand for interest and penalty on delay deposit of provident fund under the Employees Provident Fund and Miscellaneous Provisions Act, 1952, disputed by the Company.	2.72	2.72
(ii)	Demand for Electricity fuel charges raised by Jaipur Vidyut Vitran Nigam Limited (JVVNL) and disputed by the Company. (including amount paid under protest Rs. 30.40 lakhs)	74.00	-
	In the Opinion of the management, the Company has fair chances of success in the above case and thus chances of liability devolving on the Company is not probable and hence no provision in respect thereof has been made in the books.
B	Commitments
(i)	Estimated value of contracts (net of advances) remaining to be executed on capital account and not provided for	211.54	6.28
	(Advances paid Rs.49.11 Lakhs in current year (31 March 2023: Rs.6.28 Lakhs))

C Others, not considered as Contingent liability

(i) The Company has procured certain capital goods in earlier years under EPCG Scheme at concessional rate of duty against commitment to fulfil export obligation. As on 31st March, 2024 the Company is contingently liable to pay differential custom duty Rs. 123.55 lakhs (31 March 2023: Rs. 123.55 lakhs) on balance fulfilment of export obligation. In view of past export performance and future projections, the management is hopeful of completing the export obligation within stipulated time and expect no cash outflow on this account.

(ii) The Company has procured certain raw materials under advance license scheme without payment of custom duty against commitment to fulfil export obligation. As on 31st March, 2024 the Company is contingently liable to pay custom duty Rs. 183.02 Lakhs (31 March 2023-Rs.24.86 lakhs) on balance fulfilment of export obligation. In view of past export performance and future projections, the management is hopeful of completing the export obligation within stipulated time, and expect no cash outflow this account.

(ii) Defined Benefit Plan:

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Gratuity liability is being partially contributed to the scheme formed and administrated by LIC.

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2024. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

F. Description of Risk Exposures:

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 -

A) Salary Increases- Higher than expected increase in salary will increase the defined benefit obligation.

B) Investment Risk - Assets / liabilities mismatch and actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability / Assets.

C) Discount Rate - Reduction in discount rate in subsequent valuations can increase the plan''s liability.

D) Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that includes mortality, withdrawals, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends on the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the employee benefit of a short career employee typically costs less per year as compared to a long service employee.

B. Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial Instruments by valuation technique: Level 1 inputs are quoted prices /net asset value (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date;

Level 2 inputs are inputs, other than quoted prices (unadjusted) included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the asset or liability.

The Company has assessed that the fair value of trade receivables, cash and cash equivalents, other bank balances, other current financial assets, trade payables and other current financial liabilities approximate to their carrying amounts largely due to the short-term maturities of these instruments. Where such items are non-current in nature, the same has been classified as Level 3 and fair value determined present value. Similarly, unquoted equity instruments in subsidiaries company have been considered at cost less impairment, if any, and has been excluded in the fair value measurement disclosed below.

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. The following methods and assumptions were used to estimate the fair values:

- Borrowings are evaluated by the Company based on parameters such as interest rates.

- The fair value of other financial liabilities, is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

- The fair values of the Company''s interest-bearing borrowings and loans are determined by using DCF method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. No own non- performance risk as at 31st March 2024 was assessed. The following table provides the fair value measurement hierarchy of the Company''s assets and liabilities.

Significant unobservable inputs considered in Level 3 Fair valuation are as under:-

(I) Valuation of lease hold Land (right of use Assets) was carried out by Market Approach uses prices and other relevant Information generated by market transactions involving comparable assets and considers qualitative and quantitative factors (Comparable companies valuation method) by using market multiples or matrix pricing (compare with Benchmarks) in financial year 2023-24. It reveals that similar properties are available for sale in nearby area in the range of Rs 20,500 to Rs 22,000 per Square Yard depending upon various attributes such as size, shape, location, frontage, frontage to depth ration, marketability, demand & supply of similar properties in the said locality.

(ii) (a) In the year of issuance, valuation of preference shares was carried out by independent valuer using NPV of projected cash flows based on discounted cash flow method, wherein NPV of the preference shares measured based on security available, statement of credit rating of instruments, trading in stock exchange, etc.

The estimated fair value of RPS is Rs 67.98 Lakhs as on allotment date i.e. 4th July 2019 considering repayment period of 20 years and market interest rate of 14.20%.

(b) Rate of return considered 14.20% which includes risk free return of 7.20% based on 20 years bond rate and Risk premium of 7.00%. Risk premium has been considered due to the reasons like lack of liquidity due to unquoted instruments, declining operations since March 2019, customer concentration Risk, other business risk as per credit rating which has also downgraded.

II. Financial risk management objectives and policies

The Company''s principal financial liabilities, comprise borrowings, trade and other payables and lease liabilities. The main purpose of these financial liabilities is to finance and support the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, cash and cash equivalents and other bank balances that derive directly from its operations. The Company also holds investment in subsidiary companies measured at cost , unless otherwise as stated.

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the processes to ensure that executive management controls risks through the mechanism of properly defined framework.

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

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

ii. Credit risk

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

Trade receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate. The Company Management has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes market check, industry feedback, past financials and external ratings, if they are available, and in some cases bank references. Sale limits are established for each customer and reviewed quarterly. Any sales exceeding those limits require approval from the President of the Company. In monitoring customer credit risk, customers are reviewed according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties.

The Company establishes a provision for expected credit losses that represents its expected credit losses in respect of trade receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

The Company has taken the credit insurance policy for its domestic customers to mitigate the financial loss in case default in payment. Risk on export customers is covered through the ECGC Ltd.

The gross carrying amount of trade receivables is Rs. 4,923.18 Lakhs (31 March 2023: Rs.3,717.82 Lakhs ).

iii. 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 fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected future cash flows. In addition, the Company''s liquidity management strategy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

iv. Market risk

Market risk Is the risk that the fair value of future cash flows of a financial Instrument will fluctuate because of changes In market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits. The Company is not effected by equity price risk.

a. Currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD and small exposure in Euro. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company''s functional currency (Rs.). The risk is measured through a forecast of highly probable foreign currency cash flows. Currency risks related to the principal amounts of the Company''s foreign currency payables, have been naturally hedged.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company''s policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Interest rate risk

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 loan given and borrowings taken. Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

41 Segment information

Information about geographical areas

The board of directors of the Company which have been identified as being the chief operating decision maker (CODM), evaluate the Company''s performance. Based on identical products the Company deals in, which have similar risks and rewards, the entire business has been considered as a single segment i.e. Empty Capsules, in terms of Ind AS-108 on segment reporting.

The Empty Capsules segment is managed on a worldwide basis, but manufacturing facilities and sales offices are primarily in India.

The geographic information analyses, the Company''s revenue and non-current assets by the Company''s country of domicile and other countries. In presenting the geographic information, segment revenue has been based on the geographic location of customers and segment assets were based on the geographic location of the assets.

Major Customer

One major customer (Previous year: Two major customers) have individually contributed more than 10% of the revenue from operation of the Company.

42 Capital management

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

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

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year and previous year.

⁴⁷ Additional regulatory information required by Schedule III to be disclosed in the financial statements:

I) The Company has no transaction and/or outstanding balance with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 as Identified to the extent of struck off companies details available on the public domain.

II) No proceedings have been Initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Amendment Act, 2016 and rules made thereunder.

III) The Company has not been declared wilful defaulter by any bank or financial Institution or government or any government authority.

Iv) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

v) There Is no undisclosed Income under the tax assessments under the Income Tax Act, 1961 for the year ending March 31,2024 and March 31,2023 which needs to be recorded In the books of account.

vi) The Company has not traded or Invested In crypto currency or virtual currency during the current or previous year.

vII) Utilisation of borrowed funds and share premium:-

a) The Company during the year has 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 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 provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

b) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) during the year, that the Company shall 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 provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

vIII) Borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such loans were taken.

Ix) All charges creation and satisfaction thereof are registered with ROC within the statutory period.

48 The Company having borrowing facility from banks on the basis of security of current assets, the amount shown in quarterly returns or statement were derived from the unaudited and provisional books of account. As regards the disclosure of discrepancies, if any, envisaged to be disclosed as part of additional information were not made due to unfinished summary of reconciliation in this regards. However, the management of company do not foresee any reasons for material discrepancies nevertheless figures submitted in quarterly returns or statement were provisional and unaudited in nature and subject to reconciliation.

49 Accruals to employees were earlier classified under Other Current Liabilities. Since Accruals to employees are settled in cash, these are financial Instruments, accordingly, in order to give more appropriate presentation, the Company has reclassified previous year figures, amounting Rs. 102.63 lakhs, to Other Current Financial Liabilities to conform current year classification.

The Accompanying notes are an Integral part of these standalone financial statements

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Mar 31, 2023

J Provisions, Contingent Liabilities and Contingent Assets

Based on the best estimate provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event and it is probable ("more likely than not") that it is required to settle the obligation, and a reliable estimate can be made of the amount of the obligation at reporting date.

A contingent liability is a possible obligation that arises from a past event, with the resolution of the contingency dependent on uncertain future events, or a present obligation where no outflow is probable. Major contingent liabilities are disclosed in the financial statements unless the possibility of an outflow of economic resources is remote.

Contingent assets are not recognized in the financial statements but disclosed, where an inflow of economic benefit is probable.

K Measurement of fair value

a) Financial instruments

The estimated fair value of the Company''s financial instruments is based on market prices and valuation techniques. Valuations are made with the objective to include relevant factors that market participants would consider in setting a price, and to apply accepted economic and financial methodologies for the pricing of financial instruments. References for less active markets are carefully reviewed to establish relevant and comparable data.

b) Marketable and non-marketable equity securities

Fair value for quoted securities is based on quoted market prices as of the reporting date. Fair value for unquoted securities is calculated based on commonly accepted valuation techniques utilizing significant unobservable data. If fair value cannot be measured reliably unlisted shares are recognized at cost.

c) Leasehold land

Fair valuation of leasehold land at revaluation date is estimated by the independent valuer in accordance with measurement principles as prescribed in Indian Accounting Standards (IND AS).

L Financial instruments Financial Assets

Initial recognition and measurement

Financial assets (except trade receivables) are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit or loss which are measured initially at fair value. However, trade receivables that do not contain a significant financing component are measured at transaction price.

Classifications and Subsequent measurement

The Company classifies its financial assets as subsequently measured at either amortised cost or fair value depending on the Company''s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.

Financial assets at amortised cost

A financial asset is measured at amortised cost only if both of the following conditions are met:

- it is held within a business model whose objective is to hold assets in order to collect contractual cash flows.

- the contractual terms of the financial assets represent contractual cash flows that are solely payments of principal and interest.

After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (''EIR'') method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance income in the Statement of Profit & Loss. The losses arising from impairment are recognised in the Statement of Profit & Loss.

Financial assets at fair value through Other Comprehensive Income (FVOCI)

Financial assets with contractual cash flow characteristics that are solely payments of principal and interest and held in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets are classified to be measured at FVOCI.

Financial assets at fair value through Profit & Loss (FVTPL)

Financial assets, which does not meet the criteria for categorization as at amortized cost or as FVOCI, are classified as at FVTPL.

In addition, the Company may elect to classify a Financial assets, which otherwise meets amortized cost or FVTPL criteria, as at FVOCI. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch'').

Financial assets included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit & Loss.

Equity Instruments

All equity instruments in scope of Ind AS 109 are measured at fair value. On initial recognition an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis.

All other Financial Instruments are classified as measured at FVTPL except investment in equity instruments of subsidiaries which are carried at cost less provision for impairment, if any.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the company''s balance sheet) when:

- The rights to receive cash flows from the asset have expired, or

- The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either

(a) the company has transferred substantially all the risks and rewards of the asset, or

(b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognize the transferred asset to the extent of the company''s continuing involvement. In that case, the company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in the Statement of Profit & Loss.

Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

With regard to trade receivable, the Company applies the simplified approach as permitted by Ind AS 109, Financial Instruments, which requires expected lifetime losses to be recognised from the initial recognition of the trade receivables.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, amortised cost, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of amortised cost, net of directly attributable transaction costs. Classifications and subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial Liabilities measured at amortised cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through Statement of Profit or Loss.

Gains or losses on liabilities held for trading are recognised in the Statement of Profit & Loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains! losses attributable to changes in own credit risk are recognized in OCI. These gains! loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.

Derecognition of financial liabilities

The company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired.

M Income tax

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in Other Comprehensive Income.

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. It is measured using tax rates enacted enacted at the reporting date. Current tax assets and liabilities are offset only if, the Company:

a) Has a legally enforceable right to set off the recognised amounts; and

b) Intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Deferred tax

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Balance Sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the Balance Sheet date. Minimum Alternative Tax (MAT) is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of credit to the statement of profit and loss and included in deferred tax assets. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

N Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is (or contains) a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned. Leases are classified as financeleases when substantially all ofthe risks and rewards ofownership are transferredfromthe Companyto the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company''s net investment inthe leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.

Company as a lessee

The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. Contingent and variable rentals are recognised as expense in the periods in which they are incurred.

Lease Liability

The lease payments that are not paid at the commencement date, are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lessee''s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value as that of right-of-use asset in a similar economic environment with similar terms, security and conditions.

Lease payments included in the measurement of the lease liability comprise:

• Fixed lease payments (including in-substance fixed payments) payable during the lease term and under reasonably certain extension options, less any lease incentives;

• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

• The amount expected to be payable by the lessee under residual value guarantees;

• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the Balance Sheet.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

• The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

Right of Use (ROU) Assets

The ROU assets comprise the initial measurement ofthe corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Whenever the company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under Ind AS 37- Provisions, Contingent Liabilities and Contingent Assets. The costs are included in the related right-of-use asset.

ROU assets are depreciated over the shorter period of the lease term or useful life of the underlying asset. If the company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset''s useful life. The depreciation starts at the commencement date of the lease. Premium on Leasehold land is being amortised over the period of lease tenure. Leasehold land is revalued at interval of every 4 years to reflect current fair value. Refer foot note "Revaluation Reserve on Leasehold Land (Right of Use Assets)" in Statement of change in Equity.

The ROU assets are presented as a separate line in the Balance Sheet and details of assets are given ROU note under "Notes forming part of the Financial Statement".

The Company applies Ind AS 36- Impairment of Assets to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as per its accounting policy on ''property, plant and equipment''.

As a practical expedient, Ind AS 116 permits lessee not to separate non-lease components when bifurcation of the payments is not available between the two components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.

Extension and termination options are included in many of the leases. In determining the lease term the management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option.

O Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. P Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The board of directors of the Company has been identified as being the chief operating decision maker by the Management of the company.

Q Government Grants

Government grants are recognised at its fair value, where there is a reasonable assurance that such grants will be received and compliance with the conditions attached therewith have been met.

Government grants related to expenditure on property, plant and equipment are credited to the statement of profit and loss over the useful lives of qualifying assets or other systematic basis representative of the pattern of fulfilment of obligations associated with the grant received. Grants received less amounts credited to the statement of profit and loss at the reporting date are included in the balance sheet as deferred income.

R Earning Per Share (EPS)

The Company presents basic and diluted earnings per share ("EPS") data for its equity shares. Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares.

S Standard issued but not yet effective

Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1,2023, as below:

Ind AS 1 - Material accounting policies - The amendments mainly related to shifting of disclosure of erstwhile "significant accounting policies" in the notes to the financial statements to material accounting policy information requiring companies to reframe their accounting policies to make them more "entity specific. This amendment aligns with the "material" concept already required under International Financial Reporting Standards (IFRS). The Company does not expect this amendment to have any significant impact in its financial statement.

Ind AS 8 - Definition of accounting estimates - The amendments specify definition of ''change in accounting estimate'' replaced with the definition of ''accounting estimates''. The Company does not expect this amendment to have any significant impact in its financial statement.

Ind AS 12 - Income taxes - Annual Improvements to Ind AS (2021) - The amendment clarifies that in cases of transactions where equal amounts of assets and liabilities are recognised on initial recognition, the initial recognition exemption does not apply. Also, If a company has not yet recognised deferred tax asset and deferred tax liability on right-of-use assets and lease liabilities or has recognised deferred tax asset or deferred tax liability on net basis, that company shall have to recognise deferred tax assets and deferred tax liabilities on gross basis based on the carrying amount of right-of-use assets and lease liabilities existing at the beginning of 1 April 2022. The Company does not expect this amendment to have any significant impact in its financial statement.

Significant unobservable inputs considered in Level 3 Fair valuation are as under:-

(i) Valuation of lease hold Land (right of use Assets) was carried out by Market Approach uses prices and other relevant information generated by market transactions involving comaprable assets and considers qualitative and quantitative factors (Comparable companies valuation method) by using market multiples or matrix pricing (comapare with Benchmarks) in financial year 2019-20. It reveals that similar properties are available for sale in nearby area in the range of Rs 12,500 to Rs 14,000 per Square Yard depending upon various attributes such as size, shape, location, frontage, frontage to depth ration, marketability, demand & supply of similar properties in the said locality.

(ii) (a) In the year of issuance, valuation of preference shares was carried out by independent valuer using NPV of projected cash flows based on discounted cash flow method, wherein NPV of the preference shares measured based on security available, statement of credit rating of instruments, trading in stock exchange, etc.

The estimated fair value of RPS is Rs 67.98 Lakhs as on allotement date i.e. 4th July 2019 considering repayment period of 20 years and market interest rate of 14.20%.

(b) Rate of return considered 14.20% which includes risk free return of 7.20% based on 20 years bond rate and Risk preminum of 7.00%. Risk premium has been considered due to the reasons like lack of liquidty due to unquoted instruments, declining operations since March 2019, customer concentration Risk, other business risk as per credit rating which has also downgraded.

II. Financial risk management objectives and policies

The Company''s principal financial liabilities, comprise borrowings, trade and other payables and lease liabilities. The main purpose of these financial liabilities is to finance and support the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, cash and cash equivalents and other bank balances that derive directly from its operations. The Company also holds FVTPL investments and investment in subsidiary companies measured at cost , unless otherwise as stated.

i. Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the processes to ensure that executive management controls risks through the mechanism of property defined framework.

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

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

ii. Credit risk

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

Trade receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Company establishes a provision for expected credit losses that represents its expected credit losses in respect of trade receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables.

40 Capital management

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

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

47 Additional regulatory information required by Schedule III to be disclosed in the financial statements:

i) The Company has no transaction and/or outstanding balance with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 as identified to the extent of struck off companies details available on the public domain.

ii) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Amendment Act, 2016 and rules made thereunder.

iii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

iv) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

v) There is no undisclosed income under the tax assessments under the Income Tax Act, 1961 for the year ending March 31,2023 and March 31,2022 which needs to be recorded in the books of account.

vi) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

vii) Utilisation of borrowed funds and share premium:-

a) The Company during the year has 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 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 provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

b) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall 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 provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

viii) Borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such loans were was taken.

ix) All charges creation and satisfaction thereof are registered with ROC within the statutory period.

48 The Company having borrowing facility from banks on the basis of security of current assets, the amount shown in quarterly returns or statement were derived from the unaudited and provisional books of account. As regards the disclosure of discrepancies, if any, envisgaed to be disclosed as part of additional information were not made due to unfinished summary of reconciliation in this regards. However, the management of company do not foresee any reasons for material discrepancies nerertheless figures submitted in quarterly returns or statement were provisional and unaudited in nature and subject to reconcilation.

49 Interest Payable on MSMSE dues were earlier classified under Other Current Financial Liabilities. Since interest payable on MSME dues is statutory in nature, these are not financial instrumnets, accordingly, in order to give more appropriate presentation, the Compnay has reclassified previous year figures, amounting Rs. 6.52 lakhs, to Other Current Assets to conform current year classification.

The Accompanying notes are an integral part of these standalone financial statements

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

For Singhi & Co.

Chartered Accountants

ICAI Firm Registration No. 302049E

Bimal Kumar Sipani Anil Khaitan Harish Pal Kumar

Partner Chairman Cum Managing Director Director

Membership No. 088926 DIN No. 00759951 DIN No. 01826010

Satyendu Pattnaik Pawan Rathi

Place: New Delhi Company Secretary Chief Financial Officer

Date: 29th May, 2023 Mem No.: F7736

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Mar 31, 2018

1 Reporting Entity

Sunil Healthcare Limited referred as “the Company” is domiciled in India. The registered office of the Company is at 38E/252A, Vijay Tower, Shahpurjat, New Delhi. Equity shares of the Company are listed in India on the Bombay stock exchange and the Calcutta stock exchange.

The Company has manufacturing plant in Alwar (Rajasthan), India. The Company is a manufacturer of Empty Hard Gelatin and HPMC Capsule Shells. The Company is also doing Trading of Food Items.

The financial statements of the company for the year ended 31st March 2018 were authorized for issue in accordance with a resolution of the directors on 25th May, 2018.

2 First TimeAdoption of Ind AS

As stated in note 2, these are the Company’s first financial statements prepared in accordance with Ind AS. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31st March, 2018, the comparative information presented in these financial statements for the year ended 31st March, 2017 and in the preparation of an opening Ind AS statement of financial position at 1st April, 2016 (the Company’s date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables. Exemptions and exceptions availed

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

A IndAS optional exemptions

i) ”Deemed costInd AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets except land at their previous GAAP carrying value.”

ii) ”Effect of changes in exchange rateIn respect of long term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period, the Company has elected to recognise exchange differences on translation of such long term foreign currency monetary items in line with its Previous GAAP accounting policy.In respect of long term foreign currency monetary items recognised in the financial statements beginning with the first Ind AS financial reporting period, exchange differences are recognised in the statement of profit and loss.”

iii) ”LeasesAppendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception ofthe contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to IndAS, except where the effect is expected to be not material. The Company has elected to apply this exemption forsuch contracts/arrangements.”

B IndASmandatory exceptions

i) ”EstimatesAn entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.Ind AS estimates as at 01st April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with IndAS at the date of transition as these were not required under previous GAAP.”

ii) ’’Classification and measurement of financial assetsInd AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.”

C Reconciliations between previous GAAP and IndAS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to IndAS.

D Notes to first-time adoption:

1 Property Plant and Equipments

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised as at 01 April, 2016 measured as per the previous GAAP except leasehold land which has been fairvalued and use that carrying value as the deemed cost ofthe property, plant and equipment and intangible assets. The resulting impact of fair valuation of land is Rs 1041.86 Lakhs and a positive impact of Rs.801.12Lakhs is reflected in the reserves as on 31/3/16.

As per IndAS 16, Property Plant and Equipment, Company has decapitalised certain costs which were capitalised as a part of cost of fixed assets under previous GAAP. Such costs along with accumulated depreciation on such costs have been decapitalised on the date of transition. During the year ended 31 March 2016 depreciation expense was derecognised under IndAS for such items of Property Plant and Equipments which was charged to statement of profi t and loss under previous GAAP.

2 Borrowings

“Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part ofthe interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss and PPE as and when incurred. Accordingly, borrowings as at 31 March 2017 have been reduced by Rs. 4.20 Lakhs (1 April 2016- Rs.Nil Lakhs) with a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount of retained earning. The profit for the year ended 31 March 2017 reduced by Rs. 1.27 Lakhs as a result ofthe additional interest expense.”

3 Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the netdefined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss forthe year.

4 Trade receivables

Under previous GAAP, the Group had created provision for doubtful debts based on specific amount for incurred losses. Under Ind AS, the allowance for doubtful debts has been determined based on expected credit loss model.

5 Fair valuation ofderivatives

The company has taken forward contracts to hedge foreign currency receivables/ payable. Under previous GAAP, AS 11 accounting was followed to account for these contracts. Under IndAS all these derivatives has been valued at fair value as per Ind AS 109. This has decreased retained earnings by Rs. 13.56 Lakhs as at 31 March 2017 and decreased retained earnings by Rs. 8.48 lakhs.

6 Other comprehensive income

Under IndAS, all items of income and expense recognised in a period should be included in statement of profit & loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in statement of profit & loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans and taxthereon.The concept of other comprehensive income was not there under previous GAAP.

7 Deferred Tax

Under previous GAAP, deferred tax was prepared using income statement approach. Under Ind AS, company has prepared deferred tax using balance sheet approach. Also, deferred tax have been recognised on the adjustments made on transition to IndAS.

8 Retained earnings

Retained earnings as atApril 1,2016 has been adjusted consequent to the above IndAS transition adjustments.

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Mar 31, 2016

C. Terms/Right attached to equity shares

Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company the holder of equity share will be entitled to receive remaining assets of the Company after preferential distribution. The distribution will be in proportion to the number of equity shares held by the share holders. There is no restriction on distribution of dividends. However same is subject to the approval of the shareholders in the Annual General Meeting.

* includes Rs. 5.36 lakhs carrying amount of fixed assets (after retaining the residual value),whose remaining useful life have been reassessed to be nil at the beginning of the Year has been adjusted with General Reserve.( Previous Year Rs.134.16)

1 (i) The company has exercised option under notification no. GIR 914 (E) dated 29th December 2011 issued by Ministry of Corporate Affairs and accordingly net exchange loss for the year amounting to Rs.27.05 (Previous year Rs.NIL ) on long term foreign currency borrowing has been adjusted with the depreciable fixed assets acquired. As at 31st March 2016 Rs.21.59 (Previous year Rs.NIL) remain to be amortized over the balance life of the assets.

(Previous year Rs.NIL ) on long term foreign currency borrowing has been adjusted with the depreciable fixed assets acquired. As at 31st March 2016 Rs.21.59 (Previous year Rs.NIL) remain to be amortized over the balance life of the assets.

2 Other Notes on Accounts

3 Some of the Trade Receivable , Payable, Borrowing and Loans & Advances are Subject to Confirmation

4 In the opinion of the management, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business.

5 Segment Information’s

^a As of March 31, 2016, there are two business segments i.e. Empty Capsules and Marketing of Food Product. A description of the types of products by each reportable segment is as follows:

Empty Capsules - the Company deals in manufactures or trading of Capsule Shells Marketing of Food Product includes trading activities carried out on high sea sales basis.

Segment Reporting (by business segment):

The following table presents revenue and profit information regarding business segments for the years ended March 31, 2016 and March 31, 2015 and certain assets and liability information regarding business segments at March 31, 2016 and March 31, 2015.

6 The previous year figure has been reclassified /regrouped to conform current year figures.

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Mar 31, 2015

1. Nature of Operation

The Company has manufacturing facility at Alwar (Rajasthan) for 8430 Million (Previous year 7700 Million) of Hard Gelatin Capsule Shells. Comapany is also doing Trading of Food items.

2. Terms/Right attached to equity shares

Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company the holder of equity share will be entitled to receive remaining assets of the Company after preferential distribution. The distribution will be in proportion to the number of equity shares held by the share holders. There is no restriction on distribution of dividends. However same is subject to the approval of the shareholders in the Annual General Meeting.

(a) Term Loans are Secured by specific Plant & Machineries and other immovable or movable fixed Assets, purchased against specific loan and carries interet rate of 14.70% p.a.(Previous year 14.70% p.a.) The same is also personally guaranteed by Chairman cum Managing director and a relative. Payment terms of Term loans of non-current portion is as follows:

(a) Cash Credit is Secured by first charge by way of hypothecation on the entire stock of inventories, receivables, bills, and other chargeable current assets of the company (both present and future) and extension of first mortgage / hypothecation charge on the entire fixed assets of the company. The same is also personally guaranteed by Chairman cum Managing director and a relative.

3. Contingent Liabilities and Commitments

A. Contingent Liabilities

(a) . Claims against the company not acknowledged as debt:

Demand for Octroi under disputes 8.47 8.47

Income Tax and Wealth Tax 0.85 0.85 (Paid under Protest Rs. 0.85 Previous year Rs. 0.85)

(b) Liability for Customs duty on capital Goods imported under EPCG Scheme, against which export obligation is to be fulfilled. 7.45 NIL

(c) Liability for Customs duty on Raw Materials imported under Advance License, against which export obligation is to be fulfilled. 347.28 453.64

B. Commitments

(a). Estimated amount of contracts remaining to be executed on capital account and not provided for 301.75 10.95 "(Advances paid Rs. 154.31 Previous Year Rs. 7.54)"

4. Other Notes on Accounts

5. Some of the Trade Receivable , Payable, Borrowing and Loans & Advances are Subject to Confirmation

6. In the opinion of the management ,the Current Assets, Loans and Advances are approximately of the value stated,if realised in the ordinary course of business.

B. "Disclosure relating to Provident Funds

The Company recognised Rs. 42.66 (Previous year Rs. 37.95) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. "

7. Segment Informations

a As of March 31, 2015, there are two business segments i.e. Empty Hard Gelatin Capsule and Marketing of Food Product. A description of the types of products by each reportable segment is as follows:

Empty Hard Gelatin Capsule - the Company deals in manufactures of EHG Capsule Shells Marketing of Food Product includes trading activities carried out on high sea sales basis. b Segment Reporting (by business segment):

The following table presents revenue and profit information regarding business segments for the years ended March 31,2015 and March 31, 2014 and certain assets and liability information regarding business segments at March 31, 2015 and March 31, 2014.

c Segment Reporting (by Geographical demarcation):

(a) . The segment is based on geographical demarcation i.e. India and Rest of the World.

(b) . The Company's revenue from external customers and information about its assets and others by geographical location are follows:

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Mar 31, 2014

1. CASH FLOW FROM FINANCING ACTIVITIES

Notes:

1. The Cash Flow Statement has been prepared under the indirect method as set out in Accounting Standard (AS) 3 "Cash flow Statement" as notified under the Companies (Accounting Standard) Rule 2006.

2. Figures have been regrouped/rearranged wherever necessary.

2. SHARE CAPITAL

Terms/Right attached to equity shares

Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company the holder of equity share will be entitled to receive remaining assets of the Company after preferential distribution. The distribution will be in proportion to the number of equity shares held by the shareholders. There is no restriction on distribution of dividends. However same is subject to the approval of the shareholders in the Annual General Meeting.

3 RESERVES AND SURPLUS:

(a) Term Loans are Secured by specific Plant & Machineries ando ther immovable or movable fixed Assets, purchased against specification. The same isalso person all yguaran teed by Chairman cum Managing director and a relative. Payment of Term loan so fnon-current portion and rate of interest payable is as follows:

(b) Loans from Chairman Cum Managing Director of Rs. 5.40 is interest free (Previous year Rs.12.63)

(c) Loan from other saggre gate of Rs.22.69 payable in 11 monthly instalments w.e.f. 3rd March 2013 and carries rate of interest 19.29% p.a. (d) Loan from others aggregate of Rs.33.72 payable in 24 monthly instalments w.e.f. 29th March 2014 and carries rate of interest 19.67%p.a.

(e) Loan from others aggregate of Rs.23.65 payable in 22 monthly instalments w.e.f. 07th February 2014 and carries rate of interest 19.51%p.a

4. Short Term Borrowings

(a) Cash Credit is Secured by first charge by way of hypothecation on the entire stock of inventories, receivables, bills, and other chargeable current assets of the company (both present and future) and extension of first mortgage / hypothecation charge on the entire fixed assets of the company. The same is also personally guaranteed by Chairman cum Managing director and a relative.

5. Trade Payables

The Company has not received any intimation from its suppliers being registered under Micro, Small and Medium Enterprises Development Act,2006(MSME).Hence the necessary disclosure required under MSME-Act-2006 cannot be made.

6 Contingent Liabilities and Commitments

A. Contingent Liabilities As at 31/03/2014 31/03/2013

(a) Claims against the company not acknowledged as debt:

Demand for Octroi under disputes 8.47 8.47

Income Tax and Wealth Tax 0.85 0.85

(Paid under Protest Rs 0.85 Previous year Rs.0.85)

(b) Customs duty on capital Goods imported NIL 6.51 under EPCG Scheme, against which export obligation is to be fulfilled.

(c) Customs duty on Raw Materials imported 453.64 363.86 under Advance License, against which export obligation is to be fulfilled.

7.1.1 Exceptional item reported for Rs NIL (Previous year 55) received from a Debtor which was written off in earlier year.

7.1.2 Some of the Trade Receivable, Payable, Borrowing and Loans & Advances are Subject to Confirmation.

7.1.3 In the opinion of the management, the Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business.

7.1.4 Disclosure required by Accounting Standard (AS) 15 (Revised) on "Employee Benefits":

The estimates of the future salary increases, considered in actuarial valuation, taken account of inflation, seniority, promotion and other relevant factors. Gratuity upto certain amount per employee is covered under an irrevocable Gratuity Fund under the Group Gratuity cum Life Assurance Scheme of the Life

Insurance Corporation of India. The Company has also recognised 37.95/- (Previous Year Rs. 31.96/-) being contribution to employees'' Provident Fund (Defined Contribution Plan)

7.1.5 Segment Informations

a Company''s business activity falls within a single primary business segment viz EHG Capsule Shells

b Segment Reporting (by Geographical demarcation):

(a). The segment is based on geographical demarcation i.e. India and Rest of the World.

(b). The Company''s revenue from external customers and information about its assets and others by geographical location.

7.1.6 The company has no outstanding derivative instrument as at Balance Sheet date.

7.1.7 The previous year figure has been reclassified /regrouped to conform current year figures.

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Mar 31, 2013

1. Contingent Liabilities and Commitments

A. Contingent Liabilities

(a) Claims against the company not acknowledged as debt:

Demand for Octroi under disputes 8.47 8.47

Income Tax and Wealth Tax 0.85 0.85

(Paid under Protest Rs.0.85 Previous year Rs.0.85)

(b) Customs duty on capital Goods imported under EPCG 6.51 Nil Scheme, against which export obligation is to be fulfilled.

(c) Customs duty on Raw Materials imported under Advance 363.86 126.22 License, against which export obligation is to be fulfilled.

B. Commitments

(a) Estimated amount of contracts remaining to be executed 45.36 544.32 on capital account and not provided for (Advances paid Rs. 6.84 Previous Year Rs.221)

2. Notes on Accounts

3. Exceptional item reported for Rs. 55 Lacs received from a Debtors which was written off in earlier year

4. Some of the Trade Receivable , Payable, Borrowing and Loans & Advances are Subject to Confirmation

5. In the opinion of the management ,the Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business.

6. Disclosure required by Accounting Standard (AS) 15 (Revised) on "Employee Benefits":

The estimates of the future salary increases, considered in actuarial valuation, taken account of inflation, seniority, promotion and other relevant factors. Gratuity up to certain amount per employee is covered under an irrevocable Gratuity Fund under the Group Gratuity cum Life Assurance Scheme of the Life Insurance Corporation of India. The Company has also recognised Rs.31.96/- (Previous Year Rs.25.56/-) being contribution to employees'' Provident Fund (Defined Contribution Plan)

7. Segment Information’s

a Company''s business activity falls within a single primary business segment viz EHG Capsule Shells

b Segment Reporting (by Geographical demarcation):

(a) The segment is based on geographical demarcation i.e. India and Rest of the World.

8. b) The company has no outstanding derivative instrument as at Balance Sheet date.

9. The previous year figure has been reclassified /regrouped to conform current year figures.